139 F. 370 | 6th Cir. | 1905
Margaret R. Poor, a resident of Cincinnati, Ohio, died August 18, 1882, leaving a will, made in March preceding, and a considerable estate, consisting of both real and personal property. John W. Herron and William H. Fisher
In view of the questions raised on this appeal, it seems necessary to state with some particularity several provisions of this will. By the first and second paragraphs the testatrix gave certain legacies to the persons therein named, and then by the third paragraph devised and bequeathed all the rest and residue of her estate, real, personal, and mixed, which she owned or had any interest in, to John W. Herron and William H. Fisher, and to the survivor of them, absolutely and in fee simple, in trust, to sell, dispose of, and convey all such as was not in ready money, and to lease, repurchase, and reconvey, and do all other things in reference to the same as to them might seem best for the purposes of the trust. And in several succeeding paragraphs she directed the trustees to invest certain several named sums in productive real estate, or stocks or bonds, for the benefit of the several persons therein named, who were to receive the income thereof, and among whom was the complainant in this bill. In reference to her, in paragraph 5, she gave the following direction:
“I do further will and direct that said trustees pay to iny niece, Nellie Preston Barr, ten thousand dollars in money, and that they invest the further sum of fifty-six thousand six hundred and sixty-seven dollars in productive real estate* bonds and mortgages, or interest-bearing stocks or bonds, at their discretion, with full power to change the said investments or any of them as they may think best; and to pay the income therefrom statedly to my said niece, Nellie Preston Barr; and X further direct that until said sum of ten thousand dollars is paid to my said niece, and said additional sum invested for her benefit, as in this article directed, my trustees pay to her at the rate of four thousand dollars per annum, from the date of my decease.”
To still other persons the testatrix directed her trustees to pay out and out certain specified sums. Then, in paragraph 14, she gave this further direction:
“I further will and direct that said trustees pay over and transfer all the rest and residue of my estate not herein devised, and all shares thereof at the termination of the estate for which it is devised, and all shares which from any cause shall fail to pass out of the possession of said trustees under any of the provisions of this will, to my six nephews and nieces, Nellie Preston Barr, William Alexander Barr, Mary E. Williamson, Margaret E. Merrill, Ada G. Huston and William B. Finley, to be equally divided between them.”
Finally, she appointed and directed as follows:
“I hereby appoint John W. Herron and William H. Fisher executors of this will, and I direct that no bond be required of them, either as such executprs or as trustees under any of the clauses of this will.”
The trustees, accepted the trust.
The property left by the testatrix, not specifically disposed of by her will, consisted in part of stocks and bonds, but in far larger part of real estate in and about the city of Cincinnati. The executors proceeded to perform the duties imposed upon them by the will.
“That the complainant and the other residuary legatees, defendants herein, under item 14 of said will, the court further finds and adjudges are entitled to a present division of -the residue of the estate, all the other provisions of the will having, as appears to the court, with the exceptions heretofore noted, prior to item 14 of said will, been carried out, and said defendants, trustees, etc., as aforesaid, are hereby ordered and directed to pay over and transfer to the said residuary legatees, complainant and defendants, their said respective one-sixth (%) shares and interest in said rest and residue of said estate,” with the exception of one share to E. Mary Williamson, which the court reserved for further disposition.
Thereupon the decree of the court proceeds as follows:
“The court further orders, adjudges, and decrees that the complainant is not entitled to so much of the relief prayed for in her bill of complaint and supplemental bill herein as seeks an order from the court directing the defendants, trustees, etc., to make a report and itemized statement and description, and a full account render of all the rest and residue of the estate left and remaining after full payment shall have been made under and pursuant to the various devises preceding item 14 of the will, and as seeks an accounting from said defendants, trustees, etc., as aforesaid, and that said relief be, and the same hereby is, denied, and all said matters relating to the ascertainment of said rest and residue, and an accounting from said defendants, trustees, etc., as aforesaid, is hereby left to the probate court of Hamilton county, Ohio, where the affairs of said estate have heretofore been- administered.
“It is further ordered, adjudged, and decreed that as soon as the rest and residue of the estate shall have been ascertained by the probate court of Hamilton county, Ohio, and an accounting had therein that the complainant, the said residuary legatee, is entitled te have paid over, divided, and distributed to her her distributive share of said rest and residue in kind as prayed for in the bill of complaint, and said defendants, Herron and Fisher, as aforesaid, are hereby ordered and directed, in making the distribution as aforesaid of the rest and residue of said estate, to divide the different kinds of property of which it may consist into as nearly six equal shares as possible, and to pay over and to transfer to the said complainant and such other residuary legatees as may desire it their respective shares in each of said kinds of property in kind,” with further direction for conveyances.
The complainant appealed from those parts of said decree which denied to her the balance of the annuities and refused an accounting in that court of “the rest and residue of said estate left in their hands.” This court on the appeal sustained the assignments of error in both particulars, and remanded the cause with directions to decree for the complainant for the balance of the annuities, and to require the trustees to account for the residue of the estate remaining in their hands subject to distribution under the provisions of paragrc.ph 14 of the will, and, when that residue should be ascertained, to distribute it to those entitled. Comstock v. Herron, 6 U. S. App. 626, 55 Fed. 803, 5 C. C. A. 266. In all other respects the decree of the court below remained undisturbed. On the reception of the mandate, the court below, on June 21, 1893, entered the particular decree therein required, and made the following order of reference:
“It is further ordered that this cause be and is hereby referred to B. R. Cowen, who is hereby appointed special master for said purpose, to state an account showing the rest and residue of the estate in the hands of said execu*375 tors and trustees after carrying out the various provisions of said will prior -to item 14. For said purpose said special master is ordered to make such account of the transactions of the said trustees and executors from the year 1882, the date of their appointment, as may be necessary, also to make and allow such credits and charges as may be proper, and as to the accounts filed and approved in the probate court of Hamilton county prior to the bill herein, if they be expected to, they shall have the same force and effect that they would have upon a final accounting in said probate court, and, as to all items to which no exceptions shall be taken, the same be allowed as filed and approved in said court.”
Upon the hearing before the master it appeared that the defendants, sometimes designating themselves as executors, and sometimes as trustees, had at several times, extending to May 24, 1890, presented their accounts to the probate court for Hamilton county, some of which had been confirmed and others had not. And it further appeared that the defendants, as executors, on August 1, 1892, while this cause was pending in the court below, and six months after the filing of their answer therein, filed their petition in the probate court for Hamilton county praying for an extra allowance of $2,500 for services rendered by them in the case which were described in the petition. It should be here observed that the services mentioned were wholly bestowed by them, as appears from the petition, in the care and management of the real estate which was in their possession as trustees. It was stated in the petition that they had received no extra allowance for such services. This was an inadvertence, no doubt. In the settlement of their accounts in October, 1885, which was subsequent to anything done by them in their character as executors, they asked for and were allowed for extra compensation $1,000. We refer to this only for the purpose of making it clearer that the extra compensation of $2,500 was allowed to them for their services as trustees. The order of the probate court allowed this $2,500 to the defendants as “trustees.” In the account there filed July 30, 1892, the defendants credited themselves with $1,242.93 for certain enumerated services relating to the trust, which seems also to have been allowed by that court, though we have been unable to find from the record that this certainly was so. The master held that this was excessive, and reduced the amount by $663.63, to which the defendants excepted. It does not appear that any notice was given of the filing of the account of July 30, 1892, or the petition of August 1, 1892, or that the complainant had any knowledge of the proceedings. The item of $2,500 was presented to the master as a charge against the estate, and was disallowed by him as one fixed by the probate court, but he considered the claim on its merits and disallowed it. The defendants excepted to this action of the master. The court, on the coming in of the report, seems to have considered the whole subject of the defendants’ charges for commissions and allowances on broader lines than the master had done, but, following it in its main features, proceeded to make an adjustment of them upon its own view of their merits, and allowed 5 per cent, on the whole sum which had passed through their hands, and, adding the $1,000 which was allowed by the probate court in 1885, awarded a decree on that basis. The result was practically about the same as
The appellants rely upon the proposition that the probate court of Hamilton county had jurisdiction to order the allowances in question in August, 1892, and that the orders were final, and not subject to the control of the Circuit Court of the United States in the suit there pending. And in support of this contention it is strenuously argued that the probate court had possession of the res, and was the proper forum in which to conduct the accounting and all other matters relating to the administration of the estate. We copy the syllabus of the brief of counsel for the appellants as follows:
“The Circuit Courts of the United States have no power, even in a case involving diverse citizenship, to take an estate out of the hands of the probate court having jurisdiction thereof, and order an accounting of the receipts and disbursements thereof.”
As applied to this case, this amounts to a denial of the authority of this court to direct the decree which we ordered when the case was here in 1893. This court expressly decided that the accounting should be had in the United States Circuit Court. The decree entered in the court below upon receiving the mandate, and which is copied in the preceding statement, was in accordance therewith. This court had jurisdiction of the cause and of the parties, and power to decree the relief which should be granted, and assuming, for the sake of argument, that it erred in ordering an accounting in the pending cause, the decree, being final, was none the less valid and binding upon the parties. It is pressed upon us that our decision was contrary to the ruling of the Supreme Court of the United States in Byers v. McAuley, 149 U. S. 608, 13 Sup. Ct. 906, 37 L. Ed. 867, and, though it is not expressly urged that we should recall our judgment, yet the effect of what is now insisted upon would be to ignore it. But there is no foundation for the contention that the former judgment of this court was in conflict with Byers v. McAuley. In that case there was no trust for administration, and the estate concerned was personal property in the possession of the probate court for the purposes of ordinary administration. It was that possession which formed the obstacle to the assumption of control over it by the federal court. The Supreme Court recognized fully the right of a citizen of another state to invoke the jurisdiction of a federal court for the purpose of obtaining the share to which
Upon the probate of the will the fee simple passed to the trustees, and the trust became effective. So, also, the rights and interests of the cestui que trust in the estate became securely and definitely fixed. The probate court had no control over it so far as the
“Any trustee of any non-resident idiot, imbecile or lunatic, appointed as aforesaid, and any trustee heretofore or hereafter created by any last will or deed, or appointed by any. competent authority, to execute any trust created by any such last will or deed shall, as often as once each two years, render an account of the execution of his said trust, to the probate court of the county in which he was appointed, or in which such last will or deed may be recorded, in the manner provided by law for the settlement of the accounts of executors and administrators; provided, this section shall not apply in any case in which the will or deed creating such trust designates any other tribunal for the settlement of the trust, or in which any other tribunal shall have acquired jurisdiction.”
But assuming that this statute is applicable to a trust estate in real property, it gives to the probate court no control over the property itself, but only the authority to biennially settle the trustees’ accounts. This authority is, however, denied in any case in which any other tribunal shall have . acquired jurisdiction. And this was the condition of things here. Upon the filing of this bill the subject-matter of the trust was drawn into the possession and control of the court. It would have been an anomalous proceeding for the Circuit Court in these circumstances to remit the parties to the probate coui't for an accounting by the trustees of matters relating solely to the execution of their trust, there being no purpose of undoing anything done by the defendants as executors, or by the probate court in the exercise of its jurisdiction as such. And equally anomalous would it be to permit the trustees, after the Circuit Court had taken jurisdiction of the bill, and they had appeared and submitted thereto and had answered and invoked the direction of the court, to go into the probate court and obtain orders which would intrude into and predetermine the matters and questions belonging to the subject of the suit. The court below did not err in concluding that it was not bound by the orders of the probate court ob
In regard to the merits of the claim for extra compensation, the master in his report said:
“Defendants claim that they are entitled to extra compensation for extraordinary services, even in excess of that already retained. But, as has been shown, the percentage of commissions is largely in excess of the statutory or customary allowances for such services.
“The total value of the money and other property passing through the hands of defendants from the Poor estate was $229,211.49 (page 48, master’s report), the great bulk of which was never changed by sale and reinvestments. The statutory fees on that amount would be $4,707.22. The total amount retained for services, including $557.16 hereinafter allowed, was $17,619.19, an amount in excess of the statutory commissions of $12,908.97, or nearly three times the statutory commissions.
“In view of these facts, the extra compensation of $2,500 made after the filing of the bill of complaint herein is disallowed.”
The court, in its opinion, said:
“The total amount of moneys passing through their hands, either as executors or trustees, is found by the master to be $229,211.49. The remainder of the property was distributed in kind.”
Apparently this was an inadvertence. As the master stated, the great bulk of the $229,211.49 was never changed by sale and rein-
In regard to the action of the master in reducing the commission of $1,242.93 by $663.63 to $579.30, which was 2 per cent, of the amount involved, it is to be observed that this claim was presented as a claim for commissions and not as a claim for extra compensation. In Ohio, while no fixed percentage is fixed by statute, the master says it is customary to allow commissions to trustees in analogy to the statute fixing the compensation of executors, assignees, etc., and this we understand to be the rule, though extra allowances may be made in the discretion of the court for cause shown. The master allowed 2 per cent, upon the amount, $28,-965.18.
We are unable to find any sufficient ground on which we would be justified in disturbing the action of the master and of the court in rendering the decree in respect to the matters complained of. The costs of the trustees in this litigation in the Circuit Court and in this court have been borne by the estate. We are of opinion that the defendants have no ground in equity to complain of the decree. It is accordingly affirmed, with costs.