9 Paige Ch. 398 | New York Court of Chancery | 1842
The exceptions of the complainant all relate to the commissions allowed to the assignee as a compensation for his services, in the execution of his trust, in addition to his expenses and disbursements; the master having allowed the same rate of compensation which is fixed by law in the case of executors and administrators and guardians. There is no doubt that the rule of the English court of chancery was to refuse to allow any com
The practiced in stime of our sister states however, was different. As early as 1793, in the case of Granberry v. Granberry, (1 Wash. Virg. Rep. 250,) the court of appeals in Virginia decided that an’executor’was entitled to comensation for His trouble; and that by custom the allowance was generally fixed at fivb per cent upon his actual
The act of April, 1817, having authorized the chancellor of this state to settle an allowance or compensation for the services of executors, administrators and guardians, as a fixed and settled rule of compensation to be conformed to in all cases of the settlement of their accounts. Chancellor Kent considered the case of a committee of a lunatic as coming within the equity of the statute. He therefore allowed the committee a compensation, by way of commissions, for his services in the execution of the trust, at the rate fixed by him under the statute. (Ex parte Roberts, 3 John. Ch. Rep. 43.) I am not aware of any case in which this court has by an express decision applied the same rule of compensation to an ordinary trustee created by deed or will, where no provision was made in the instrument creating the trust to compensate the trustee, for his services. For in such instruments express provision is generally made for a fixed compensation to the trustee • or at least to allow Mm to retain a reasonable sum for his care and trouble in the execution of the trust. But in the case of Van Rensselaer v. Bayard and others, which came before this court, in April 1832, on appeal, but not reported, a commission was allowed to a trustee for certain services not within the ordinary duties of his trust. The question as to his general right to compensation did not, however, arise on that appeal; that question having been se filed by a previous order of the vice chancellor which was not appealed from. The question was afterwards discussed in this court in the case of Denniston v. Bleecker and others, which came up on appeal from the decision of a
In the present case the vice chancellor has based his decision, overruling the complainants’ exceptions, upon the somewhat equivocal language of the deed of assignment by which the trust was created. The language of that instrument is, that he may in the first place retain and reimburse himself out of the proceeds of the trust property tc all costs and charges, damages and expenses” which he may bear, pay, or sustain or be put to, by reason or means of or on account of the execution of the trust. Considering the law as settled that a trustee is not entitled to any compensation for his services unless the same is provided for in the instrument creating the trust, this language may all be properly applied to such costs, damages, charges and expenses as are allowable by the rules of the English court of chancery. But if the equity of the statute allowing a fixed compensation by way of commission to executors, &c. was applicable to the case, then the language of the assignment was broad enough to embrace the legal charges for commissions, as well as the costs, damages and expenses of the trustee in the execution of the trust confided to him.
It may, therefore, be considered the settled rule, so far as the decision of this court can settle it, that in all cases of trusts of this description, and all other express trusts of a similar nature, where nothing is said in the deed or instrument creating the trust on the subject of compensation to the trustee, for his personal services in the execution of the trust, and where there is no agreement on the subject for a different allowance, that the trustee, upon the settlement of his accounts, will be allowed the same fixed compensation for his services, by way of commissions, as are
The complainants’ counsel further contends that, if the trustee was entitled to commissions, the master erred in allowing him his half commissions on the monies with which he was charged, as trustee, in consequence of his neglect to collect the same ; and that the trustee was not entitled to commissions on the debts due to himself as one of the creditors of the assignors, nor upon the balance in his hands as reported by the master. I see no principle, however, upon which he should be excluded from receiving commissions upon funds with which he is charged in the account, although he did not in fact receive them. It is certainly a sufficient punishment of the trustee, for his negligence, to compel him to account for the monies which he might have collected, in the same manner as though the same had actually been received by him. And 1 believe it has been the uniform practice of the courts, since the pas
Several of the exceptions'taken by the defendant Esleeck to the report of the master relate to property belonging to him as trustee, under the assignment, which property has been lost either through his gross negligence, or because he sold it, on a credit, to persons who afterwards failed or were originally irresponsible. By adverting to the assignment it will be seen that it was a general conveyance of all the stock trade in and debts due to the assignors, in trust to sell the merchandize, and collect the debts due to the firm, and out of the moneys to be raised thereby as the proceeds of the assigned property, to pay the debts due from the firm in the order of priority specified in such assignment. Although the assignment provided that the property shall be sold by the trustee in such manner and at such reasonable times as should seem proper to him, the very nature of the trust precluded the idea that he should
It was moreover a breach of his duty as a faithful assignee for the benefit of creditors to retail the property in this way, upon credit. For the creditors were entitled to have the assigned property converted into money and applied to the payment of their debts without any unnecessary delay. And the assignment itself would have been clearly fraudulent if the assignees had in terms directed their assignee to dispose of the property in the manner in which it was disposed of by the trustee in this case; they being at the time of the assignment in failing circumstances and making this assignment of all their partnership effects in trust to pay their debts. It is not improbable that this mode of disposing of the property was in accordance with the wishes of the assignors. But that cannot protect the trustee when he is called upon to account, by the creditors for the payment of whose debts the assignment professes or purports to have been made. The first, second and third exceptions of the defendant were therefore properly overruled. The two notes of Schuyler Hodges and the Vermont notes taken upon the compromise of the Rogers’ debt, appear to have been lost, or left uncollected, by the gross negligence of the trustee. And there was equal negligence in relation to the piano in the
But the seventh exception, which relates to a supposed balance left uncollected on the Cobb debt, appears to have been well taken. The defendant in his examination stated that the amount of the account charged upon the books of the assignor against Nathan Cobb, of Chitteningo, was disputed by Cobb. And he settled it for the sum 6f $375,21; which amount was received and credited by the trustee in his accounts with the trust fund.' In the absence of any proof that the other $59 charged upon the books against Cobb was actually due, I think the trustee must be deemed to have acted in good faith in receiving the sum admitted by Cobb to be justly chargeable against him, in full satis faction of the claim. This $59, and the interest thereon as computed by the master, must therefore be deducted from the amount decreed to be paid.
The eighth, eleventh and thirteenth exceptions are defective in form ; but the complainants’ counsel, on the argument, consented that they should be considered in the same manner as if the defendant had in one exception objected to the disallowance of the charges of Esleeck & Spencer for the professional services charged in the debit side of his account against the trust estate. In any form in which the question can be presented, however, the exceptions are not well taken; as the services referred to were not proper charges against the trust estate. The services were for the personal benefit of the assignors only ; and the trust estate assigned for the benefit of other creditors could not be. liable therefor, unless there was. a balance
The fifteenth exception relates to the missing piano received from Meacham & Pond. I think the evidence shows that this piano was among those sent to the hardware store under the care of the assignee, and that he was bound to account for it; or at least to show what had probably become of it. It seems to be impossible that an instrument of the size and value of the one under consideration should have thus strangely disappeard without gross negligence on the part of some one. It appears to be clear that one instrument is to be accounted for to make up the requisite number. And in the absence of any explanation on the part of the trustee, I think the master was right in charging him with the value of the piano. The only way to account for its disappearance is to suppose the trustee has sold it to some one and forgotten to charge himself with the amount received therefor in his account with the trust estate. This exception to the report was therefore properly overruled.
The 18th and 22d exceptions, which relate to the computation of interest by the master, I understood to be abandoned by the counsel for the defendant upon the hearing of the appeal. The interest is charged on both sides of the account down to the date of the report; which certainly is the most favorable mode of computing interest for the trustee, who has had a considerable balance in his hands for several years, which should have been paid over to the creditors entitled to it long since.
The nineteenth and twenty-first exceptions'of the defendant relate to a compensation by way of commissions claimed by him, beyond the allowance fixed by the revised statutes in the case of executors, &c., and also to a further claim of a gross sum of |2000 for his services in executing the trust. The grounds upon which I have based my decision sustaining the disallowance of the complainant’s exceptions, preclude the allowance of any further compensation to the trustee in this case than that which is allowed
Both parties are dissatisfied with the decision of the vice chancellor in relation to costs. But taking all the circumstances of the case into consideration, I think he came to the correct conclusion. The trustee does not appear to have intentionally violated his trust; but has rather erred in permitting the assignors to manage the assigned property in their own way, for the purpose of obtaining a greater price therefor, instead of converting it at once into money, either by a public sale or by disposing of it at private sale for cash. The result, as is generally the case where the trustee suffers the trust to remain unexecuted for any considerable time, is a loss to the defendant, and attended by an expensive litigation. Where there has been such negligence, however, on the part of the trustee as this case exhibits, and where the expense in the master’s office principally arises out of such negligence, he may think himself fortunate if he escapes without being personally charged with the costs of the opposite party, instead of being left merely to bear his own expenses of the litigation.
With the slight modification of the decree in the mat