5 Redf. 601 | N.Y. Sur. Ct. | 1882
This is an application for the allowance of commissions to James A. Roosevelt (whose account, as surviving trustee of decedent’s estate has recently been filed in this court), and also to the repre
By the will of the testator, these two gentlemen and John Q. Jones, or such of the three as might qualify, were named as “executors thereof and trustees under the same.” The fifth clause of the instrument gives to his executors all the testator’s personal estate not otherwise effectually disposed of, in trust, to divide the same into as many equal shares as he may have children living at his decease, to set apart such shares for investment in the names of his executors and trustees, for each of such children respectively, to receive the interest and income of such shares, and to apply the same to the use of such children respectively, during their natural life, and, upon the death of each of them, to assign and transfer his or her share to his or her issue then living, according to their stocks. The fifth clause of the testator’s will further provides that if, during his own life-time, any child shall die leaving issue, such issue shall take the share of their parent, but that, during their respective minorities, the same shall be held for their benefit by the executors, as trustees, in trust to receive the income thereof, and apply the same to the use of such issue, respectively, during their respective minorities. By the sixth clause of the will, all the real estate of the testator, not otherwise effectually disposed of, is given to his executors, “as trustees, in trust” to receive the rents, issues, and profits thereof, and apply "the same as is therein specifically directed. These directions are substantially the same as are provided in the previous clause, for the disposition of the personalty.
The testator died in April, 1875. Three children sur
In December, 1876, the executors accounted as such, for the personal estate which had come into their hands, and also as trustees for the rents, issues and profits of the realty. Upon the settlement of that account, they were awarded, as executors, full commissions, both upon the capital of the personalty, which was then ready to be set apart to the trusts for the three children, and upon the entire income of the personal estate. As trustees, they were also allowed commissions upon the income of the trusts of realty. They have as yet received no commissions whatever upon the corpus of the real estate, and none, in their capacity as trastees, upon the capital of the personal trusts. To these commissions they now assert the claim which is the subject of the present contention.
The three trusts in question were duly set up as directed by the decree, except that certain assets valued at about §100,000 could not be immediately assigned, and the executors, as they were directed to do, retained the same for future disposition.
The decree provided that, with this exception, the estate then in the hands of the executors, valued at about $1,200,000, should be divided into three parts for the three children of the testator, and should be invested ‘‘ in the names of the said executors as trustees, ’ ’ for each of such children respectively. The executors thereupon proceeded to divest themselves as executors of all the securities, apportioning the same to the respective trusts
Since the entry of that decree, the investments of each of such trust funds have been made in the name of the trustees thereof, as such trustees, and all the accounts relating to those trusts, respectively, have been kept separate and distinct from each other, and from the accounts relating to the rest of the testator’s estate. One of the executors and trustees, Mr. Theodore Roosevelt, died in February, 1878. Since that date, there have been two annual accountings by his survivor. One of these was made in March, 1878, and the other in March, 1881, In November, 1881, James A. Roosevelt made a second accounting, as surviving executor, for such portion of the estate, and for such portion only, as he had continued to hold in that capacity.
It has been strenuously insisted, by the counsel for the eestuis que trust, that the trustees have already received compensation fully commensurate with their labor and responsibility. It has, on the other hand, been as earnestly . contended by opposing counsel, that the amount hitherto allowed these gentlemen has been but a meagre reward for the performance of duties at once delicate and onerous.
Which of these conflicting views is the more reasonable and just is foreign, however, to this discussion, for reasons which will presently be made apparent.
There are several questions at issue in this proceeding: 1st. Has this court jurisdiction under the existing law to allow commissions, at all, to testamentary trustees % 2d. If it has such jurisdiction, should it ever allow to
First. Is the Surrogate now authorized to direct the payment of commissions to testamentary trustees, at the time of their accounting as such %
Prior to the year 1850, it is indisputable that this court had nothing whatever to do in respect to any of the incidents of-a trustee’s accounting. It was by chapter 272 of the laws of that year—entitled “An act to provide for the settlement of the accounts of testamentary trustees”—that these matters were first brought within the jurisdiction of the Surrogate.
The statute just referred to was in form an amendment of section 66. title 3, chapter 6, part 2, of the Revised Statutes. That section declared that “the last preceding section” (which related to the accountings of executors) “should not extend to any case where an executor was liable to account to a court of equity, by reason of any trust expressly created, by any last will or testament.”
The amendatory act of 1850, supra, provided that any testamentary trustee, or executor, or administrator with the will annexed, might ‘ ‘ from time to time render and finally settle his accounts before the Surrogate, in the manner provided by law for the final settlement of the accounts of executors and administrators.” It further
This statute of 1850 did not specify the amount of commissions grantable to testamentary trustees, nor make any express provision for the allowance by the Surrogate of any commissions whatever. Whether a grant of power to award such commissions was a necessary incident of the authority accorded by that statute is a matter which will be hereafter considered. •
There was no further legislation upon this subject until 1866, when an additional amendment was made to section 66 of the Revised Statutes, supra (see ch. 115, Laws 1866). This amendment expressly provided that, upon the accounting of testamentary trustees, the Surrogate should “allow . . . the same compensation . . . by way of commissions, as was allowed by law to executors and administrators.” That allowance had, long before, been fixed by section 58, title 3, chapter 6,. part .2 of the Revised Statutes, and, save in particulars not necessary to be here considered, has remained unchanged to this day.
Now it is claimed that each and all of the foregoing provisions, for the accounting and compensation of testamentary trustees, have been absolutely blotted out of existence by the general repealing act of May 10,1880, and that, although the present Code of Civil Procedure has in the main rebuilt the structure thus destroyed, it
This naturally suggests the inquiry whether the repeal of an act, by reference to its original title or description, operates also as a repeal of other acts by which it has been amended. The general doctrine of statutory construction applicable to this subject need not, however, be considered in the present case, as the repealing act in question establishes its own standard of interpretation. Section 2 of that act (ch. 245, Laws 1880) declares that the repeal of the portions of the Revised Statutes specified in the next preceding section (and in that section there is a distinct specification of section 66) effects also the repeal “of all of the existing laws which expressly amend the portions of the Revised Statutes so repealed, by adding to or otherwise altering the text thereof.”
It is provided also by section 3 of the repealing act in question, that, except as otherwise provided in section 2 just quoted, “the repeal of any provisions of the existing laws which have been amended by a subsequent provision of those laws not expressly repealed by this act, does not affect the subsequent provision.” Now, both the act of 1850 and that of 1866 are “ subsequent provisions” amending a law which is abrogated by the general repealing statute. Are those two. amendatory acts within the protection of section 3, or are they, on the other hand, under the ban of section 2 ? Very manifestly, the
Either those words are idle, meaningless and worse than unnecessary, or else they contain a plain implication that certain provisions of the Revised Statutes have been amended in some other fashion than “by adding to or otherwise altering the text thereof.” And such provisions, if any there be, are kept alive by section 3.
Now, in a broad and general sense, whenever a statute has been so dealt with that it has ceased to be precisely the same as it was originally, such statute may fairly be said to have been altered. But, in a more restricted and exact sense, it may, perhaps, be true that the utter extinguishment of all its original words by the substitution of others not simply modifying its meaning, but utterly reversing it, is somewhat infelicitotisly and even inaccurately described by styling it an “ alteration.” In technical language it is of course an “ amendment,” but it may be doubted whether it is such an amendment as is made “by adding to or otherwise altering the text.”
If these words restrict the scope of the general repealing statute in the way that has been suggested, the acts of 1850 and 1866 are of course unaffected by the destruction of section 66; for the slightest reflection will make it apparent that, only in the most general and comprehensive sense, can the two amendatory statutes be said to add to or otherwise alter the original text.
While this suggestion seems to me well entitled to consideration, in view of that rule of construction which requires that, if possible, some effect must be given to
Chapter 18 of that Code is devoted exclusively to the subject of “ Surrogates’ courts and proceedings therein.” It consists of seven titles, one of which (title. 6) concerns nothing except the “ provisions relating to a testamentary trustee.” These provisions are very broad and sweeping in their character. They disclose an evident purpose on the part of the legislature to give to the Surrogate precisely the same authority in reference to testamentary trustees, with which he is invested as regards executors.
It will, indeed, be found, upon critical examination, that, with scarcely an exception, every section which relates to the accounting of an executor, and the settlement of a decedent’s estate, is elsewhere repeated, mutaiis mutandis, in reference to testamentary trustees.
The sections relating to executors are included between section 2722 and section 2748. Those relating to trustees begin at section 2802 and end at section 2820. Among those provisions touching executors which are in terms made applicable to the case of trustees are two,
If the position of the objectors herein is correct, the application of this section to testamentary trustees is discovered to be idle and absurd. The following would be the interpretation of the statute: “If there be two trustees, they shall be paid double the nothing which could be claimed by one trustee, and three trustees shall receive three times as much nothing as one trustee, but three times nothing is the maximum sum which can be allowed, whatever the number of the trustees who are entitled to claim commissions.” Surely this section should not receive a construction so ridiculous, unless it is manifest that it can bear no other.
So, too, section 2811 makes applicable to testamentary trustees the provisions of section 2737, to the effect that, where a will gives specific compensation to an executor, he must formally renounce his claim to that compensation, to entitle himself to the statutory allowance. How, if the claim of these objectors is well founded, this section, so far as it relates to testamentary trustees, would read as follows : “ Where the will provides something as specific compensation to a trustee, he must formally renounce that something, in order to entitle
It is scarcely conceivable that the legislature has deemed it advisable to impose such stringent conditions upon the allowance of nothing as a reward for fiduciary service. If, upon a study of the whole plan ar.i purpose of the Code, there can fairly be given to these sections an interpretation which does not involve such absurdities, that interpretation ought surely to be accepted.
After careful consideration, I am fully persuaded that the Surrogate’s power to allow commissions to testamentary trustees is implied in the provisions of title six already referred to. I think, indeed, that, ever since the act of 1850 went into effect, the Surrogate has had such power, and that it "was not, as these objectors claim,, first accorded to him in 1866. The act which, in that year, came upon the statute book, cannot be justly regarded as any legislative intimation that, but for its enactment, the Surrogate would lack jurisdiction in the premises. Whether its object was to set up a barrier against possible grants of allowances in excess of the amount theretofore sanctioned by the supreme court, or whether its main excuse for being was its sensible provision for the apportionment of commissions upon small estates, and its reference to the subject .of commissions in general was simply incidental, and for quieting all doubts, reasonable and unreasonable, as to the Surrogate’s authority, need not be here discussed.
I have made a fruitless search through the reports, to find any determination or even any intimation of opinion as to the power of Surrogates, between the years 1850 and 1866, to award commissions to testamentary trustees.
During the interval from 1850 till 1866, that officer' could deal with voluntary proceedings only; and even as to these the trustee might, at his own option, give account of his stewardship either to the supreme court or to the Surrogate. • So far as this county is concerned, our records show that the latter tribunal has seldom selected, and that many years elapsed after it had acquired jurisdiction, before it was called upon to exercise it.
The objectors in this proceeding aire not correct, however in saying that no commissions Were in fact awarded by the Surrogate prior to 1866. Our records disclose many instances where the allowance of commissions to testamentary trustees was made a part of the decree upon their final accounting. Indeed, it would appear that such was the general practice.
It is quite true, as counsel have insisted, that this court has only such jurisdiction as the legislature has expressly conferred upon it (Code, §§ 2472, 2481). But is there not, after all, a complete warrant of law, for the exercise of the power which is here invoked % With the exception of the act of 1866 above referred to, there has never been upon the statute books of. this State, so far as I can discover, any distinct and express legislative sanction for the award, by this tribunal or any other, of commissions to testamentary trustees. And yet, ever since the decision of Chancellor Walworth, in 1842 (Meacham v. Sternes, 9 Paige, 398), the court of chancery and,
The rate of compensation was thereafter fixed by the Chancellor, and promulgated in an order issued on October 16, 1817 (3 Johns Ch., 630). This act was repealed in terms by the general repealing act which accompanied the revision of the statutes (3 R. S., 1st ed., p. 139). In its place, appears the provision which has been already referred to (§ 58, title 3, ch. 6, part 2, R. S.), which adopts the former rule in chancery, and declares that “ on the settlement of the account of executors or administrators, the Surrogate shall” make certain specified allowances.
Now this was the only law in force relating to this matter, when the case of Meacham v. Sternes (supra), was decided by the Chancellor. In the course of his opinion sustaining the Master’s award of compensation to a trustee, the Chancellor says : “The question, therefore, appears to be presented for the decision of the court, whether such a trustee is entitled to compensation for his services, within the equity of the act of April, 1817,
If I construe this decision aright, it holds that the right of testamentary trustees to an allowance of commissions rests upon the same foundation as that of executors, administrators or guardians. In other words, it substantially holds that section 58 of the Revised Statutes should be construed as if trustees were expressly included in the class of persons entitled to an allowance for fiduciary service. Such has been the practical con-' struction of that section for fifty years, and the legislature have never, meantime, sought to disturb it.
Assuming, then, upon the authority of this decision, and the settled practice of the courts, that even before 1866 trustees could lawfully claim commissions, where could such claim be enforced % The language of the statutes,
All this goes to show that the deduction of commissions, if any have been earned, has always been regarded as a necessary incident of judicial settlements of trust, accounts. Indeed, the doors of this court were thrown open to testamentary trustees for the very purpose, no doubt, of securing for them an easier and speedier mode of final accounting, than had been previously afforded.
But this manifest object of the statute of 1850, and of the corresponding provision of the present Code, is strikingly inconsistent with the relegation of such trustees to the supreme court, for the determination of their claims for compensation. I hold, therefore, that, at the moment when this court obtained the jurisdiction over the accounting of testamentary trustees which was given to it by the statute of 1850, it acquired the same authority to make allowances in the premises as had theretofore been enjoyed by the supreme court. It need scarcely be added that all that has been said touching
Second. It must next be determined whether the fact of one’s reception of commissions as executor is, ipso facto, a bar to his claim for commissions as trustee.
Section 2514 of the Code declares that the expression “ testamentary trustee,” as used in the Code, includes, among other persons, an executor designated by a will, when such executor “is acting in the execution of a trust created by the will, which is separable from his functions as executor.” This is a distinct recognition that the two functions may be united in the same person. Indeed, the current of decisions shows that the courts have repeatedly so held. Now, in the absence of any prohibition by law or by the, terms of a will itself, it would seem to be an immaterial inquiry, in passing upon the claim for commissions by a trustee,- as such, whether he had or had not exercised also the functions of an executor. So thought the court of appeal's in the case of Hurlburt v. Durant, fully reported in the New York Daily Register of March 9, 1882. It seems idle to cite other authority, in view of this very recent and explicit declaration of our highest court. The decision is utterly inconsistent with the doctrine that double commissions are under, no circumstances allowable.
Third. Next arises the inquiry whether, upon all
The case last mentioned may fairly be deemed almost as conclusive upon this point, as upon the one in support of which it has been already cited. In pronouncing the unanimous opinion of the court of appeals, Judge Banfortii says, after referring to the terms of the will: “It is manifest that the testator intended to create a trust; .... he did not leave the legacies to be paid by the executor in the course of administration, and out of the general assets, but appointed him as trustee to hold and re-invest, during the continuance of the trust, the sum of $275,000 represented by bonds and mortgages ; and while it may be conceded that, so long as these characters were co-existent, commissions might be retained as executors only, it is otherwise where there has been a separation of duties performed in the two capacities.”
After commenting upon the decision of Drake v. Price (5 N. Y., 430), and referring, with undisguised, approval, to the views expressed in Judge Paige’s dissenting opinion in that case, Judge Banforth: adds (in considering the circumstances under which a separate commission as trustee might be allowed an executor), “no doubt a separation by order or decree of a court or Surrogate, as in Ward v. Ford, and In re Carman, would be most satisfactory evidence of the real relation of the party to the fund.” Both of the cases thus approvingly mentioned arose in this county, and were decided by Surrogate Calvin (Matter of Carman, 3 Redf., 46; Ward v. Ford, 4 Id., 34). They contain an able review
Indeed, those conclusions were impliedly indorsed by the court of appeals, even before its recent decision in Hurlburt v. Durant.
In Hall v. Hall (78 N. Y., 535), that court held that certain persons who had been awarded commissions as executors were not, under all the circumstances of that particular case, entitled thereafter to commissions as trustees. There is not, however, the faintest suggestion, that the reception of commissions as executor is, of itself, a bar to any subsequent claim as a trustee. On the contrary, the only inference which can fairly be drawn from the language of Chief Judge Church is that, in the judgment of the court of appeals, double commissions may properly be awarded, where the will contemplates a separation between the functions of executor and trustee, and such separation has actually taken place. This is apparent from the fact that a distinction is drawn by the court between the case, then before it, and the two cases already referred to, as decided by Surrogate Calvin.
In those instances “where executors have been allowed to retain commissions as trustees,” says Judge Church (78 N. Y., 539), “ there has been a separation of the duties performed in the two capacities.” And thereupon the learned judge calls attention to the fact that, in the case of Carman (supra), the fund had been ordered, by decree of the Surrogate, to be set apart and kept invested for the beneficiary ; that such separation had been made; that a bank account had been opened by the trustees, as such; that the trust funds had been
The case of Ward v. Ford (supra), is also referred to by Judge Ciiurcii as being one in which there had been a final judicial settlement upon an executor’s accounting, a direction in the decree theft the persons who had been executors should retain the funds in their hands as trustees, and an actual compliance on their part with such direction. On applying, to the facts of the case at bar, the doctrine of the authorities which have been cited, it will appear that there has here been as thorough and effectual a separation of the functions of executor and trustee as could well be imagined. Such separa tion was designed by the testator and directed by the court, and such separation has been in fact accomplished. In support of this position little need be added to the statement of facts at the beginning of this opinion.
It seems to me that, in its whole scheme and spirit, the will contemplates a speedy termination of the executorial duties and establishment of the trusts. As it was the purpose of the testator to appoint the same persons both as his trustees and as his executors, it is not strange that he sometimes used the two words interchangeably, as a mere designation of persons, and without literal exactness. But on the whole, his purpose is as -clear and definite as words can make it. And that purpose has been accomplished. With unimportant exceptions, the entire corpus of the estate, applicable to the trusts, has been actually assigned to them.
Whether a separation of the two functions of exec
Bub the present case is, in my judgment, free from such perplexities. It does not essentially differ from that of Quackenboss v. Soutkwick (41 N. Y., 117), in which the court of appeals held that an executor, upon whom were enjoined by the will certain distinct and separate duties as trustee, might be removed from the latter office, and still remain in the full enjoyment of the other.
Perhaps, indeed, there is no better mode of presenting the question whether, in the case of a person named as an executor, the trust duties enjoined by the will .are a mere enlargement of executorial functions, or, on the other hand, involve the existence of a trustee as such, than to consider what would be the effect of the person’s resignation or removal.
In the present case, so completely have the trusts been divorced from the body of the estate that, within sections 2817 and 2819 of the Code, Mr. James A. Roosevelt might be removed as the trustee of Charles, or Frederick, or Marcia, for mismanagement of one of the three trusts, and not be thereby dislodged, either from his executorship, or from his control of the other trusts. So, too, he might be removed from the executorship, and his authority as trustee would remain unaffected (§ 2688).
My conclusion, therefore, is that persons named by Mr. Roosevelt as his executors are now entitled, as trustees, to such commissions as could have been lawfully
Fourth. The basis upon which commissions should becalculated is the only matter which remains to be considered.
The courts of this State have uniformly construed statutes awarding commissions for receiving and paying out” as if they granted one-half of such commissions for receiving and the other half for paying out (Matter of Kellogg, 7 Paige, 265; Matter of Roberts, 3 Johns. Ch., 43 ; Howes v. Davis, 4 Abb. Pr., 71; Ward v. Ford, 4 Redf., 43).
It may be remarked, in passing, that, upon the strength of these authorities, it would appear that the trustees, in the case at bar, may have become entitled, as snch, to one-half commissions when the trusts were first established. And, as this was before the Code went into operation, it may be claimed, with some show of reason, that their right to such commissions became vested before the act of 1860 was repealed, and was therefore in no manner affected by such repeal (Code, § 3352).
For the reasons above set forth, I find that each of the trustees is entitled to one-half commissions upon the entire capital of the personal trusts, and upon all the realty as well (Wagstaff v. Lowerre, 23 Barb., 223; Matter of De Peyster, 4 Sandf. Ch., 511; Estate of Moffat, 24 Hun, 325 ; Ward v. Ford, 4 Redf., 34; Ogden v. Murray, 39 N. Y., 203).
Decreed accordingly.