Court Opinion

ID: 6696019
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:51:06.117609+00
Date Added: 2024-06-11T16:01:14.764562
License: Public Domain

Walker, J.
Concurring fully with the Court in the opinion that Mr. Pace, as trustee, is entitled to commissions on the entire proceeds of the sale, and not merely to the extent of the indebtedness, and at the rate fixed by the deed, I am unable to agree with my brethren that he is not entitled to even the actual cost and expense of advertising the sale, though paid by him, beyond the amount of $3, which is fixed by law for advertising sales. In my judgment, Revisal, sec. 641, as to the cost of advertising, applies only where the sale is made by the court, as will appear from the proviso, which'is that “the cost of such newspaper publication shall not exceed $3, to be taxed as costs in the action, special proceeding or proceeding to sell.” It plainly means that the court ordering the sale shall not allow more than that amount, and when you say, “shall be taxed as cost in the action,” you refer necessarily to a judicial proceeding. Besides, this sale was required to be advertised, not for four weeks, but for thirty days, which is more than four weeks.
In the absence of fraud, undue influence or some other vitiating element, partieé may freely contract with each other. If a debtor, when giving a mortgage with a power of sale, wishes to provide that notice of sale shall be advertised for a longer time than four weeks, or thirty days, or even sixty days, in order to secure the widest publicity of the sale, I can see no good reason why he should not be permitted to do so, if he is willing to pay for it; and not being against good morals or any established public policy, and the contract being free from fraud, undue influence or oppression, it would be an interference with the freedom of contract to forbid that he should do so. Whether the trustee has paid an unreasonable amount for the advertisement, or is about to pay it, raises a different question, and the reasonableness of the amount should be determined by the court below, which should find the facts, and decide thereon whether it is reasonable or not. If it is the usual amount charged, and prudent men paid for such service, and it was paid, in good faith, for the purposes of executing the trust, we do not see why he should not be entitled to an allowance of the full amount. How, otherwise, could he perform his duty as trustee, under the terms and directions of the deed? He must advertise in a newspaper, for the deed so requires, and he must pay what is usually charged or be refused the service. What is he to do ? The trustor has directed him to do that particular thing, and promised to pay for it — not $3, but what it reasonably costs to have it done. He should not be ex*713pected to pay tbe difference out of bis own pocket, wben tbe service is not rendered to bim individually, but as trustee, and be derives no personal benefit from it, but is acting solely for another wbo bas requested bim to do tbe act, or perform tbe service, and agreed to reimburse bim 'for bis outlay.
It was said in McIver v. Smith, 118 N. C., 73, in reference to advertisement by a mortgagee: “Tbe mortgage fails to specify tbe manner of advertising, but simply states tbat after advertising, tbe mortgagee may sell on default. A mortgage is a contract, and tbe parties may affix sucb terms and conditions as they see fit, provided creditors or others interested at the time are not affected thereby.” Tbe original statute brought forward in Revisal, sec. 641, was passed to remedy a certain evil. Property was being advertised only at tbe courthouse, by posting there, and also at three or four public places elsewhere. This was found to be subject to abuse, to tbe prejudice of tbe mortgagor or trustor, and, therefore, a more effective method of giving notice was resorted to, so tbat there would be more bidders and greater competition, insuring a higher price. It was not intended to prevent tbe parties from so arranging by agreement among themselves tbat there should be a more extended advertisement so as still further to attract bidders and stimulate competition, for it was tbe object of tbe statute itself to do tbat very thing, though not so elaborately, on account of tbe expense, leaving to tbe parties to contract for additional time of advertisement, if so desired.
It is generally held elsewhere tbat a trustee is entitled to tbe commissions, and tbe costs and expenses of executing tbe trust, as stipulated in tbe instrument creating tbe trust. 27 Cyc., 1500, 1501. It is there stated tbat a trustee, “if it is so provided in tbe deed, or by contract of tbe parties, may retain out of tbe proceeds (of tbe sale) bis fixed fee or commissions,” and further, tbat this rule also extends, in its application, to “tbe cost of printing and publishing tbe notices or advertisements of tbe sale,” which is “incurred in connection with tbe sale,” and this is true, even though the sale proves ineffective, if tbe attempt to sell was made in good faith, and tbe abortiveness of it was not due to any fault of tbe trustee; and be is also entitled to any other proper and legitimate items of expense to be charged against tbe proceeds and taken out by bim. 27 Cyc., 1502.
It was said by tbe present Chief Justice in Turner v. Boger, 126 N. C., at p. 302: “It is true tbat a stipulation for compensation for making tbe sale, in addition to actual expenses, if reasonable, would be sustained,” unless a cloak for usury. There is no suggestion of it here. Judge Daniels bas found tbat tbe cost of advertising was reasonable, and should be paid by tbe trustee. Tbe deed of trust provides tbe same kind of notice to be published in tbe newspaper as at tbe courthouse, *714that is, for thirty running or consecutive days. There is nothing in the wording of the deed to show that the parties intended it to be once a a week for four weeks. That would be substituting the language of the court for that of the parties. Besides, it may also' be said, in proof of what they meant, that Mr. Pace, the trustee, advertised daily in the News and Observer, according to the requirement of the deed, as he understood. His construction of it, and especially his act in reference to the kind of advertisement, was fully approved and indorsed by Mr. Leach in his note to Mr. Pace, dated 6 May, 1915, referring specially to the advertisement, and directing him to retain said costs and expenses of sale, and his commissions, and to make deed to Miss Dixie Leach, the purchaser, as he had arranged for the surplus, and he further acquits Mr. Pace of all liability to him for so dealing with the proceeds. How can language be stronger to express the clear understanding of the parties, and where is there now any ground of complaint left to the trustor ? He not only agreed to pay the amount, now disputed, but afterwards ratified what the trustee had done, with full knowledge of the facts.
The Court held, in Rish v. Ivey, 76 Ga., 738, that a requirement that advertisement be made in a newspaper for thirty days was not complied with by inserting it once a week for four weeks. This matter does not depend upon the law in regard to sales under executions, nor is there any analogy thereto, or any inference to be drawn therefrom, contrary in effect to the view herein taken, as the question depends for its solution entirely on the contract of the parties. 39 Cyc., 493, 494.
As to the attorney’s fees, I will readily concede that if Mr. Pace was required only to pay the net balance in his hands to Miss Leach, he would not be entitled to any fee for his attorney, as that required no professional assistance, being merely an act to transfer expressly directed by the deed. But he was compelled to do more than the simple act of payment. An attachment was issued in this action and levied on the fund in his possession, as trustee, and a complaint filed alleging that the deed of trust was fraudulent and void as against the trustor’s creditors, and praying that the surplus be applied to the payment of his> debts and to the satisfaction of his wife’s dower interest in the land. The trustee could not, under the circumstances, admit these allegations to be true by not denying them, for his failure to deny them would, under the statute, Revisal, sec. 503, be equivalent to an admission of them. If the plaintiff, before the sale, had attacked the trust, it would have been the duty of the trustee, as we have decided, in Belcher v. Cobb, ante, 689, to defend in behalf of the trustor, and if he had failed to do so, he would have been liable for his inaction or delinquency, and this must also be true as to the fund or any part thereof after a sale of the property, and still more true, as he has actual possession of the *715fund, and the creditor seeks to divert it from the original purpose in a way contrary to the directions of the deed.
It is said in 39 Cyc., pp. 339, 340: “A rule which has been applied in a great variety of cases affecting the administration and execution of trusts, is that a trustee has a right, whenever necessary to the proper administration, preservation, and execution of the trust and the prosecution or defense of actions, to employ counsel and to be reimbursed from the trust estate for whatever sums he has paid for the services of such counsel. The rule is applicable, even though the cesiuis que trustent employed counsel to represent the same interests, and although, to a certain extent, .the private and personal interests of the trustee may also be involved in the litigation. Counsel fees are a charge, on the trust fund, however, only when they are reasonably necessary and proper, and contribute to the due administration of the trust.” They are, of course, not allowable for services made necessary solely by the fault or maladministration of the trustee. Many courts even hold that^if the professional services are rendered by the trustee himself, being an attorney at law, he may be allowed for them, thereby repudiating the English rule. 39 Cyc., 484, 485.
Ohancellor Kent, in answer to an inquiry from a member of this Court, many years ago, gave it as his opinion that the English rule of not compensating trustees had not met with favor in this country because of our law in regard to public trustees, such as guardians, executors, administrators and receivers, and that the English rule had been greatly relaxed, if not totally abolished, by decisions in this country, so that now the courts allow conventional trustees to contract for their own compensation, in the form of commissions, besides reimbursing their expenses, which include an attorney’s fee, and, when the agreement is silent, they will fix the charge for their services at a reasonable amount. Boyd v. Hawkins, supra. Mr. Pace was not bound to rely on his own professional skill, but had the right to seek independent advice and the services of an attorney to file his answer and take care of his fiduciary interests. All this is well supported by authority. Fox v. Fox, 250 Ill., 384, 395; Grimball v. Cruse, 70 Ala., 534, 539; Nesbitt v. Woodburn, 190 Ill., 283, 298; Manderson's Appeal, 113 Pa. St., 631, 634; Abend v. End. Fund. Com., 174 Ill., 96, 106; Cochran v. Richmond R. R. Co., 91 Va., 339, 342.
In one of the cases it is said that perilous indeed would be the position of a trustee if the law required him to protect and guard the trust fund in litigation at his own expense, and by his unaided efforts, and further, that the trust may be lawfully called upon to bear the necessary expenses of its own preservation, and among these are reasonable counsel fees paid to an attorney for properly appearing in court and presenting the trustee’s side of the questions of doubt or controversy, *716they being a proper charge on the trust fund, which is benefited by such service. If he had let go the fund without a contest, the consequences to him, as well as to the trustor, might have been serious. He could, at his option, advise himself and otherwise perform an attorney’s part in the case, but it has grown into an adage of long standing that a man who is his own attorney has not a very wise or discreet client, however expert and skillful he may be. In this case the services of an attorney were necessary, and the amount allowed to him seems to have been reasonable.
In regard to the controlling effect of the express stipulations in the deed of trust, as to compensation and' other matters, and for the proposition that the “agreement constitutes the law of the particular case, and as such it will be enforced,” many authorities here and elsewhere may be cited. Jones on Mortgages (6 Ed.), sec. 1923; College of Charleston v. Willingham, 30 S. C. Eq., 195; In re Schell, 53 N. Y., 263, 265; Jackson v. Jackson's Exrs., 3 N. J. Eq., 96, 113; Meacham v. Sternes, 9 Paige’s Chancery Reports (N. Y.), 398, 404; Southern Ry. Co. v. Glenn, 98 Va., 299, 313; Ladd v. Pigott, 114 S. W. (Mo.), 984; Biscoe v. State, 23 Ark., 592, 598. And especially as to the necessity of advertising strictly according to the requirements of the deed, the following cases apply: Eubanks v. Becton, 158 N. C., 230; Ferebee v. Sawyer, 167 N. C., 200; Brett v. Davenport, 151 N. C., 56. Defendant’s counsel in his brief cites quite an array of cases in support of those propositions. Ys may add, that the judge held both the cost of advertising and the fee to be reasonable in amount, and considering what is necessary to insert in an advertisment, under this deed, including the recital of the power and the description of the land, it clearly appears that the ruling was right as to the cost of advertising. The fee is not only reasonable, but very moderate, for the service to be performed. The Court in Harris v. Martin, 9 Ala., 895, said that the inquiry is not what such services are usually rated at, but the compensation of the attorney is fixed by ascertaining what a prudent trustee would feel authorized to pay an attorney, taking in consideration all the circumstances of the case, though the usual rate charged is entitled to. some weight in making the estimate of a reasonable reward for the professional service, and the same is true as to the cost of advertising. But, in any view of the question, the judge’s ruling was correct. Ky. Natl. Bank v. Stone, 93 Ky., 623; In re Edward Schell, Trustee, 53 N. Y., 263; Mitchell v. Holmes, 1 Md. Ch., 287.
T agree, therefore, with Judge Daniels, that defendant "W. H. Pace should be allowed the full amount paid for advertising the sale, and also the attorney’s fee.
Justice BrowN concurs in the dissenting opinion of Justice Walker.