157 A. 813 | Pa. Super. Ct. | 1931
Argued April 24, 1931.
The court below sustained an exception to an account filed by the executrix of a deceased trustee, and surcharged the accountant with $191.86, credit taken for accountant's commissions on the corpus, — 2% on $9,593. The court based its action on the ground that in the absence of exceptional circumstances justifying a departure from the general rule, — which, it was said, were not here present —, commissions upon the corpus of a trust estate are not allowable except when the trust is terminated and the fund is in the course of distribution. The court below rested its decision largely on the cases of Riter's Est.,
The Supreme Court has, in exceptional circumstances, where the corpus of the estate has been largely increased through the efforts of the trustee, allowed *89
the trustee a commission on the corpus, although the trust was not terminated nor the trustee's relation to it ended, (Thouron's Est.,
The elements to be considered in awarding compensation to a trustee are two: (1) The care, labor and services of the trustee in the performance of the trust; *90
and (2) the responsibility incurred and involved. In the administration and settlement of a decedent's estate, it was early said by the Supreme Court that while the former element was variable in proportion to the work done, the latter, the responsibility, could be measured by an "unvarying rate per cent without regard to the magnitude of the sum," for "the responsibility increases in proportion to the amount;" and this responsibilty was "reasonably put at two and a half per cent": Stevenson's Est., 4 Whart. 98, 103. This was followed and approved in Lowrie's App., 1 Grant 373, 374; Duval's App.,
We also think that the opinion of Judge ASHMAN in Mintzer's Est., supra, cited by the lower court, must be read in connection with the facts of the particular case, which related to a claim for commissions against the corpus of a trust estate by a corporate trustee, which had been illegally appointed upon the removal of a prior trustee for misconduct, and which had no just title to the office; for the orphans' court of Philadelphia County, only five years after the decision in Mintzer's Est., in an opinion by President Judge HANNA (Makin's Est., 7 Dist. 126, 1892), awarded a retiring trustee, who voluntarily resigned, "reasonable and moderate compensation" out of the corpus of the *91 estate; and in Wainwright's Est., 27 Dist. 955 (1918), Judge GEST, whose judgment on orphans' court law is deservedly respected everywhere, after stating the rule as first above mentioned, said, "But an exception to this rule obtains where the relationship of the trustee to the trust is terminated by his death;" and allowed one per cent on the corpus as compensation to the deceased trustee's estate. See also the same judge's ruling in Biddle's Est., 24 Dist. 577, 581. A like conclusion was reached by President Judge METZGER of Lycoming County in Lloyd's Est., 23 Pa. C.C. 267, and by President Judge BITTENGER of York County in Weiser's Est., 20 Dist. 454, 457. The latter after commenting on the fact that he found no decision by the higher courts of this Commonwealth holding that the death of a trustee, was such a termination of the trust, or of the trustee's relation to it, as to be within the exceptions recognized in the decisions, warranting a claim for compensation of the deceased trustee out of the corpus of the trust estate in his hands at the time of his death, said: "This may be ascribed to the fact that the correctness of the proposition has so strongly appealed to a sense of justice and common sense that it has not been disputed; and therefore the question has not come before the appellate courts for adjudication."
In Mylin's Est.,
The learned judge of the court below said that the possibility of the trustee's death "before the termination of the trust was something he could have foreseen before acceptance of the trust." We look at the matter from a wholly different viewpoint, viz., that the possibility of the trustee's death before the termination of the trust was something which those moving for his appointment could have foreseen when they asked for it, and if they preferred the personal attention and interest of an individual trustee rather than have the services of a corporate trustee, not subject to natural death, they will be held to have assumed the risk of his death before the trust terminated and the payment, in such event, of reasonable compensation out of the corpus, proportioned to his "labor, care and responsibility pertaining to the conservation of the capital itself."
The court below did not pass upon the reasonableness of the amount charged, but disallowed all compensation under what we think was a mistaken view of the law. It is not our province to pass upon the reasonableness of such a charge in the first instance. The deceased trustee had the responsibility of handling and conserving for three years an estate of about $9,600 in the course of which he collected and reinvested two mortgages forming part of the trust investments. We are of opinion that for this labor, care and responsibility he was entitled to some *93 compensation payable out of the principal, in addition to the commissions on the income which accrued in connection with his "services rendered by way of collecting and paying over the income." Just what that compensation ought to be, should, in the first instance, be fixed by the court below, not by us. It may be the amount claimed in the account filed by the executrix of the deceased trustee, or less than that. We express no opinion on the subject at this time.
The assignments of error are sustained. The decree is reversed and the record is remitted to the court below for further proceedings in accordance with this opinion. Costs to be paid out of the corpus of the estate.