In re the Judicial Settlement of the Accounts of Maxwell (170 A.D. 138, 1915)

Kellogg, J.:

The decree settling the accounts of Thomas F. Maxwell, as committee of the person and estate of John K. Cullin, an incompetent, now deceased, after passing upon the account as stated, provided that the “said Frederick E. Bowen is allowed the sum of $1,000 for his costs in this proceeding.” Mr. Bowen was the attorney of the petitioner, the accounting committee, but it did not appear from the account of said committee that he had paid to the said Frederick E. Bowen the sum of $1,000 for any services rendered in behalf of the estate, the court merely assuming to make the allowance “ for his costs in this proceeding.” Subsequently the learned county judge, on motion, amended the decree by striking out the words “That the said Frederick E. Bowen is allowed the sum of $1,000 for his costs in this proceeding,” and inserting in the place thereof “That the said Thomas F. Maxwell is allowed the sum of $1,000 for his counsel fees and costs in this proceeding.” The only effect of this amendment is to provide for the payment of $1,000 to the committee instead of to the attorney, and, of course, is of no practical importance to any one.

The County Court has determined that $1,000 was a just compensation for such services. It is urged that the committee should have paid the attorney and brought the amount in as a disbursement and that there is error in its allowance as a cost of the proceeding. But the incompetent having died, all power of the committee ceased under section 2344 of the Code of Civil Procedure and the committee had no power as committee in determining the amount due to the counsel and could not have paid the same from the funds of the estate. He could have paid-it from his own funds, if he had funds; but. if he had no funds of his own with which to pay his attorney that should not deprive the attorney of the right to pay for his services or the committee of the right to be reimbursed for the liability which he might be under therefor. It is not a matter of substance whether the allowance of $1,000 is under the name of costs or is under the name of disbursements made by the committee; the question is, is the amount just and is it a charge which may be brought against the estate. Clearly the reasonable compensation of the attorney for his services on the accounting is a just charge against the estate. The order shows that the allowance of $1,000 is as the costs of the proceeding and that the personal estate on hand at the accounting is $132,161.33. The record is not before us; we cannot judge as to the services actually rendered by the attorney; but the account made by the attorney was passed upon by that court and all the proceedings were before the court. It knew with reasonable certainty what the services of the attorney were in preparing the account and conducting the proceedings. It has determined that $1,000 was reasonable. The amount does not seem unreasonable, and there is no allegation that $1,000 was not fairly earned by the attorney. The appellants were present in court, were parties to the accounting, and they and their attorneys knew that the attorney for the committee was not acting gratuitously, and that the committee would be allowed his reasonable expenses for the settlement, and that payment of his counsel for his services was a necessary part of such allowance. If the amount was not stated in open court they had the right, and it was their duty if they wished to contest it, to have the matter discussed in court and the amount fixed after discussion. If it was so fixed, then they have had their day in court; if it was not- so fixed, it is as much their fault as that of the respondent or County Court. But, as we have said, the County Court knew what services had been rendered, and if neither counsel put in evidence upon that subject, it was fairly left to the County Court to determine upon the record before him. The determination was not unreasonable, and ought not to be defeated by technicalities. It is immaterial whether the allowance is to the committee as an expense which he had paid or as an expense which he must pay. We are required upon appeal to disregard technicalities and to decide according to the justness of the case. There is nothing to indicate that the order is unjust in the respect in which it is criticized If there was surprise or mistake, and the defendant should nave a further opportunity to he heard as to the value of the attorney’s services, his remedy is to ask the County Court to reopen the order and not to appeal to this court.

The order should be affirmed, with costs.

All concurred, except Woodward, J., dissenting, in opinion.

Woodward, J. (dissenting):

The decree settling the accounts of Thomas F. Maxwell, as committee of the person and estate of John K. Cullin, an incompetent, now deceased, after passing upon the account as stated, provided that the “said Frederick E. Bowen is allowed the sum of $1,000 for his costs in this proceeding.” Mr. Bowen was the attorney of the petitioner, the accounting committee, hut it did not appear from the account of said committee that he had paid to the said Frederick E. Bowen the sum of $1,000 for any services rendered in behalf of the estate, the court merely assuming to make the allowance “ for his costs in this proceeding.” Subsequently the learned county judge, on motion, amended the decree by striking out the words “That the said Frederick E. Bowen is allowed the sum of $1,000 for his costs in this proceeding ” and inserting in the place thereof “ That the said Thomas F. Maxwell is allowed the sum of $1,000 for his counsel fees and costs in this proceeding. ” The only effect of this amendment is to provide for the payment of $1,000 to the committee instead of to the attorney, and, of course, is of no practical importance to any one.

Herbert M. Cogswell, the sole next of kin, etc., of John K. Cullin, the deceased incompetent, served a notice of appeal on the 26th day of May, 1915, from the original decree, complaining of the allowance of $1,000 to Mr. Bowen as counsel fee, and while this appeal was pending the court made the amendment above detailed. Thereupon Mr. Cogswell filed a second notice of appeal from the order amending the decree, and the executors of the last will and testament of the said incompetent likewise served a notice of appeal from this amending order, but without appealing from the original decree as thus amended. For all practical purposes, therefore, Mr. Cogswell, as sole next of kin, is the only person appealing and it is suggested on the part of .the respondent that Mr. Cogswell has no right to raise the question by appeal, it being contended that the executors of the estate are the only proper persons to raise this question.

We are left entirely in the dark as to the real relations of the executors to the estate, but it appears from the decree appealed from that Mr. Cogswell, as sole next of kin, etc., appeared in the proceeding for the judicial settlement of the accounts of the committee of the incompetent, and we think it is now too late to suggest that he is not a party aggrieved by the decree appealed from, which disposes of $1,000 of the property of the incompetent. While it does not appear that Mr. Cogswell takes anything under the will of the decedent, it seems to have been assumed that he had an interest in the estate, for he appears without objection so. far as we can discover, and the liberal policy of the law, as manifested by section 1296 of the Code of Civil Procedure, would seem to indicate that he has a right, as a party to the original proceeding, to raise the question here presented.

We think there is no doubt that a person holding property in a fiduciary relation has a right to expend such sums as may be reasonably necessary in reducing the property to possession and in preserving the same, and in making a final accounting; this proposition is supported by many authorities. But we think the law is also well established that such expenditures should be made upon the judgment of the person so holding the property, in the orderly administration of the trust, subject to the approval of the court upon the judicial settlement of the account. In other words, the trustee should employ such assistance by way of counsel or otherwise as is reasonably necessary, and should include the charges for such services in his account, like any other disbursement, so that it may be subject to objection, investigation and judicial determination, rather than the mere caprice of the court. In the present instance the estate is large and the allowance may not be unjust; nothing is shown by the record what services were rendered — what were necessary to be rendered — and the rule is well established that costs and allowances are purely a matter of statutory provision, and that where there is no provision for them they cannot be awarded. (Matter of Board of Water Supply, 158 App. Div. 116, 118, and authorities there cited; Matter of School Street, Nos. 1 & 2, 162 id. 158, and authorities there cited.) Interested parties are allowed to have a hearing upon all other matters of administration by a trustee, and we can see no good reason, nor is authority cited to the contrary, why this should not prevail in the matter of allowances of counsel fees as a part of the expenses of administration. There is no doubt of the right of a trustee, who has faithfully discharged his duties, to be reimbursed out of the estate for his legitimate expenditures, but this should not depend upon the discretion of the court, but upon the judgment of the trustee, subject to the same review by the court that follows any other disbursement of the funds of the estate. I have purposely refrained from elaborate citation of authorities upon this subject, because it is one involved in great confusion, but, after an examination of the case, I am persuaded that the rule above set forth is the true one, and that it does not run counter to any determination which is controlling* here.

The order amending the decree should be reversed, and the original decree should be modified by striking out the provision for the allowance made to the attorney for the respondent, with costs to the appellants, and as so modified, affirmed.

Order and decree affirmed, with ten dollars costs and disbursements.