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Whitehead v. Draper

Supreme Court of New York, Appellate Division

June 11, 1909


Appeal from Special Term, New York County.

Action by Pennington Whitehead against Maria H-I. Draper and others to settle plaintiff's account as trustee. From a judgment entered upon the report of a referee, plaintiff appeals. Modified and affirmed.

[117 N.Y.S. 540] George A. Strong, for appellant.

Francis Smyth, for respondent Dehon.

William Mitchell, for respondents Bowne and remaindermen.

George S. Mittendorf, for infant defendants Codman.

Ernest M. Strong, for infant defendant Bell.

William E. Bristow, for infant defendants Bowne and Colt.



John A. Haggerty died in 1868, leaving a last will and testament by which he divided his residuary estate into six shares, to be held in trust for six nieces named, of whom Anna K. Shaw, then Haggerty, was one, with remainder to their issue. So far as material to this appeal, the will further provided that, if any of said nieces should die without issue surviving, her share was to be divided among the survivors share and share alike. The will was duly probated, and letters testamentary issued to the two executors and trustees named therein, the sole survivor of whom died in 1894. In February, 1895, one Welcome S. Jarvis was duly appointed, by order of the Supreme Court, to carry out the trust created for the benefit of Anna K. Shaw, and following his death the plaintiff, in December, 1898, was appointed for the same purpose, and he has continued to act as such to the present time. Jarvis never accounted, and in June, 1907, Anna K. Shaw having died, the plaintiff commenced this action to procure a settlement of his accounts and of the accounts of Jarvis-the latter's administrator being made a party-and for the distribution of the trust estate. The judgment appealed from settled the accounts of Jarvis and of the plaintiff, and directed the latter to distribute the corpus of the trust in accordance with the terms of the will. The judgment was entered upon the report of a referee, to whom the case had been referred, and the plaintiff alone appeals.

The questions involved relate solely to the commissions payable to plaintiff and to the estate of Jarvis. The corpus of the trust which came into the hands of Jarvis amounted to $60,100.34, of which $879.37 was in cash. The plaintiff paid to Jarvis' estate $395.50 as commissions at half the statutory rate of moneys received. The referee held that, since Jarvis was a substituted trustee, he was only entitled to commissions on the amount of cash received, and surcharged plaintiff's account with the amount of the commissions paid on securities, which he found to be $273.32. This amount should have been $373.32; but, in view of the conclusion reached, the error is immaterial. He likewise allowed to the plaintiff, for receiving the corpus of the trust, half commissions or the amount received in cash only. The question thus presented is whether Jarvis and the plaintiff were each entitled to receive half commissions on the whole corpus of the trust turned over to them as for money received.

The law does not contemplate that an estate is to be charged with full commissions by every person who shall be called in to administer a trust, nor that such persons are to perform their part of the duties without any compensation whatever; but sections 2730, 2802, and 3320 of the Code of Civil Procedure clearly contemplate that an estate shall be charged certain fees for the receiving and paying out of [117 N.Y.S. 541] moneys coming into the hands of persons administering a trust. Matter of Todd, 64 A.D. 435, 72 N.Y.Supp. 277.No claim is made that Jarvis' estate is entitled to commissions on the fund or cash which it turned over to the plaintiff as for moneys paid, and it could not well be because it has been held that a trustee is not entitled to commissions for turning over the estate to his successor. Palmer v. Dunham, 53 Hun, 637, 6 N.Y.Supp. 262; Matter of Todd, supra.As was said in Attorney General v. Continental Life Insurance Company, 32 Hun, 223, affirmed 99 N.Y. 674,2 N.E. 152:

" It is the service or duty of collecting or gathering together the fund which subjects it to a charge for commissions, and not for succeeding to its possession after it has been gathered together."

The plaintiff, however, urges that his payment of commissions to the estate was proper under chapters 150 and 151, pp. 423, 424, of the Laws of 1902. While these statutes were not passed until after Jarvis' death, it has been held that the commissions allowed to testamentary trustees are governed by the law in force at the time of the settlement of their accounts. Naylor v. Gale, 73 Hun, 53, 25 N.Y.Supp. 934; Robertson v. De Brulatour, 188 N.Y. 301, 80 N.E. 938.It is claimed by the respondents that these statutes do not apply to the present case. Whether they do or not, the court had the power and ought to have awarded some compensation for Jarvis' services, aside from what he may have realized upon payments of income. Upon the death of the original trustees the execution of the trust devolved upon the Supreme Court, and thereafter it became its duty to appoint some one to execute the trust and invest the appointee with all or any of the powers and duties of the original trustee. Laws 1882, p. 223, c. 185; section 20, c. 45, Laws 1909. The court appointed Jarvis, and he thereupon became its agent to execute the trust, so far as it then remained unexecuted. Wetmore v. Wetmore, 44 A.D. 52, 60 N.Y.Supp. 437.He died before the trust was fully executed, and then he had received neither commissions on receiving the property nor on paying it out. The court having appointed him as its agent, he should be allowed some compensation for the services, which it is conceded were faithfully and efficiently rendered. It seems to me that a fair measure of such compensation is to allow his estate commissions at half the statutory rates, not only upon the moneys which came into his hands originally, but also upon the moneys which he received in the course of his administration in the liquidation of securities which he originally received, ...

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