165 Misc. 747 | N.Y. Sur. Ct. | 1937
An application is here made to modify the decree on accounting entered on July 19, 1937. An obvious clerical error requires modification of the decree so that the total of commissions allowed will be stated at $23,090.70 instead of at $15,393.80. The original .decree correctly fixed the amount of commissions for each trustee, but computed the total as if there were only two rather than three acting trustees. The application is granted to the extent stated.
The moving party seeks separately on this application to have the court adopt a proposed revised decree submitted in behalf of the trustees containing text dealing with their acts in liquidating certain shares of stock and in retaining other shares of the same stock. By the decree entered in July the court limited its determination to a holding that in the absence of objection the transactions actually reported in the account stood approved. The language of the decree then submitted in behalf of the trustees sought to deal prospectively with the operation of the trust, sought approval prospectively of the continued handling of the shares which remained in the trust and sought prospectively to establish an exemption from liability for such retention by the trustees. The court declined to make the decree in the language requested, and there is now presented by this motion for reargument the problem whether the decree actually entered should be corrected to conform to the wishes of the trustees.
Before dealing with the text of the decree as entered and of the decree proposed in behalf of the trustees, the court deems it appropriate to comment on a situation which is not directly involved in the question whether the decree should be revised but is of vital importance in assuring a complete development of the merits of the problem. The trustees heretofore retained counsel in connection with the administration of the affairs of the trust. Counsel so retained are attorneys for the estate. In the general character of their work they are engaged in the interest of the trust as a whole. An accounting proceeding is one in rem in a certain sense since it may furnish only an opportunity for settlement of controversies arising among claimants to estate assets. The impersonal relationship which a fiduciary holds in such a situation is wholly changed when the issue becomes one between the beneficiaries, on the one hand, and the fiduciary, acting in his personal interest, on the other. When such controversies arise it may develop that the attorney for the estate is asked to advance or to defend a legal
At the time of his death in 1930 deceased held a controlling share interest in a holding corporation. The executors of deceased delivered this controlling interest to the trustees at a total valuation of about $600,000. Two of the trustees were also shareholders
It is the view of the court that the matter cannot be dealt with on so simple a basis. The testator’s investments were in a corporation in which were other interests whose combined resources or whose combined efforts for individual benefit might constitute a far greater assurance of safety of the investment of each one of the original stockholders than is now supplied by the corporate setup resulting from the acts of the trustees. The individual trustees have taken out their investment and no longer have that personal interest in the business and in the corporate affairs which may have been of controlling importance to deceased in making
The decree originally presented sought to have the surrogate state that he had “ determined that the acts of the said trustees with reference to the capital stock of Uplands Corporation were within the power, authority and discretion given them under the provisions of the last will and testament, and that they have the power and authority to retain and continue to hold in the trust estates shares of the capital stock of Uplands Corporation.” The requested decree further asked the court to adjudge ‘‘ that the Trustees of the trusts under the Will of said decedent had the power, authority and discretion to deposit for redemption and cancellation 969 shares of the capital stock of Uplands Corporation and to receive in lieu thereof underlying assets of the Corporation in proportion to the stock holdings so deposited for redemption and cancellation, and that the acts of said Trustees in connection therewith be and they hereby are approved,” and that the “ Trustees under the terms of the Will of said decedent have the authority, power and right to continue to hold as a part of the trust estates, as they now do, 6,662 shares of the capital stock of Uplands Corporation.”
The petition of the trustees in the accounting proceeding states: “ That your petitioners are desirous of rendering to said Surrogate’s Court an account of their proceedings and also of submitting to the Court for approval the facts and acts of your petitioners set out in Schedule ' L ’ of the account filed herewith relating to the liquidation of 969 shares of the stock of Uplands Corporation, a
The decree which has been entered furnishes to the trustees all the assurances to which they are presently entitled. It was entered on the basis of the facts as they stood at the closing date of the accounting period. This is in strict accord with the rule established in Matter of Roche (259 N. Y. 458). The application to modify the decree is granted only in respect of the error in mathematics.
Submit order accordingly.