23 Md. App. 600 | Md. Ct. Spec. App. | 1974
delivered the opinion of the Court.
I
By motion timely filed, Ralph A. Nattans, Emanuel Hecht, Arthur Nattans, Roger Nattans, Albert Lowenthal, Jean Arthur Lowenthal, Elinor S. Multer, Aline H. Johnson, Barbara H. Cleveland, Paul W. Schatzkin, Arthur G. Schatzkin, Dorothy R. Schatzkin and Audrey N. Katz, appellees and cross-appellants, hereinafter referred to as appellees, moved to dismiss the appeal of Max Sokol and Louis Eliasberg, two of the Trustees under the Will of Arthur Nattans, deceased, appellants and cross-appellees, hereinafter referred to as appellants. Maryland Rule 1036 c. The ground for the motion was that the appeal was not allowed by law. Rule 1035 b (1). Appellants filed an answer giving reasons why the motion should be denied and the appellees filed a motion ne recipiatur to the answer which appellants answered. At the request of this Court, a memorandum of law was filed by appellees and by appellants. The motions were heard by the Court en banc. We deny the motion to dismiss the appeal and the motion ne recipiatur to the answer thereto. In determining the motion to dismiss the appeal, however, we have not considered any allegations of fact set out in the answer to the motion to dismiss which do not appear in the record submitted to us.
II
Arthur Nattans I died on 17 April 1905 leaving a Will and two Codicils thereto. The Will created a trust' of 396 shares of the 400 shares outstanding of Read’s Inc. The trust was to cease upon the death of the last survivor of the testator’s eight children, which event occurred upon the death of Arthur Nattans II on 24 September 1972.
“1 have also been advised that one or both of you may appeal Judge Ross’ decision. Although your success on appeal would financially help me, because I am entitled to 1/3 of any trustees’ commissions but 1 would be charged with the expense of only 1/7 of the commission, 1 think it*604 would be very unwise to appeal. First, I think that Judge Ross’ decision was a very fair one. Second, our chances of success on appeal are very limited because of the manner in which Judge Ross’ opinion was written. He made a finding of fact as to the fair and reasonable compensation, and as your lawyers have undoubtedly told you, it is very difficult to reverse a trial judge’s finding of fact.
As one of the three co-trustees, I therefore oppose the institution of any appeal, and I instruct the two of you not to file an appeal from Judge Ross’ Order of July 5.”4
III
The question presented for decision is simply whether, in the circumstances, the appeal as taken is allowed by law.
Appellees argue that two of three trustees may not prosecute an appeal in their fiduciary capacity without the joinder and consent of the third trustee. They point to the rule of unanimity as set forth in Restatement, Trusts 2d, § 194 (1959):
“If there are two or more trustees, the powers conferred upon them can properly be exercised only by all the trustees, unless it is otherwise provided by the terms of the trust.”6
“If there are two or more trustees, action by all of them is necessary to the exercise of the powers conferred upon them as trustees. If one of them refuses to concur in the exercise of a power, the others cannot exercise the power.”
Appellees refer to 3 Scott, The Law of Trusts, § 194 (3rd ed. 1967) and Bogert, Trusts and Trustees, § 554 (2d ed. 1960) for similar statements of the rule. They claim that the courts of Maryland have adhered to the rule of unanimity at least since Latrobe v. Tiernan, 2 Md. Ch. 474, decided in 1851 and cite Wlodarek v. Wlodarek, 167 Md. 556, 558. They assert that the rule was applied to dismiss an appeal in Donovan v. Miller, 137 Md. 555 and Kramme v. Mewshaw, 147 Md. 535. They distinguish Mathias v. Segaloff 187 Md. 690 as concerning receivers, which they believe the Court viewed as a different class from trustees.
Appellants declare that this is a case of first impression. Their research “disclosed no reported case wherein a co-trustee was barred from pursuing his right of appeal from denial of compensation because of the failure or refusal of a co-trustee to join in such appeal.” They attribute the dearth of litigation on the question “to the fact that the recognized rule requiring trustees to act unanimously applies only to matters involving the fiduciary management of the trust estate and does not apply to cases, such as the present case, involving the exercise of no such fiduciary power and in which the trustees have a personal interest.” This is the keystone of their argument. They claim that the rule of unanimity is limited to trustees exercising fiduciary powers and discretion in the management of the trust. They agree that Maryland has followed the rule of unanimity since Latrobe v. Tierman, supra, but maintain that the rule has never been applied in a reported case in this State or in
“The interest which a trustee has in the subject matter of the trust estate is of a dual nature. He has a personal interest to the extent that he is entitled to a compensation for his services in the administration of the trust, and to this extent he is an interested person aggrieved by any adverse judgment or order, within the contemplation of the rule as to appeals. He is also an aggrieved party if the decree or order imposes upon him a personal*607 liability arising from the administration of the trust estate or from the duty to account therefor (citations omitted). . . His right to take an appeal is universally recognized where his personal rights are affected by the order or judgment ...” (Emphasis supplied)
They opine: “An appeal from the denial of a commission on corpus upon the termination of a trust does not constitute the exercise of ‘powers conferred upon them as trustees’ within the scope of Sec. 194 [of Restatement of Trusts, Second], nor upon the facts and holdings of the Maryland cases that have enunciated [the rule of unanimity].”
Appellees counter by asseverating that “[a]ppellants are estopped and precluded from asserting any personal interest in the award of compensation.” They support this argument by pointing out that “[w]hen the question arose as to where the burden should fall of lawyers’ fees in connection with the efforts made to obtain a termination commission, Appellants saw only the representative character of their claim, and persuaded the lower court, over objection, to allow such fees as proper charges against the trust assets. The Appellants successfully opposed the contention that they had sought the commissions in their individual capacities, and so should pay their lawyers from their own pockets.”
Thus the issue is cleanly drawn. Appellees contend that all the trustees sought, as they must, compensation in their fiduciary capacity and, under the rule of unanimity, not less
IV
(a)
Whether the order here is considered a final order or an appealable interlocutory order, there is no statute dispositive of the question before us.
(b)
We are not concerned with the right vel non of a sole trustee or multiple trustees acting as a unit to appeal from a final judgment or an appealable interlocutory judgment affecting the trust estate and rights of beneficiaries.
We think that a trustee has the right to seek compensation to which he may be entitled by law or under the trust agreement. To that end, even though it is a matter of personal interest, appropriate action is properly brought in his fiduciary capacity because it is in that capacity that compensation is due him.
In so holding, we intend no departure from the rule of unanimity. We expressly affirm it, but we simply do not believe that it applies in the circumstances. We find no authority compelling a contrary decision. As appellants suggest, we see at least tacit authority for our view in Schloss v. Rives, supra.
It is true that grants to trustees are usually construed as
Motion to dismiss appeal denied; motion ne recipiatur to answer to motion to dismiss appeal denied; costs to be paid by appellees.
. A decree of the Circuit Court for Baltimore City construing the Will was affirmed by the Court of Appeals in Weller v. Sokol, 271 Md. 420.
. The trust was administered under the supervision of the Circuit Court for Baltimore City, docket 53A (1913), folio 169 et seq. See Ryan v. Herbert, 186 Md. 453.
. On 3 July 1973 Forrest F. Bramble, Jr., Esq. and Delverne A. Dressel, Esq. filed a petition for the passage of an order authorizing the trustees
. On 16 August 1974 appellees and Ruth L. Creamer filed an order for cross-appeal to this Court from that portion of the order of-5 July. 1974 authorizing the trustees to pay out of the income of the trust estate $8,686.32 to counsel for Sokol and Eliasberg for services “related to that portion of the Petition for Compensation which sought allowance of a termination commission from the corpus of the trust.” See Rule 1012 b, effective 1 July 1974. The cross-appeal is not involved in the matter now being considered by us.
. Appellants in their memorandum present the question thus: “Can the rights of independent Co-Trustees to appeal from a denial of their claim for a termination commission on corpus be defeated by the refusal of a Co-Trustee, who is also a beneficiary of the trust, to join in the appeal?”
. Sokol, Eliasberg and Solomon are successor trustees. The Will named three trustees to hold and manage the trust estate consisting of the Read’s Inc. stock during the existence of the trust. They were the testator’s son-in-law, Samuel L. Bachrach, his friend, W. Burns Trundle, and his wife, Jennie Nattans. Their duties as to payment of taxes, expenses and income, and with respect to certain other matters, were set out but powers which they could exercise were not specifically designated. The Will, however.
. Stanton v. Preis, 291 P. 2d 118 (Cal. App. 1955); In re Estate of Cooper v. Security Pacific National Bank, 11 Cal.App.3d 1114, 90 Cal. Rptr. 283 (1970); Tree v. Continental Illinois National Bank and Trust Company of Chicago, 346 Ill. App. 509, 105 N.E.2d 324 (1952); Commercial National Bank v. Hayter, 473 S.W.2d 561 (Tex. 1971); In re Luscombe’s Will, 85 N. W. 341 (Wis. 1901).
. As we have indicated, the propriety of this is the subject of the cross-appeal and is not now before us.
. It may be that before 1 January 1974, effective date of Acts 1973, 1st Sp. Sess., ch. 2, § 2, which repealed Code, Art. 5, an appeal such as the one here brought was authorized, with restriction, by Art. 5, § 8: “Any receiver, trustee, or other fiduciary appointed by or acting under the jurisdiction of a court of equity may appeal to the Court of Appeals from any final decree by which any preference or priority between creditors or other persons interested in the estate is determined, but no such appeal shall be entered without the consent and approval of the court having jurisdiction over the estate.” No comparable provisions appear in the Courts Article. The Revisor’s Note to Courts Art. § 12-301 explains: “The portion of § 8, permitting an appeal under its provisions only when the court consents, has been eliminated. It seems anomolous to permit an appeal only with the permission of the very court whose decision is being appealed.” See Mackenzie v. Gerke, 118 Md. 326, 334-335.
. Courts Art. § 12-101 (f) defining “Final judgment” as “a judgment, decree, sentence, order, determination, decision or other action by a court, including an orphans’ court, from which an appeal, application for leave to appeal, or petition for certiorari may be taken”, does not attempt to specify what is an appealable final order, leaving that to case law.
. See, for example, MacNabb v. Sheridan, 181 Md. 245.
. Whether counsel fees incurred in pursuing such action are properly chargeable to the trust is not now before us, and we expressly do not decide that question in this opinion. See note 4, supra.
. Killen v. Houser, 239 Md. 79, and 251 Md. 70, are not factually apposite. We' think it clear that one trustee may bring an action against a co-trustee for violating his trust.
. Crowe v. Houseworth, 19 Md. App. 688, 691-693 reversed on other grounds, 272 Md. 481, 483.