The Pennsylvania Company for Insurance On Lives & Granting Annuities v. Picher

• Decision Date: 14 February 1921
• Parties: THE PENNSYLVANIA COMPANY FOR INSURANCE ON LIVES AND GRANTING ANNUITIES, et al., Appellants, W. H. PICHER, Respondent
• Court: Missouri Court of Appeals

227 S.W. 863

206 Mo.App. 325

THE PENNSYLVANIA COMPANY FOR INSURANCE ON LIVES AND GRANTING ANNUITIES, et al., Appellants, v. W. H. PICHER, Respondent

Court of Appeals of Missouri, Springfield

February 14, 1921

Appeal from Circuit Court of Jasper County.--Hon. Joseph D. Perkins Judge.

AFFIRMED.

Judgment affirmed.

H. S Miller for appellants.

(1) It is true that the case of Kent v. Foster, 22 Mo.App 649, holds that in certain cases when a trusteeship has been created, that the law implies an obligation to pay a reasonable compensation. And likewise the case of Maginn v. Green, 67 Mo.App. 620, and other cases as well. However, in all those cases the facts were entirely different than in the case at bar, and we find a very respectable authority that holds that a trustee is not entitled to compensation eo nomine, and he is entitled to no compensation for his services unless there was some understanding to that effect when the trust was created. 17 N. Car. 195, and other cases. (2) We quote from the case of Sanitary Co. v. Reed, 179 Mo.App. 174, as follows: "Corporations are, in a way, partnerships; the directors are themselves, under our law, members of the corporation, stockholders. Acting as directors they are more than mere agents for their fellow stockholders; they are their trustees in charge of a trust fund. They cannot charge or receive pay for any services rendered their co-stockholders--the cestui que trust--unless compensation for such services is provided for in its charter or authorized by a by-law or resolution of the board of directors before the services are rendered." (3) We quote from 39 Cyc., page 480, the following: "The English rule at common law is well settled that a trustee is not entitled to compensation for his personal or professional services in respect to his trusteeship in the absence of any provision in the order of court appointing him or of a contract or stipulation with the parties. This rule seems to have been enforced in this country as a rule of the English common law at an early period. The accepted rule in this country at the present time, however, is, in case the matter is not otherwise permitted by statute, for courts of equity to exercise a just discretion and make or withhold allowance as they consider the particular circumstances required." And again we quote from 39 Cyc., page 483, as follows: "A trustee may waive his claim to compensation. What amounts to a waiver of commissions will be determined like all other questions of waiver, by the acts or omissions of the party entitled otherwise to claim them, etc. (citing authorities)."

C. C. Spencer and A. E. Spencer, for respondent.

(1) In Mumbach v. Nienhaus, 219 S.W. 354, our Supreme Court said: "Of course, the statute does not forever preclude an executrix from purchasing in good faith, and without previous arrangement, property she has formerly and finally sold as executrix. The 'mere circumstance of the subsequent sale by the purchaser' to the executrix 'is not sufficient to warrant the assertion that the sale to Rambousek was not made in good faith.' No presumption of collusion arises from that fact alone. Vasques et al. v. Richardson, 19 Mo. 101; West v. Waddill, 33 Ark. 575. According to these decisions, the mere fact of the purchase in this case is no evidence of collusion. At most, it cannot be held that such fact shows collusion as a matter of law." (2) Under the law, as declared in Missouri and elsewhere, even though defendant in making collections and distributions, be classed as a sort of trustee, he is entitled to reasonable compensation for his services rendered at the request of plaintiff and others. In Kemp v. Foster, 22 Mo.App. 649, the Kansas City Court of Appeals said: "Generally, a trustee is entitled to a reasonable compensation for his time, trouble and skill in managing the fund and executing the trust, unless it appears that it was the intention that no compensation should be charged." Citing 2 Perry on Trusts, sec. 917-918. The St. Louis Court of Appeals, in Maginnis v. Green, 67 Mo.App. at 620, said: "In England a trustee is held to act gratuitously unless the instrument creating the trust provides for his compensation. In America the general rule is that he will be allowed reasonable commissions if he has spent his time in the management or preservation of the trust estate." St. Louis Court, in Wiegand v. Woemer, 155 Mo.App. 227-259, held that where trustees of a fund to be held for payment of an annuity received it on July 8th in the form of interest paying bonds and a certificate of deposit in an absolutely safe bank and were not required to give bond, and on August 5th, after the death of the annuitant, which occurred on July 24th, were asked to turn over the fund to the distributees, but refused to turn over the fund or any part of it, for the reason that part of it was in dispute, $ 500 was a reasonable allowance for their compensation. Here the right to some compensation was not seriously disputed, and the contest was over the amount thereof. To the same effect is case of Ladd v. Pigott, 215 Mo. 370. (3) A trustee can receive pay out of the trust fund for such services and expenditures only as are within the line of duties imposed upon him by the instrument creating the trust. Tracy v. Railroad, 13 Mo. App 295, affirmed in 84 Mo. 210. The Supreme Court of the United States plainly states the American rule, as follows: "In England courts of equity adhere to the principle, which had its origin in the Roman law, 'that a trustee shall not profit by his trust, and therefore that a trustee shall have no allowance for his care and trouble. A different rule prevails generally, if not universally, in this country. Here it is considered first and reasonable that a trustee should receive a fair compensation for his services, and in most cases it is gauged by a certain percentage on the amount of the estate." Barney v. Saunders, 16 How. (U.S.) 535, 541, 14 L.Ed. 1047, 1050 28 Am. & Engl. Ency. Law (2 Ed.), pp. 1032-1033, thus states the rule: "It is a fundamental principle of the English courts that trustees are not to be permitted to derive personal profit from the performance of the duties of the trust, and, hence, no compensation is allowed to them for personal services in the performance of their official duties, though involving personal trouble and loss of time, unless such compensation is provided for in the trust instrument, or by special contract. But even in England the trustee is allowed indemnity for all necessary expenses, including losses and charges. The effect is much the same as if compensation was granted to him. Although formerly this doctrine was, and is at the present time, in the absence of statute, followed in some States, yet now in America and Canada, generally, a trustee, in the absence of any agreement or stipulation therefor, is allowed compensation by the court when he has faithfully discharged his duties." (4) Even a constructive trustee is entitled to compensation for managing property, where he is chargeable with the rents. Olson v. Lamb, 56 Neb. 104, 76 N.W. 433, 71 Am. St., Rep. 670; Cowing v. Howard, 46 Barb. (N.Y.) 579; Barney v. Saunders (U. S.), was followed in Rowland v. Maddock, 183 Mass. 364, 67 N.E. 347, 349, holding committee of creditors of absconding debtor, for benefit of themselves and other creditors, to recover and distribute debtor's property, are entitled to reasonable compensation for bringing back debtor from Canada, together with money, for services in distributing money, though committee were wrong in failing to render proper account and in paying gratuity to police. There is a suggestion occurring for the first time in appellants' printed brief that, in some way not disclosed, defendant has waived his right to compensation, if he ever had such right. The pleadings present no question of waiver, the evidence does not support any such claim, and appellant does not attempt to point out what constitutes the basis of the alleged waiver.

FARRINGTON, J. Bradley, J., concurs. Cox, P. J., not sitting.

OPINION

FARRINGTON, J.

Plaintiffs appeal from a judgment rendered in favor of defendant in a suit seeking to to recover the sum of $ 685.76, alleged to be wrongfully withheld by the defendant from plaintiffs. The cause was tried in the circuit court before the judge sitting as a jury upon the following agreed statement of facts:

"It is hereby agreed and stipulated by and between the parties hereto that a jury be and the same is hereby waived and that this cause shall be submitted to and decided by the court upon the following agreed statement of facts, which shall be taken as and shall be the sole and only evidence in the case, to-wit:

I.

On February 15, 1906, all of the stockholders of the Picher Lead Company, a Missouri corporation, and amongst others the plaintiffs and the defendant herein, and Oliver H. Picher entered into a written contract and made, executed and delivered their written contract, in and by which it was agreed and provided that said Oliver H. Picher was thereby authorized to sell and deliver all the capital stock of said Picher Lead Company for a price and sum therein specified and payable (1) a designated portion in cash, (2) another portion in notes, one-half due in one year and one-half due in two years from date with interest and secured by first mortage on the lands and works owned by said Picher Lead Company and (3) balance of $ 100,000 to be represented by certificates of indebtedness of the purchasers, carrying no personal liability of the maker or makers thereof and to be secured by ten sixty-sixths (10/66) of the then Picher Lead Company stock; that said notes were to bear interest from date at the rate of 6 per cent per annum,...