Court Opinion

ID: 8823909
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:41:38.542178+00
Date Added: 2024-06-11T17:04:43.335809
License: Public Domain

Mr. Justice McGoorty delivered the opinion of the court. It is contended by counsel for appellants that the trust in this case is not an active trust, and that it was the duty of appellee, as sole surviving ’trustee of the estate of John S. Cooke, deceased, when the estate was closed, to terminate the' trust, except as to the real estate. It is further contended by appellants’ counsel that the will in question is free from ambiguity, and, therefore, the costs of this litigation .should not be borne by the estate. It is also urged by appellants that the compensation allowed appellee, as sole surviving trustee, for his services, that of liis counsel, and costs, including master’s fees, are clearly excessive; that the hypothetical questions as to trustee’s and solicitor’s fees are vague, indefinite, and not supported by the evidence; that the findings of the master and the decree of the court are contrary to the law and the evidence, and that for these reasons the decree of the Circuit Court should be reversed. Where, as here, the trustee is required to convey the real, estate to the beneficiaries on the happening of a certain event, viz., the death of testator’s widow, and to convey to said beneficiaries, at the end of seven years, certain stock, subject to the charge in favor of the widow’s annuity, the trust is not a passive or dry trust. * * * Lawrence v. Lawrence, 181 Ill. 248, 252. In this case the trustees distributed dividend checks, informed themselves as to the payment of the widow’s annuity, requiring presentation of her receipts therefor, and performed other duties arising from a trust of this nature. This court is of the opinion that the bill of complaint, of appellee in this cause was not improvidently filed. There was a sharp conflict of opinion between the heirs and the trustees of the estate of John S. Cooke, deceased, in regard to the duties of the trustees under the fourth provision of the will. The trustees were informed in writing, by counsel for the beneficiaries, that if the trustees did not, within a week thereafter, file a bill seeking a construction of the will and for the determination of the question of compensation of the trustees by the court such bill would be filed by the beneficiaries. Six days thereafter, the present bill of complaint was filed by the trustees. In Warner v. Mettler, 260 Ill. 416, the court commencing at page 420 says: “ ‘Wherever there is any bona fide doubt as to the true meaning and intent of the provisions of the instrument creating the trust or as to the particular course which he ought to pursue, the trustee is always entitled to maintain a suit in equity at the expense of the trust estate and obtain a judicial construction of the instrument and directions as to his own conduct.’ (3 Pomeroy’s Eq. Jur. sec. 1064.) Courts of equity will not only compel the performance of the trust, but they ‘will assist the trustees and protect them in the due performance of the trust whenever they seek the aid and direction of the court as to the establishment, the management or the execution of it.’ (2 Story’s Eq. Jur.—13th ed.—sec. 961.) The difficulties arising in the execution of a trust may make it eminently proper for the trustee ‘to apply to a court of equity for its aid and direction in the premises, and we have no doubt of the jurisdiction of a court of equity to afford the requisite relief.’ ” As the personal property of the estate has been disposed of, the construction of the will in regard thereto is not material to the issues in this case. Even though this court may be of the opinion that the will in question is free from ambiguity, yet, under the evidence, it is manifest that the trustees were unable to agree with the beneficiaries as to the proper construction of thé will and, under all the facts and circumstances in evidence, they were justified in seeking the intervention of a court of equity for that purpose. Appellee is entitled to reasonable compensation for services rendered and reasonable expenses incurred as trustee. Bean v. Northern Trust Company, 266 Ill. 205, 211. This court has held that: “The compensation of a trustee is not determined by any established practice or rule, but in determining such compensation the responsibility incurred, the amount of the estate, the time and labor properly devoted by the trustee to the discharge of his duties are to be considered. What is reasonable compensation depends largely on the circumstances of each case.” Follansbee v. Outhet, 182 Ill. App. 213, 216. The fact that appellee received compensation as executor does not deprive him, as sole surviving trustee, of his right to compensation for services rendered as trustee, provided the duties were separate. An executorial trustee may not, however, charge fees in both capacities for the same service. Arnold v. Alden, 173 Ill. 229, 234. The Probate Court fixed the compensation of the executors in this case at the sum of $6,000; they were paid the additional sum of $800 as interest thereon. The Circuit Court by its findings did not separate nor distinguish the services* of appellee rendered as executor from those rendered as trustee, although the decree finds that by order of the Probate Court the trustees were paid their fees as such executors. The court finds that considerable time was spent by the trustees in regard to a bill filed by the Plamondons involving more than $30,000. The suit referred to was settled by the executors and referred to in their first report filed in the Probate Court. During the period of the executorship the services performed by the trustees, as such, until Jnne, 1903, when the management of the brewery was taken from George J. Cooke, mainly consisted of the distribution of dividends, ascertainment of receipt by the widow, Charlotte H. Cooke, of her annuity, attending a family conference determinative of a choice between George J. Cooke and Charles F. Cooke for president of the brewing company, attending certain meetings of the stockholders thereof, either in person or by proxy, and holding title to the real estate. . Under the third provision of the will, the trustees were directed to, and did, permit the wife of the testator, or her authorized agent, to collect all rents and income of the real estate and to pay the current carrying charges thereon. Dissensions among the Cooke heirs, covering a period of years, assuming serious form in June, 1903, imposed, thereafter, duties more pressing and onerous upon the trustees. • That the trustees earnestly endeavored, though unsuccessfully, to harmonize the differences which had arisen between the sons of the testator is manifest from the evidence. These efforts of the trustees included many conferences with the heirs, their counsel, and with each other. After the real estate had been sold for taxes, appellee, as sole surviving trustee, took prompt and effective measures to protect the property affected. The litigation between the heirs, instituted by George J. Cooke, to which the trustees were made parties, and other litigation and court proceedings, including 'the matter of the conservatorship of John B. Cooke, required the attention, to some extent,, of the trustees. The constant attendance of trustees ’ counsel at the several hearings before the master in the proceeding wherein George J. Cooke sought a construction of the will as to the duties of the trustees, was justifiable, even though the several parties were represented by counsel. The trustees were necessary parties to the proceeding and had the right, therefore, to be represented by counsel. It is evident that the trustees in administering the trust acted in good faith, and the question of compensation of appellee, as sole surviving trustee, for services rendered in behalf of the trust should be determined upon that basis. Appellee did not, however, render services to the extent set forth in the long series of findings, in the decree entered by the Circuit Court. The findings of the court that the gross sales of the brewery during the trusteeship were $3,000,000, salaries paid to the children amounting to $175,000, and the gross rental value of the real estate $90,000, though relevant for the purpose of showing the size and character of the trust property, should not be used as a basis or as a determining factor, in arriving at the value of the services of appellee, as trustee.. The trustees took no part in the actual management of the brewery, in the selection or management of its employees, nor in influencing its policy, and took no part in the management of the real estate, the title to which was vested in the trustees. In 1904 the book value of the 1,498 shares of stock held in trust by the trustees was about $500,000. Six years later the complete change in the fortunes of the business is shown in the fact that the entire plant and business of the Cooke Brewing Company was sold for $160,000, less than three-fourths of which proceeds belonged to the trust estate and which was practically all absorbed by outstanding indebtedness of the company. The court by its decree finds that the real estate left by John S. Cooke was worth (presumably at the time of his death) more than $150,000. The only evidence as to the value of the real estate at the time of the entry of the decree is that of George J. Cooke, who testified that the real estate exclusive of the brewery plant was worth approximately $65,000 to $75,000. The personal property belonging to the trust has been practically exhausted. An allowance of $33,000 for the fees of appellee and his counsel, together with costs, including master’s fees, is a sum disproportionate to the apparent value of the trust estate at the time of the entry of thé decree, regarding the value of which the court below makes no finding. In arriving at an equitable conclusion as to the question of compensation, the amount fixed should bear a reasonable relation to the value of the trust estate. Due consideration must be given to the rights and interests of the widow, to whom the testator willed an annuity of $7,500 per annum, during her life. The intention of the testator should not be defeated if it can reasonably be complied with. The hypothetical question asked appellee’s witnesses assumed that the sales of the product of the brewery during the trusteeship were over $3,000,000, the assets of the Cooke Brewing Company about $600,000, and that the estimated value of the total estate including income was $4,000,000. The hypothetical question contains no reference to the rapidly diminishing income of the business, commencing in 1904. It is obvious that such assumption must have produced in the minds of the various witnesses the erroneous impression that the trust estate was of great magnitude. The annual sales of the brewery, according to the testimony of George J. Cooke, were about 72,000 barrels in 1904, and in 1908 the annual sales had fallen to about 40,000 barrels. All of these witnesses assumed that the trustees took an active part in the management of the business, or, by the election of the directors, largely dominated its business policy. It is manifest that such hypotheses were misleading, and the opinions expressed by the various witnesses as to the value of the services rendered can be of but little aid to the court. This is further emphasized by the fact that the recitals as to the services of appellee and his counsel, contained in such hypothetical questions, were, in many instances, vague, indefinite and uncertain. The testimony of appellee’s counsel, is, that he was “practically a third trustee; was consulted, considered and run to, in matters that were the duties of the trustee, by everyone connected therewith. ’ ’ In regard to the legal services rendered by appellee’s counsel, the evidence tends to show that he was present at all hearings and arguments in the proceedings instituted by George J. Cooke; that he examined all pleadings and filed answers in all cases for the trustees; that he attended practically all of the hearings and arguments of counsel before the master and advised the trustees of such hearings and the evidence heard; that he had numerous conferences with the several lawyers employed by the heirs, reported such conferences and matters relating thereto, to the trustees, and advised with them regarding same; that he attended to all other litigation in which the trustees were parties, or the interests of the beneficiaries involved. The services of William A. Doyle extended over a period of four years. The evidence tends to show that he, as counsel for the trustees, actively and faithfully discharged his duties as such. The duties of trustee, however, performed hy Mr. Doyle, which were not legal in their character, are not properly chargeable to the estate. It is further contended, by counsel for appellants, that the fees of the master in chancery are excessive. The fee requested by the master, as shown by Ms certificate and allowed by the court, was $2,500. How such sum is arrived at cannot be determined from an inspection of the master’s certificate. A master in a county of the third class cannot arbitrarily fix his fees for examining questions of law and fact and reporting his conclusions thereon, but before he is entitled to demand compensation it is his duty to have the court determine the amount he should receive, and the parties may be heard upon that question. Schnadt v. Davis, 185 Ill. 476. Further evidence should be heard to determine the extent and value of the master’s services, and as to the reasonableness of his fee. It is also urged that the court erred in taxing, as costs in the case, the sum of $500 for stenographer’s fees, as such item was included in the fee allowed the master. Such allowance is clearly erroneous. Schnadt v. Davis, supra. It is further contended that the court erred in taxing against the estate the solicitor fees allowed to Joseph J. Thompson, as solicitor for appellee in this proceeding, and that such fee should be paid by the appellee. The costs of this litigation should be borne by the estate. Arnold v. Alden, supra. The decree of the Circuit Court is reversed and the case remanded for such proceedings as equity and justice may require, consistent with the views herein expressed. Reversed and remanded with directions.