Estate of Thouron

182 Pa. 126 | Pa. | 1897

Opinion by

Mr. Justice Green,

The account under consideration is the fourth account filed by the present trustee, and its items occupy forty-six pages of solid printed matter, and vary in innumerable details from twenty-five cents to $179,796. It represents an account of capital and an account of income, including the distribution of the latter, in monthly payments to those entitled. The capital account starts with the balance of assets in hand from the third account, amounting to $179,796, and cash $17,865.60. The aggregate debits of this capital account at its close amount to $315,158.88, and after deducting the payments charged against them the resulting balance to the credit of the account is $302,406.87. Then follows an investment account showing the various changes of investment and new investments of the capital, resulting in an exhibition of securities amounting to $293,543.61 and cash $8,863.26. In addition to the foregoing an income account is annexed with an immense number of items, most of them small, but aggregating $78,283.61, against which are charges, leaving a balance of $51,367.55 which was distributed to the parties entitled in very numerous items, leaving a balance of cash on hand of $1,620.73.

In the income account credit is taken for commissions to the • amount of $3,903.44, to which no objection is made. In the capital account no credit is taken for commissions, but a claim for compensation was made before the auditing judge, who allowed the sum of $7,500 in view of the extraordinary character of the circumstances and the length of time through which the services of the accountant were rendered.

A statement of facts sworn to by the accountant and annexed to his account, explained the reasons of his action in regard to compensation, and this was in no way contradicted or impeached as to its correctness. It is upon the record without objection as a part of the account, and was considered by the auditing judge in passing upon the questions raised. From the statements there made it appears that the accountant became sole trustee by appointment of the orphans’ court in October, 1880. His first account was filed in January, 1882, and in it he made no claim for compensation. His second account was filed in May, 1891, and again no charge was made for compensation. The third account was filed in April, 1892, on the death of one of the legatees. A credit was taken and allowed for a small commission of $467.31 on the income. The present account was filed in June, 1896, and covered the time from April, 1892 to the date of filing, and in this account large additions were made to the bulk of the fund. A body of coal land in Schuylkill county was sold for upwards of $100,000. A tract of land in the state of Texas was sold for $6,180. Both of these properties were theretofore unproductive, and their value constituted no part of the capital of the estate in any of the preceding-accounts. The capital as shown by the third account was $196,661.60, and by the fourth account it was $802,158.88, exhibiting an increase of $105,497.28. It further appears that the accountant had never received any compensation whatever for his management of the capital of the estate. His total sales of real estate amounted to $164,485. His collections of gross income amounted to $270,679, and his total transactions on account of the principal or capital of the estate, including re-investments, amounted to $749,691, making a total of all items of $1,020,870, which passed through his hands. His payments to the legatees were made with unusual promptness, and were very large in amount. To three annuitants he paid $41,334, and to each one of the cestuis que trust he paid $29,015.24. His management of the estate extended over a period of fifteen and a half years. It was a most successful management in every respect. His very numerous investments, most of them in moderate sums, have not resulted in any loss to the estate. No objection whatever is made to any of his acts and transactions in conducting the affairs of the -estate, and nothing but praise is awarded to him even by the only one of the parties in interest who excepts, or rather who objects, to the allowance of compensation for the management of the principal of the estate. No other objection to any part of the account is made by any one. The amount of compensation in that connection which was allowed by the auditing judge, $7,500, is not objected to as unreasonable, and it certainly is not unreasonable in any point of view. In addition to all this the cestuis que trust, who are five in number, acquiesced in the allowance, except one, a brother, and they make no objection now to the allowance.

In view of all the facts of the case we coincide entirely with the auditing judge, in regarding this as an exceptional case, and presenting an instance of extraordinary circumstances, such as are held sufficient to constitute an exception to the ordinary rule that commissions cannot be allowed on the principal of a trust until the termination of the trust or of the trustee’s relation to it. The auditing judge was overruled by two of the judges of the orphans’ court, solely upon the strict application of the general rule, and not upon any other ground whatever.

In considering the propriety of this ruling it must be borne in mind that this not the case of a fixed, definite amount of a trust fund, which would be diminished by the allowance of commissions upon it. On the contrary it is a case in which the capital of the estate had been very largely increased by the excellent and judicious management of the trustee, and instead of its being reduced by the allowance of commissions, it will still be very much larger after the allowance than it was at the beginning of the account. The reason for the general rule therefore does not exist, and hence that rule is not of controlling force in determining the question. The record does not show what the capital account was when the accountant was appointed in 1880, but it does show that even at the end of the third account in 1892 it was $197,661.60, whereas at the close of the fourth account it was $302,406.87, showing an increase of about $105,000 in the four years and three months over which it extended. It cannot be contended therefore that the capital of the trust will be reduced by the allowance of the very moderate compensation granted by the auditing judge. Nor is it any answer to this to say that the capital was alwaj^s there, though in a different form. It was unproductive real estate which was originally valued at only $7,000, and it was a kind of real estate which has no fixed value in the market, and whose ultimate money value depends almost entirely upon tbe skill, the prudence and good judgment of the person who has it in charge. When it is considered that this piece of real estate was so wisely and skilfully managed, that instead of the original valuation of $7,000, the sum of $103,385 was obtained for it and added to the real capital of the estate, it seems incredible that such a thing could be. It seems to us that the circumstances of this estate are of the most unusual and extraordinary character, and most amply justify, and indeed require, a departure from the usual rule regulating this subject. Again it must be considered that the accountant can never again receive tins or any other compensation for this particular service. It is conceded that if this were the final account the trustee would be entitled to full compensation as well upon tbe principal as upon tbe income, but so far as this accountant is concerned he would not, upon tbe settlement of bis final account, be permitted to charge any part of tbe sum now allowed, and hence tbe estate could not suffer by its present allowance. The authorities, particularly Bosler’s Est., 161 Pa. 457, and Mintzer’s Est., 18 Phila. 98, recognize tbe exception of extraordinary circumstances to the operation of tbe general rule, and when to this is added tbe fact that tbe real capital of tbe fund will not be diminished by tbe allowance, and that tbe amount allowed can never be allowed again, all reason for enforcing the general rule disappears. We are clearly of opinion upon a consideration of all tbe facts of tbe case that the ruling of tbe auditing judge was correct, and that tbe sum of $7,500 allowed by him was a fair and reasonable allowance of tbe compensation claimed, and we therefore sustain it. Tbe assignments of error are sustained.

Tbe decree of tbe court below is reversed at tbe cost of tbe appellee, and tbe record is remitted with direction to tbe court below to correct it in accordance with this opinion.