In re Rutledge

• Decision Date: 27 February 1900
• Citation: 56 N.E. 511,162 N.Y. 31
• Parties: In re RUTLEDGE.
• Court: New York Court of Appeals Court of Appeals

162 N.Y. 31

56 N.E. 511

In re RUTLEDGE.

Court of Appeals of New York.

Feb. 27, 1900.

Appeal from supreme court, appellate division, Fourth department.

Appeal by Harriet Rutledge, as executrix of Walter Heard, and by others, from a judgment of the appellate division (56 N. Y. Supp. 1115) affirming an order of the surrogate court settling her account. Affirmed.

Parker, C. J., and Martin and Werner, JJ., dissenting.

Henry M. Field and Frank Rice, for appellants.

John Gillette, for respondent.

GRAY, J.

Upon the accounting of this executrix, objections were filed and a hearing had before the surrogate, who rendered his decision, with findings of fact and conclusions of law, upon which a final decree of the surrogate's court for the county of Ontario was duly entered, which judicially stated and settled the account. Upon appeal the decision was unanimously affirmed by the appellate division, in the Fourth department, and appeals were taken by the executrix, and by other parties interested in the estate and in its distribution, to this court.

I think no error has been presented which, in view of the unanimous affirmance of the decree of the surrogate's court, would warrant a reversal of the order, and that it should be affirmed. The only question demanding any consideration by this court arises upon the exception of the executrix to the surrogate's conclusion that she was not entitled to commissions. There had been the finding of fact that she ‘did not give proper personal attention to the estate she had in charge, but delegated to her counsel duties which were imposed upon her as such executrix, knowing that he represented conflicting interests.’ The question is whether a surrogate has the power to withhold commissions upon the facts of the case, or whether he is without discretion in the matter, and must in all cases allow commissions at the rate fixed by the statute. It may be that this question is still open to us, but I do not think that it can be said that the question of the right to deny commissions was not deliberately passed upon in Stevens v. Melcher, 152 N. Y. 583, 46 N. E. 965. The point was distinctly made by counsel in that case that ‘the general term erred in affirming the judgment of the special term and referee in refusing to allow commissions to Mrs. Stevens.’ Mrs. Stevens was the executrix whose commissions were in question, and it was claimed, in answer to the appellants' point, that, under the facts found by the referee, his conclusion, as matter of law, that Mrs. Stevens was not entitled to commissions, necessarily followed. The controversy with respect to commissions was discussed in the opinion, which, after referring to the facts which the referee had found relative to the manner in which Mrs. Stevens had discharged her duties as executrix, held that upon the findings the conclusion of the referee should be sustained. In Wheelwright v. Rhoades, 28 Hun, 57, which related to the settlement of the accounts of executors, it was said by Davis, P. J., delivering the opinion of the general term, in the First department, that ‘it is in the power of the surrogate or court to deny all commissions where there has been misconduct on the part of executors, resulting in losses to the estate greater than the lawful compensation. And executors may be personally charged with losses and injuries prejudicial to their trust, and denied commissions altogether, in the sound discretion of the court, in cases deserving great severity of censure.’ In Re Curtiss, 9 App. Div. 285,37 N. Y. Supp. 586,41 N. Y. Supp. 1111, the appellate division, in the Second department, affirmed a decree of the surrogate upon his opinion. Surrogate Silkman, in that opinion, used this language: ‘Under the provisions of the Code as they exist, there is no power to deny such commissions, except for misconduct on the part of the executor or trustee.’ In Re Harnett's Estate, 15 N. Y. St. Rep. 725, Surrogate Ransom held that the administratrix should be denied commissions because she had been grossly delinquent in her administration of the estate.

It is sought to make a distinction between what a court of equity may do, and what the surrogate's court (being one of limited jurisdiction) may do, with respect to executor's commissions. It is said that while a court of equity, with its general powers and jurisdiction, might withhold commissions, in its discretion, a surrogate's court, for the lack of those powers, is under the strict mandate of the statute. The provision of the statute, which is found in section 2730 of the Code, reads, ‘On the settlement of the account of an executor or administrator, the surrogate must allow to him for his services,’ etc., and it is argued that in that language there is no room for the suggestion that anything is left to the discretion of the surrogate. I do not feel so confident, however, that the language requires of us that we read it with such strictness. Is there not an implication that services must have been rendered, and, further, that the services must have been beneficial to the estate? If no services were rendered, and the executor or administrator was delinquent in that respect, or if the services were such as were prejudicial to the just and lawful administration of the estate, then were there such services rendered to the estate, for which the surrogate must allow commissions? I doubt it, and I doubt if there be any good reason for our making the distinction which is contended for. I cannot think that, where the authority for commissions to an executor or administrator depends upon one statutory provision, they may be denied if the accounting happens to be in a court of equity, and must under all circumstances be allowed if the accounting happens to be in the surrogate's court. I am of the opinion that the language of the statute is not necessarily exclusive of all discretion in the surrogate, and that its exercise should be left to him upon the facts, in the review of which by the appellate division ample opportunity for correction is afforded. I do not know that there is any public policy involved in this matter, and yet it seems to me that a better policy is subserved by making the allowance of commissions to executors and administrators to depend upon the faithful rendition of services by them, and by giving such a construction to the section of the Code in question as will vest some discretion in the surrogate upon the subject. The order appealed from should be affirmed, with costs to all parties appearing in this court by counsel and filing briefs, payable out of the estate.

PARKER, C. J.

I dissent from so much of the decision declared by the majority of my associates in this case as affirms the order of the surrogate refusing commissions to the executrix, Harriet Rutledge. As to the other questions, I agree that they are put beyond our reach by the unanimous decision of the appellate division, by which the findings of fact of the surrogate are made conclusive.

The executrix in this case is a woman without much business experience, and she suddenly found herself placed, by the will of her brother, in charge of an insolvent estate; the situation being complicated by the fact that the testator had received funds as trustee, and had commingled these funds with his own in the matter of making investments. It was impossible in some instances to trace the trust fund into securities found in his possession, and, to advise and aid her in the execution of the trust, she employed an attorney, who seems to have made some serious mistakes,-mistakes for which the surrogate has held the executrix responsible. Not content with that, he concluded further to punish her for having reposed too much confidence in her attorney by imposing upon her a fine in the amount of her commissions. This he had no power to do. The statute fixes the compensation to be allowed by the surrogate to executors and administrators absolutely. It confers no discretion whatever upon that officer, who can neither add to nor take from the amount fixed by the statute. Whether the services performed by little or much, matters not, for the statute declares the basis upon which such amount shall be computed. If the legislature had intended that the surrogates of the state should be vested with the authority to grant or withhold commissions in their discretion, it would have said so, but it did not vest surrogates with any discretion whatever in the direction; and that its action was wise, experience teaches, and this case illustrates. But whether it was wise or otherwise is of no consequence, for the power was vested in the legislature alone to determine whether commissions should be allowed, and upon what basis, and, having allowed commissions in this class of cases, its action is conclusive upon the surrogates of this state.

Our attention has been called to some authorities which, it is suggested, show that this court has held that a surrogate can withhold commissions from an executor or administrator as a punishment for negligent conduct. Those authorities hold no such thing, as I shall point out later; but, if they did, it would be the duty of this court of disregard them, for it is the statute, not the decisions, which constitutes the law of this state upon that subject.

Turning to the provisions of the statute, which may now be found in section 2730 of the Code, we read: ‘On the settlement of the account of an executor or administrator, the surrogate must allow to him for his services, and if there be more than one, apportion among them according to the services rendered by them respectively, over and above his or their expenses. For receiving and paying out all sums of money not exceeding one thousand dollars, at the rate of five per centum. For receiving and paying out any additional sums not amounting to more than ten thousand dollars, at the rate of two and one-half per centum. For all sums above eleven...