Caldwell v. Hopkins

• Decision Date: 03 May 1920
• Docket Number: 3310.
• Citation: 265 F. 972
• Parties: CALDWELL v. HOPKINS.
• Court: U.S. Court of Appeals — District of Columbia Circuit

265 F. 972

CALDWELL v. HOPKINS.

No. 3310.

United States Court of Appeals, District of Columbia.

May 3, 1920

Submitted April 6, 1920.

Appeal from the Supreme Court of the District of Columbia.

Eugene A. Jones, of Washington, D.C., for appellant.

Paul E Lesh, of Washington, D.C., and F. S. McCandlish, of Fairfax Va., for appellee.

SMYTH Chief Justice.

This appeal brings before us for review a decree of the Supreme Court holding that a trustee was entitled to receive compensation out of the corpus of the trust estate for his services in handling and caring for the estate, in addition to 10 per cent. paid to him on all collections and allowances for disbursements made by him for counsel fees, premium on his bond, and other outlays.

William A. Jones was for about 20 years a trustee of the estate of Sarah A. Hagner, deceased. He died in 1918. The estate consisted of personal and real property valued at about $121,000. He sold the real estate and invested the proceeds. When he took charge of the estate it produced yearly about $3,500, but under his management the income therefrom increased, so that at the time of his death it amounted to upwards of $6,300 a year.

Upon the death of Mr. Jones, Mrs. Anne S. Hopkins, his daughter was appointed administratrix of his estate, and as such took possession of the trust estate. Mrs. Caldwell, life tenant and mother of the potential remaindermen under the will of Sarah Hagner, and the wife of Hugh M. Caldwell, the appellant, filed a petition, asking that her husband be substituted for Mr. Jones as trustee. He was appointed in October, 1918, but did not qualify for more than a year thereafter. In the meantime Mrs. Hopkins continued under the order of the court to administer the trust estate. Upon his qualifying, she turned over to him all the trust property, except sufficient to cover claims made by her against the estate.

Later she filed a petition as administratrix c.t.a. of the estate of William A. Jones, deceased, in which she claimed, after alleging that she had turned over to Caldwell the property as just stated, that a commission was due her on the income collected by her after the death of Mr. Jones, and on that portion of the corpus of the trust estate on which no commission had been allowed either to her or Mr. Jones; also that she was entitled to an allowance for counsel fees. She then recited the appointment of Mr. Jones, first as receiver of the trust estate, and then as trustee; described the property of the estate as a farm in Virginia and two houses on H street, Washington; that there was an indebtedness, chargeable upon the houses, of $8,000 and interest; that the farm yielded no income, but the houses produced a rental of $3,450 annually; that he sold the Virginia farm for $6,500, and out of the proceeds paid the balance due on the houses; that in 1911 he consummated a sale of the houses for $123,000, after having been authorized to do so by the court; that he was directed to hold and invest the proceeds of the sale upon the same trusts as he had held the real estate; and that he continued to administer the trust until the time of his death, when the income therefrom was $6,300 per annum. She referred for a more detailed disclosure concerning the matters just mentioned, to the proceedings and entries theretofore had and made in the case, and asked leave to produce such evidence as might be considered desirable touching the services rendered.

She further stated that a commission of 10 per cent. had been allowed to Mr. Jones in respect to the income collected by him, also 5 per cent. on account of the principal derived from the sale of the Virginia farm; that no allowance on the balance of the principal of the estate, including the sale of the H street property, had been claimed or made by the trustee; that allowance had been made to him from time to time for counsel fees; also that no allowance or commissions had been made to her for administering the trust since the death of her father, and none for services of her attorneys in that connection; and she prayed that the matter be referred to the auditor for the purpose of settling the commissions and allowances, and for general relief.

Mrs. Caldwell and the substituted trustee, Hugh M. Caldwell, filed separate answers. They denied that the estate of Jones was entitled to any commission, either on the principal of the estate or on the income, or that Mrs. Hopkins was entitled to an allowance for attorney's fees; alleged that the income of the estate, after deductions of commissions and charges, was less than $6,000; referred to the record of the cause for the accuracy of their statements; and denied that there was any necessity for an accounting by the auditor.

Mr. Jones, during his administration of the estate, filed only two reports with the auditor-- one in 1905 and the other in 1911. In each he made claim for commissions and allowances for disbursements. He asked and was allowed by the auditor 10 per cent., 'the maximum commission on income.' The allowance was made, the auditor said, 'in view of the character of the trust and the services and responsibility imposed upon him. ' At no time did Mr. Jones make or intimate any claim for a commission on the corpus. The entire amount received by him as commission was $8,616.53. In addition he was allowed counsel fees, the premium on his bond, and a commission of $3,690 paid to brokers for effecting the sale of the H street property.

The decree of the court, appealed from, recited that the cause came on to be heard 'upon the petition of Anne Seymour Hopkins * * * and the answers thereto of Hugh M. Caldwell, substituted trustee, and Sarah S. Caldwell,' and held that the estate of William A. Jones was 'entitled to an allowance of commissions upon the corpus of the trust estate administered herein by him as trustee until the time of his death, the amount of said commission upon the corpus to be determined by the auditor upon the reference hereinafter made,' and made certain other findings, immaterial here because the only matter complained of by the appellant is the holding in respect to the commission on the corpus, and the reference of the subject to the auditor.

It is settled law in this District that in a proper case a commission may be paid on the principal, as well as on the income, of an estate to a trustee. Such was the ruling of the Supreme Court of the United States in Barney v Saunders, 16 How. 535, 541, 14 L.Ed. 1047, a case which went up from this court. In passing upon the question the court said that it was customary...