Court Opinion

ID: 3525991
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:38:06.682216+00
Date Added: 2024-06-11T13:45:41.016672
License: Public Domain

The respondents filed suit in the circuit court of Scott county against appellants as trustees under the will of Benjamin F. Marshall, deceased, asking that they be required to file an annual accounting in said court. Appellants appeared and consented that a decree as asked should be entered which was done and they then filed their accounting. The respondents filed exceptions to the accounting which were heard by the court and overruled except as to three items which were sustained. The trustees have appealed to this court and seem to have abandoned one of the three items but insist that the court's action was wrong as to the other two.
The two items involved here are commissions claimed by the trustees by way of compensation for their services and attorneys' fees of $1000 paid by them to attorneys. The facts as far as necessary to determine the matters involved here may be briefly stated as follows: Benjamin F. Marshall owned a large amount of both real and personal property. The real estate was located chiefly in Scott county and consisted of farms and town lots. His brother, Isaac Marshall, one of appellants, was employed by him to look after the real estate, secure tenants and collect rents and was paid therefor. Benjamin F. Marshall made a will in which he directed that his property be held and controlled by trustees therein named for a long term of years as therein specified and made full provision for a disposition of the income from the property and for its final disposition by the trustees to the parties therein designated. He desired to make the St. Louis Union Trust Company and his brother, Isaac Marshall, joint trustees in his will but before executing the will went to see Mr. John F. Shepley, Vice-President of the Trust Company, and had a talk with him as to the expense of the administration by the trustees and their compensation. Afterward Mr. Shepley addressed to Mr. Marshall, the following letter: *Page 18 
"Dear Mr. Marshall:
"In order to state fully the extent which the executors of your will and the trustees under its provisions will be entitled to compensation I make the following statement:
"The executors will receive for the administration of your estate, whether it lasts for one or more years, five per cent of the value of all personal property passing through their hands. The estate will then be turned over to the trustees, who will be entitled to receive five per cent upon the net income received by them during the life of the trust, and as its expiration when the principal of the estate shall be finally turned over to the persons ultimately entitled to it, they will be entitled to receive such additional compensation as the circuit court of the county in which the will is probated shall determine in an accounting between the trustees and the beneficiaries, not in any event exceeding five per cent of the value of the property turned over.
The conversion of land into personal property by the trustees will not in any degree affect their compensation unless the property or money received for the land shall produce a greater income than the land produced.
I desire in this connection to repeat my previous assurance to you that this company will divide equally with its co-executor all compensation received by them jointly, and will do the same with its co-trustee, and at the same time it will take charge of the property of the estate and do all the duties of both executors and both trustees except in so far as its co-executor or co-trustee may ask or demand participation."
The will was executed with the trust company and Isaac Marshall named as trustees but the will gave no directions as to the compensation to be paid the trustees. At his death Benjamin F. Marshall left as his widow Florence M. Marshall and as his heirs, the two minor children who are plaintiffs in this action. He made provision for all of them in his will but the widow elected to take under the statute and brought a suit in partition *Page 19 
and made the two minors and the trustees parties defendant. In that suit, the trust company was appointed guardian ad litem
for the minors. Answers were filed by the guardian ad litem and by the trustees. There was no controversy as to the title or rights of the parties. Commissioners were appointed and the widow's interest set off to her. Report was filed and approved. The attorney for the widow who brought the suit was allowed and paid a fee of $3000. The trust company as guardian ad litem was allowed and paid $750.
In the account filed by the trustees they asked credit for their services a commission of five per cent on the amount of money received by them as income from the property, which commission at that rate amounted to $5897.24. The trial court held this to be too much and reduced it by $2541.18 which left it at $3356.06. They also asked credit for an attorney fee of $1000, paid Bryan, Williams  Cave, attorneys for representing them as trustees in the partition suit. The exceptions to this item was sustained and the credit therefor disallowed. These two items are the two involved here.
The respondents contend that the letter of Mr. Shepley above set out having been written for the purpose of placing in writing the verbal understanding and agreement between the testator and Mr. Shepley before the will was drawn amounted to a contract and while it may be proper to pay a trustee on a commission basis, yet Mr. Shepley had agreed for the trust company that the commission should be computed on the net income while in this case, the trustees had computed it on the gross income. Appellants contend that the letter is not a contract and that they are not bound by it as to the amount of their compensation. If this letter is to be regarded as a contract, it could in no event apply to Isaac Marshall, the other trustee who was not a party to it. Contracts between the trustee and cestui que trust
fixing the amount of the compensation of the trustee for services are permissible and when honestly entered into will be recognized by the courts. [Ladd v. Piggott, 215 Mo. 361, 114 S.W. 984] *Page 20 
When the trust instrument fixes the compensation to be paid to the trustee, he may, by accepting the trust, bind himself by the provision therein made for him and prevent his collecting a larger sum [Oppliger v. Sutton, 50 Mo. App. 439.]
We have been cited to no case, nor have we found one, holding that a trustee who is to handle farm property for a long term of years after the death of a testator, as is to be done in this case, is to be bound as to his compensation by a voluntary agreement made by him at the time the will is executed to work for a commission on the income from the property either net or gross. It is universally held that a trustee cannot be allowed to profit from the trust estate but the guiding star in fixing the amount of his compensation by the court is always reasonable compensation for the work done. [Kilpatrick v. Roberts,278 Mo. 257, 212 S.W. 884.]
It may well be doubted whether the testator and a trustee can bind the court by any agreement they might make as to the compensation of the trustee when the trustee has no interest in the property and the trust is to continue for a long term of years and involves the control and management of property where the conditions relating to the service of the trustee are liable to change and where the cestui que trust is not a party to the contract. Should the compensation agreed on under such circumstances prove to be too small, the trustee could resign his trusteeship and let another be appointed by the court who would not be bound by the contract of the former. Or if the trustee should die, it would then be necessary for the court to appoint another and he would not be bound by the agreement of the original trustee. If a contract of that kind is valid, it is clear that the trustee can secure relief by resigning or if death should intervene he and his estate would be relieved, while on the other hand, if the compensation agreed on was too high, the estate might be thereby dissipated and the court be powerless to prevent it. We do not think, however, that the letter referred to is in fact a contract *Page 21 
for the reason that it only applies to one trustee while the will nominated two trustees. The letter might properly have some bearing in fixing a proper allowance for handling and disbursing money collected as interest or dividends but it could certainly be of no value in fixing compensation for looking after farms and collecting rents.
The record before us does not disclose on what the court based its action in reducing the amount of compensation claimed by the trustees, but, from what is before us, we cannot see that the court's action in that respect is erroneous and we shall approve it.
It appears from the record here that the trust company looked after the personal property and that Isaac Marshall, the other trustee, looked after the farms. It also appears that Mr. Marshall had a very large expense account charged as having been necessarily incurred in looking after the farms. The reasonableness of these items is not before us but it may not be amiss to suggest that in the future the trustee should be careful to incur no more expenses than are reasonably necessary in properly doing the work assigned to them. In short, the court should scrutinize with some care all items in the account and while the allowances should always be fair and reasonable, the court should see that reasonable care is used by the trustees to keep expenses within proper bounds.
As to the attorney's fee of $1000 paid by the trustees to Bryan, Williams  Cave for representing them in the partition suit and which was stricken out by the court, we think the court's action in that particular was correct. Mr. Cave, a member of this firm, testified, that he had individually represented the trust company from time to time since it took charge of the Marshall estate. He represented it in the partition matter and secured its appointment as guardian ad litem and represented it in that capacity. He was therefore attorney for the guardian adlitem and for the same party as trustee. There was no controversy in the partition suit and no conflict of interest between the minors whom the trust company *Page 22 
represented and the trustees. Had there been a conflict of interest between them, the trust company could not have acted as guardian ad litem. The guardian ad litem was allowed a compensation of $750 which of necessity included legal advice and the services of an attorney in preparing the answer and in seeing that the interest of the minors were properly protected. The interest of the minors and the trustees in the partition suit were identical. All they were required to do or could do was to see that the widow got no more than the law would give her. An attorney for the guardian ad litem could render no service that would not inure to the benefit of the trustees as such and viceversa. The compensation of the guardian ad litem covered the service of an attorney as far as one was necessary and that expense was to be borne by the whole estate, of which the widow who had refused to take under the will would bear her part. Since the guardian ad litem was one of the trustees, the trustees received all the legal advice and service they needed through the trustee who acted as guardian ad litem and it was unnecessary to add an additional fee to the same attorney for representing the trustees as such as distinguished from his service to the same party as guardian ad litem.
Our conclusion is that the action of the trial court in relation to the items in the account involved in this appeal was correct and his judgment is therefore affirmed.
Bradley, J., concurs. Farrington, J., concurs in the result. *Page 23