Case ID: ad_157/html/0310-01.html
Source: Caselaw Access Project
Author: {"author": "Burr, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Judicial Settlement of the Account of the Long Island Loan and Trust Company, as Trustee, Respondent, under a Deed of Trust Made by Magdalena E. Sohmadeke, Appellant. (Proceeding No. 2.)
    Second Department,
    June 6, 1913.
    Trust—termination of portion of trust of personal property—submission of controversy—settlement of trustee’s accounts — allowances.
    The question as to whether a trust consisting of personal property had been terminated as to a certain amount thereof was submitted to the court under an agreed statement of facts. The court determined that the trust had been terminated as to the amount claimed, and a judgment was entered, without any objection on the part of the trustee, that the beneficiary have judgment for the amount claimed, and that no costs be awarded either party as against the other. The judgment was appealed from by the trustee and affirmed by the Court of Appeals. The amount not being paid, the beneficiary issued an execution under the judgment and the money was collected by the sheriff. The trustee, upon the settlement of its accounts, was allowed credit, over the objection of the beneficiary, for sheriff’s fees, services of counsel and interest on the trust fund claimed to have been paid.
    
      He Id, that credit should not have been allowed the trustee for sheriff’s fees or services of counsel;
    That the order settling the trustee’s account should be reversed and the proceedings remitted to the Special Term, with leave to either party to introduce further evidence upon the question of interest only.
    Appeal by Magdalena E. Sohmadeke from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the 6th day of September, 1912, settling the accounts of the trustee herein.
    
      Charles J. Ryan [John R. Kuhn with him on the brief], for the appellant.
    
      George S. Ingraham, for the respondent.
   Burr, J.:

In 1910 a controversy between Magdalena E. Hoskin and the Long Island Loan and Trust Company was submitted upon an agreed statement of facts. (Hoskin v. Long Island L. & T. Co., 189 App. Div. 258.) The question to he determined was, whether a trust created by Magdalena E. Schmadeke (who had married subsequently to the creation of such trust and was the plaintiff Magdalena E. Hoskin), and which trust consisted of $25,000 in personal property, had been terminated as to $10,000, a part thereof. The submitted case provided that the court should render such judgment as should be proper under the above facts.” This court determined that the trust had been terminated as to $10,000, and the effect of that was that the defendant, the Long Island Loan and Trust Company, had in its possession $10,000 to which the plaintiff was entitled. There was no necessity for any provision in said judgment directing a conversion of the trust fund. The trust fund was already personal in character. Upon the decision in that case, a judgment was entered without, so far as appears, any objection on the part of the defendant, that Magdalena E. Hoskin have judgment against said defendant for the sum of $10,000. That judgment was appealed from, and was affirmed by the Court of Appeals on the opinion below (203 N. T. 588). The $10,000 was not paid, and plaintiff issued an execution under the judgment, asunder the form of the judgment she was entitled to do, and the money was collected by the sheriff.

Upon the settlement of the trustee’s accounts, said trustee claimed credit for the sum of $141.78 paid for sheriff’s fees, and $317.80 paid to counsel for services in this litigation. The trustee also claimed credit for interest on- the trust fund from June 28, 1910, to December 21,1911, which the trustee claimed to have paid. Objections were made by the beneficiary, Mrs. Hoskin, to the allowance of these three amounts, the objections were overruled, the account settled accordingly, and she appeals.

We think as to two of the amounts the objection was well taken. If plaintiff was justified in issuing an execution to recover the $10,000 which the judgment directed her to recover from the defendant in said submitted controversy, defendant cannot impose upon her the sheriff’s fees paid on such execution. Under the form of the judgment she clearly was entitled to issue such execution. Appellant now contends that the judgment was not in proper form. We are not sure that, considering the provisions of the original case as submitted, this form of judgment was not fully authorized, but he that as it may, the defendant acquiesced in it, and until the judgment is modified in form, any proceeding properly taken under it is not only not void, but not even irregular. The case of Corn Exchange Bank v. Blye (119 N. Y. 414), referred to by the learned justice at Special Term, is not only not an authority in support of the contention, but an authority directly to the contrary. If the judgment is to he modified in form application must be made to this court to modify it, and no such application has been made either to this court or to the court at Special Term, nor has any order been entered modifying it. Therefore, the objection to the attempt to make the plaintiff in said action pay the sheriff’s fees for collecting the money judgment in her favor against the defendant should have been sustained. So, also, the objection to the payment of counsel fees on the part of the trustee to its own attorney should have been sustained. There was no provision in the case as submitted with regard to costs. Costs were, therefore, in the discretion of the court. We thought, under the circumstances, that the defendant trustee was justified in submitting the question in dispute to this court, and, therefore, our judgment was that no costs should be awarded to either party as against the other. That judgment was a sufficient protection to the trustee, but it was unwilling to rely upon it and took the case to the Court of Appeals, involving Mrs. Hoskin in further expense, with no beneficial result to her or to the trustee. To allow the trustee now to charge counsel fees against her for this entire litigation would be not only unjust so far as the expense of litigation in the Court of Appeals is concerned, hut would he directly contrary to the decision of this court to the effect that each party to the litigation should hear her or its proportionate part of the costs thereof.

As to the objection for the allowance of the sum paid for interest, the record is exceedingly confused. It would seem that between January, 1910, just before an attempt was made to terminate this trust, and January, 1912, when the trust was terminated and the money paid over, a sum was paid to the beneficiary nearly equivalent to interest on the $25,000, and as to the balance the trustee claims that by reason of lack of opportunity to invest the funds no income was earned. It is to be presumed that the execution called not only for the collection of the judgment, but interest thereon at six per cent, and that the plaintiff in said action received that. If so, the trustee should be permitted to charge back such sum, being equivalent to interest on that amount at the rate actually received by it during the period; otherwise the beneficiary receives double interest.

The order appealed from should be reversed, with costs to the appellant, and the proceedings remitted to the Special Term of this court to settle the account in accordance with this opinion, with leave to either party to introduce further evidence upon the question of interest only.

Jenks, P. J., Thomas, Carr and Rich, JJ., concurred.

Order reversed, with costs to the appellant, and proceedings remitted to the Special Term of this court, to proceed in accordance with opinion by Burr, J.