Ewing v. First Nat. Bank of Atlanta

• Court: Georgia Supreme Court
• Writing for the Court: ALMAND
• Citation: Ewing v. First Nat. Bank of Atlanta, 209 Ga. 932, 76 S.E.2d 791 (Ga. 1953)
• Decision Date: 13 July 1953
• Docket Number: No. 18240,18240
• Parties: EWING v. FIRST NAT. BANK OF ATLANTA et al.

Page 791

76 S.E.2d 791

209 Ga. 932

EWING v. FIRST NAT. BANK OF ATLANTA et al.

No. 18240.

Supreme Court of Georgia.

July 13, 1953.

Rehearing Denied July 27, 1953.

Syllabus by the Court.

Where the trustees and executors of a trust estate in an equitable petition seek authority to execute a lease with an option to buy a certain tract of realty, a part of the trust estate, and a beneficiary successfully resists such efforts, on the ground that the instrument creating the trust did not authorize the execution of such instrument by the trustees and executors, a court of equity has authority to entertain the beneficiary's application to assess and award against the estate, in its discretion, as a part of the costs in said proceeding, the expense, including counsel fees, incurred by the beneficiary in thus protecting and preserving the trust estate.

Lewis S. Pope, Nashville, Tenn., James A. Branch, Atlanta, for plaintiff in error.

Mosise, Post & Gardner, Antha Mulkey, Spalding, Sibley, Troutman & Kelley, John L. Tye, Jr., and Benjamin M. Parker, Atlanta, for defendants in error.

ALMAND, Justice.

The executors and trustees of the will of James W. English filed their petition in Fulton Superior Court, and prayed that the court take jurisdiction of certain real property, a part of the trust estate, wherein they sought authority to modify an existing lease executed by the testator to M. Rich & Bros. Co., and to execute a proposed lease to the same lessee, with an option to buy; that a commissioner be appointed by the court to carry out the orders and directions imposed by the final decree; and that the executors and trustees, as officers of the court, be empowered to execute said modification and lease. All the persons who were beneficiaries of the trust established by the will of James W. English were made parties defendant except two beneficiaries who were executors and trustees, and who were parties plaintiff in their individual and representative capacities. A guardian ad litem was appointed for the minors. Mrs. Emily Robinson Ewing, a granddaughter of the testator, and othrs of the same class, were by order of court designated as representative of a class consisting of all grandchildren and greatgrandchildren of the testator who were in life or yet unborn. All of the defendants who were of age except Mrs. Ewing, and the guardian ad litem of the minors, filed answers to the petition, in which they conceded that it was to the best interest of the estate that the proposed lease instruments be executed. Mrs. Ewing's general demurrers to the petition as amended were sustained and the petition was dismissed. On appeal to this court, the judgment of the trial court was sustained. First Nat. Bank of Atlanta v. Robinson, 209 Ga. 582, 74 S.E.2d 875.

On October 30, 1952, Mrs. Ewing filed her application in the case, setting up that in resisting the application of the trustees and executors she had incurred expenses and obligations which should be taxed as costs in the case, to be paid out of the trust estate, and prayed that the court amend its judgment of dismissal by designating as a part of the costs the expense incurred by her, including fees for counsel employed by and representing her in said case. Subsequently, on March 16, 1953, this application was amended, in which amendment it was recited that, on appeal of the trustees and executors, the counsel employed by her had filed briefs and argued the case in the Supreme Court, and that the judgment of that court sustained the position and contentions of her attorneys. When the application of Mrs. Ewing came on to be heard, the trial court, on oral motion of counsel for the plaintiffs, dismissed it. A bill of exceptions, assigning error on this order, brings the case here for review.

The allowance and taxing of costs in equitable actions lies within the discretion of the trial court. Code, § 37-1105; Peninsular Naval Stores Co. v. Culbreth, 162 Ga. 474, 134 S.E. 608. As a general rule, in the absence of statutory authority, a court of equity cannot under ordinary circumstances, in an adversary proceeding, allow attorneys fees to the prevailing party. Eckford v. Borough of Atlanta, 173 Ga. 650, 652(3), 160 S.E. 773. There is a generally recognized exception to this rule, and that is: a court of equity in its discretion may, by order, allow counsel fees to a party who at his own expense has maintained a successful suit for the protection or increase of common property or a common fund. Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157; Hobbs v. McLean, 117 U.S. 567, 6 S.Ct. 870, 29 L.Ed. 940. This principle has been recognized and approved in Porter v. Stewart, 163 Ga. 655, 137 S.E. 28; Eckford v. Borough of Atlanta, supra, and Georgia Veneer & Package Co. v. Florida National Bank, 198 Ga. 591(3), 32 S.E.2d 465. In the last-cited case, this court quoted with approval the following statement from Hobbs v. McLean, supra: 'When many persons have a common interest in a trust property or fund, and one of them, for the benefit of all and at his own cost and expense, brings suit for its preservation or administration, the court of equity in which the suit is brought will order that the plaintiff be reimbursed his outlay from the property of the trust, or by proportional contribution from those who accept the benefits of his efforts.' 198 Ga. page 615, 32 S.E.2d page 479. The general rule as to allowance of attorneys fees to a beneficiary of a trust is stated in Re Atwood's Trust, 227 Minn. 495, 35 N.W.2d 736, 737, 9 A.L.R. 1126, as follows: 'In the sound and cautiously exercised discretion of the court, and not as a matter of right, attorneys' fees and other expenses reasonably and necessarily incurred by all necessary parties to litigation may be allowed and properly charged to the trust estate where such litigation, with respect to substantial and material issues, is necessary in order to resolve the meaning and legal effect of ambiguous language used by the settlor in the trust instrument, if an adjudication thereof is essential to a proper administration of the trust, and if, without unnecessary expense or delay, the litigation is conducted in good faith for the primary benefit of the trust as a whole.' For an exhaustive and comprehensive annotation on this subject, see 9 A.L.R.2d 1132.

In upholding an allowance of counsel fees to certain beneficiaries who successfully obtained a construction of a testamentary trust, it was held in Field v. Field, 297 Ill. 379, 130 N.E. 748, 753: 'Where the questions in controversy affect the rights of all the parties to the trust, and the decision thereof will serve as a guide to the trustees in the future performance of their duties, the costs should be charged against the trust fund as a whole, and not against any particular portion of it.' In Central Trust Co. v. Harris, 152 Kan. 296, 103 P.2d 902, 907, the trustee sought instructions from the court as to the management of the trust estate. Some of the beneficiaries resisted this application on the ground that the intention of the testator would not be carried out if the court granted the instructions requested by the trustee, and obtained a ruling in their favor. The application of these beneficiaries for allowance of attorneys' fees was denied by the trial court, on the ground that it did not have authority to make such an allowance. Rejecting the argument of the trustees that the attorneys for the beneficiaries only represented a part of the beneficiaries of the trust and were not entitled to an allowance of counsel fees, the Supreme Court of Kansas, in reversing the trial court, said: 'It was necessary that there be attorneys to present to the court the opposite side from that presented by the trustees, and it is not equitable that these beneficiaries should be compelled to pay this fee out of their personal assets.' For other authorities of like tenor, see Garrison v. Garrison, 354 Mo. 62, 188 S.W.2d 644; Clarke v. Clarke 246 Ala. 170, 19 So.2d 526; Mairs v. Central Trust co., 127 W.Va. 795, 34 S.E.2d 742; Rezzemini v. Brooks, 236 N.Y. 184, 140 N.E. 237; In re Kennedy's Estate, 141 Pa. 479, 21 A. 671; De Korwin v. First National Bank of Chicago, D.C., 84 F.Supp. 918; Wallace v. Fiske, 8 Cir., 80 F.2d 897, 107 A.L.R. 726; In re Buckton, [1907] 2 Ch. 406. In the case last cited, the court said: 'In a large proportion of the summonses adjourned into Court for argument the applicants are trustees of a will or testament who ask the Court to construe the instrument of trust for their guidance, and in order to ascertain the interests of the beneficiaries, or else ask to have some question determined which has arisen in the administration of the trusts. In cases of this character I regard the costs of all parties as necessarily incurred for the benefit of...