Will of Boddy, Matter of

• Decision Date: 30 June 1987
• Citation: 136 Misc.2d 87,517 N.Y.S.2d 877
• Parties: In the Matter of the Judicial Settlement of the Account of Chase Lincoln First Bank, N.A., as Executor of the WILL OF Florence C. BODDY, Deceased. Surrogate's Court, Monroe County
• Court: New York Surrogate Court

Page 877

517 N.Y.S.2d 877

136 Misc.2d 87

In the Matter of the Judicial Settlement of the Account of Chase Lincoln First Bank, N.A., as Executor of the WILL OF Florence C. BODDY, Deceased.

Surrogate's Court, Monroe County.

June 30, 1987.

Nixon, Hargrave, Devans & Doyle, Rochester, for petitioner.

Sutton, Deleeuw, Clark & Darcy, Rochester, for Residuary Legatee.

DECISION

ARNOLD F. CIACCIO, Surrogate.

In this proceeding to judicially settle the accounts of the executor, the sole beneficiary of the estate, Emma Durfee, objectant, has filed objections to the account. The objections are three fold: (1) the accounting party should not be entitled to continuing commissions after completing its services as executor; (2) the accounting party should not have paid itself a sum of money for preparation of decedent's final income tax return--this objection has been withdrawn; (3) the accounting party has disregarded a contract under which it has agreed to specific commissions at a reduced rate.

The nature of the objection enumerated (1) involves the fact that the accounting submitted by petitioner accounts for the period from August 29, 1984 to October 6, 1986. The objectant avers that presumably having accounted to October 6, 1986, the executor's services were completed on that date and it is improper for it to charge additional fees on the income earned from the date of the accounting to the return date of the citation which commences the proceeding in March of 1987 some five months later. While it is conceded that there is no statutory time during which the accounting must take place, it is argued that public policy encourages the timely settlement of estates and timely accounting by accounting parties. The objectant argues further that to permit additional commissions for the "waiting period" between the time of the accounting period and the court date places the institution in a position where it simply can hang on to funds and increase its compensation.

FACTS

Florence C. Boddy died April 16, 1984, her will dated June 13, 1967 was duly admitted to probate in this Court and Chase Lincoln First Bank, N.A. was appointed executor on September 4, 1984. From then until January 16, 1985, Chase Lincoln as executor performed its duties in accordance with the law, marshalling assets, paying legacies and filing tax returns. In April 1986, the Internal Revenue Service audited the federal estate tax return and a final closing letter was obtained on July 18, 1986. An amended order fixing New York State estate tax based upon the federal adjustment was signed by this Court on July 29, 1986. Chase Lincoln then prepared the present accounting and signed it on October 6, 1986. The account as filed computes the executor's commissions on the assets as shown and further states, "an executor's income commission will continue to be computed and collected at the rate of 3% on all income received from the date of the accounting to the date of the decree."

A fiduciary's right to compensation is a creature of statute. (Matter of Jadwin, 58 Misc.2d 809, 296 N.Y.S.2d 901) At common law fiduciaries provided services without such compensation. (Matter of Smathers, 309 N.Y. 487, 131 N.E.2d 896) It was an honor to serve and no one expected to be compensated. Courts have therefore strictly construed statutes providing for fiduciary compensation. (Matter of McDonald, 116 Misc.2d 834, 456 N.Y.S.2d 657; Matter of Stillman, 82 Misc.2d 736, 371 N.Y.S.2d 78). Nevertheless, unless a fiduciary has been delinquent in carrying out his or her responsibilities, courts have adhered to the statutory allowances. (Matter of Bernstein, 94 Misc.2d 898, 405 N.Y.S.2d 958).

As indicated by former New York County Surrogate Samuel DeFalco in Matter of Tucker, 75 Misc.2d 318, 347 N.Y.S.2d 845 the Court has the inherent discretion to scrutinize the services performed for the commissions charged. Fiduciary commissions cannot be a bonus or a gratuity. Commissions cannot be awarded to an executor or a trustee who has not performed any duties. (Bank of New York and Trust Company v. Hamersley, 210 App.Div. 57, 205 N.Y.S. 544, aff'd 240 N.Y. 558, 148 N.E. 704). Executor's commissions accrue at the time of judicial settlement of the accounts and must be allowed by the surrogate where reasonable. (Matter of Maurice, 74 App.Div.2d 906, 426 N.Y.S.2d 66).

In the instant application, it does not appear to this Court that an unreasonably lengthy period of time has elapsed between the date of the end of the accounting period and its submission to the Court.

This Court, however, does not view favorably the request for commissions beyond the date of the decree which settles the accounts. Surrogate's Court and Procedures Act Section 2307 states that the court "must allow to the fiduciary ... commissions (at specified rates of payment) ... receiving and paying out (certain sums of money and other property of the estate)." (Matter of Jadwin, 58 Misc.2d 809, 296 N.Y.S.2d 901). However, the petitioner in this proceeding is asking for an open-ended order for continuing commissions on unascertained interest income to be paid at a future date. There is nothing in the statute that provides for the payment of future commissions on unknown amounts of interest income. Allan R. Lipman in the Practice Commentary, McKinney's SCPA 2307 at pg. 368 states "commissions continue to be based on the concept of 'receiving and paying out'. The amounts received should be determined and one-half of the applicable percentage applied, and the amounts paid out should be determined and the same percentage applied to it." (Emphasis added.) Commissions can and will be granted on the amounts set...