Ladd v. Pigott

• Decision Date: 23 December 1908
• Citation: 114 S.W. 984,215 Mo. 361
• Parties: FANNIE E. LADD et al., Appellants, v. FRANK W. PIGOTT, Administrator, etc
• Court: Missouri Supreme Court

114 S.W. 984

215 Mo. 361

FANNIE E. LADD et al., Appellants, v. FRANK W. PIGOTT, Administrator, etc

Supreme Court of Missouri, First Division

December 23, 1908

Appeal from Cooper Circuit Court. -- Hon. Wm. H. Martin, Judge.

Affirmed.

John Cosgrove for appellants.

(1) Pigott's acts from the death of Trigg were not authorized, and he is entitled to no compensation for services rendered since then. The giving of a bond, as required by the judgment of the circuit court, was "a condition precedent to his occupancy of the trust." Tracy v. Railroad, 13 Mo.App. 299; Davis v Bank, 78 Minn. 409. The law is well settled in this and some other States that a trustee is entitled to a reasonable compensation for his services rendered in the management and control of a trust estate. "The compensation will depend largely upon the skill displayed, the risk and the responsibility incurred, and the extent and amount of time and labor required of him." 28 Am. and Eng. Ency. Law (2 Ed.), 1035-1041; 2 Perry on Trusts (2 Ed.), sec. 918; Maginn v. Green, 67 Mo.App. 617; Garesche v Investment Co., 146 Mo. 453; Tracy v. Railroad, 13 Mo.App. 295. (2) The only skill required and the only labor performed by Mr. Pigott was to take credit semiannually for the dividends declared by the Central National Bank on $ 15,500 of its stock, and to take credit for the interest on $ 22,000 of the first mortgage bonds of the Boonville, St Louis & Southern Railway Company, which was paid semiannually and deposited in the Central National Bank, and to loan $ 4,050, and collect the interest thereon and remit to Mrs. Ladd. The charge of one per cent per annum on the whole of the live assets is excessive. The general practice is to allow compensation by commission, and five per cent is the ordinary rule. Pusey v. Clemmons, 9 S. & R. 209; Perry on Trusts (5 Ed.), sec. 918, p. 624. "No statute has determined the rule and each case is left to depend upon the labor and trouble and the amount of the estate." Harris v. Nortin, 9 Ala. 899; Perry on Trusts, supra, p. 627. If the decree appointing a trustee has fixed his compensation, that would govern, but as it established no rate the trustee is entitled to a reasonable amount which will be ascertained by means of a judicial investigation as to the value of his services. 2 Pomeroy's Equity Juris. (2 Ed.), 1084.

W. M. Williams for respondent.

(1) The trustee was not in default for failure to make annual settlements with the court. The decree did not provide that he should do so. He was only directed by the order of appointment to make reports, from time to time, as required. He furnished a detailed settlement each year to the beneficiary, which was sufficient. Matter of Accounting of Mason, 98 N.Y. 535. (2) The trustee qualified by giving bond with proper security, which was approved by the court. He continued, with the consent of the appellants, to serve as trustee after the death of the surety, and no new bond was required. It is too late for appellants to object to his right to compensation after having consented to receive his services and after having accepted payments from him as trustee. Greeley v. Bank, 103 Mo. 222. (3) The compensation of the trustee was fixed in 1887 by an agreement between him and the beneficiary. His charges were in strict accord with the contract entered into at that time. No objection was made thereto by appellants for more than eleven years. The courts will not interfere with an agreement between the trustee and the beneficiary fixing his compensation. Bowker v. Pierce, 130 Mass. 262. (4) Aside from the agreement of the parties, the testimony clearly shows that the charges made by the trustee were reasonable and were similar to the allowance usually made in such cases in the locality where the trustee was appointed, and where the services were rendered. The weight of the evidence was clearly with respondent upon this proposition. (5) While there was no change in some of the securities during the trusteeship in this case, yet it was the duty of the trustee to see that the estate was safely invested and to carefully guard the securities in his hands and to be prepared to make any changes that circumstances should require. It is entirely proper to consider the amount of the estate and the responsbility devolving upon the trustee in fixing his compensation. Wagstaff v. Lowerre, 23 Barb. 225; Re de Peyster, 4 Sanford 511; 7 Law Ed. N. Y. Chancery Rep. 510, and note.

OPINION

WOODSON, J.

This cause originated in the circuit court of Cooper county by appellants filing therein exceptions to the final settlement made by the administrator of the estate of John T. Pigott, deceased, trustee of certain funds willed by Joseph L. Stephens to his widow, Fannie E. Stephens, since intermarried with her coappellant, W. M. Ladd.

Since the facts of the case are fully and clearly stated by counsel for respondent, we will adopt that statement as the statement of the case. It is as follows:

"The sole controversy presented by this appeal is concerning the compensation of John T. Pigott, now deceased, for services as trustee by appointment of the circuit court of Cooper county under the circumstances hereinafter stated.

"Appellant, Fannie E. Ladd, who was the second wife of Joseph L. Stephens, deceased, became entitled, upon his death, in 1881, under a marriage settlement, to the profits and income from a portion of his estate. She subsequently married W. M. Ladd.

"She and her second husband, in 1885, instituted a suit in equity in the circuit court of Cooper county, Missouri (making the children and heirs at law of Joseph L. Stephens, deceased, defendants), for the appointment of a trustee, to receive, hold, manage and control the funds in which she had said life interest. On the 14th of November, 1885, a decree was entered in said cause by which John T. Pigott was appointed trustee and directed to receive said funds and to collect and pay over to Mrs. Fannie E. Ladd the interest and income thereof and to preserve the principal for the parties entitled thereto. It was further ordered that the trustee execute a bond, with securities to be approved by the court, in the penal sum of $ 100,000, conditioned for the faithful performance of his duties as such trustee; and the decree further provided that said trustee, from time to time, as required, present his accounts for the examination of the court.

"Mr. Pigott accepted the trust, qualified by giving bond, with Dr. Wm. H. Trigg as security, which was approved by the court, and received from the administrators of the estate of Joseph L. Stephens, deceased, 123 shares of stock of The Boonville, St. Louis & Southern Railway Company, of the par value of $ 16,000, which was non-productive and of no market value. He also received 15 first mortgage bonds of The Boonville, St. Louis & Southern Railway Company, of the par value of $ 15,000; 155 shares of the stock of The Central National Bank, of Boonville, of the par value of $ 15,500; cash, $ 2,600; and three Boonville township funding bonds, of the par value of $ 700; and, before his first report, 7 additional first mortgage bonds of The Boonville, St. Louis & Southern Railway Company, of the par value of $ 7,000; cash $ 750; making a total, excluding the non-productive railway stock, of $ 41,500; and other small sums during the continuance of the trust. Mr. Pigott continued to act as trustee from his appointment, on the 14th of November, 1885, until his death, in December, 1904.

"Dr. W. H. Trigg, the surety upon his bond, died in 1895. No application was made to the court by any of the interested parties to require a new bond, and none was given. He continued to act as trustee without objection from any of the parties.

"At the February term, 1887, the trustee presented a report to the circuit court of Cooper county, setting out in detail the assets received by him and the payments that he had made to the appellant, Fannie E. Ladd, and taking credit in the settlement for an allowance to himself as trustee of $ 415, which was one per cent of the assets received from the administrators, excluding the unproductive railway stock, but did not include a percentage upon $ 4,635, which he had collected during the year as dividends and interest. He deducted the $ 415 from the income and paid the remainder to Mrs. Ladd, the appellant. This settlement was approved by the court, as shown by the judge's docket, but there is no entry in regard to it upon the record proper.

"Mr Pigott, before filing this settlement or making any charge for his services, wrote to the husband of Mrs. Ladd, who was authorized to act as her agent and to represent her in the matter, on the 5th of February, 1887, saying: 'Will you please advise me at your convenience what commission would be reasonable. Our probate court usually allows 1 per cent on gross amount of estates. That stock in R. Ry. not being productive should not be taken a/c. Would be pleased to have amount of my commissions acceptable to Mrs. Ladd and yourself.' To this there was a reply on February 10th, 1887, saying: ...