108 N.W.2d 50 | S.D. | 1961
The decision of this court in Barbour v. First Citizens National Bank of Watertown, South Dakota, 77 S.D. 106, 86 N.W.2d 526, wherein we held that the $37,654.62 savings account of Frederick R. Bamberger, Deceased, was not the property of the alleged joint tenant, James A. Barbour, Jr., but was the property of the Estate of Frederick R. Bamberger, Deceased, was followed by such proceedings in the estate in county court, and on appeal in the circuit court as resulted in the allowance of an attorneys fee out of the estate to counsel of David A. Barbour, in ■the amount of $8,000. That in making the described allowance the trial court abused its discretion is the principal contention presented by the appeal of James A. Barbour, Jr., a legatee under the last will of the deceased.
That an allowance may be made out of the estate of a deceased for services of attorneys for beneficiaries Where those services were beneficial to the estate was settled In re Engebretson’s Estate, 68 S.D. 255, 1 N.W.2d 351, 142 A.L.R. 1454. In so holding we expressed agreement with the pronouncement of the Michigan court that
“A doctrine which permits a decedent’s estate to be so charged, should, however, in our opinion, be applied with caution and its operation limited to those cases in which the services performed have not only been distinctly beneficial to the estate, but became necessary either by reason of laches, negligence, or fraud of the legal representative of the estate.”
Becht v. Miller, 279 Mich. 629, 273 N.W. 294, 298. We adhered to those views in our later decision in Engebretson v. Graff, 69 S.D. 549, 12 N.W.2d 761, 762.
Counsel for James does not question our holding in the Engebretson cases, but urges, because the contest was, in reality, between David and himself, and he, as the defeated party, has suffered detriment and only David has been benefited, the rule declared in those Cases should not be applied. It is also asserted that, in conducting itself as a neutral after diligently presenting the facts to the county court, the executor cannot be said to have been guilty of either negligence, laches, or fraud, and hence the Engebretson rule is not invoked.
We elect to first consider the contention that it cannot be said the executor was guilty of negligence. In
In limiting the application of the Engebretson rule, as it had been limited by the Michigan court, to instances where the services of counsel .for a beneficiary or distributee became necessary by reason of the laches, negligence, or fraud of the legal representative of the executor or administrator, we were but intending to catalogue types of conduct of an executor which would in fact deprive the estate of effective representation. Although we do not question the good faith of the bank, we are of the view that by mistakenly assuming a neutral attitude, because of its depositary relation, it deprived the estate of the vigorous representation contemplated by the law, and thrust the burden of protecting its interests upon counsel for David. This inactivity gave rise to the circumstances which would support an allowance for fees and expenses of counsel for David, if the services thus induced proved to be beneficial
Indubitably, the services of counsel for David brought more than $40,000 in added assets into the possession of the bank in its capacity as executor and will materially increase the distributive share that both James and David will receive in their capacities as legatees of the deceased. This was such a “benefit to the estate” as was contemplated by our holding in the Engebretson cases. And cf. In re Smith’s Estate, 167 Misc. 95, 3 N.Y.S.2d 503, for a cogent explanation of the .meaning of the phrase “benefit to the estate”.
The argument that the Engebretson rule should not apply in the circumstances at bar is founded upon the assumption that the contest for the savings account was, in reality, between David and James, the only legatees of the deceased. Such was not the case. In fact the contest arose between the estate and James by reason of his claim to the account as the alleged surviving joint tenant. That claim of James necessitated services of legal counsel to represent the interests of the estate. The allowance of fees is predicated upon the fact that those necessary services were actually rendered by David’s counsel. Had those services been performed by counsel of the executor, James would certainly be in no position to question an allowance to the executor for the reasonable amount paid to counsel as compensation. We are unable to perceive any reason for holding that James gains a strengthened position to question an allowance for the same character of service rendered to the estate by David’s counsel in the absence of effective representation by counsel for the executor. The case is not soundly distinguishable on its facts from Engebretson, In re Lounsberry’s Estate, 226 App. Div. 291, 234 N.Y.S. 680; Bean v. Bean, 74 N.H. 404, 68 A. 409; and Becht v. Miller, 279 Mich. 629, 273 N.W. 294. We hold that the trial court did not abuse its discretion in making an allowance for the services in question.
The judgment is reversed.