Washington Loan & Trust Co. v. Convention of Protestant Episcopal Church of the Diocese of Washington

• Decision Date: 05 November 1923
• Docket Number: 4003.
• Citation: 293 F. 833
• Parties: WASHINGTON LOAN & TRUST CO. v. CONVENTION OF PROTESTANT EPISCOPAL CHURCH OF THE DIOCESE OF WASHINGTON et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

293 F. 833

WASHINGTON LOAN & TRUST CO. v. CONVENTION OF PROTESTANT EPISCOPAL CHURCH OF THE DIOCESE OF WASHINGTON et al.

No. 4003.

United States Court of Appeals, District of Columbia.

November 5, 1923

Submitted October 4, 1923.

Appeal from the Supreme Court of the District of Columbia.

Arthur Peter, of Washington, D.C., for appellant.

Charles Linkins, Arthur S. Browne, and E. A. Harriman, all of Washington, D.C., for appellees.

Before SMYTH, Chief Justice, ROBB, Associate Justice, and BAILEY Justice of the Supreme Court of the District of Columbia.

SMYTH Chief Justice.

Samuel L. Phillips, a member of the bar and a director of the Washington Loan & Trust Company, departed this life in Washington, leaving a will and nine codicils, by which he distributed a large estate. Substantially one-half of his property was given to the Convention of the Protestant Episcopal Church of the Diocese of Washington, a corporation (which we shall refer to for convenience as the corporation) and the remainder to his only brother and his brother's family. He nominated the Washington Loan & Trust Company hereinafter called the Trust Company, executor of his will and trustee of the personal estate disposed of by it. The provision naming the trust company as executor and trustee reads thus:

'I hereby appoint the said Washington Loan & Trust Company as executor of this my last will and testament upon condition that the compensation provided for in item I of this will shall be accepted in lieu of commissions as executor and all other charges, inasmuch as the duties of executor of my estate will be without special trouble. In the event that said Washington Loan & Trust Company shall decline to accept my terms for compensation, or for other cause, then the courts of probate and equity as may have jurisdiction are hereby asked to appoint a new executor and trustee to be paid the compensation aforesaid and no more. The party appointed executor is to be the same as the one to be appointed trustee of the personal estate and preferably a responsible Trust Company.'

The trust company was given the legal title, for purposes mentioned, to certain personal property described in the will, and was authorized:

'To retain as a commission for executing this trust and the executorship of this will, a sum of five per centum on the net income of said estate, and which shall be in lieu of all other charges as trustee or executor.'

In a codicil the amount of the compensation was reduced from 5 to 3 per cent. and the reasons assigned for doing this were that the duties of the trust company would 'consist almost exclusively of cutting off coupons from bonds and the receipt of checks from corporations, duties involving no trouble and quickly performed.'

Being dissatisfied with the amount of compensation provided for the trust company sought to obtain an agreement from the beneficiaries by which it would be allowed 3 per cent. on the corpus, instead of the net income, of the estate. From a statement of facts it appears that the trust company was advised by its attorneys that the provision of the will limiting the compensation was void, and this fact was made known to certain officers of the corporation and to the other beneficiaries. It is recited in the statement that a satisfactory understanding was reached between the trust company and those representing the brother and his family. What the understanding was is not disclosed by the statement, but the brother, in a waiver of citation signed by him, stated specifically that he did not and could not consent that the court should provide any other or greater compensation than that mentioned in the will, and added that the question of compensation was reserved for the future and was not to be determined, except upon notice to him. The guardian ad litem of the minor beneficiaries refused to consent to any increase in compensation. While the treasurer and chancellor of the corporation expressed the opinion that the compensation prescribed was too small, yet the corporation never consented to any change with respect to it.

None the less the trust company filed its petition in the probate division of the Supreme Court of the District asking for the probate of the will and the issuance of letters testamentary to it. In the petition it recited that in the will it was nominated executor of the will and appointed as trustee of the personal estate; set forth the provision with respect to the compensation provided for the executor and trustee; stated that it had been advised by counsel that the provisions relating to the compensation were void and of no effect, that its petition asking for the granting of letters testamentary to it was based on that advice, and was presented with the expectation that it would be made an allowance in accordance with the statute, the quantum of the estate and the duties to be performed. The will and codicils were admitted to probate, and letters testamentary were issued to the trust company as executor.

The trust company entered upon the performance of its duties, and in due time filed its final account, in which it asked for the allowance of 3 per cent. on the corpus of the personal estate and an attorney's fees. Notice of the filing of the final account and the request for its allowance was served upon those interested in the estate. Certain of the beneficiaries presented objection to the allowance of the commission and attorney's fees, and called attention to the terms of the will which provided that if any of them, directly or indirectly, should seek to invalidate it in any particular, they should forfeit what was intended for them. The corporation objected on the ground that the appointment of an executor was conditional upon the executor's agreeing to render its service for the amount provided for in the will, and that in law it was entitled to no more. The court took this view of the matter and entered an order to that effect.

An elaborate written and oral argument has been made in support of the appellant's contention that the provision in the will limiting the compensation is void; that, if not void, its validity cannot be assailed in this kind of a proceeding; and, lastly, that the beneficiaries are estopped by their conduct from asserting that it is binding upon the trust company.

With respect to the first proposition counsel for the trust company base their contention upon a Maryland statute as construed in McKim v. Duncan, 4 Gill (Md.) 73, and Handy v. Collins, 60 Md. 229, 45 Am.Rep. 725. That statute provided that the commissions of an executor should 'be (at the discretion of the court) not under 5 per cent. nor exceeding 10 per cent.' In the McKim Case the testator provided 'that neither of my said executors shall be entitled to any commissions for settling my estate, but all necessary expenses relative to such settlement, shall be charged to my estate. ' The court, in rejecting this provision as invalid, said that the statute fixes the amount of an executor's commission within certain limits, at the discretion of the court, and that it was not within the competency of a testator to take from the courts the power which the law gives to them and which is conferred in language which makes it their duty to allow not less than five per cent. In answer to the suggestion that the executor having accepted his charge upon the...