Boston Safe Deposit and Trust Co. v. Wall
| Citation | 254 Mass. 464 |
| Court | United States State Supreme Judicial Court of Massachusetts |
| Decision Date | 13 January 1926 |
| Parties | BOSTON SAFE DEPOSIT AND TRUST COMPANY v. JAMES H. WALL& others. |
September 23, 1925.
Present: RUGG, C.
J., CROSBY, PIERCE CARROLL, & SANDERSON, JJ.
Trust Trustee's accounts. Broker, Commission.
Upon the evidence at the hearing of an account filed by a trust company as a trustee under a will which authorized the trustee to sell real estate at such times and in such way or manner at public or private sale and for such prices as it in the exercise of its best judgment should deem wise and prudent and most for the interest of those entitled to the estate, it was held that
(1) The trustee was not required to consult the beneficiaries; (2) It could have been found that a large expenditure would be necessary before the income could be substantially increased, and that upon the facts then known it was the exercise of good judgment on the part of the trustee and for the benefit of all who were interested in the estate that a sale should be made and the larger expenditure not incurred.
Evidence at the hearing above described tended to show that a real estate broker first found a customer for the real estate in question and then came to the trustee without being sent for and asked one of its officials if the trustee would be willing to dispose of the property and told the official with whom he talked the name of his customer and the price he could get for the property; that the trustee wanted a larger price, and that the broker negotiated therefor and an agreement for sale finally was reached; that the broker made an arrangement with the trustee as to his commission; and that the broker negotiated with only the one customer, did not try to get any other and did not advertise the property. The broker was paid a commission of $5,200, while the regular rate charged by brokers in the locality where the real estate was would entitle the broker to a commission of $2,850. The judge allowed the item at $5,200. On an appeal by the beneficiaries under the trust, it was held, that
(1) On all the evidence, it could not be said that the employment by the trustee of the broker who acted in the transaction was unwarranted as a matter of law;
(2) As a matter of law, the burden, which was upon the trustee, of proving that the amount paid the broker was fair and reasonable, was not sustained;
(3) The evidence did not justify the finding that the trustee was warranted in paying the broker more than the usual commission;
(4) The item of $5,200 must be reduced to $2,850.
PETITIONS, filed in the Probate Court for the county of Worcester for the allowance of the ninth to the twenty-eighth accounts, inclusive, of the trustee under the will of James H. Wall, late of Worcester.
The petitions were heard by F.H. Chamberlain, J. Material evidence is described in the opinion. By order of the judge, there were entered decrees allowing the accounts with some modifications not now material. The respondents appealed.
W.C. Mellish, (A.W. Mitchell with him,) for the respondents. C.M. Rogerson, for the petitioner.
This is an appeal from a decree of the Probate Court for the county of Worcester allowing accounts, numbered nine to twenty-eight inclusive, of the trustee under the will of James H. Wall. The two items now in controversy relate to a sale of real estate on Main Street, Worcester, in November 1915, for $260,000, and to the payment of $5,200 to one Horowitz who acted as broker in the transaction. In regard to the former item, the contention of the contesting beneficiaries is, that the property was sold at an inopportune time; that the residuary legatees, who had previously been led to believe that a larger amount could be obtained for it, were not consulted; that the trustee did not make a reasonable effort to and did not obtain an adequate price; and that it should be charged for the loss sustained by them as a result of the sale. In regard to the second item, it was contended that no payment should have been made to the broker, and that if it should be decided that he was entitled to a commission, the regular commission of brokers in Worcester should have been paid instead of the sum allowed in the account.
1. The sale was made by the trustee after consulting men in Worcester well informed on real estate values, and receiving their estimates of value varying from $240,000 to $270,000; and after making various investigations in regard to the property and trying to sell it through one broker to the owner of the adjoining lot and offering it to one or more larger buyers of centrally located real estate in Worcester. The sale was made as a result of conferences between the trustees and the broker who called at its place of business and stated that he had a customer for the property for whom he first made an offer of $270,000 at the expiration of the leases on the property, with certain other provisions, not now material. Later, after further conferences with the customer, he made an offer of $270,000 subject to a deduction of $10,000 because of the leases, making the purchase price $260,000. Before this offer was accepted, the trustee consulted the president of a Worcester bank who was also largely interested in centrally located Worcester real estate. The sale was authorized to be made upon this offer both by the executive committee and the board of directors of the trust company.
The testimony of certain real estate brokers in Worcester tended to show that more than one broker should be employed or consulted in a transaction of this kind; that a sale should not be confined to the offer of one particular purchaser; and that the year 1915 was not a good time to sell. There was ample evidence upon which the court could have found that the property brought all that it was worth in 1915, and that the trustee exercised sound judgment in selling then, notwithstanding the fact that after 1917 or 1918 there was a substantial rise in real...
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