Court Opinion

ID: 9669387
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:54:38.966152+00
Date Added: 2024-06-11T18:15:56.148147
License: Public Domain

Adams, J.
(dissenting in part). This case was before this Court in Merkel v. Long, 368 Mich 1, wherein a so-called Dodge act1 agreement was approved, and in Merkel v. Long, 372 Mich 144. This is a rehearing granted from a 4/4 division in the latter on the question of award of attorney fees and fees to the guardians ad litem.
Previously the difference upon the Court was over whether there was a direct benefit to the trust estates as a résult of the Dodge act proceedings. Chief Justice Carr found such a benefit, and, in accordance with the doctrine of Trustees v. Greenough, 105 US 527 (26 L ed 1157), and Sprague v. Ticonic National Bank, 307 US 161 (59 S Ct 777, 83 L ed 1184) recognized by this Court in Sant v. Perronville Shingle Co., 179 Mich 42, and Becht v. Miller, 279 *220Mich 629, he affirmed the authority of the trial judge to award fees to the attorneys and guardians ad litem. Justice Souris found no benefit to the trust estates, distinguishing such a benefit from one to the beneficiaries. He would have denied award to the attorneys of the parties sui juris but would have permitted award to the guardians ad litem.
As a general rule, costs are governed by statute or court rule. See CLS 1961, § 600.2405 (Stat Ann 1962 Rev § 27A.2405) and committee comment thereon.2 There is no statutory authority to support the exercise of the power which was asserted by the chancellor. Nor has provision for such action been made by this Court under its rule-making powers as provided for in CLS 1961, § 600.2401 (Stat Ann 1962 Rev § 27A.2401). Courts of chancery have sometimes drawn upon their reservoir of inherent powers to award reasonable expenses to a party in litigation.3 The question upon this rehearing is whether the chancellor should be permitted to exercise such power. The question is one of power and not of the propriety of particular fees or the precise method by which the chancellor makes an award.
Dodge act proceedings were designed to bring before the 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. It was stated in In re Peck’s Estate, 323 Mich 11, 22:
*221“The purpose of the act principally was to allow settlements to be made with approval of the court so as to bind minors and unborn heirs and others whose present existence or whereabouts cannot be ascertained.”
Trustees v. Greenough and cases hereinbefore cited involved proceedings to bring about restitution of property to a fund, preservation of a fund from wrongful acts of the trustee, or some analogous situation. No such purpose is contemplated in a Dodge act proceeding (though it may he an incidental accomplishment), the primary purpose being the resolution by agreement of an ambiguity in a trust instrument.
A Dodge act proceeding begins as a nonadversary one instituted only after agreement has been reached by the parties not under some legal disability. It may become an adversary proceeding, in the sense that it may be defeated due to objection thereto, but primarily it remains nonadversary throughout. The chancellor is instructed to approve an agreement “found to be just and reasonable.” CL 1948, § 702-.47 (Stat Ann 1962 Rev § 27.3178[117]).
In this case there are three separate trusts. Each trust has its own life beneficiary upon whose death the principal of the trust is to be distributed. The ambiguity in the testator’s will made uncertain the manner in which distribution should be made. Under one theory, the principal would be divided among the heirs of the testator determined at the time of his death; under another, it would he divided among his heirs determined as though he had died immediately following the death of the life tenant; and under still another, it would be divided among the issue of the life tenant. As this Court observed in the first appeal, the Dodge act agreement eliminated all but the last of these possibilities in a *222manner most nearly compatible with the probable intention of the testator. Merkel v. Long, 368 Mich 1, 15.
The problem of parties is illustrated by the fact that some of the children of one of the life tenants are of age and joined in the agreement but a younger brother and sister were unable to do so because of minority. Any one of the children could die before his parent and, under the agreement, never enjoy the benefit of the trust estate. It is also possible that persons who have not yet come into being may realize the prime benefits of the agreement.
The benefits attained were: (1) resolution of an ambiguity in the will; (2) the remainder of each trust estate will vest in those who were the probable objects of testator’s residuary disposition; (3) the principal of the estates will be distributed directly to the issue of the life tenants relieved of diminution by estate taxes; (4) determination of those entitled to the remainder will aid in administration; and (5) the parties can plan their own affairs with certainty and make disposition of their own estates.
However desirable or substantial these benefits may be, none results in preservation of or additions to .the trust estates. If such a result is necessary before attorney fees and costs may be assessed under the reasoning of Trustees v. Greenough and Sprague v. Ticonic National Bank, supra, and other cases, it does not follow that this conclusion is dispositive of the issue. The inherent powers of a chancellor in an equity proceeding, as has been noted, are great. Traditionally this Court has reposed great confidence in a trial court in the exercise of such powers. In Boyce v. Wendt, 305 Mich 254, it was said, (p 261):
_ “The allowance of costs and expenses in connection with the accounting we treat as discretionary *223with the trial court and conclude that said court did not abuse the discretion vested in him.”
The parties who are under no legal disability can pay their own counsel. The mental incompetent, the minor, the individual not yet in being, or others under a disability, for whose benefit and protection the act is designed, cannot. Yet all have a vital interest in the fund. All may have benefited from the result achieved. That some should have their attorney fees and guardians’ fees paid from the fund, and some not, is almost certain to produce an inequitable result. Whether such is actually the case will be for determination by the chancellor upon remand. As was said by Mr. Justice Frankfurter in Sprague v. Ticonic National Bank, supra, at p 166:
“Plainly the foundation for the historic practice of granting reimbursement for the costs of litigation other than the conventional taxable costs is part of the original authority of the chancellor to do equity in a particular situation.”
The rule is stated in 20 CJS, Costs, § 13, pp 284, 285, as follows:
“In a suit in equity the court, by virtue of the discretion vested in it as to costs, * * * has power in a proper case to apportion the costs between the parties, according to the equitable principles applicable to the facts of the particular case; and unless it appears that this discretionary power has been abused, the court’s action will not be disturbed as to its apportioning costs, or in denying apportionment.”
It would seem that a Dodge act proceeding can be fully effectuated only if the chancellor is empowered to dispose of the entire matter, and that, in the absence of any statutory provision or court rule, this *224should include the power to award attorney fees and fees and costs of guardians ad litem. The benefits to beneficiaries or possible beneficiaries of such a proceeding, because of the many different circumstances which may arise, can best be determined by the chancellor who has the responsibility of giving approval to the agreement. He, in his discretion, may award fees and costs and, if it is possible to do so, should make such awards against the respective interests as they have benefited by the proceeding.
In the present case, total attorney fees of $37,500, expenses of $555, and total guardian ad litem fees of $6,050 have been requested. For a determination as to the propriety of the same we remand this case to the trial court. The chancellor is instructed to exercise his discretion in awarding or not awarding fees and costs in accordance with the equitable principles herein indicated. He may, of course, deny as well as grant fees and costs if for any reason he determines that they should not be borne out of the trust estates.
The decision of the trial court should be affirmed. Costs to appellees.
Dethmers and O’Hara, JJ., concurred with Adams, J.
Kelly, J., did not sit.

 PA 1921, No 249, as re-enacted in the present probate code, PA 1939, No 288, ch 2, §§45-48 (OL 1948, § 702.45 et seq. [Stat Ann 1963 Rev § 27.3178(115) et seg.]).

 See Final Report of Joint Committee on Michigan Procedural Revision, pt 2, § 18.2, p 140.

 See the discussion of the common-law practice as it existed in England in Sprague v. Ticonic National Barilo, supra, pp 164, 165. These same powers are possessed by our circuit judges in chancery except as they may be modified by the Constitution and laws of this State. Henkel v. Henkel, 282 Mich 473, 478. For an example of the use of this power see Mann v. Day, 199 Mich 88, 97.