Opinion
01-22-1895
WILKINSON et al. v. ABBOTT et al.
James E. Howell, for complainant. R. Wayne Parker, for defendants.
Bill by George Wilkinson and others, executors, against Clarissa M. Abbott and others, for the allowance of a compensation, in addition to that already allowed by statute, to an executor employed by his co-executors for special services in behalf of the estate. Bill dismissed.
James E. Howell, for complainant.
R. Wayne Parker, for defendants.
GREEN, V. C. John P. Wakeman. late of Newark, in the county of Essex, departed this life February 5, 1891, having first made, published, and declared his last will and testament, under date of July 23, 1890, with a codicil thereto under date of February 18, 1891. By the will he nominated and appointed George Wilkinson, Harrison Van Duyne, and Walter W. Salter executors, clothing them with the following powers, viz.: "And do hereby authorize them, or the survivor of them, to sell, convey, mortgage, or otherwise dispose of any real estate, whereof I may die seised, when in their judgment, such sale, conveyance, mortgage, or other disposition of such real estate would be for the best interest of my estate. And do hereby give my said executors as ample power and authority in the premises as I could have, if I were living." The above punctuation is that of the copy of the will annexed to the bill. By the original will, he gave the net income of all his estate to his wife, Maria Wakeman, during her life, authorizing her to dispose by will of $50,000 of his estate, the same to be in lieu of dower. The balance of his estate he gave to residuary legatees. By the second clause of the codicil, he modified the bequests to his wife as follows, viz.: "That, instead of her receiving all the net income of my estate, she shall be paid by my executors, during her natural life, all the net income of my estate, up to, and not exceeding, the sum of $5,000 per year. If the net income of my estate at any time exceeds $5,000 per year, the surplus over and above that sum shall be added to the principal of my estate." He also gave her all his household goods, horses, carriages, etc., absolutely, and the use of his house, No. 320 Belleville avenue, Newark, free of rent, as long as she should desire, and directed that his executors should not sell the same during his wife's lifetime, unless she consented thereto in writing. The provisions of the will and codicil were declared to be in lieu of dower, and the amount which his wife was authorized to dispose of by will was reduced from $50,000 to $30,000. He then, by the sixth clause, bequeathed a number of pecuniary legacies, amounting to $13,000, and, for the purpose of making the residuary clause of his will more clear, directed that the rest and residue of his estate should be equally divided, at and after the decease of his wife, between 19 persons, whom he named, with the proviso that, if any of them should die before his wife, his or her share should be divided among the others, so that only those of the persons named who were living at his wife's death should share in the residue of his estate. All the executors proved the will, and entered on the discharge of their duties. He left real estate, improved and unimproved, worth between $400,000 and $500,000, and personal property which was inventoried at $18,911.48. At the end of the first year the executors settled their accounts in the orphans' court in which they charged themselves with the personal estate, and also the income of the estate, including the rents received from the real estate, and were allowed by the orphans' court, as commission, under the statute, the sum of $1,678.12. There remained in their hands at the date of the settlement the sum of $14,834.63, on which they claim they are entitled to be allowed a further sum, under the statute of 1882 (Supp. Revision, p. 779, § 16).
The improved real estate consists of 66 different buildings, occupied by over 80 tenants. In round numbers, the rental income is about $18,000 per annum, and the expenses a little over $8,000, for taxes, insurance, repairs, and interest on mortgages. With the exception of a few houses which seem tohave been in good repair, the others, according to the evidence, were in a dilapidated and ruinous condition. Two houses had been commenced, and not completed. According to Mr. Salter's testimony, the others were so much out of repair that it required the continuous attention of some person to keep them habitable, so as to bring any considerable income to the estate. This being the case, the care of the real estate, including its repair, collection of rents, etc., was devolved by the other executors on Mr. Salter, who had, prior to Mr. Wakeman's death, attended to that business for him. An office in one of the buildings of the estate was used by him, and a clerk was also employed, and paid by the executors, to keep the accounts. Mr. Salter claims that his whole time has been occupied in the discharge of these services for the estate. This bill was filed by the executors for the purpose of having their action confirmed, and of having an allowance made by this court to Mr. Salter for his services. The second prayer is "that your orators, as executors of the will of John P. Wakeman, may be directed and allowed to designate the said Walter W. Salter to care for the said estate, by collecting the rents, and attending to the payment of the taxes, insurance, and repairs, and other expenses incident to the ownership of the said real estate, and that your orators may be allowed to compensate him for his past services, and for such services as he shall render in the future, in the capacity aforesaid, and that this court will fix the rate of such compensation, and direct your orators in relation thereto"; and, third, for other and further relief.
Under the original will, it may be doubtful if the executors were charged with any duty with respect of the income of the real estate. The fee, subject to the power of sale, was vested in the residuary legatees, and the whole net income was bequeathed to the widow. By the codicil, however, the executors are charged with the duty of collecting the income, and after paying the charges upon it, and so much of $5,000 as the widow desired, to appropriate the balance to the principal of the estate. This created an active trust in the executors, as to the rents of the real estate in question, and that trust devolved on them "the duty of keeping the property in proper tenantable condition." Jacobus v. Munn, 37 N. J. Eq. 48. It may be true that the services rendered by Mr. Salter, made necessary by the dilapidated condition of some of the houses, were on the extreme limit of his executorial duty, and that the executors might have been justified in employing some competent person to have performed these very services, and to have paid him a reasonable compensation, for which they would be allowed; but the question is, can the executors devolve that duty on one of their own number, and then have him paid as another person employed would be? The 109th section of the orphans' court act provides that "the allowance of commissions to executors, administrators, guardians or trustees, shall be made with reference to their actual pains, trouble and risk in settling such estate, rather than in respect to the quantum of estate"; and section 110, that "on the settlement of the accounts of executors, administrators, guardians or trustees under a will, their commissions, over and above their actual expenses shall not exceed the following rates," Then follow the specified percentages. In Wolfe's Case, 34 N. J. Eq. 223, in the prerogative court, it is held that these sections are to be read together. The ordinary says: "The allowance of commissions, it will be seen, .while it is in the discretion of the court, is subject to certain positive limitations, which cannot be exceeded, and also to certain admonitory provisions, by which the legislature intended still further to circumscribe the exercise of the discretion. It is provided that the amount to be allowed shall not exceed certain rates, and also that, in the exercise of this discretion, regard is to be had to what are the true grounds of compensation, trouble, risk, and actual pains, rather than to the size of the estate." While in Van Houten v. Van Houten, 45 N. J. Eq. 796, 18 Atl. 842, it is held that this statute does not control the court of chancery, in fixing the commissions allowable to trustees appointed by the court, to execute trusts created by a will, it is said in Holcombe v. Holcombe, 13 N. J. Eq. 415, at page 419, to afford a criterion by which, at least in the judgment of the legislature, the value of these services may be estimated. If we assume, for the purposes of this suit, that this court has the power to grant compensation to one who is an executor and trustee under a will, for extraordinary services in behalf of the estate, where the orphans' court has already allowed commissions permitted by statute, is this a case wherein such jurisdiction should be exercised? With the possible exception of finishing the two uncompleted buildings, the services, while exacting, were superintending and making the houses tenantable. Some little work may have been performed by himself. As is said in Jacobus v. Munn, supra, it was the duty of the trustees to keep the property in proper tenantable condition. If two devolved the duty on one, and he, instead of employing mechanics, did the work himself, the case falls within the rule, always observed, that an executor or administrator who is a lawyer will not be allowed compensation, as attorney or counsel, for services rendered as such to the estate, and which will not permit executors to employ one of their number as a clerk, and pay him a salary. Pomeroy v. Mills, 37 N. J. Eq. 579; Vanderheyden v. Vanderheyden, 2 Paige, 287; Clinch v. Eckford, 8 Paige, 412. The principle has been frequently recognized in New Jersey. In Wolfe's Case, supra, services of an accountant weredisallowed. Counsel fees were limited to litigations, leaving out payments for services which the administrator was himself bound to render. In King v. Berry, 3 N. J. Eq. 201, traveling expenses were disallowed, but counsel fee allowed. In Dickerson v. Canfield, 11 N. J. Eq. 259, an executor directed by the will to make partition was directed by the court of chancery to make the sale, and he was only allowed master's fees on the sale. In Holcombe v. Holcombe, supra, the employment of an attorney was held unnecessary. In Parker v. Johnson, 37 N. J. Eq. 360, the employment of necessary assistants was recognized and approved. In Kingsland v. Scudder, 36 N. J. Eq. 285, counsel fees, for services which the executor should have himself rendered, were disallowed, as was also the case in Personette v. Johnson, 40 N. J. Eq. 173, 4 Atl. 778, and in Hurlbut v. Hutton, 44 N. J. Eq. 303, 15 Atl. 417. The whole trend of opinion in this state seems to be against permitting the executors to employ, for extra compensation, one of their number to perform services for the estate, whether strictly within the executorial duty, or outside of it. Counsel relies largely on the case of Lent v. Howard, 89 N. Y. 169, where the court allowed compensation to one of the executors, who had taken upon himself the management of five farms belonging to the testator, and worked them for 15 years. The court seem to rest on the fact that the executors in that case were not entitled to the possession of the testator's real estate; that the control and management thereof were apparently surrendered to Bailey, the active executor, by the consent of all the parties in interest; and that the services rendered by him were not within his executorial duties. The New York statute as to executors' commissions, so far as allowances are concerned, is very similar to ours; but they have, I believe, no section like our 109th section, to be read in connection with the allowance of percentages. There is this difference, also, in the cases; Salter's services were in keeping the property in tenantable condition, collecting the rents, etc., which has been held by our courts to be part of his duty. The services which Bailey, the executor in the New York case, rendered, were, not that he kept the buildings in repair, and collected the rents, but that he worked the farms, which the court held was not part of his duty as executor. Counsel also refers to some English cases making allowance to trustees, notwithstanding the general rule there that none should be made. This rule was a great hardship on trustees whose time was taken for the benefit of estates, and the court therefore sometimes granted what was called "indemnity" to trustees. Ringgold v. Ringgold, 1 Har. & G. 11. Such were the cases of Marshall v. Hollo way, 2 Swanst. 432; Ex parte Permor, Jac. 404; and Smith v. Langford, 2 Beav. 362. It was to do away with the injustice of the English rule that in this country provision has been made by the statute for compensation to executors and administrators. See Gibson's Case, and note, 17 Am. Dec. 257-266. I do not think this court should,—in view of the rule which has obtained, disapproving of the employment of an ex ecutor by his coexecutors, for a compensation—by a decree, sanction the action of the executors in this case. As the bill has been filed solely for the purpose of obtaining authority for extra compensation, I will advise that the bill be dismissed.