Melson v. Travis

| Ga. | Jan 11, 1910

Lumpkin, J.

(After stating the facts.) A trustee may incur attorney’s fees reasonably necessary for the protection and preservation of the trust estate. But if'he mismanages or misappropriates the trust estate, and the beneficiaries have to bring an action against him on account thereof, he is not entitled to charge the trust estate with fees for defending his own maladministration against the complaint of the beneficiaries. To permit him to do so would be to allow a trustee fees out of the estate, not for defending it, but for defending against it. In Roberts v. Thomas, 32 Ga. 31, it was said, that, “When a complainant is justifiable for suing a trustee to recover or secure a trust fund in the hands of the defendant, the solicitor’s fees of the trustee will not be allowed for resisting the bill.” See also Moses v. Moses, 50 Ga. 9, 33 (6); Lilly v. Griffin, 71 Ga. 535. The nature of the litigation out of which the employment of counsel and the incurring of fees arose, or the facts on which it was based, are not very clearly shown in the record before this court; but there is enough to indicate that it was based on charges of mismanagement and maladministration, and that those charges were not disproved or overcome, but that a settlement was made. Melson was a party .to that litigation, and there is nothing to indicate that he took the notes otherwise than with full notice of their consideration. Where a trustee is authorized to employ-counsel and incur fees for that purpose, he may employ such counsel and incur such fees as would be reasonably necessary and proper; but when it is sought to subject the trust estate to the payment of the fees, the number of the attorneys employed, the necessity of their employment, and the reasonableness of the fees agreed to be paid are proper subjects for consideration. Where a trustee employed a firm of lawyers, and also two separate attorneys, and gave notes for their fees, which were transferred to a third person, in a suit by the latter to subject the trust estate to such claims he should have shown that such employment was reasonably necessary and proper for the defence or protection of the trust estate.

On the subject of payment, while the evidence was not without conflict, it was amply sufficient to support the finding. If Melson received sufficient cotton in payment of the collateral rent notes to discharge the indebtedness against the trust estate, he could not apply it to claims of his own against the tenants, and retain the notes on which suit is now brought, as a subsisting claim against the trust estate. If the trustee, without reason or benefit to the trust estate, merely assented to such an application, it would not be binding on the beneficiaries. The court submitted to the jury the question whether there existed any good reason for allowing such an appropriation, or any proper consideration for such an assent on the part of the trustee, if there was one, and the jury apparently thought there was no assent or no sufficient reason or benefit to the trust estate.

The principles above announced cover substantially all of the case. One or two expressions in the charge may have been subject to-verbal criticism; but in view of the evidence and of the entire charge, there is nothing which requires a new trial.

Judgment affirmed on main hill of exceptionsj cross-hill dismissed.

All the Justices concur.