Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
GENALS C. MANN ATTORNEY GENERAL
Honorable J. D. Looney County Auditor Boston, Texas
Dear Sir:
Opinion No. 0-3654 He: Under the given facts is the county judge entitled under Article 3926.R.C.S., to a commission of one-half of one percent of certain receipts in connection with the estate of W. A. Jucquan, deceased?
Your letter of September 30th, 1943, requesting the opinion of this department in the above stated question reads as follows:
"The administrative of the estate of W. J. Buchanan, deceased recently killed her annual account in the County Court of Bowie County. Exhibit 1 of this account, showing cash receipts and disbursements, conving an item, under the heaging of capital receipts, of "liquidating Dividends" in the amount of $255,659.80. This amount was received by the estate from the liquidat tion of lumber company stocks, after the filing of the inventory and appraisement, and represents an increase of this amount over and above the values of said stocks as originally shown in the inventory. These liquidating dividends were paid to the estate partly in cash and partly in other stocks.
"Counsel for the administrative contends that these liquidating dividends are a part of the corpus of the estate, and as such not subject to the commission of one-half of one per cent due the County Judge under Art. 3926, RCS, although the full amount represents an increase over the actual inventory values.
*2 Honorable J. D. Looney para 32 "In taxing the costs in this case, should onehalf of one per cent commission be taxed by the County Judge on this item of liquidating dividencs?"
In reply to our inquiry as to how this liquidation was handled, your letter of October 20, 1943, states: "The lumber company wound up business and paid off the interest of share holders partly in cash and partly by issuance of stock in a new corporation."
Article 3926, Revised Civil Statutes reads in part as follows: "The county judge shall also receive the following fees: "1. A commission of one-half of one percent upon the actual cash receipts of each executor, administrator or guardian, upon the approval of the exhibits, and the final settlement of the account of such executor, administrator, or guardian, but no more than one such commission shall be charged on any amount received by any such executor, administrator or guardian."
The answer to your question depends upon a proper construction of the term "actual cash receipts" as used in the above statute. Under the facts as we-understand them, deceased owned stock in a corporation at the time of his death. Since that time, this asset of the estate has been charged in form. In exchange for the stock, the administrator has received from the corporation cost and some stock in a new corporation. The administrator has reported this transaction in her annual account recently filed in the county court. Do these new assets, acquired in lieu of the old, constitute "actual cash receipts" within the meaning of the above statute?
The contention of counsel for the administrator as referred to in your letter 15 apparently based upon their
*3 Honorable J. D. Looney para 13 Interpretation of the language of the Court of Civil Appeals in the case of Willis vs. Harvey, 26 S. W. (2) 288, in which case writ of error was refused. In that case the court reviewed a decision of the trial judge allowing the county judge a commission under Article 3926, supra, of one-half of one percent on. oash of the testatrix on deposit in the bank at the time of her death. The executors appealed from the ruling making this allowance. We quote the following excerpt from the decision of the Court: "The set very clearly has in view the providing of compensation to the probate judge for his official control of estates, based on 'the actual oash receipts' shown by the exhibits and the final settlement of the account of the 'executor'. But properly construing the Act, it is believed that the specific case presented here on appeal may. not be regarded as within its scope and within its purpose. There is nothing in the words of the article to attach a different meaning capable of expressly embracing it. An independent executor is not included within the term 'executor,' as employed in the article, and the term'receipts' therein used does not embrace oash on deposit in the bank at the death of the testator. The word 'executor' as used is made clear and specific by considering the associated words 'administrator or guardian.' Judged from its associated words, the term 'executor' was meant to refer to the executor administering the estate of the testator under the control of the probate court. Such class of executors are required, as administrators and guardians are, to present to the probate court in an exhibit of accounting, under oath, all sums in oash derived from sales, collections, and like sources in due course of administration. The probzte judge is required to examine and approve all such exhibits of accounting when duly presented to him by such executor or administrator or guardian. The official situation of an independent executor is different, and it is otherwise provided as to his legal duties and authority. The statute of this state authorizes administration independent of the control of probate jurisdiction where the testator has 80
*4 indicated by the terms of the will that such is his desire. The independent executor so named in the will. is qualified to act, and independently of the probate court, from the time the will-appointing him is admitted to Probate. Coleman v. Produce Co. (Tex. Civ. App.) 204 S. W. 382; Pepper v. Walling (Tex. Civ. App.) 195 S. W. 892; Roy v. Whitaker, 92 Tex. 346, 48 S. W. 892, 49 S. W. 367. He need not necessarily return an inventory in order to make his executorship valid. Cooper v. Horner, 62 Tex. 356; Willis v. Ferguson, 46 Tex 496. It is thought the term 'actual cash receipts' should be held to specifically describe money received by the executor other than the cash or corpus of the estate which was on hand when the testator died, because the words used point to and imply that meaning. And too, another section of the statute, bearing upon the same subject-matter of compensation, makes it evident that such was the meaning that the Legislature intended should be put upon the term used in the presently considered article. The one section of the statute stands as the context of the other, and they may be compared and read together as a means of giving to the language used the meaning intended by the Legislature. By such sections (article 3689 and 3690) executors and administrators are allowed commission on 'all sums they may actually receive in cash' but which shall not include ' any cash which was on hand at the time of the death of the testator or intestate.' Also by article 4310 R.S., commissions are expressly denied to the guardian on "State * * * first delivered." The express shutting out of a commission to executors and administrators on 'cash * * * on hand at the * * *death of the testator or intestate' and to guardians' on the estate first delivered' is to be taken as an expression of legislative intent of the scope and purpose of article 3926. There is no difference in the meaning of the terms 'actually receive in cash' as used in article 3689, and 'actual cash receipts,' as used in article 3926, and 'estate when first delivered', as used in article 4310. The very purpose of the statute in authorizint, an executor to act independently of control of the probate court is, as stated in Wilhelm's estate v. Matthews (Tex. Civ. App.) 274 S. W. 251, 752: 'To avoid the usual costs and bother of regular administration."
*5
Yonorable J. D. Looney parr 5
Cloarly, under the above holding, the ounty juice is not entitled to a conmission on oash on hand or in the bank at the time of the death of the deceased. As a matter of fact, this was the only issue in the case, ie do not construe the laggure of the decision ee hold= in: by way of diots that oash procecds from disposition of the corrus of the estate yield no oomission to the ceunty judge. In fact, no decision of our appellate courts has onerefted any exoerition on the term"actual cash receipts" as used in said urticle 3926 other then cash or hand or in the bank on the date of the death of the owner.
The fact that county judges are entitled to a fee when assets are converted into oash in the course of adrinisterieg an eatite is slom in the deoision of the suprome Court in lylos vs. 1 : 121 m , 159 d. i. (2) 102. In thet case at the time of the death of the testator, he. oased a 13,000 eoro ranoh, considerable livestock and some ranoh at uipenent. All of asid assets were sold and the administrator paid the then ceunty judge one-half of one iereent on the proceeds of the sale. A later county judge who approved the rinal account for the estate elelued the eomission should have been paid to him and brought suit. The court is an orinion by Justice Sharp, as well as the Court of civil Apreale in its opinion, in denying relief to the new county judge, seered to take it for granted that conversion of the property of the estate into cash ercated "actual oash receipts" an which the judge merited a oomission, and in conclusion, the suprome Court said: "Yanh county judge was paid the amount due his in this case."
In the case of Goodwin ve. Downs, 280 S. N. 512, by the Comnisation of Appoala, the Adinlustrator conpl ebed certain road building contrsots on wioh the deceased hed been work at the time of hie death. The administrator took in large aume of money, paying out a large part of it for labor, waterlols, etc., as the work 1 rogressed. The Court of civil Apreale allowed the judge a commission only upon the profits over and above the expenses of the business, and stated the rule as follows:
*6 Honorable J. D. Loaney page 6
"We are rather inclined to think. . . the county Judge should be paid a commission. . . on all actual cash received by the administrator while acting as such from the sale of property owned by decedent at the time of his death, or from the collection of debts belonging to the estate at the time of his death, or on. . . rentals, etc., . . . or on actual cash remaining . . . from the prosecution of the decedent" business."
The Commission of Appeals in reversing the decision, quoted the above excompt, apparently finding fault only with the last 1985 because it was not liberal enough. It was there held that the judge was entitled to a commission on all receipts of the business regardless of the fact they were in large measure paid right out again.
Our conclusion that the commission of appeals in Goodwin vs. Downs, supra, a proved the above quoted except from the opinion of the Court of Civil Appeals as for as it went and disagreed only because it did not so far enough seems to be shared by the text writer in 14 Tex Jut. 504. In discussing the right of the Judge to commissions under article 3926, Revised Civil Statutes, the statement is there made:
"This commission is not confined to receipts arising from sales of property, collection of debts, rent of property, etc; it may be collected on receipts arising from the conduct of a business."
In discussing one phase of the case, the Commission of Appeals in the opinion last cited said:
"The county Judge has only one way to receive any compensation for his supervision of an administration. His responsibility is great. He must study the reports and approve the accounts, including receipts and disbursements. The legislators z'æed this definite method of computing his fees."
*7 Hororahle J. D. Looney - 2:0 7
Artiols 3320, 'avised Civil Ietutes provides os follons: "Executors and adnInl.etrators shall maze annual exhibits under oath, fully ahoming the... oonction of the estate; . . ."
Artilole 3321, Revised Civil Itetutes, provides: "any exhibit made by an exouator or adminis. trator. - showing the condition of said estate and an account of all moncy received and paid out on account of said estate, . . .shall be filled with the clerk, . . .after which the court shall examine said exhibit, and if correct, render judgment of approval thereon and order it to be recorded."
A careful examination of the foregoing authorities leads to the conclusion that when, in the course of an adminiotration, part of the corpus of the estate is converted into carh, the county judge is entitled to a commission on the mount of such cash. We see no reason why the same principles. should not apply to the cash received in the stock trenoation involved here, as apply in the case of each received from a sale of the corpus of the estate or onsh received from the collection of a debt which was part of the corpus of the estate. In this case, the administrator has riled her annual exhibit or account ahoming the money taken in in the stock liquidation. Under Article 3321, supra, it is the responsibility of the court to approve the account if correct. The exhibit reveals that an asset of the estate, stock in a corporation, has been converted into a different form. The approval by the jusge of the account in effect places the court's stamp of approval on the transection by which cash and stoer in a new corporation were accepted in lieu of stock in the old corporation.
Persuasive, in behalf of the similarity in principle between the realization of cast in this trennaction and the collection of a debt, is the 1 . . . 'ume of the legislature in Article 3563, Revised Civil Ite tutes, providing: "If the exouctor or administrator shall represent to the court on oath in writing that there is stoer before the ue table to collect or ocimand, the court may order that the same be sold. . ."
*8 Honorable J. D. Looney page 88
Accordingly we are o' the opinion that the county-judge is entitled to a commission of one-half of one percent on the actual cash received in the liquidation transaction, but he would not be entitled to a commission on the stock received in the new corporation.
Yours very truly
ATTORIHY GENERAL OF TEXAS
By J. Arthur Sandlin
A. Arthur Sandlin
Assistant
JASinod