Case ID: scl_47/html/0224-01.html
Source: Caselaw Access Project
Author: {"author": "Johnstone, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Simpson Bobo, Admr., vs. W. D. D. Poole and others.
    Executor— Commissions.
    
    An executor is not entitled to ten per cent, commission for paying annually to a legatee, as directed by tbe ■will, the interest on a certain part of the estate. Such commissions are only allowed when the executor ieceives interest, annually, and lets it out again as principal.
    BEFORE INGLIS, OH., AT SPARTANBURG, JUNE, 1860.
    David Dantzler, the testator in the cause, directed by his will that bis property should all be sold, and the money invested at interest. The interest due to each of the children to be paid annually to the parents, until the grandchildren arrived at the age of twenty-one years, when their respective fortunes were to be paid over.
    The appellant, administrator with the will annexed, took charge of the estate, and John Poole, who married one of the daughters, and to whom the annual interest was due, received from him sums of money exceeding the annual interest, and gave his notes for the same.
    On a settlement with the administrator before the Ordinary, the question was made, whether under the will he was entitled to ten per cent, on the annual interest made.
    The Ordinary decided that he was not, and the administrator appealed, on the ground that under the statute he is entitled to ten per cent, on annual interest made by investment of funds, and five per cent, on the corpus of the estate.
    The. decree of- his Honor, the Chancellor, is as follows:
    Inglis, Oh. David Dantzler by his will directed one-fifth part of his estate to be invested, and the interest to be paid, over to his son, Lewis M. Dantzler, for the support of himself and family and the education of his children, and the principal divided in equal shares among his children, to be delivered to them as they successively should come of age or marry. Another fifth part he directed to be “ appropriated to his daughter, -Poole, and her family, on the same terms and considerations as the bequest to his son Lewis and family.” Under the authority of these provisions, the interest upon the one-fifth part to which Mrs. Poole and her children were entitled was paid by Simpson Bobo, administrator with the will annexed, annually, to John Poole, the husband of the testator’s said daughter. In an accounting, had in the Ordinary’s Court, between the children of Mrs. Poole and the administrators of their father, who is dead, on the one side, and Mr. Bobo, in his representative capacity, on the other, the Ordinary allowed to the latter the regular commission of two and one-half per centum for receiving and the same for paying out the annual interest as well as the principal sum. Prom the decree made by the Ordinary, based upon this mode of stating the account, Mr. Bobo has appealed to this Court, on the ground of error in this, that the commission on the interest annually received and paid out should have been calculated at the rate of ten per centum. It appears in point of fact that the interest was not annually paid to John Poole; but, in anticipation of the annual period, Mr. Bobo lent and advanced to Poole a sum exceeding the aggregate of the interest which he would have received otherwise in annual payments during his life, and for the sum so advanced took his note or notes. He claims now, in a settlement with the administrators of Poole, to add the interest accruing on Poole’s notes, up to the 1st January in each year successively, and to credit on each 1st January the amount of the annual interest then payable to Poole on the property of his wife and children, as well in pursuance of the understanding and intention of the parties as upon the ground of legal right, independent of any such intention. And this, it seems to the Court, he is entitled to do, provided the interest is calculated only on so much of the balance due from year to year on the notes as is principal, and not upon such part of these balances as is interest in arrear, if there be any such. If, indeed, the interest annually due on the money supposed to be invested for the benefit of Mrs. Poole and her children was insufficient to satisfy and extinguish the interest annually accruing on the notes of Poole to Bobo, then the result of the mode of calculation here directed will not vary from that attained by the mode adopted in the Court of Ordinary. Poole being, during all the time of the currency of this annual interest, indebted to Mr. Bobo, and the latter having the right to apply the interest, annually payable to Poole, in satisfaction pro tanto of that indebtedness, it seems to the Court that he is entitled to whatever benefit he can derive from being supposed to have, in fact, made.the application. How far this concession affects the question of the rate of commission reniains to be ascertained.
    An Act of Assembly of 1789, in the 29th section, 5 Stat. 112, allows to an executor, &c., for his trouble and attendance in the execution of his duties, a commission of two and one-half per centum on all sums of money received, and the same upon all sums of money paid away in credits, debts, decrees, or otherwise, during the period of administration. If the Act had stopped there, a narrow and literal interpretation might have induced a sharp-witted executor to put out the moneys in his hands at interest, and again, at annual or shorter intervals, gather in and put out both principal and interest, or interest alone, insisting upon his right to retain two and one-half per centum at each receipt and payment. To guard against so gross an abuse, and at the same time not discourage proper efforts to increase the estate by lending out, from year to year, the annually accruing interest on moneys invested, the proviso was added, which, while it prohibits tbe indefinite multiplication of commissions upon tbe same sum, yet allows double commissions upon tbe aggregate profits, accumulated for tbe benefit of tbe estate, by tbe active movement of tbe moneys thereof, in annual collections and reinvestments. Tbe Act contemplates a benefit to tbe estate in compounding tbe interest upon tbe original corpus, by making that interest, as it annually accrues, a part of tbe corpus, in its turn yielding interest, which is to become again in its turn prolific of like profit. If, omitting actually to invest tbe money of tbe estate, tbe executor, &c., suffer it to accumulate in a like ratio of progression in bis own bands, by adding tbe interest, year by year, to tbe principal, tbe benefit to tbe estate is tbe same, and tbe enlarged rate of compensation earned; 2 McO. Ob. 196; 2 Hill Cb. 495; 3 Eicb. Eq. 15,
    In tbe present case, so far as the Court is informed, there was in fact no investment made. Tbe body of tbe testator’s estate was sold in 1847, and from this sale was derived tbe chief part of tbe corpus of this fund. In each subsequent year, however, until 1853, further sums were occasionally reported in annual returns, but from what source they were derived is not disclosed in tbe report. All these moneys appear to have remained in tbe bands of tbe administrator, except so much as may have been advanced to John Poole. There was and there could be no accumulations of tbe fund by gathering in tbe annual interest and putting it out in its turn to yield interest. In tbe administration of bis trust, tbe interest, as it accrued each year, was paid out and gone from tbe control of tbe administrator, to come back no more with or without accretions. It is tbe simple and ordinary case of receiving tbe annual income of tbe estate, and paying it out again in a due course of administration, and tbe Court is unable to discover any ground or reason whatever for tbe claim of tbe increased rate of commissions at ten per centum.
    It is proper to say that, in deducting tbe full amount of five per centum commissions at the date of the receipt of the fund, and so crediting the administrator with commissions for paying out, whereby he is allowed in effect commissions upon paying his own commission, and the fund which ought to be bearing interest for the benefit of the estate is prematurely reduced that much below what it should be, the mode of making up the account which has been adopted by the Ordinary is highly favorable to the administrator, and, in the judgment of the Court, subject to exception. But no objection is raised to the account and decree on this ground, and the only reason for alluding to it is, that the attention of the intelligent Ordinary may be turned to the point in cases hereafter arising in his Court.- It is ordered that the appeal be dismissed, and the decree óf the Ordinary affirmed.
    The administrator appealed, and now moved this Court to reverse the decree, on the ground:
    That he was entitled to ten per centum on the annually accumulating interest.
    Edwards, for appellant.
    
      Wright & Orr, contra.
   The opinion of the Court was delivered by

Johnstone, J.

We think the decision in this case conforms to the law as laid down in Wright vs. Wright, 2 McC. Ch. 196. There was, in fact, no accumulation of interest by letting out the principal, and taking in the interest and loaning it again as principal, which is held, in .that case, to be a condition of allowing ten per centum commissions.

It is ordered that the decree be affirmed and the appeal dismissed.

O’Neall, O. J., concurred.

Wardlaw, J., absent at the hearing.

Appeal dismissed.