Reed v. Taliaferro

• Decision Date: 04 October 1927
• Docket Number: 1362
• Parties: REED, ET AL. v. TALIAFERRO [*]
• Court: Wyoming Supreme Court

259 P. 815

37 Wyo. 107

REED, ET AL. v. TALIAFERRO ^[*]

No. 1362

Supreme Court of Wyoming

October 4, 1927

APPEAL from District Court, Sweetwater County; WILLIAM A. RINER Judge.

Action by Gail Reed and another against T. S. Taliaferro, Jr. From the judgment, plaintiffs appeal.

Modified and Affirmed.

Arnold & Arnold, of Laramie, for appellants.

The executor acting as trustee was obligated under the will, to account for the interest accruing on the funds at the rate fixed by statute, 4131-4133 C. S. It should have been paid annually to the beneficiaries under the will. The statute relating to public deposits (2955 C. S.) is not applicable. Section 7049 C. S. did not exist when this trust was created and of course, does not apply; the beneficiaries were entitled to compound interest on the interest past due. In Re Piercy's Estate (Calif.) 145 P. 91, and cases cited; in re Myers, 131 N.Y. 409. If an administrator mingles funds of an estate with his own, or employs them in his own business, he may be chargeable with interest thereon at the highest legal rate compounded. Woerner Am. L. Ad. (3rd Ed.) p. 1765, and cases cited; Michoud v. Girod, 4 How. (U.S.) 503, 556. The note given for the funds borrowed, and providing for interest at two per cent. per annum, is a mere nullity. St. Paul Trust Co. v. Kittson, 65 N.E. 74 (Minn.) ; in re Myers' Estate 30 N.E. 135, 137; in re Roach's Estate (Ore.) 82 P. 118. Executors must account, and their responsibility only terminates after compliance with the statutes; In re Higgins Estate (Mont.) 39 P. 517. Executor's commissions are to be allowed by the Court, 6853 C. S., after accounting and settlement, but are not deductible by the executor before settlement. In re Straus Estate, 77 P. 1122, 22 P 86; in re Sullivan Estate (Wash.) 78 P. 945; in re Hite's Estate, 101 P. 448. The executor dispersed Four Hundred Dollars to other attorneys during his administration, without authority. Ross Pro. Law p. 765; Noble v. Whitten, 80 P. 451; Kuhn's Appeal, 4 Wash. 534; Needham v. Needham, 20 P. 345; in re Davis Estate 88 P. 957. The statute limits the amount allowable for attorney fees (6854 C. S.) The executor failed to fully account for book accounts inventoried at $ 3656.55; uncollectable accounts should be reported. Woerner (3rd Ed.) 1741. The trial court followed an erroneous theory of law in its decision in requiring appellants to prove that the account was not right instead of requiring the executor to substantiate his account. Rice v. Tilton, 14 Wyo. 101; in re Sanderson's Estate, 15 P. 753 (Calif.) ; in re More's Estate, 54 P. 148; in re Hite's Estate, 101 P. 448; in re Roach's Estate, 92 P. 118; in re Byrne's Estate, 54 P. 957. Conversations between a guardian and probate judge are admissable to show guardian's good faith and knowledge of the judge of the nature of the proceeding. Nagle v. Robbins, 9 Wyo. 211.

Mahlon E. Wilson and Albert R. Barnes, for respondent.

The record shows that the testator was under contract with a company in Idaho for the purchase of land and water rights, and that the employment of counsel to adjust or dispose of said interest, was in the interests of said estate; the court below found that the book accounts were uncollectable except as to $ 23; the trial court allowed the statutory executor's commission on money reported as received; the executor charged himself with compound interest voluntarily--he was not chargeable with compound interest under the law. In re Ricker, 14 Mont. 153, 29 L.R.A. 622; in re Ward's Estate, 73 Mich. 220; 24 C. J. 506; Stimson v. Rountree (Ind.) 99 N.E. 439. The $ 4,000.00 note executed by T. S. Taliaferro, Jr. and W. B. Dunton to T. S. Taliaferro, Jr., as executor, is not a demand note; the trial court did not treat it as a loan; the will authorized the executor to invest the funds in such manner as he saw fit; the executor was charged with a reasonable degree of care and given a large discretion in making investments. There is no hard and fast rule as to the rate of interest chargeable to trustees. In re Seward (Nebr.) 37 A. L. R. 441-448; re Babcock's Estate, 9 N.Y.S. 554; re Griffing, 80 N.Y.S. 659; in re Klunck, 68 N.Y.S. 629; in re Wiley, 91 N.Y.S. 661. The trial court charged the executor with approximately $ 1650.00, which he never received in any way, out of the funds of the estate. The executor took no appeal. The judgment below should be affirmed.

OPINION

Per Curiam:

R. Harvey Reed died on January 30, 1907, a resident of Sweetwater County, leaving a last will and testament, in which he appointed his sons Gail Reed, then about twenty-three years of age, and Penrose Reed, then about twenty years of age, as his heirs, and in which he directed his executor to act as trustee under the will to invest the net estate at interest or in such manner as he should see fit, to pay the interest and profits thereof from time to time to his heirs, and to pay the principal to them when Penrose Reed should arrive at the age of forty years. The will was duly admitted to probate on March 4, 1907. T. S. Taliaferro, Jr., named therein as executor, was duly appointed as such, and he, after giving bond, proceeded to administer the estate, paying the last item of indebtedness, aside from premiums on his bond, on June 30, 1910. An inventory and appraisement was filed on March 13, 1907. The executor filed a report on January 18, 1908, another on May 25, 1916, and his final report on July 14, 1923. He testified that he filed other reports which were lost. Objections were made by the heirs to the final report of the executor and to the supplemental report thereto. A hearing on said reports and said objections was had before the court on December 24, 1924. Judgment was rendered on July 25, 1925, in which the court charged the executor with receipts in the sum of $ 6355.50, credited him with the sum of $ 2051.18 expenses, with the sum of $ 963.23 for money advanced to the heirs and with the sum of $ 319.75 executor's fees, leaving a balance of $ 3021.34. On this balance the court charged the executor with interest at the rate of four per cent per annum, compounded annually from July 1, 1909, amounting to the sum of $ 2653.28. The executor was directed to pay such interest to the heirs and to hold the principal sum of $ 3021.34 for distribution in accordance with the terms of the will. From this judgment the heirs have appealed.

1. The court, in fixing the principal upon which the interest to be paid by the executor should be computed, first deducted the expenditures, and the sum of $ 319.75, as fees allowed to the executor under the statute (Sec. 6853, W. C. S. 1920). It is contended that the deduction of the executor's fees should not have been made as of that time; that his fees were not payable until the final accounting, and that interest should have been computed against him, compounded, at the legal rate, the same as on other amounts. The result would be that the executor would not alone lose all of his commission, to which the statute appears to give him an absolute right, but he would in addition be required to pay at least an equal amount thereof to the heirs. Counsel rely upon In re Hagerty's Estate, 97 Wash. 491, 166 P. 1139, and cases therein cited. Without stopping to analyze the rule there announced, and as to when it should be applied, we feel that we are not warranted in the case at bar to reverse the action of the trial court in this respect. The court followed the rule announced in Mathis v. Mathis, 18 N.J.L. 59; Callaghan v. Hall, 1 Serge. & Rawle 241, and 24 C. J. 87, to the effect that-- "in charging an executor or administrator with interest on funds in his hands at a final settlement, his commission or recompense * * * should be deducted before a balance is struck and the interest is finally computed against him."

2. The executor was and is an attorney at law. He employed two other attorneys, Mr. Preston and Mr. Reavill in connection with some of the matters of the estate, and paid them the sum of $ 400, divided equally between them. The services were performed mainly in connection with the cancellation of two contracts, made by the decedent in connection with some lands in Idaho, and calling for payments largely in excess of the total amount of assets of the estate. No objection is made to the amount paid to Mr. Preston, but exceptions are taken to the amount paid to Mr. Reavill. The court found that his services were necessary, and we cannot interfere with that finding. Counsel for appellants contend that the total amount that could have been paid to attorneys was, in any event, limited to $ 319.75, and they base that contention on section 6854, W. C. S. 1920, which provides that the fees that may be paid to the attorneys of an executor shall not exceed the amount allowed to the executor or administrator except in case of actual litigation. Without determining the full effect or scope of the section, or whether there was actual litigation in this matter within the meaning thereof, we take it that the fees that may be paid to attorneys under it may at least equal the sum allowable to the executors or administrators, and that the amount is not dependent upon fees actually paid executors or administrators, for otherwise an attorney could not, at times, be paid at all, if for some reason--in case of waiver, for instance--nothing were paid to an executor or administrator. Now under section 6853, an executor or administrator receives certain commissions--amounting to $ 319.75 in the case at bar--and the court may allow him fifty per cent thereof in addition. Hence it is clear that the sum paid to the attorneys in this case is not in violation of the amount allowable under the statute.

3. The court, after allowing the...