273 A.D. 740 | N.Y. App. Div. | 1948
Lead Opinion
On this accounting proceeding, the Surrogate held, among other things, that the executor’s attorney had received excessive fees to the- extent of $2,707.41. Reargument was granted by this court to consider the question of whether the executor’s surcharge and the refund directed to be made by the attorney of the excess fees should be limited to the amount
Appellants contend that under the decisions of this court in Matter of Ellensohn (258 App. Div. 891) and Matter of Dempsy (259 App. Div. 1083), such refund and surcharge should be restricted to an amount sufficient to pay only the objectants. I am of the opinion, however, that under section 231-a of the Surrogate’s Court Act that contention cannot be sustained; and that the refund directed thereunder inures to the benefit of all those interested in the estate, regardless of whether or not all the parties had interposed objections. That section was not passed upon in the Ellensohn and Dempsy decisions (supra); and those cases should not be deemed controlling on the question at issue.
Assuming it to be the general rule that a surcharge is limited to the amount of damages suffered only by objecting legatees (Matter of Garvin, 256 N. Y. 518; Matter of Roche, 259 N. Y. 458), that principle has no application where an attorney’s fees have been found to be excessive and a refund has been directed under section 231-a of the Surrogate’s Court Act. That section authorizes the Surrogate, at any time during the administration of an estate, to fix the compensation of an attorney for services rendered to the estate or its representative. It also expressly provides: “ In the event that any such attorney has already received or been paid a sum in excess of the fair value of his services as thus determined, the surrogate shall have power to direct him to refund such excess.” Obviously, the refund of 1‘ such excess ’ ’ means the entire excess, and not merely the part thereof represented by the objecting interests. It may be that the quoted provision was added to the section to overcome the decision in Matter of Rosenberg (263 N. Y. 357), in which it had been held that the Surrogate was without authority summarily to direct an attorney to refund the excessive fees. The statutory language, however, permits the Surrogate to order a refund of the entire excess. There is nothing contained therein which indicates that it was the legislative intent to restrict the refund to the “ proportionate ” excess sufficient to pay only those parties who objected. Moreover, the refunds, when recovered, become assets of the estate for administration like any others which may come into the hands of the fiduciary (Matter of Stemmler, 171 Misc. 318, 320); and, as such, they are available for distribution to all the beneficiaries.
' That section may be invoked in connection with the executor’s accounting, without the necessity of a separate petition or hearing. (Matter of Smith, 259 App. Div. 63, 66.) In the case at bar, notice was given to all the interested parties, there was substantial compliance with all the procedural requirements, and upon the filing of the objections to the amount paid for attorney’s fees, the proceeding, in effect, became one to determine the attorney’s compensation. As such, the provisions of section 231-a are applicable; and the Surrogate properly directed the refund of the entire excess of the attorney’s fee to the estate and surcharged the executor in the same amount.
Matter of Sielcken (176 Misc. 235, affd. 263 App. Div. 866, motion for leave to appeal denied 288 N. Y. 739), referred to in the dissenting opinion, is not at variance with the views expressed herein. That case holds only that a reduction in the fees of the executor’s attorney, resulting from objections filed by the attorney for one of the legatees, was not such an increase in the assets of the estate as to justify payment of the fees of the legatee’s attorney out of the general assets of the estate. It does not involve the question under consideration; and does not affect the conclusion that the entire estate benefits from the refund directed under section 231-a of the Surrogate’s Court Act.
We adhere to the decision of this court heretofore rendered; and the decree, insofar as appealed from, should be affirmed, with costs to' the successful parties who have appeared and filed briefs, payable out of the estate.
Dissenting Opinion
(dissenting). I dissent and vote to modify the decree by limiting the surcharge to the amount necessary to satisfy the shares of the objecting legatees only and to limit the attorney’s refund to the estate to the amount of the surcharge as thus determined.
The court is unanimously of the opinion that ordinarily a fiduciary’s surcharge is limited to the amount necessary to pay
We are presently concerned only with the amount of the surcharge. The history of the amendment shows that its purpose was entirely foreign to the subject under consideration. In Matter of Rosenberg (263 N. Y. 357) it was held that under section 231-a as it then read (that is, prior to the 1934 amendment), the Surrogate’s Court was without power to direct an attorney for the estate to refund excess compensation voluntarily paid to him and that the rights of the parties should be litigated in the ordinary way, that is, by action. It was to overcome that decision that section 231-a was amended by adding the above-quoted paragraph. The sole object of the amendment was to clothe the Surrogate’s Court with jurisdiction — which prior thereto it did not possess — to direct, by summary order, that an attorney refund excess compensation. (Matter of Rosenberg, 157 Misc. 490, 493.) The amendment did not have for its purpose any change in the rule with respect to the amount of the surcharge to be made. This court, on two prior occasions, has expressly so held. (Matter of Ellensohn, 258 App. Div. 891; Matter of Dempsy, 259 App. Div. 1083.) The record on appeal in the latter case reveals that the sole argument advanced in the briefs and rejected by this court was that, because of the express provisions of section 231-a, as amended in 1934, the entire excess was properly made the subject of surcharge and refund and that all the distributees, whether they did or did not file objections, were entitled to share in the surcharge. No reason presently appears why Matter of Ellensohn (supra) and Matter of Dempsy (supra) should be overruled. In fact, a re-examination of the question confirms the correctness of the determinations.
In my opinion, the conclusion of the majority may not be reconciled with the theory underlying the determination in
The fact that the refund by the attorney for the estate of his excess compensation is required to be made to the estate does not add any force to the views of the majority. The only reason for such a direction is that the overpayment originally was made from the moneys of the estate. The statutory language permits the Surrogate to direct a refund of the entire excess where all of the legatees object, but does not require him to direct a refund of the entire excess where only some of the legatees, object. That it was the legislative intent to restrict the refund to the proportionate excess necessary to pay only objecting legatees appears clearly from the fact that as to non-objecting legatees the fee is not excessive because they are deemed, by not objecting, to have assented to or ratified the payment insofar as the payment represented their share of the estate assets.
The amount of the surcharge of the executor and the amount of the refund directed to be paid by the attorney to the estate should be limited to four eighths, or one half, of the alleged overpayment to the attorney.
Sneed and Wenzel, JJ., concur with Lewis, P. J.; Johnston, J., dissents, in opinion in which Adel, J., concurs, and votes to modify the decree by limiting the surcharge to the amount necessary to satisfy the shares of the objecting legatees only and to limit the attorney’s refund to the estate to the amount of the surcharge as thus determined.
On reargument, decree of the Surrogate’s Court, Putnam County, insofar as appealed from, affirmed, with costs to the successful parties who have appeared and filed briefs, payable out of the estate.