Summary
In Walton v. Avery, 22 N.C. 411, this question is discussed, and it is held: "The subject of commissions, as incidental to the settlement of administrators, is within the cognizance of every court exercising equitable jurisdiction in a suit for the purpose of settling those accounts."
Summary of this case from Shepard v. ParkerOpinion
(December Term, 1839.)
1. In a trial at law, on the plea of fully administered, the allowance of commissions to the executor or administrator by the county court, under the act of 1799, 1 Rev. Stat., ch. 46, sec. 29, is definitive and conclusive. But in a suit in equity for the settlement of the testator or intestate's estate, the subject of commissions is incidental to the settlement of the executor's or administrator's accounts; and the court will consequently take cognizance of it, and correct an improper allowance of commissions made by the county court.
2. In a suit in equity for the settlement of an executor's or administrator's accounts, though the ex parte order for the allowance of commissions made in the county court is not conclusive, it is entitled to much respect, and it is not proper to vary it unless it be founded on a mistake of the law, or the rate be clearly excessive.
3. Slaves inventoried by an administrator, and delivered over to the next of kin, are not "receipts" within the meaning of the act of 1799, so as to entitle the administrator to a commission on their value, even though they may have been recovered by him for his intestate's estate in a suit at law, though the trouble of managing them may properly be taken into consideration in estimating the commissions to be allowed on the receipts proper.
4. A set-off allowed by an administrator in reduction of a debt due the estate is not such a "receipt" whereon the act of 1790 allows a commission. The balance is the true debt in the case of a set-off, and that balance is the receipt within the statute.
5. Bonds which were in the hands of the intestate as a trustee, and which his administrator delivers over to the true owner, is not a "disbursement" on which the act of 1799 allows a commission.
6. An allowance made in the county court of 5 per cent commissions to administrators upon the receipts and disbursements of a large estate, reduced by the court of equity, in a suit brought to correct such allowance, to 2 1/2 per cent, where the administrators, under an arrangement with the guardian of the infant next of kin, paid over to him bonds, instead of collecting them and paying over the money.
7. Administrators are not to be charged with interest on money which they honestly retained under an impression that it belonged to them, the same having been allowed them as commissions by an order of the county court, especially when they interposed no delay in a suit brought in equity for the purpose of correcting the allowance.
IN January, 1832, the defendants administered on the estate of James Murphey, who died intestate, and left the plaintiffs, his infant grandchildren his next of kin. His estate was considerable, and, except (406) five, his slaves were sold, and also the perishable property, to the value of $38,658.41. There were also a number of debts due to him on bonds, notes, and accounts. From these sources, including the interest accrued on the debts to the intestate, and on the proceeds of sales, the administrators received assets to the value of $66,615,43 1/2 over and above the value of the five slaves. The administrators paid debts of the intestate to the amount of $9,869.43 3/4. The plaintiffs all had the same guardianship, and it was agreed between him and the administrators, in order to keep the funds of the children at interest and the better to secure the money due the estate, that the administrator should take bonds with good sureties for debts due the estate, and made payable to the guardian, and that the latter would receive such bonds in payment as cash. The business was accordingly conducted in that manner, and $54,699.76 1/4 thus paid to the guardian for the plaintiffs; whereof $33,884.63 1/2 was paid in October, 1833, and $16,566.65 on 1 May 1835, and the residue in 1836 and 1837. One of the five slaves not sold was in possession of another person, against whom the administrators were under the necessity to bring an action of detinue to recover the negro, who was of the value of $625. The other four were of the value of $1,590, and at those values the guardian took them and gave a receipt to the administrators.
The intestate had been the guardian of certain infants, and at his death owed them a sum of money which he had received of theirs, and also held bonds payable to him as their guardian for $237.26. The intestate had also been administrator of his only child, who had died intestate leaving the present plaintiffs his children, and the defendant's intestate owed that estate upwards of $2,000, for a balance of cash in his hands, and held bonds for the further sum of $2,936.48 1/2, payable to him as administrator. The present defendants in settling with the former wards of their intestate, and with the administrator de bonis non of the first intestate claimed and got credit for a commission of 5 per cent to the intestate. James Murphey; and also passed over (407) to the wards and to the administrator de bonis non the bonds for the said sums of $237.26 and $2,936.48 1/2 as cash. The defendants, in like manner, delivered over to a person bonds to the amount of $113.58, which their intestate held in trust for that person.
In settling and collecting the debts owing to their intestate, the same were reduced by $3,437.89 1/2 for and by way of set-off, claimed by the debtors, and allowed judicially or by the defendants themselves.
In January, 1836, upon the application of the administrator, the county court which granted the administration passed an order "allowing them 5 per cent commission on the receipts and disbursements of said estate," and also appointed commissioners to audit and settle the administration account. In October, 1836, a report was made, upon which a balance appeared to be remaining in the hands of the administrators of $1,348.79 after giving them credit for $4,294.86 for their commissions. That sum was made by computing the commissions at the rate of 5 per cent on the receipts and disbursement reckoning as receipts the sums of $3,437.89 1/2 and $2,215, being the amounts of the set-offs and values of the slaves; and also reckoning as disbursements the said sums of $337.26, $2,936.48 1/2 and of $113.58, being the amount of the bonds delivered to the administrator de bonis non and others, as before mentioned.
Subsequently the administrators disbursed the balance of $1,348.79, reported to be in their hands, in payment of demands then impending over the estate.
In October, 1839, Mr. Walton having intermarried with one of the next of kin of James Murphey, and been appointed guardian for the others, instituted this bill in the names of himself and his wife, and his wards, for an account of the estate; but alleging therein particularly no objection to the account tendered to the county court except in respect to the charges and allowances of commissions. As so that, the bill charged that the value of the slaves specifically delivered to the guardian, and the amounts of set-off, and the bond which the intestate James held as guardian, administrator, or trustee, and (408) which the present defendants delivered over to the owners, were not properly the subjects of commissions. The bill charged, secondly, that, considering the time and trouble of the defendants while employed in the administration, and that the guardian accepted payment in bonds without putting the administrators to the trouble and delay of collecting the money, the rate of commission was excessively high and disproportionate, and that as the allowance was ex parte and while next of kin were infants, the order of the county court ought not to conclude them, but that the commission ought to be reduced to a reasonable compensation.
The defendants, without waiting for service of process, put in an answer at the same term, and therein set forth a particular and detailed account of their administration, and annexed also a copy of the account. stated by the auditors; between which two accounts there was no discrepancy, except as to transactions subsequent to the report. The accounts appeared to have been very accurately kept, and especially in respect to the interest accrued on the debts, and for interest thus arising large sums were accounted for. With the accounts thus rendered the plaintiffs were so entirely satisfied as to set the cause down for hearing on bill and answer. The defendants admitted therein the charges of the bill as to the several items on which the compensation was charged; but they insisted that the order of the county court was made upon due investigation, and, as the decision of a competent tribunal, was conclusive; that the commission was properly charged upon the value of the slaves, bonds, and set-offs, and that the administration was tedious, difficult and protracted, and the responsibility very great, and requiring sureties for a large amount, and that the commission was reasonable — especially as there was no charge for personal expenses in attending to the business of the estate, which were heavy, but that no account was kept of them.
In this state of the case it was, by the consent of counsel, submitted for decision; and PEARSON, J., before whom it was heard, at (409) Burke, on the last circuit, allowed no commission on the amounts of set-off, or on the value of the four slaves. His Honor allowed a commission of 5 per cent on the cash collected by the defendants, and on the value of the slave which was recovered at law, and on all the cash disbursements; and a commission of 2 1/2 per cent on the residue of the estate which the administrator did not collect, but paid over in bonds to the guardian. And upon the admissions of counsel, as to the probable amount of expenses for traveling, attending courts, etc., his Honor allowed therefore the sum of $400, making for all those allowances the sum of $2,851.78 1/2.
This reduction of the amount of commissions had the effect of creating a balance in the hands of the defendants of $1,409.52, with interest on which, after two years from the administration, viz., the sum of $493.33 his Honor directed the defendants also to be charged; and for the aggregate thereof, namely, $1,902.85, a decree was made in favor of the plaintiff, and the defendants appealed.
W. A. Graham for plaintiffs.
Badger and Hoke for defendants.
The argument for the defendants denies the power of the court to reexamine the question of commissions; and if the power exists, then propriety of the alterations made by the decree is denied. It is supposed that the jurisdiction of the county court is exclusive, and therefore, that the determination of the court is conclusive upon all others. This position rests upon the wording of the act as included in the Revised Statutes, ch. 46, sec. 29, which uses the words "courts of pleas and quarter sessions are authorized", etc. But that phraseology is not found in the act of 1799, which speaks of courts generally. We do not suppose that this change of language is material; but it is noticed for the purpose of showing that of the jurisdiction be in the county court, it arose originally out of the nature of the subject, and not out of an express grant to that court by statute, that might perhaps impart exclusive authority over the subject. We do not doubt that the court, in the contemplation of the Legislature, is (410) that in which the administration account is to be rendered, upon which the commission is allowed; and, therefore, that ordinarily the county court is meant. But it does not thence follow that the allowance of that court is absolutely definitive and conclusive for all purposes, however erroneous in point of law, or unjust it may be in its operation. From necessity, is indeed so in trials at law, on the plea of fully administered. Juries are incompetent to the determination of the proper rate, and cannot have before them the data for fixing a just allowance. Different juries, too, might think differently as to the time and trouble of the executor, and of the value of time and responsibility; so that as to one creditor a full administration would be found, and as to another would not, as the commission was made more or less by the jury. Hence in Hodges v. Armstrong, 14 N.C. 253, the Court said there could not be a retainer for commissions, unless they were allowed by the court; and it follows that when so allowed, the jury is bound to find accordingly. That, however, proceeds from the obvious mischief of any other rule at law, which lays on the courts the necessity of adopting this. It is far otherwise with respect to the court of equity, when called on directly to take all the accounts of the estate, which acts once for all in taking the final account and distributing the fund. That court has the best means of deliberate and thorough investigation into all matters material to settling a just allowance. It cannot be supposed that the Legislature meant the statute to be more to that court than a mandate to allow compensation, and not to render the fiat of the inferior tribunal, with inadequate means of information, imperative and conclusive as to what the decree should be. The conclusion contended for on behalf of the defendants cannot, in such a case, be supported by words of grant merely to the county court, but would require additional words of exclusion to oust the court of equity of its natural jurisdiction over matters of account, and over everything that can enter into the account. Nay, independent of that consideration, and supposing the jurisdiction to be exclusive at law, yet the court of equity, when the order is impeached (411) as being unjust, is bound to reexamine it, upon the ground that, as an ex parte proceeding, it is regarded as having been obtained by surprise as against those who are injuriously affected by it. We think, therefore, that the subject of commissions, as incidental to the settlement of administrations, is within the cognizance of every court exercising equitable jurisdiction in a suit for the purpose of settling those accounts, and that, upon a bill in the court of equity, an improper allowance by the county court may be corrected.
It becomes, then, our duty to consider of the proper subjects of commission in this case, and of is rate, and to determine on these points between his Honor and the county court. In the first place, we desire it to be distinctly understood that although we do not deem the ex parte order for commissions conclusive, yet we regard it as entitled to much respect, and that it is not fit to vary it unless it be founded on a mistake of the law or the rate be clearly excessive. The transactions of executors are often affairs of the vicinage, and the magistrates frequently possess personally the information requisite to a just determination. But at the same time it is well known that while the law intends the commission as a bare compensation for trouble, time, and responsibility, many persons look upon the office of executor as one of profit, and endeavor to render it such by the emoluments contrived for it. It is, therefore, often proper to reduce the commission, even when it is allowed in numero, or after a fixed rate on a specified sum. In the present case, however, the order is so loose in its terms as to admit of abuse, and for that reason ought to be reformed. It was made in January, 1836, and "allows 5 per cent on the receipts and disbursements of the estate." In October following, the administrators made up their accounts, under the inspection of the auditors; and therein for the first time it is seen what they call "receipts and disbursements of the estate," for the order of the court neither specifies any sum on which the commission is to be calculated nor gives the amount of it, but only declares the rate. The order was probably construed by the auditors contrary to the intention of (334) the court. But if not, we are confident that specific articles, inventoried merely by an executor and delivered to a legatee, are not "receipts" within the meaning of the act on which a commission is to be calculated. We have already so expressed our opinion in Spruill v. Cannon, ante, 400. We are not aware of its ever having been done, much less that it is usual. It may be very proper to take into consideration the trouble of managing the slaves in estimating the commission on the receipts, properly speaking. But the law provides no means of putting a value on the slaves so as to lay a foundation for a commission. We are equally clear that a set-off in reduction of a debt to the intestate does not fall within the description of "receipts". Suppose there were set-off to all the debts. Could the administrator repel the last, upon the ground that if allowed there would be no fund to pay his commission? The balance is the true debt in case of set-off; and that balance is the receipt within the statute. So the bonds, which were in the hands of the intestate as a trustee, did not belong to him; and delivering them to the true owners was not an "expenditure" for the estate of the intestate. These items amount together to $8,940.22, and thereon a commission of 5 per cent, viz., the sum of $447.01, was improperly charged under the order of the county court. In our opinion, his Honor was right in disallowing it as far as he did; and he ought to have gone further, and refused the commission of $31.25 given on the value of one of the slaves — in which particular the decree must now be corrected.
The commission on the residue of the estate, which the administrators paid over in bonds to the guardian, the decree reduces from 5 to 2 1/2 per cent, allowing on $50,818.29 the sum of $1,270.45, instead of $2,540.90. We approve of the decree in this respect, and accordingly affirm it. Regularly, there ought to have been a reference to the master to state the facts specially, and to settle the allowance; and so, if either party had requested it, or if the facts had been uncertain or complicated, it would doubtless have been directed. But in this case almost the whole subject of controversy is the question of commissions, and the charges of the bill and statements of the answer are special and (413) circumstantial as to all matters that can affect the decision. The cause is tried upon the bill and answers, so as to give the defendants the full benefit of their own statements as being entirely true. Taking the answer as our guide, we concur in the opinion of his Honor on the point under consideration, and therefore do not deem it necessary to send the case to a master. By the decree, after deducting the before mentioned sum of $31.25, the allowances of the defendants amount to $2,820.53 1/2. The burden of the administration was much lightened by the agreement of the guardian to accept the bonds instead of the money, which enabled the administrators to avoid much responsibility, and to close the business at comparatively an early day. The estate was principally paid over in less than two years, and we think the sum fixed must fully compensate for the time and trouble of these gentlemen in doing the business of the estate, while they were at the same time attending to their own. The management of the estate seems, indeed, to have been unexceptionable, and the accounts perfectly plain and true; for in no respect are they questioned, except on the point of the allowances solely. The administrators ought, therefore, to be amply compensated; and in adopting the sum mentioned, we consider that they are thus compensated.
We do not, however, approve of the charge of interest against the defendants, and especially from the period specified in the decree. The defendants have not sought any delay in this suit, not even that of having process served in the ordinary course. They answered at once, and in a full and precise manner, so that the plaintiffs set down the cause to be heard instantly upon the defendants' own statements. This shows no consciousness of error, but, on the contrary, that the defendants believed they had no money but their own. In reality, they retained by an authority apparently lawful and without fraud on their part or objection from the other side. They could not suppose they owed the plaintiffs any sum whatever, much less know what it was. Until the bill was filed, therefore, it does not seem there was any ground for charging interest; and in that respect, also, we think the decree must be corrected. With those modifications, the decree must be affirmed; but we do not think it a case for costs, either in the court below or in this (414) Court.
PER CURIAM. Affirmed.
Cited: Shepard v. Parker, 35 N.C. 105; Green v. Barbee, 84 N.C. 73; University v. Hughes, 90 N.C. 541; Weisel v. Cobb, 118 N.C. 21; Overman v. Lanier, 157 N.C. 547.
Dist.: Walton v. Erwin, 36 N.C. 139; Sellars v. Ashford, 37 N.C. 107.