Burton v. Bean, 6580

• Decision Date: 23 March 1977
• Docket Number: No. 6580,6580
• Citation: 549 S.W.2d 48
• Parties: Nora Lee BURTON and Arlene Schultz, Appellants, v. Woodrow W. BEAN, II and Ward L. Koehler, Co-Administrators of the Estate of Veatrice Ulmer McGuffey, Deceased, Appellees.
• Court: Texas Court of Appeals

Page 48

549 S.W.2d 48

Nora Lee BURTON and Arlene Schultz, Appellants, v. Woodrow W. BEAN, II and Ward L. Koehler, Co-Administrators

of the Estate of Veatrice Ulmer McGuffey,

Deceased, Appellees.

No. 6580.

Court of Civil Appeals of Texas, El Paso.

March 23, 1977.

Ramon (Ray) Ramos, Jr., El Paso, for appellants.

Woodrow W. Bean, II, Ward L. Koehler, El Paso, for appellees.

OPINION

OSBORN, Justice.

This is an appeal from an order of the County Court, in probate, approving fees for Co-Administrators in a final account. We affirm.

By two points of error, two of the three heirs involved in an administration contend that the claim for fees of Co-Administrators was not properly itemized, and that the order approving the claims provided compensation to the Co-Administrators in excess of that provided by Section 241(a). ¹ Following the death of Veatrice Ulmer McGuffey on February 28, 1974, her daughter, Nora Lee Ekola (now Nora Lee Burton), employed Woodrow W. Bean, II, to file an application for temporary administration on her estate. At the same time, her other two daughters, Bertha Maudelle Elliott, who is not an Appellant, and Arlene Schultz, who is an Appellant, employed Ward L. Koehler to also file an application for temporary administration. Subsequently all three heirs renounced their rights to represent the estate in favor of their respective attorneys, who were appointed Co-Administrators. They were appointed, qualified, and served in such capacity, and in their final accounting seek additional reimbursement for their services.

At the hearing on the final account, the undisputed evidence established that at the time the Co-Administrators were appointed, the heirs agreed and understood that they would also serve as attorneys for the estate and would be reasonably compensated for such services. On June 4, 1974, the Court entered an order approving an application to pay administration expenses, which included fees in the amount of $4,500.00 for Woodrow W. Bean, II, and $4,750.00 for Ward L. Koehler. The application had an attached exhibit which itemized the date and services rendered, and the application reflected the total hours involved in performing such services as had been rendered at that time.

On June 23, 1976, the Co-Administrators filed their final account, which included a request to pay additional administrator's and attorney's fees and expense to Woodrow W. Bean, II, in the sum of $2,400.00, and to Ward L. Koehler in the sum of $13,525.67. Again, there were exhibits attached which showed the services rendered, the date thereof, and the total hours involved. There is no showing of how much time was served in the capacity of Co-Administrator and how much as an attorney for the estate. Perhaps in many instances it would be a fine line to decide in which capacity the service was rendered.

Appellants contend that the Appellees are limited by the provisions of Section 241(a), and that a five percent commission on sums received and paid out in cash in this instance would be $6,600.00, an amount less than the compensation paid to the Co-Administrators prior to the final account, and that therefore they should receive no additional compensation. Of course, an administrator may receive reasonable compensation for his services if he (1) manages a farm, ranch, factory, or other business of the estate, or (2) if the compensation as calculated on the five percent commission is unreasonably low. In this case, there is neither proof nor a finding by the Court that either of those alternatives are applicable. Thus, if Appellees are limited solely to compensation provided for in Section 241(a), the order approving the final account is erroneous.

But, Section 242 provides that personal representatives of estates shall be entitled to all necessary and reasonable expenses incurred by them in the management of the estate, and all reasonable attorney's fees necessarily incurred in connection with the proceedings and management of such estate. This necessarily raises the question of whether an attorney, as an administrator of an estate, may also perform the legal work and be compensated for his reasonable attorney's fees. "The majority rule appears to be that in the absence of statute otherwise providing, an executor or administrator is not entitled to extra compensation for legal services rendered by him." Annot., Right of executor or administrator to extra compensation for legal services rendered by him, 65 A.L.R.2d 809, 811 (1959). That annotation cites but one Texas case, Neblett v. Butler, 162 S.W.2d 458 (Tex.Civ.App. Galveston 1942, writ ref'd w. o. m.). In that case, the Court pointed out the reason for the majority rule and concluded that on public policy, one in a position of trust should not place himself in a situation where his interest conflicts with his duty as a fiduciary. The Court, in considering this problem, said:

"In 11 R.C.L., p. 231, it is said: 'It has been stated that if he (the executor) chooses to exercise his professional skill as a lawyer in the business of the estate, it must be considered a gratuity, and that to allow him to become his own client and charge for professional services, would be holding out inducements for professional men to seek such representative places to increase their professional business, which would lead to most pernicious results.'

"There is certainly very respectable authority for holding that executors cannot employ themselves to render legal services for the benefit of an estate."

But, the Court went further in analyzing the problem and by way of dictum said:

"However, strictly speaking, a personal representative does not have authority to bind an estate for legal service. Art. 3691, Vernon's Ann.Tex.Civ....