Opinion
Decided January 9th, 1942.
1. Allowance of 3% to executors for handling the affairs of the estate, whose gross corpus is $4,857,510.27, affirmed.
2. Clements v. Clements, 129 N.J. Eq. 350, followed in making allowances to various counsel.
3. The right of the executors to enter into an agreement to pay the proctor for the estate a flat fee of 1%, as allegedly was done here, questioned.
On appeal from an order of the Prerogative Court advised by Vice-Ordinary Egan, who filed the following opinion:
"On the intermediate account in this estate, the executors and the various counsel representing the parties in interest applied for commissions, counsel fees, and expenditures as follows: corpus ad litem pro se ad litem ad litem ad litem
Executors' commissions on (at the rate of 5%) .................................. $201,416.60 Executors' commissions on income (at the rate of 5%) .................................. 16,300.10 ___________ Total commissions applied for ......................... $217,716.70 Counsel fees applied for: Carl M. Herbert, as proctor for the four executors in the estate's litigation ................................... 17,750.00 And for an alleged balance due under an agreement with the executors to pay him 1% of the estate's proceeds, upon which he has been paid $20,000 ....................... 24,620.00 Pitney, Hardin Skinner, of counsel, associated with Mr. Carl M. Herbert ....................................... 1,750.00 Mark A. Sullivan, of counsel, associated with Mr. Carl M. Herbert ................................................ 16,500.00 William M. McConnell, guardian of the three children of John W. Herbert, 3d, and proctor ................................... 35,000.00 James F. Murray, as proctor for John A. O'Brien, one of the executors .......................................... 12,000.00 Richard Stockton, 3d, proctor for Edward D. Dunne, guardian of infant exceptants, Edward D. Dunne, Jr., and Eric Warne Dunne, two of the beneficiaries under the will of John W. Herbert, deceased ............... 35,000.00 Also disbursements .......................................... 1,037.26 Elias A. Kanter, of counsel with Edward D. Dunne, guardian aforesaid, and associated with Richard Stockton, 3d ...................................... 40,000.00 Also disbursements .......................................... 75.00 David T. Wilentz, of counsel with Edward D. Dunne, guardian aforesaid, and associated with Richard Stockton, 3d ...................................... 25,000.00 Also disbursements .......................................... 185.00 ___________ Total commissions, fees and disbursements asked by executors and counsel .............................. $426,634.02 "All of the above named counsel have filed statements and affidavits detailing their services. This estate has been in litigation for approximately five years. The account was excepted to, a reference made to a special master who made his report in which he said, in part:"`Upon my consideration of this case I was impressed with the care and ability with which the executors conducted themselves in the difficult administration of this considerable estate. It is easy to perceive that they have been confronted with many difficult problems for solution and in dealing with them, I am convinced that they employed more than ordinary prudence. I was also agreeably impressed by the manner in which they handled themselves on this reference.'
"The executors charged themselves with gross corpus of $4,857,510.27. The corpus of the estate as of August 26th, 1934, amounted to $4,573,440.21. Additions were made through personal effects, corporate dividends, cash accruals, liquidating dividends, increases through sales and redemption of securities,c., which ran the corpus from the sum of $4,573,440.21 to the aforesaid gross amount of $4,857,310.27.
"The executors displayed good judgment in handling the affairs of the estate over a long period of time, notwithstanding exceptions to their account have been sustained. They were confronted with many difficult financial problems. They were called upon to give careful and close attention to the estate's business generally. The result of their management of the estate is reflected in the increased corpus. I feel at this time that an allowance of 3% to them will be reasonable. The estate's final account is yet to be filed and further services by the executors and trustees in the meantime will undoubtedly be required.
"Counsel herein have detailed their work and the number of hours and days spent in its performance, the results of their labors in the litigation in this court and in the Court of Errors and Appeals, the hearings before the special master, the conferences had with their clients, the time consumed in their offices preparing the account, their exceptions to it, and their defenses interposed thereto. It is not my aim to minimize either their work or the fruits of it. They have devoted hundreds of days of labor to the affairs of this estate. Their affidavits or statements of labor, and the record in this case, stand as clear indices to their services and their accomplishments. However, I feel that the requests for allowances are excessive.
"Mr. Carl M. Herbert, as proctor for the estate of John W. Herbert, asks on this intermediate accounting, a flat fee of 1%, which amounts to $44,620.06; he already has been paid $20,000 on account thereof. The percentage asked for is the result of an alleged agreement between him and the executors of the estate. He now requests the balance of $24,620.06. In addition to this requested balance, he asks for the sum of $17,750 for services rendered in connection with the litigation involving the estate. Associated with him, and also asking for counsel fees, are the counsel aforesaid, Messrs. Pitney, Hardin Skinner, who seek an allowance of $1,750, and Hon. Mark A. Sullivan, who applies for $16,500.
"Messrs. Pitney, Hardin Skinner and Hon. Mark A. Sullivan, I believe, were `brought into' the instant case, by, or at, the direction of Carl M. Herbert. The executors apparently approved his selection of associated counsel. I feel that Mr. Herbert will be amply compensated if he receives $15,000 of the balance of the $24,620.06 which he claims is due him under the aforesaid agreement; this allowance of $15,000 to be in full settlement of his claim. I question the right of the executors to enter into such an agreement to pay counsel as allegedly was done here. The services rendered by Messrs. Pitney, Hardin Skinner covered a short period of time. I feel that the sum of $1,000 will adequately compensate them. Hon. Mark A. Sullivan, to a great extent, carried the laboring oar for the estate in the many court contests. I believe an allowance to him of $15,000 is proper.
"The application by William M. McConnell for $35,000, I think, is wholly out of proportion to the services rendered by him as guardian ad litem aforesaid and as proctor pro se. He was zealous in asserting the rights of the infants he represents and thereby merits a reasonable compensation. The requested sum of $35,000 is grossly excessive. I think that an allowance to him of $5,000 is ample.
"Mr. James F. Murray, after the litigation had been under way, was selected by Mr. John A. O'Brien, one of the executors, as his counsel. The efforts of Mr. Murray, I feel, benefited the estate. Under the circumstances, I think that his services entitled him to an award of $5,000.
"Mr. Richard Stockton's request for $35,000 is clearly excessive. He, Mr. Kanter and Mr. Wilentz represent the same interests. The court work, from my point of observation, was largely, if not fully, conducted by Mr. Kanter.
"This court on May 3d 1937, filed an opinion upon exceptions filed by Mr. Kanter ( In re Herbert's Estate, 121 N.J. Eq. 564; 192 Atl. Rep. 39). Mr. Kanter took an appeal therefrom to the Court of Errors and Appeals; that court reversed this court's findings ( 125 N.J. Eq. 25; 4 Atl. Rep. 2d 286). The case, being remitted hereto, it was then re-referred to the special master. Counsel were, for a long period of time engaged before the special master in litigating the issues involved. While Mr. Stockton, Mr. Kanter and Mr. Wilentz have shown in great detail the time and effort devoted by them in the preparation and presentation of the points material to their clients' interests, and of their resulting successes, claiming that the estate benefited thereby to the extent of approximately $600,000 in eliminated commissions, taxes, c., I feel their applications for allowances are too high. The Court of Errors and Appeals in Clements v. Clements, 129 N.J. Eq. 350; 19 Atl. Rep. 2d 644, has pointed out the rule to be followed by this and other courts in making allowances. I consider the sum of $15,000 a reasonable allowance to Mr. Kanter, the sum of $5,000 to Mr. Stockton, and the sum of $5,000 to Mr. Wilentz.
"Mr. Stockton employed the services of Morris J. Hoenig, a certified public accountant, who examined the decedent's books and records, and testified before the special master. Mr. Hoenig's bill for this work amounts to $1,000. I believe his bill for that amount should be paid.
"The disbursements of counsel enumerated as aforesaid are allowed.
"The estate of the decedent will be charged with the payment of the above allowances."
Mr. Richard Stockton, 3d, for the appellants.
Mr. Carl M. Herbert, Mr. William M. McConnell and Mr. James F. Murray, for the respondents.
The order appealed from will be affirmed, for the reasons stated in the opinion filed in the Prerogative Court by Vice-Ordinary Egan.
For affirmance — THE CHIEF-JUSTICE, CASE, DONGES, HEHER, PORTER, COLIE, DEAR, WELLS, WOLFSKEIL, HAGUE, THOMPSON, JJ. 11.
For modification — PERSKIE, RAFFERTY, JJ. 2.