35 Misc. 2d 493 | N.Y. Sur. Ct. | 1962
The principal objections to the account of the executor relate to payment by the executor from an award made to the executor by the Foreign Claims Settlement Commission of the United States. The decedent had been the owner for many years of shares of stock of a Yugoslav corporation which, for convenience, has been referred to as Dugaresa Corporation. The assets of the corporation were confiscated by the Yugoslav Government and the corporation was thereafter nationalized. The decedent had become a citizen of the United States prior to the confiscation of the property. Pursuant to the provisions of the International Claims Settlement Act of 1949 (U. S. Code, tit. 22, §§ 1621-1642) with respect to claims of the United States citizens within the scope of the Yugoslav Claims Agreement of 1948 (62 U. S. Stat. 2133), the decedent filed a claim with the International Claims Commission of the United States on April 4,1951. Under a governmental reorganization plan established on July 1,1954, the International Claims Commission was abolished and its functions were transferred to the newly created Foreign Claims Settlement Commission of the United States. The decedent died July 5, 1954 while his claim was still pending before the commission. The executor continued the prosecution of the claim, and an award was made by the Foreign Claims Settlement Commission. The executor received the total sum of $116,580.54. The claim had been allowed in a larger amount, but the size of the entire fund caused a reduction of the award to the amount received by the executor.
Subdivision (f) of section 4 of the International Claims Settlement Act of 1949, as amended (U. S. Code, tit. 22, § 1623, subd. f) provides as follows: “ In connection with any claim decided by the Commission pursuant to this subchapter in which an award is made, the Commission may, upon the written request of the claimant or any attorney heretofore or hereafter employed by such claimant, determine and apportion the just and reasonable attorney’s fees for services rendered with respect to such claim, but the total amount of the fees so determined in any case shall not exceed 10 per centum of the total amount paid pursuant to the award. Written evidence that the claimant and any such attorney have agreed to the amount of the attorney’s fees shall be conclusive upon the Commission: Provided, hoivever, That the total amount of the fees so agreed upon does not exceed 10 per centum of the total amount paid pursuant to the award. Any fee so determined shall be entered as a part of such award, and payment thereof shall be made by the Secreatry of the Treasury by deducting the amount thereof from the total amount paid pursuant to the award. Any agreement to the contrary shall be unlawful and void. * * * Whoever, in the United States or elsewhere, pays or offers to pay, or promises to pay, or receives on account of services rendered or to be rendered in connection with any such claim, compensation which, when added to any amount previously paid on account of such services, will exceed the amount of fees so determined by the Commission, shall be guilty of a misdemeanor (Emphasis added.)
There is no question that the attorneys who represented the decedent and the estate rendered valuable legal services in connection with the claim. There can be no doubt that the estate is obligated to pay the agreed or reasonable value of the services rendered unless such payment is prohibited by act of Congress. (Nesbit v. Frederick Snare Corp., 96 F. 2d 535, 537.) The objectant cites cases which, interpreting other Federal statutes, have ruled that fees could not be paid in excess of a stated amount and that the limitation applied to all fees, compensation and payments for services. Each opinion must be read in the light of the statute then before the court. The various statutes involved in the cited cases are different in text from the statute now under consideration. In all of them there was explicit provision in the statute that fees could not exceed a stated amount, the prohibition extended explicitly to agents, as well as attorneys, and in some of them, approval of the fee schedules by Government officials was prescribed. Fontheim v. Legerlotz (199 Misc. 308) dealt with the Trading with the Enemy Act (U. S. Code, tit. 50, App., § 20); Hines v. Lowrey (305 U. S. 85) and Matter of Shinberg (238 App. Div. 74) related to War Risk Insurance (U. S. Code, tit. 38, § 551); Greenberg v. American Sur. Co. (15 Misc 2d 422), Nesbit v. Frederick Snare Corp. (supra) and Sutherland v. New York & Baltimore Transp. Lines (43 F. Supp, 94, affd. 125 F. 2d 551) involved special acts of Congress, and Calhoun v.
Subdivision f of section 4 of the International Claims Settlement Act does not prohibit the payment of any fees that were not determined or apportioned by the commission. The statute plainly makes it permissive for the interested parties to call upon the commission for a determination. In the absence of any request for a determination, it is not necessary under the statute for the commission to make a determination of fees and a commission determination is not a prerequisite to the allowance of fees. Under generally accepted principles of law, the estate is obligated to pay for legal services rendered to the decedent at his request, and the International Claims Settlement Act does not inhibit the judicial enforcement of that obligation except, perhaps, in a case where the basic agreement contravened the express terms of the statute.
In any event, even if there were no agreement at all upon the subject, the court finds that a fee of 10%, of the net recovery is a fair and reasonable fee. The services were extensive and substantial and resulted in a financial benefit to the estate. Moreover, such a fee is in accord with the expressions of legislative policy on that subject.
It will be noted that the writing incorporating the earlier oral agreement states that the claimant undertakes 1 £ to pay any disbursements or expenses to be incurred in connection with legal or other services to be rendered by others in Central Europe. Such expenses are to be first deducted in arriving at your fees.” The executor attorney offered this exhibit in evidence and must be deemed to have assented to its terms. There is no evidence at all with respect to the deduction of any amounts from the award except disbursements of the attorneys themselves. Any other disbursements within the stated class must, of course, be deducted in figuring the total compensation of the attorneys.
The payment to Mr. Binder was made pursuant to a written agreement executed by the decedent and Mr. Binder in March, 1951. In order to protect the decedent’s interest from confiscation by the Nazis, an agreement had been made several years earlier that Mr. Binder was to hold nominal ownership of the claim and was to preserve it for the benefit of the decedent. The claim was subsequently reassigned to the decedent. Full disclosure of these activities to the United States was made by the decedent in his claim. In the original negotiations, the decedent had agreed that Mr. Binder would get some compensation for his services if the family was ever able to realize anything out of the Dugaresa claim, but no definite figure was agreed upon. However, in the agreement reduced to writing in 1951, the decedent agreed to pay Binder 5% of the net recoveries that he received in the future from any source on his interest in the Dugaresa enterprise. The term ‘1 net recoveries ’ ’ was defined in the written agreement to mean the full amount of the recoveries ‘ ‘ less the legal fees and other expenses and disbursements made in order to procure said payments.”
Mr. Binder is not a lawyer, and he did' not attempt to render any legal services. The agreement with the decedent did not call upon him to render any services except the use of his name as nominee in order to protect the claim. It is not disputed that he rendered no other services. Subdivision (f) of section 4 of the statute does not prohibit payments to agents, servants or employees in addition to legal fees. Other statutes which are
The objectant also contends that the executor is not entitled to any commission for receiving or paying the proceeds of the Dugaresa claim. There is nothing in the statute which prohibits the payment of compensation for executorial services in administering this asset. The objectant argues that the award was in fact made to the residuary legatee and was paid to the executor only for transmission to her. There is nothing in the record, that would justify such an assumption. The claim was made by the decedent. After his death it was paid to his executor. Subdivision (c) of section 7 of the act (IT. S. Code, tit. 22, § 1626, subd. c) explicitly declares that payments made pursuant to the act shall be made only to the person on behalf of whom the award is made, except that ‘1 if such person is deceased or is under a legal disability, payment shall be made to his legal representative ”. There is no basis for the argument that the claim was not payable in law and in fact to the executor. The executor was required to receive the fund, to administer it, and he will be required to distribute it. Under our statute (Surrogate’s Ct. Act, § 285) he is entitled to commissions. There is nothing in the Federal act which prohibits the award of such commissions on such property.
The petition requests the court to fix the fees of the attorney executor, the firm of which he is now a member, and of another attorney for legal services rendered to the estate. The account and the citation state the value of the services of the executor and his firm at $15,000 and the services of the independent attorney at $5,000. The objectant opposes the requested fees as excessive in amount. In addition to the normal services that would be required in an estate of this size, substantial tax questions required the attention of counsel. The court fixes the total compensation of the executor, his firm and the independent attorney in the sum of $17,500. The aggregate sum may be divided among
The following rulings are made on the objections: The first objection is sustained by consent. The second objection, like the first, is addressed to the computation of commissions on securities pledged as collateral for a loan. The parties are in agreement on the law but in disagreement as to whether the second item is merely a part of the first. The executor states that the basis for the misunderstanding will be obviated in the supplemental account which he will file. This objection will, therefore, be reserved for determination on the settlement of the decree. The third, fourth and fifth objections are overruled for the reasons stated hereinabove. The sixth objection is to commissions on the amounts paid for services in the Dugaresa matter on the ground that the attorneys could have requested the commission to fix the fees, and in that case the executor would have received the award less such fees. The fact is, however, that the entire award was received, the executor was accountable for it, and the beneficiary was able to bring up all the questions for judicial determination. The objection is overruled. The seventh objection is sustained to the extent of ruling that it was improper for the executor to pay his own personal claim prior to court approval; it is overruled insofar as it seeks repayment of the sum and a surcharge. The fixation of attorneys’ fees has disposed of the eighth objection.