Opinion
November 15, 1912.
William N. Dykman [ Francis L. Archer with him on the brief], for the appellant Brooklyn Trust Company as trustee.
Emile Dreyfus, for the appellant Richard M. Henry, special guardian.
Edward P. Lyon [ Charles A. Clark with him on the brief], for the respondent Laura E. Rowland, executrix.
Lawton B. Garside [ Albert W. Linton with him on the brief], for the respondent Florence D. Bond, as executrix.
This is an appeal from a decree of the Surrogate's Court of Suffolk county, which settled the account of Laura E. Rowland and Florence D. Bond, as executrices of the last will and testament of Adeline Garrison, deceased. There are two questions presented for decision on this appeal. The Brooklyn Trust Company, as trustee of two-thirds of the residuary estate, objected to certain charges made by the executrices for counsel fees on the probate of the will and administration of the estate. The special guardian for an infant contingent remainderman joined in this objection, and he likewise objected to a payment made by the executrices to Laura E. Rowland, as life tenant, of a cash sum equal to one-third of the residuary estate, without having taken any security from said Laura E. Rowland for the protection of those interested in the corpus of the fund bequeathed to said Laura E. Rowland for her life. The estate was a large one, aggregating in value over $1,000,000. It consisted of several pieces of real property, all of which were specifically devised by the will, and a large amount of personal property amounting to $990,000, consisting of cash on deposit in various banks, listed securities and bonds and mortgages. The amount of commissions payable to each of the executrices exceeded the sum of $10,000. When the will was offered for probate there was a contest before the Surrogate's Court in Suffolk county. A copy of the testimony taken in the probate proceedings is returned in the record on this appeal, in order that this court may have an opportunity to ascertain the extent of the services rendered by the attorney for the proponents in that proceeding. The executrices found themselves unable to agree on one lawyer or a firm of lawyers as counsel for the estate, and each engaged her own attorney. Each of these attorneys was paid the sum of $10,000 for his professional services on the probate proceedings and the administration of the estate. The Brooklyn Trust Company, as trustee, claimed that the amount so paid to each of these attorneys was very largely excessive, and asked that the executrices be surcharged with the amount so paid to whatever extent it was above the reasonable value of the services rendered. The probate proceedings were not protracted, no serious question of law arose thereon, and the contestants failed absolutely to make out even a prima facie case as to the only question they attempted to litigate. The nature of the estate was such as to require care and exactness in its administration. There were practically no debts of the decedent. Both of the executrices were women of no business training, Mrs. Rowland being about sixty-two years of age, and Mrs. Bond a little above forty. The respective attorneys submitted to the Surrogate's Court a transcript of their books showing the services rendered to their clients. It is quite apparent that a very large, if not the greater part of such services were in the nature of assistance to the executrices in the performance of purely executorial duties, for which the commissions payable were generous compensation. The attorneys, however, claimed that they made no charge for such services as were merely incidental to the discharge of executorial duties, and that the amounts paid to them for counsel fees covered only such services as were purely in the nature of necessary counsel work. Experts were produced before the surrogate on behalf of the executrices and the contestants, in regard to the reasonable value of the services rendered by the attorneys. There was a wide difference between the estimates made by the respective expert witnesses. The surrogate sustained the payment made by the executrices as being reasonable in amount for the services rendered by the attorneys. It would appear that if each of these attorneys had been paid the sum of $7,500 instead of $10,000, they should have been very liberally compensated, considering the nature of the work done. The surrogate should not have allowed any payment to either of these attorneys in excess of the sum of $7,500, and his decree should be so modified as to surcharge the executrices with the sum of $5,000 as an overpayment to both attorneys. The executrices paid out to counsel on the contest of their accounts the sum of $2,500, distributed between two counsel, each receiving $1,250, and likewise paid about $600 to the expert witnesses whom they produced to support their claim for an allowance of the disputed payments for counsel fees.
If the executrices have overpaid their respective counsel then they should not be allowed the moneys which they paid to expert witnesses on the accounting proceedings in an attempt to sustain their prior payments to counsel, and their account should be surcharged to that extent also. They have credited themselves with payment of additional counsel fees of $1,250 to each of two counsel who represented them on the contest in the accounting proceedings. The objections made by the special guardian on the accounting as to the payment over to Mrs. Rowland of the corpus of the fund in which she had a life interest justified the services of counsel for executrices, but the sum of $1,250 for each of said counsel was excessive, and should be reduced to $750 for each, and the account surcharged accordingly.
This leaves for our consideration the question of the propriety of the decision of the Surrogate's Court which overruled the objection of the special guardian as to the custody of the fund set apart for the benefit of Mrs. Rowland during her lifetime.
While there are no express words in the will which direct the payment to Mrs. Rowland of the corpus of the fund in question, it is contended that the general scheme of the instrument shows plainly that such was the intention of the testatrix. The will of the testatrix appointed the respondents, Mrs. Rowland and Mrs. Bond, as executrices; it contained a number of specific devises and some general legacies. It provided for a distribution of the residue of the estate by two separate provisions. The first of these provisions (the 9th clause of the will) was in form as follows: "I give, devise and bequeath unto said Laura E. Rowland, one-third of all the rest, residue and remainder of my estate less the sum of Ninety-two [thousand]. . . . ($92,000) Dollars (she having already in her possession the sum of Forty-six thousand ($46,000) dollars, for and during the term of her natural life, and at her death to her descendants in equal shares per stirpes; and in the event of the death of said Laura E. Rowland, without leaving issue, I give, devise and bequeath the same to the heirs of said Sarah Garrison Sneden in equal shares per stirpes." Then followed another clause in which the decedent gave to the Brooklyn Trust Company the residue of the estate under an express trust for the benefit of Leonard Bond and Florence Bond during their lives, with further remainders over to specified beneficiaries on the deaths of those having the life interest. It was the plain intent of the testatrix that her general residuary estate was to be distributed in shares which should be equal one-third shares, two of which were given under an express trust to the Brooklyn Trust Company for the benefit of the Bonds, and one of which was set apart for the benefit of Mrs. Rowland and her "descendants" or "issue." The interest of Mrs. Rowland as so created was a life interest in the income of the fund and did not carry with it any right to consume any portion of the principal. It is the general rule that under such circumstances the life tenant is not entitled to the possession of the corpus of the fund, consisting of moneys or securities, without giving adequate security for the protection of the remaindermen, unless the will expressly provides that the life tenant shall have possession or unless the scheme of the will, viewed in the light of surrounding circumstances, indicates plainly that the testator intended that the life tenant should have such possession, in which event the life tenant should be considered as a trustee for the benefit of the remaindermen and subject to supervision by a court of equity during the continuance of the life estate. ( Matter of McDougall, 141 N.Y. 21; Livingston v. Murray, 68 id. 485; Smith v. Van Ostrand, 64 id. 278.) And where the will expressly directs that the life tenant shall have possession of the fund, the executors cannot as a matter of right insist upon security before paying it over ( Matter of Ungrich, 48 App. Div. 594; affd., 166 N.Y. 618); and also where the will, without express provision as to the custody of the fund, provides that the life tenant may consume the whole or a portion thereof, then the executors may discharge themselves by paying over the fund to the life tenant, without security ( Leggett v. Stevens, 185 N.Y. 70); and thus when the scheme of the will shows that it was contemplated, though not expressly provided, that the life tenant should have possession of the fund, then a payment over by the executors may be made without taking security. ( Matter of Hamlin, 141 App. Div. 318.) Now, in the will before us there is no express provision that the life tenant shall have possession of the fund, nor was she given the right to consume any part of the principal; therefore the propriety of the payment over to her of the principal sum, without security, can be justified only on the ground that the scheme of the will discloses plainly that the testatrix so intended. On this question it is permissible to view the will in the light of the circumstances attending its making. Mrs. Rowland had lived with the testatrix for a number of years, she had already possession of the sum of $46,000 belonging to the testatrix, she was a woman over sixty years of age and she had three living children of adult age. When the testatrix provided for the Bond beneficiaries, she purposely chose the mechanism of an express trust, by which neither her executrices nor the Bond beneficiaries should in any way have the custody or control of the fund so set apart during the running of the Bond life estates. The failure of the will to make any express trust with regard to the Rowland fund is, therefore, very significant. It is apparent that the testatrix had great confidence in Mrs. Rowland, and that she anticipated the fact that in all human probability the life estate would run but for a few years, as the life beneficiary was a woman past sixty years of age, and that in all reasonable assurance the remaindermen who would take the fund ultimately would be found among the then adult children of the life tenant. It is scarcely probable that the testatrix intended that her executrix, Mrs. Bond, who was expressly excluded from the custody and control of the fund held for her own benefit, should have a right of custody and control over the fund held for the benefit of Mrs. Rowland. Considering the scheme of the will and the surrounding circumstances, it seems to us most probable and reasonably plain that the testatrix intended that Mrs. Rowland should have the possession of the fund created for her life benefit, and that she should be the implied trustee of said fund, just as the Brooklyn Trust Company was made the express trustee of the other funds. All the parties who in reasonable probability shall succeed to the remainder of the Rowland fund were before the Surrogate's Court and have acquiesced in its decree, which approved the act of the executrices in making the payment in question. The infant who now appeals may become an actual remainderman in the future, but the probability of such an event is most remote.
We are of opinion, therefore, that the decree of the surrogate should be modified by disallowing the payments for counsel fees, etc., to the extent hereinbefore indicated, and that the account of the executrices should be surcharged accordingly, and that as thus modified the decree should be affirmed, with costs and disbursements to the appellant the Brooklyn Trust Company, and to the special guardian, payable out of the estate.
JENKS, P.J., HIRSCHBERG, BURR and THOMAS, JJ., concurred.
Decree of the Surrogate's Court of Suffolk county modified in accordance with opinion, and as modified affirmed, with costs and disbursements to the appellant the Brooklyn Trust Company, and to the special guardian, payable out of the estate.