Case Name: MERKEL v. LONG
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1965-04-09
Citations: 375 Mich. 214
Docket Number: Calendar No. 30, Docket No. 50,383
Parties: MERKEL v. LONG.
Judges: T. M. Kavanagh, C. J., and Black and Smith, JJ., concurred with Souris, J.
Reporter: Michigan Reports
Volume: 375
Pages: 214–224

Head Matter:
MERKEL v. LONG.
On Rehearing.
Decision of the Court.
• 1. Trusts — Attorney Pees — Preservation or Additions — Equity.
Attorney fees for services rendered certain individuals in effecting a compromise settlement of a controversy over the construction of provision of a testamentary trust may not properly be decreed against the trust, where result is not beneficial to the trust by way of preservation of or additions to the trust estate, merely to avoid an inequitable result, although equity has inherent power to require payment of such fees out of the funds of the trusts where result is beneficial to the trust (CL 1948, §§ 702.45-702.49).
2. Same — Attorney Pees — Pees of Guardian Ad Litem.
It is not inequitable to require parties who engage counsel to initiate proceedings for approval of, a compromise agreement resolving differences over ambiguous provisions of testamentary trust to satisfy their individually contracted obligations for attorney fees from their private funds, not the trust fund, and leave fees of guardians ad litem, appointed by the chancellor to assist him in protecting the interests of ineomx>etent, unknown, and unborn heirs of the trusts’ settlor and of the life beneficiaries of the trusts, to be taxed against the income and corpus of the trusts (CL 1948, §§ 702.45-702.49).
3. Costs — Rehearing—-Attorney Pees — Trusts.
Costs of rehearing are allowed trustees against petitioners who sought court approval of compromise agreement respecting construction of ambiguous provisions of testamentary trust, where the trustees are successful in opposing assessment of fees against trust estate.
References for Points in Headnotes
54 Am Jur, Trusts §§ 636.1, 636.11 (Supp).
Allowance of attorney’s fees in, or other costs of, litigation by beneficiary respecting trust. 9 ALR2d 1132.
14 Am Jur, Costs § 95.
14 Am Jur, Costs § 6.
54 Am Jur, Trusts § 562.
14 Am Jur, Costs § 26.
Separate Opinion.
Dethmers, O’Hara, and Adams, JJ.
á. Costs — Statutes—Court Rules.
Generally, costs are governed by statute or court rule.
5. Trusts — Ambiguities—Compromise Agreement — Approval.
Statutory proceedings, initially nonadversary, designed to bring before courts parties who have or might have a beneficial interest in an estate or trust fund but who, by virtue of legal disability, are unable to represent themselves or enter into an agreement resolving differences is principally to allow settlements, resolving controversies over ambiguous provisions, to be made with approval of the court so as to bind minors, unborn heirs, and unknown persons (CL 1948, § 702.45 et seq.).
6. Same — Compromise Agreement — Attorney Pees — Discretion op Court.
The fact that benefits flowing from court-approved compromise agreement binding upon adult, minor, and unknown heirs involved in trust estates did not result in preservation of, or additions to, the trust estate would not preclude an award of attorney fees from the trust estate should the trial court in his discretion make allowance therefor (CL 1948, § 702.45 et seq.).
7. Equity- — Expenses op Litigation — Discretion op Court.
An equity court has discretion and power, in 'making an award of costs of litigation to apporiion the expenses and costs between the parties according to equitable principles applicable to the facts of the particular case, and such apportionment or denial of apportionment will not be disturbed unless it appears the discretionary power has been abused.
8. Trusts — Expenses op Litigation — Approval op Compromise Agreement.
The expense of litigation, including attorney fees and fees and costs of guardians ad litem, involved in effecting a judicial approval of compromise agreement between parties involved in a testate or tryst -estate, some of whom are not under legal disability and others of whom are under legal disability or even unknown, in the absence of any statutory or court rule provi sion, may be disposed of by the court authorized to approve the agreement (CL 1948, § 702.45 et seq.).
9. Same — Attorney Fees — Expenses—Remand—Equity.
Bequest of $37,500 for attorney fees, $555 for expenses, and $6,050 for guardian ad litem fees in equity proceeding to secure approval of a compromise agreement respecting an ambiguous testamentary trust should be remanded for determination by the trial court as to the propriety of amount and for the exercise of his discretion in awarding or not awarding fees and costs in accordance with equitable principles involved (CL 1948, § 702.45 et seq.).
Appeal from Wayne; Piggins (Edward S.), J.
Submitted June 4, 1964.
(Calendar No. 30, Docket No. 50,383.)
Decided April 9, 1965.
In the case of Frances Gray Merkel and others against Irvin Long and Mack Ryan, successor trustees under the will of Paul R. Gray, following approval of compromise agreement, petitions were filed by Dickinson, Wright, McKean & Cudlip, Lewis & Watkins, Samuel M. Lane, and others for attorney fees and expenses as guardian ad litem to be charged against the estate. From denial of trustees’ motions to dismiss petitions and enter summary judgments, they appeal. Affirmed by Supreme Court that is equally divided between affirmance and reversal as to counsel fees for beneficiaries and affirmed as to fees and expenses for the guardians ad litem. See 372 Mich 144. Rehearing granted February 5, 1964.
Affirmed in part, reversed in part.
Dickinson, Wright, McKean <& Cudlip (Robert E, McKean and Patrick J. Ledwidge, of counsel) ; Lewis & Watkins (Clarence J. Boldt, Jr., of counsel), all in propriis personis.
Long, Ryan, Franseth & Spicer (Irvin Long, of counsel), for trustees Long and Ryan.

Opinion:
On Rehearing.
Souris, J.
(for affirmance in part and reversal in part). In Merkel v. Long (1963), 372 Mich 144, Mr. Chief Justice Carr, writing for himself and for three present members of this Court, concluded that a chancellor may order trustees to pay out of the funds of the trust estates the reasonable fees of the attorneys representing petitioning parties in a Dodge act proceeding for the services they rendered their clients. For authority, the Chief Justice relied squarely upon the doctrine of Trustees v. Greenough (1881), 105 US 527 (26 L ed 1157), and Sprague v. Ticonic National Bank (1939), 307 US 161 (59 S Ct 777, 83 L ed 1184).
Mr. Justice Adams, writing now on rehearing, concedes that the doctrine of Greenough and Sprague is inapplicable to the facts of this case, the litigation resulting in no "preservation of or additions to the trust estates". Justice Adams likewise concedes that there is no statutory or rule authority to support the exercise of such power by a chancellor in such cases. Having conceded the inapplicability of Greenough and Sprague, the authorities upon which Chief Justice Carr relied to reach the result he did, and having conceded the absence of statutory or rule authority in support of such result, Justice Adams nonetheless reaches the same result, but this time on the asserted basis of the great inherent powers of a chancellor to avoid "an inequitable result".
I agree with Justice Adams, as I said in my opinion for the remaining members of the Court in our immediately preceding decision in this case, 372 Mich at 155, that valid as the doctrine of Greenough and Sprague is (as it has been adopted by this Court for use in this State in appropriate circumstances by our decision in Sant v. Perronville Shingle Co. [1914], 179 Mich 42), absent any benefit to the trusts as such, the doctrine was misapplied by the Chief Justice to the facts of this case. I agree with Justice Adams also that there is no statutory or rule authority for the chancellor's taxation of petitioners' attorney fees against the trusts; also that, to avoid "an inequitable result", equity would have inherent power to require payment of such fees out of the funds of these trusts.
However, I fail to be persuaded by Justice Adams' assertion that any inequitable result could occur in this case, or any similar case, by virtue of taxation of the fees of the guardians ad litem against the trusts, as affirmed by the Court's prior decision herein, and disallowance of taxation of petitioners' attorney fees against the trusts. In the first place, none of the cases cited by Justice Adams, all of which were exhaustively considered in our prior opinions, lends any support to his assertion of inequity. Not even Chief Justice Carr, who relied squarely upon those cases, so much as suggested that they stood for the proposition that a chancellor may award such attorney fees whenever failure to do so might "produce an inequitable result".
Second, no inequity would in fact occur by dis-allowance of such requested costs. In the view I take of this matter, those parties who engaged counsel to initiate this proceeding would and should satisfy their individually contracted obligations for attorney fees from their own private funds, as do other private litigants, while only the fees of the guardians ad litem, appointed by the chancellor to assist him in protecting the interests of the incompetent, unknown, and unborn heirs of the trusts' settlor and of the life beneficiaries of the trusts, would be taxed against the trusts. Indeed, in my prior opinion on original hearing, I wrote for four members of the Court that a part of the fees of the guardians ad litem should he paid directly from income of the trusts thus allocating to the petitioning life beneficiaries who instituted this proceeding and for whose primary benefit its fruits are destined a substantial part of the cost of providing the services of the guardians ad litem made necessary by the proceeding they initiated.
Once again, I would affirm the chancellor's denial of the trustees' motions to dismiss the petitions for fees of the guardians ad litem and reverse his denial of the trustees' motions to dismiss the petitions for fees and expenses of the attorneys for the parties who instituted this proceeding. Further, I would allow the trustees to tax their costs of this rehearing against the petitioners below.
T. M. Kavanagh, C. J., and Black and Smith, JJ., concurred with Souris, J.