-

AUSTIX 11.TEXAS June 22, 1964

Honorable Don Hall District Attorney Waco, Texas OpinionNo. C-272
Re: Whether receipts from sale of securitiesby non-independent executorare subject to County Dear Mr. Hall: J;lp;'s fee under Article 3926,

. . .,and related question. Your letter recites that during the course of adminlstration, a non-independentexecutor sold various securities,and you request an answer to the following questions:

'Whenthe executor sold these securitiesbelonging to the estate, did the total amount ofmoney received from the sale constitutetaxable cash receiptsunder Article 3926 (l),Vernon'sRevised Civil Statutes? If so, are net losses on the sale of individually inventoried items to be deducted from taxable cash receipts?" Paragraph 1 of Article 3926,V.C.S., allows the County Judge a fee of one-half of one per cent on the "actual cash receipts of each executor.
. . *' It is well settled that cash on hand uoon a testator's death is not deemed "actualcash receipts."*Willis v. Harve& 26 S.W.2d 288 (Tex.Civ.App.1930, error ref.). The language of the cases,however, lacksuniformitywith reference to the status of cash derived from dispositionof the non-cash portion of the estate. Such lack of uniformity finds expression in a diversity of opinions from this office.
In Attorney General's OpinionsNos. ~~-1076 (1961)and O-5654(1943)>we held that money derived from disposing of the corpus of the estatewas "actual cash receipts." In OpinionNo. WW-502 1958 ,we held to the contrary. In OpinionNo. ~~-664 1959, t ! we held that certain claimsagainst an estate,when collected,were not subject to the fee in question. This latter opinionpurports to overruletwo earlier opinions to the contrary.

-1307-- .

Honorable Don Hall, page 2 (C-272)

The right to the fee on receipts from sales of the corpus was discussedat length in Lyles v. Oheim, 138T 333 159 S.W.2d 102 (1942). The administratorpaid the fE:'to tie County Judge who supervised sale of the ranch. M th later a successor county judgeapproved the annual accozzt 'demanded the fee be paid to him and filed suit therefor. The'Court said: 'The sole questionpresentedhere iswhether the commissionsto be paid a county judgeunder Article 3926
. . .on the receipts of an estate, are to be paid to the county judgewho made the orders and approved the proceedings for the sale of property belonging to the estate
. . .orwhether such commissions are to be paid to the county judgewho later acts upon the annual account.
. . . The court said $hat "eachcounty judgewas paid amount due him

. . . , and in explaining its reasons

"The law places the duty on the county judge the said: to hear applications for the sale of propertybelonging to an estate, and to order it sold. It also places on him the duty to see that such sales are made in accordancewith his orders,and that the administrator in all things complieswith same. He must checkand approve such sales,and ordera distributionof the proceeds derived therefrom. The law allows the county judgea fee of one-half of oneper cent 'uponthe actual cash receipts' received;and sincehe must perform the duties imposedupon him by law, surelyhe is entitled to such commissionsupon the approval of such accounts. The reason of this constructionrests upon the ground that the judgeperformingthese duties is entitled to be paid therefor.
. . .' Itmay be argued that the statementsby the Supreme Court are dicta, but it is obvious that the court gave the whole matter very carefulattention,, and Its holding that the first judge was properlypaid appears to have been deliberately made. At the very least, this authoritywould appear to be strong1 ersuasive Wiener v. Zwieb, 105 Tex. 262, 141 S.W. 771, 77% p1911); 15'Tex.Jur.Zd 594, courts, Sec. 135. Attention is directed to the fact that the duty is on the county judge to supervise sales of personalproperty as well as of real estate. Sections 331 et seq., Probate Code.

-1308-. -

Honorable Don Hall, page 3 (C-272)

In Goodwin v. Downs, 280S.W. 512 (Comm.App.lg26), the administrator completed certain road building contracts entered into by the decedent. The issuewas whether the fee of the judgewas to be based on gross cash received or on net profitsafter payment of expenses. The court quoted from the CivilAppeals opinion to the effect that such fee was taxable upon all cash received "from the sale of property owned by decedentat the time of his death, "on of debts, rents, etc., and "on actual cash remainin de%t"iZ %%e"~ethe administratorand coming from cedent'sbusiness." (Emphasisadded.) The Commission ofAppeals did not find fault with any portion of the holding of the lower court as above set out other than to indicate that the fee was to be computed on gross receipts rather than the net remaining. The court said:

"The county judgehas only oneway to receive any compensation for his supervisionof an administration. His responsibility is great. Re must study the reports and approve the accounts, including-receiptsand disbursements." added.) (Emphasis

Willis v. Harvey 26 S.W.2d 288 (Tex.Civ.App.1930, error ref.), involved cash &n hand at the date of death of the testatorheld by an independentexecutor. The following language by the court indicates, in our opinion, that the court deemed receipts from sales of corpus to be subject to the fee:

"Theact very clearlyhas in view the providing of compensationto the probate judge for his official control of estates, based on 'actualcash receivts' shown bv the exhibits,and the final settlement of the account of 'theexecutor' Judged from its associatedwords, the term texe&iort was meant to refer to the executor administering the estate of the testatorunder the control of the probate court. Such class of executors are required, as administratorsand guardians are, to present to the probate court in an exhibit of accounting,under oath, all sums in cash derived from sales, collections and like sources in due course of administration. The probate judge is required to examine and approve all such exhibits.

. . . The official situaiion of an independentexecutor is different.

. . . (Emphasisadded.)

-1309-Honorable Don Hall, page 4 (C-272)

Referring to the statute in question it is said in 18 Tex.Jur.2d 641, Decedents' Estates, Sec. 621: I,

. . . This commission is not limited to receipts arising from sales of property collection of debts, rent of oronertv. etc.: itmav'be collectedon receipts arising ?rom the conduct of a business.

. . ." (Emphasisadded,) Although the question is not free from difficultybecause of language In the casesmentioned below,we are constrained to hold in the light of the above authorities that the fee in question is properly due on receipts from sale of the securities mentioned,with the exception of Governmentbonds which are cashed. In OpinionNo. V-398, this officeheld that the fee was not due on receipts fromUnited States Government bonds which are cashed,relyingupon Terrill v. Terrill, 189 S.W.2d 877 (Tex.Civ.App.1945, error ref.}.
In Gilbert v. Hines, 32 S.W.2d 876 (Tex.Civ.App. a guardian's fee was claimedunder Article 4310 V.C.S. viding for fee on “estate
. . . first deliveredl'), on funds collected from the Veterans' Bureau for compensationand war risk insurance. The fee was disallowed,
In McCrory v. Wichita Count 261S.W.2d 867 (Tex.Civ. App. 1953, error ref.), the coun i judge's feewas disallowed on cash receivedby a guardian from aliquidatingtrust estate. The courtwas careful to point out:

"The 'estatefirst delivered' to appellantwas the distributionmade to her by the trustee. The real property of the trustorwas never delivered to her. Her only right was to receive forher ward one-twenty fourth of whatever amount the trustee converted into cash. As guardian, she could not have claimeda commission on the estate first delivered." There is admittedly language in the two cases last above mentioned from which a conclusion contrary to the onewe have reached could be urged. It is, therefore, our duty to ha,rmonize the decisions if at all possible. We direct attention to the fact that in neither of said two cases is the county judgerequired to supervisea sale of property. In each case, the representativeof the estams merely engaged in collecting certain claims of the estate. This is in linewith the

-1310-. -

Honorable Don Hall, page 5 (C-272)

Terrlll case, supra,denying the fee on the cashing of Government obligationsand with our OpinionNo. ~-664, supra, denying the fee on monies received by a guardian on claims for social securityand for workmen's compensation. Because we believe that the language of the courts in the L les Goodwin +- and Willis cases, supra, ismore nearly in poin as it relates to s-as distinguished from the collection of claims,we helmt the receipts from sale of the securitiesare subject to the fee in question.
fee The In the Goodwin case, supra, it is pointed out that the is assessedupon the gross receipts received by the estate. question, therefore, of whether a particular securitywas sold for more or less than its estimated value as set out in the Inventorywould be immaterial. This answers the second portion of your inquiry. Attorney General's OpinionWW-502 is hereby overruledto the extent that it is in conflictwith this opinion. S U M M.A RY Gross receipts from the sale of securities by a non-independent executor are subject to the county jud e's

% fee provided in Paragraph 1 of Article 392 , V.C.S. However, receipts from the cashing of U. S. Government bonds are not subject to such fee. Yours very truly, WAGGONER CARR Attorney General of Texas

JAS:da APPROVED: OPINION COMMITTEE W. V. Geppert, Chairman Bill Allen George Gray Grady Chandler APPROVED BOR THE ATTORNEY GENERAL By: Stanton Stone -1311-