Court Opinion

ID: 5384700
Source: CourtListenerOpinion
Date Created: 2022-01-08 09:19:12.562438+00
Date Added: 2024-06-11T08:30:12.613580
License: Public Domain

Johnston, J.
(dissenting). I dissent and vote to modify the decree by limiting the surcharge to the amount necessary to satisfy the shares of the objecting legatees only and to limit the attorney’s refund to the estate to the amount of the surcharge as thus determined.
The court is unanimously of the opinion that ordinarily a fiduciary’s surcharge is limited to the amount necessary to pay *743the proportionate share of the objecting interests alone. Indeed, that rule is well settled and supported by controlling authority. (Matter of Garvin, 256 N. Y. 518; Matter of Roche, 259 N. Y. 458; see, also, Matter of Koch, 184 Misc. 1, and cases cited at p. 5.) The majority believes, however, that, while prior to the amendment (L. 1934, ch. 332) of section 231-a of the Surrogate’s Court Act the rule applied to all types of surcharge, perforce the amendment a different rule now obtains where the surcharge is based on the payment of an unreasonable fee to the attorney for the estate representative. The amendment added the foEowing paragraph to the statute: “ In the event that any such attorney has already received or been paid a sum in excess of the fair value of his services as thus determined, the surrogate shall have power to direct him to refund such excess.”
We are presently concerned only with the amount of the surcharge. The history of the amendment shows that its purpose was entirely foreign to the subject under consideration. In Matter of Rosenberg (263 N. Y. 357) it was held that under section 231-a as it then read (that is, prior to the 1934 amendment), the Surrogate’s Court was without power to direct an attorney for the estate to refund excess compensation voluntarily paid to him and that the rights of the parties should be litigated in the ordinary way, that is, by action. It was to overcome that decision that section 231-a was amended by adding the above-quoted paragraph. The sole object of the amendment was to clothe the Surrogate’s Court with jurisdiction — which prior thereto it did not possess — to direct, by summary order, that an attorney refund excess compensation. (Matter of Rosenberg, 157 Misc. 490, 493.) The amendment did not have for its purpose any change in the rule with respect to the amount of the surcharge to be made. This court, on two prior occasions, has expressly so held. (Matter of Ellensohn, 258 App. Div. 891; Matter of Dempsy, 259 App. Div. 1083.) The record on appeal in the latter case reveals that the sole argument advanced in the briefs and rejected by this court was that, because of the express provisions of section 231-a, as amended in 1934, the entire excess was properly made the subject of surcharge and refund and that all the distributees, whether they did or did not file objections, were entitled to share in the surcharge. No reason presently appears why Matter of Ellensohn (supra) and Matter of Dempsy (supra) should be overruled. In fact, a re-examination of the question confirms the correctness of the determinations.
In my opinion, the conclusion of the majority may not be reconciled with the theory underlying the determination in *744Matter of Sielcken (176 Misc. 235, affd. 263 App. Div. 866, motion for leave to appeal denied 288 N. Y. 739). There it was held that where, on the objection of the widow of the testator — the residuary legatee — to the executor’s account, the fees paid to the attorney for the estate were reduced, the attorney for the objecting residuary legatee could not, under section 231-a of the Surrogate’s Court Act, obtain from the general estate an allowance for the services rendered but had to secure payment from his client only. If, as the majority hold, the amount of the surcharge and the refund to the estate are for the benefit of nonobjecting as well as objecting legatees, the services of the attorney for the objecting residuary legatee in the Sielcken case {supra) would result in benefit to the estate as a whole. In such event, the attorney would have been entitled to payment from the entire fund and not merely from the distributive interest of the person on behalf of whom he primarily acted. Obviously, the theory underlying the determination in the case cited is that, where the objection of the legatee results in the reduction of fees paid to the attorney for the estate, the attorney for the objecting legatee renders no services to the estate; that no one except the client for whom he purported to act has benefited by his services and, therefore, payment of the fee of the attorney for the objecting legatee must come only from the objecting legatee’s share. In my opinion, that determination can have only one meaning, and that is, that objections such as are involved in the case at bar can result only in a benefit to the objecting legatees and not in a benefit to the estate generally or to nonobjecting legatees as well as objecting legatees.
The fact that the refund by the attorney for the estate of his excess compensation is required to be made to the estate does not add any force to the views of the majority. The only reason for such a direction is that the overpayment originally was made from the moneys of the estate. The statutory language permits the Surrogate to direct a refund of the entire excess where all of the legatees object, but does not require him to direct a refund of the entire excess where only some of the legatees, object. That it was the legislative intent to restrict the refund to the proportionate excess necessary to pay only objecting legatees appears clearly from the fact that as to non-objecting legatees the fee is not excessive because they are deemed, by not objecting, to have assented to or ratified the payment insofar as the payment represented their share of the estate assets.
*745In Matter of Stemmler (171 Misc. 318), cited by the majority, the only question was whether a proceeding to compel an attorney in fact to refund money to his principal was brought in time, in view of the provision of section 231-b of the Surrogate’s Court Act that such a proceeding must be brought “ at any time during the administration of an estate The determination made had no bearing on the subject matter here under consideration.
The amount of the surcharge of the executor and the amount of the refund directed to be paid by the attorney to the estate should be limited to four eighths, or one half, of the alleged overpayment to the attorney.
Sneed and Wenzel, JJ., concur with Lewis, P. J.; Johnston, J., dissents, in opinion in which Adel, J., concurs, and votes to modify the decree by limiting the surcharge to the amount necessary to satisfy the shares of the objecting legatees only and to limit the attorney’s refund to the estate to the amount of the surcharge as thus determined.
On reargument, decree of the Surrogate’s Court, Putnam County, insofar as appealed from, affirmed, with costs to the successful parties who have appeared and filed briefs, payable out of the estate.