169 F.2d 965 | D.C. Cir. | 1948
In this case we are called on to decide the proper method of computing an executor’s commissions under the District of Columbia statute,
Mrs. Christina Buchholz died January 15, 1945. The appellant, Cornelius H. Doherty, is the executor of her will which directed that “he be allowed the maximum compensation permitted by law,” a direction which nullified the court’s statutory discretion as to the amount of his
The executor claimed a commission of ten per cent on the gross sale price of $208,-412.53. The excepting residuary legatees maintained that he was entitled only to ten per cent of the net sum of $142,210.48, as he had not actually received the larger amount and had not actually disbursed the money deducted and paid out by the title insurance company. In other words, the legatees were claiming that only the net received from the sale of realty, 'after payment of debts and expenses, could in the circumstances 'be included in the inventory upon which commissions are computed. The District Court’s judgment upheld the contention of the legatees.
There is no real question here as to whether realty is properly embraced in inventory;
Another aspect of the case is much the same. When Mrs. Buchholz died on January 15, 1945, she had on deposit in a local bank the sum of $44,219.73, and the bank held her promissory note for $25,000 due January 28, 1945. On the due date, three days before the executor qualified, the bank charged the account with $25,166.-67 (the note and accrued interest) and thereafter the executor succeeded to a credit of only $19',053.06. He claimed a commission on the deposit of $44,219.73, which he says was properly a part of the inventory. The legatees were upheld by the District Court in saying Doherty was entitled to a commission on only $19,053.06, as he did not actually pay the note and the interest. We do not agree. Mrs. Buchholz’ estate was to be inventoried as of the date of her death, which was January 15. At that time the bank owed her $44,219.73, due on demand. Her note could not be set off by the bank until its maturity on January 28. When on the due date the bank charged the account with the note and interest, it was just as though the executor had written his check for the sum then due. We hold that the deposit of $44,219.73 was properly a part of the inventory upon which commissions are calculated.
The appellees complained further that the executor paid to himself, during
An executor is not entitled to a commission, we held in Brosnan v. Fox,
In this case, however, it was certain, because of the size of the inventory and the provision of the will fixing his compensation at ten per cent thereof, that the executor would ultimately be entitled to commissions largely in excess of the sums aggregating $20,102.50 which he withdrew prematurely. Although it was improper for the executor to make the unauthorized withdrawals, no damage has resulted either to the estate or to the residuary legatees. Doherty did not die, resign or become disabled prior to the time when in due course the commissions would have been allowed, and he has substantially completed his work. The estate was not deprived of income on the amounts withdrawn too early, since, ordinarily, an executor does not make investments and is not charged with interest on the cash in his hands during the normal course of administration. To require this executor to pay interest to the estate on the sums prematurely withdrawn by way of commissions would, therefore, be nothing more than punishment for an unauthorized but harmless act. In the circumstances here disclosed, we think such punishment is unjustifiable.
Reversed.
Title 20, § 605, D.C.Code 1940.
Washington Loan and Trust Co. v. Convention of Protestant Episcopal Church of the Diocese of Washington et al., 54 App.D.C. 14, 293 F. 833, 34 A. L.R. 913.
In Mersch, on Probate Court Practice in the District of Columbia, a recognized authority, it is said, on page 305:
“Section 365; T. 29, See. 265, allows a commission of from 1% to 10% on ‘the amount of the inventory or inventories excluding what is lost or perished.’ Such items as (a) profits realized on sale or redemption of principal assets, (b) advances by heirs or legatees to make up a deficiency in cash to pay debts, (c) the proceeds of real estate sold in the probate court, are not in practice made the subject of supplemental inventories. Nevertheless these, (as well as any assets discovered after the original inventories, which should be separately inventoried) are considered proper items in the base, on which commission is claimed, on principal assets, whether inventoried or not!”
52 App.D.C. 143, 284 F. 923. .
78 U.S.App.D.C. 263, 139 F.2d 388.