W’ILL WILSON

*lToRNEiY GENERAI. July

HonorableWilliam Hunter District Attorney 69th Judicial District Dalhart, Texas

Dear Mr. Hunter: 18, 1962

OpinionNo. WW-1391
Re: Whether each of thren executors of a decedent's estate is entitled to compensationunder Article 241 of the Probate Code for sums ofmoney paid out by them under the two stated fact situations.
You have requested the opinion of this office as to whether each of three executors of a decedent's estate is entitled to compensationunder Article 241 of the Probate Code for sums they have paid out in cash for the following:

1. When money is paid to one of the executors who is employedby the estate as a clerk in a store operatedby the estate. 2. Payment of attorney&' fees for administration to a partnershipwhen one of the executors is a member of suchpartnership. Supplemental informationwas received, to the effect that the executorwho engaged in the operation of the store actually acted as the manager thereof.

Article 241 of the Probate Code reads as follows:

tratoZa) ' '

om ensation of Executors and Adminis-

. Executors and administrators shall be entitled to receive, and may retain in their hands, a commission of five per cent (576) on all sums they may actually receive in cash, and the same per cent on all sums theymay actually pay out in cash, in the administrationof the estate; provided, no commission shallbe allowed for receiving cash belonging to the testator or intestatewhich was on hand or on deposit to his credit in a bank at the time of his death, nor for paying out cash to the heirs or legatees as such;provided, further, however, that in no event shall the executor or administratorbe entitled in the aggregate to more than five per cent (5%) of the gross fair market value of the estateHon. William Hunter, page 2 (WW-1391)
subject to administration. If the executor or administratormanages a farm, ranch, factory, or otherbusiness of the estate, or if the compensation as calculatedabove is unreasonably low, the courtmay allow him reasonable compensation for his services. For this purpose, the county court shallhave jurisdictionto receive, consider,and act on applications from independentexecutors."
As regards the executorwho dealtwith the store, the plain language of the statutemust control. The statute says, "If the executor or administratormanages a farm, ranch, factory, or other business of the estate, or if the compensationas calculatedabove is unreasonably low, the courtmay allowhim reasonable compensation for his services." This "reasonablecompensation"allowable by the court is in addition to any commission that would be payable to the executor for his activities as executor in administering the estate. With respect to the executorwho is a member of a partnershipwhich was retainedby the three executors to handle the legal aspects of the estate administration,the problem is considerablymore difficult. Apparently, only one case in Texas has dealt with thematter of an estatepaying the legal fees of an executorwho has retainedhimself (orhis law firm). Neblett v. Butler, 162 S.W.2d 458 (Civ.App. 1942, error ref.,w.o.m.). ThiS casedealt with the propriety of attorney's fees and, in obiter dicta, compared the two positions regarding compensationof an executorwho has also performed legal services for an estate. The court in Neblett felt that there is no compelling reason for refusing to compensate such an executor, and would have held in favor of paying him his attorney's fees,had such a rulingbeen germane to the problembefore them. Itmust be noted that the position taken by the Galveston Court of CivilAppeals is a minority one, having been adopted completelyby only four other states AAlabama, New Jersey, Pennsylvaniaand Tennessee). 65 ALR 2d 811, 15. Nevertheless, the expressionmade is the only court decision we have to serve as a guide, although it can be consideredas no more.

If we assume that the Texas courtswill approve of an executor retaininghimself or his law firm to perform the legalwork connectedwith the estate, then we are forced to the conclusion that the executorwould be entitled to have such fees included within the amount upon which his statutory commission is computed. Article 241 of the Probate Code cannotbe construedas forbidding even such a commissionas this. It shouldbe noted that in Opinion No. 182 (1958), the Committee on ProfessionalEthics of the StateBar of Texas held that it was proper for an attorney to actHon. William Hunter,page 3 (WJ-1391)

as independent executor of a will, handle the administration thereof, and charge a reasonableattorney's fee therefor. Nothingwas said in that opinion regarding the propriety of also accepting the statutory commissionnormallydue an executor. Therefore,we are constrained to hold that, until such time as the statementsmade in Neblett are held not to be the law in Texas, an attorney-executormay retainhimself or his law firm, pay the legal fees out of the estate (so long as tke reasonablenessthereof is upheld by the probate court), and then have such fees includedwithin the amount upon which his statutory commission is computed.
SUMMARY

Under Article 241 of the Probate Code, an executorwho manages a storebelonging to an estate is entitled to a reasonable compensation, to be setby the court, and should receive a commission on funds received or paid out in connectionwith the store.
An executorwho has retainedhimself or his law firm to handle the administration of the estate is entitled to have the legal fees paid to such firm includedwithin the amount upon which the said executor's statutory commis'sion is computed.

HL6,: ms
APPROVED: Yours very truly,
WILL WILSON Attorney General of Texas

By&&& AssistantAttorney General

OPINION COMMITTEE W. V. Geppert, Chairman F. R. Booth ScrantonJones Bill Allen REVIE~JED

FOR THE ATTORNEY GENERAL By: Leonard Passmore