"Thomas C. Hill and Ray D. Hill, two of the sons of the late Thomas C. Hill, deceased, and beneficiaries of the last will and testament of the deceased, have filed three exceptions to the third account of Edmund C. Hill and Charles W. Howell, trustees of said will. The exceptions are as follows:
"'First. On June 29, 1905, the accountants charge themselves with the receipt of cash from S. P. Dunham proceeds of sale of 11 North Broad street, $55,000 (less 2 1/2 per cent. If paid in cash), $53,625, whereas said trustees, these accountants, received a much larger sum of cash from said S. P. Dunham for said premises No. 11 North Broad street, which premises belonged to the estate of Thomas C. Hill, deceased, and with which the said trustees should have charged themselves in said account, but the exceptants do not know the exact amount received by said trustees, these accountants, for the reason that said trustees, these accountants, although often requested by the exceptants so to do, have nevertheless failed and refused, and still do refuse, to inform the exceptants of the exact sum received by them from said S. P. Dunham for said premises No. 11 North Broad street.
"'Second. For that the said accountants have credited themselves in their said account with the sum of $1,375, commissions paid to Case & Cain, real estate agents, for selling the property of the estate; whereas, by law, the said executors and trustees were obliged to perform the service of selling without compensation to agents therefor.
"'Third. For that the said accountants should be charged with the sum of $600 per year, the difference between the rent for part of the premises of the estate leased to one of themselves, Edmund C. Hill, at $200 per year, and the price he, said executor, obtained
for himself from S. P. Dunham & Co. to whom he assigned or sublet his term therein at $800 per year, to wit, from January 1, 1903, to April 13, 1905, namely, $1,421.67.'
"First. As to the exception which challenges the payment of $1,375 as a commission to the real estate agents for selling the testator's property. By the will the trustees were authorized to sell the premises No. 11 North Broad street either at public or private sale, but with this limitation, that it should not be sold during the lifetime of the widow for less that $45,000. The property was sold for $55,000 at private sale to S. P. Dunham & Co. It is the duty of executors to preserve the estate and administer it without unnecessary expense. In such administration they are allowed for actual expenses, and a commission as compensation for their services. Sections 128-129, Orphans' Court Act (P. L. 1898, p. 715). Such expenses, however, must not only be actual, but reasonably necessary in transacting the business of the estate. They must have been necessary or incurred for the benefit of the estate. On a sale of the testator's land the intervention of a broker may or may not be necessary. If not necessary the brocage paid will not be allowed, unless it can be shown that by employing a real estate agent the estate has been benefited in a pecuniary sense to at least the amount of the expense incurred by such employment. Whether the intervention of a real estate agent in making the sale was necessary or beneficial to the estate depends upon the facts of the particular case. The property to be sold may be of such a character or so situated as to require the aid of one possessing greater skill or knowledge concerning real estate transactions than that possessed by ordinary persons. In such a case the employing of such an agent would be beneficial to the estate; in fact, the failure of a trustee to avail himself of such special skill and knowledge might result in a serious loss to the estate. In passing upon such employment, the test on the question of compensating the agent out of the estate is, Was it necessary or was it to the interest of the estate? If it was, the expenses thus incurred are allowed; if not, they will be disallowed. Upon this question, the burden of proof is upon the accountants. For New Jersey cases on this subject, see 3 N. J. Dig. Ann. Div. Ex'rs and Adm'rs, § 92. And for cases in other states see 7 A. & E. Enc. Law, 431; 18 Cyc. 272; and cases noted in 64 L. R. A. 554.
"Applying this test to the facts in this case, the brocage paid cannot be allowed. For several years previous to such purchase by the firm of S. P. Dunham & Co., it rented the rear of said premises, using it as a means of access between its properties fronting on Broad street to the north of the testator's property and those fronting on State street to the south thereof; the whole being used by said firm in carrying on what is known as a general department store. Such rear part of testator's premises was first leased to said firm by the testator, later by the trustees, and last by the corporation known as the Thomas C. Hill & Son Company, which, at the time of the execution of the last lease, was the lessee of the whole of such premises. From this recital it is apparent that the testator's premises bore a peculiar relation to the premises occupied by Dunham & Co. The trustees knew the nature and character of the business of said company, the use which was being made of that portion of the testator's premises which it had leased, and the peculiar relation which the testator's premises bore to that occupied by said company. Under the facts in this case, the likelihood of said company's becoming a prospective purchaser of No. 11 North Broad street was more than a mere possibility. Several years previous to the sale it had manifested a purchasing interest in said property. Negotiations were opened by it directly with the trustees, but nothing came of them because of the company's unwillingness to pay the minimum price fixed by the testator's will. There was no necessity pressing upon these trustees that required an immediate sale of the premises. When, in the judgment of the trustees, a sale of such premises was advisable, the course that prudence as well as the logic of the situation suggested was to approach Dunham & Co., which, by reason of the peculiar conditions referred to and its previous inquiries regarding the purchase of such premises, would seemingly be the most likely purchaser. The intervention of an agent to interest it in a possible purchase would not be necessary. No agent could have greater knowledge of the conditions which would make such company a likely purchaser than that possessed by the trustees. No skill in handling negotiations for sale greater than that possessed by the trustees was required in this particular case. If, therefore, the initial steps to effect a sale of said premises was to be taken by the trustees, the obvious course for them to pursue to save the estate unnecessary expense was to notify said company that the premises were to be sold. But in this case the initiative was not taken by the trustees. The estate's exigencies were not such as to require immediate sale. They could well wait upon the needs of others. In Dunham & Co. the estate ever had a prospective purchaser. A glimpse of this company's own conception of its need for a part of the premises was obtained by one of the trustees when this company voluntarily offered to increase the rent fourfold when a renewal of its lease was refused. No one else seemingly could have as great a purchasing interest in said premises. Probabilities so obvious would occur to men of such known business sagacity as these trustees, who were familiar with such conditions. At any
rate, whatever the reasons, the trustees did not seek a purchaser, but the purchaser sought them. Both Mr. Dunham and Trustee Hill testified that the real estate agents were first brought into the negotiations for the sale by Mr. Dunham. It was the purchaser seeking to buy, and not the trustees seeking a purchaser, that first interested the agents in such negotiations. Aside from the payment of the agents' commission by the trustees, there is nothing in the case that suggested that the agents were working for the interests of the estate. I fail to see anything in the case that shows that to effect this sale there was any necessity for the employment of an agent by the trustees, or that by the intervention of such agents the estate has been benefited. The result is that the payment of $1,375 as commissions to the real estate agents for selling No. 11 North Broad street must be disallowed.
"Second. As to the exception seeking to charge the accountants with the sum of $1,421.67, said to be the difference in rent received by Edmund C. Hill from S. P. Dunham & Co., and that accounted for to the estate. For a number of years prior to the 1st day of April, 1900, the firm of Dunham & Co. occupied the rear of the premises No. 11 North Broad street under a lease from the trustees, paying therefore as rent $200 per annum. During the same period the rest of said premises was occupied by a corporation known as the Thomas C. Hill & Son Company, under a lease from such trustees. On April 1, 1900, Dunham & Co.'s lease expired, and from that date the Thomas C. Hill & Son Company, under another lease from the said trustees, rented the entire premises, including that theretofore leased to Dunham & Co., paying an additional sum of $200 as rent, this...
