Biddle's Appeal , 83 Pa. 340 ( 1877 )

Mr. Justice Paxson

delivered the opinion of the court, February 5th 1877.

This record presents the question whether trustees of real estate who have had the care of it for several years, and received a commission upon the income, are entitled to further commissions or compensation out of the corpus of the estate when they come to hand it over to those entitled in remainder upon the termination of the trust. The learned judge of the Orphans’ Court, who made the adjudication at chambers, allowed the appellants $2000 as such compensation. Exceptions were filed to this allowance, whereupon the Orphans’ Court reversed the action of the judge at chambers, and rejected the claim. This ruling is assigned here for error.

The claim of the appellants is resisted mainly upon two grounds, viz.: 1st. Because no case can be found in which such a claim has been allowed; and, 2d. Because the estate in the hands of the remaindermen is not liable to any charge for commissions, the same being payable exclusively out of the income. The first objection, while entitled to weight, is not conclusive. In the absence of authority it is sometimes necessary to decide cases upon principle. When so decided they become precedents for subsequent cases. It is no sufficient answer to a valid claim to say that no adjudicated case can be found which is precisely in point. We see no difficulty in disposing of this question both upon reason and authority. In Twaddell’s Appeal, 1 Weekly Notes 227, it was held that where no sale of the real estate had been made by the trustee, he was not entitled to charge commissions as such. But it was also held, that he had a right to compensation. 'In that case the trustee was merely the donee of a power. The power was never exercised. The parties in interest elected to take the real estate devised as land. The trustee had advertised the property for sale, and had planted some trees. The Orphans’ Court awarded him $1000 as compensation, and upon appeal to this court the decree was affirmed. The general rule running through all the cases is, that a trustee should receive a compensation adequate to his care and trouble. Such compensation is proportioned to responsibility incurred and to the labor and care bestowed: Pusey v. Clemson, 9 S. & R. 207; McElhenny’s Appeal, 10 Wright 347. In the case last cited there is a distinct recognition of the principle that commissions qn the income of real estate may be a wholly inadequate compensation for its care and management. It must be conceded, that if the appellants in this case had sold the real estate at the commencement of the trust they would have been entitled to the usual commissions upon such sale. They did not sell, hut held i't for nearly nineteen years, to the great advantage of those in remainder, and to the manifest increase of their own care and trouble. There. is neither authority nor reason for a rule which would give liberal commissions upon a sale, and yet deny all compensation for years of careful management. The fact that the ajipellants received a commission upon the income is not to the purpose. It does not affect the principle. It bears merely upon the amount of compensation. In some instances a commission upon the income of real estate would be a full compensation for the care of it, in others it would be wholly inadequate. The second ground of objection, that compensation for care and management can only be taken out of income, is equally untenable. Had the trustees sold the realty the commissions would have copie out of the corpus of the estate. They did sell a portion of it, and took out their commissions ivithout objection. That they did not sell the residue was for the benefit of those in remainder. They should therefore pay for the care and management. The life-tenants paid for the collection of the rents, which were for their benefit. It Avould be unjust to require them to pay for the care and management of the property for several years, Avlien their interests would have been greatly promoted by its sale. Spangler’s Appeal, 9 Harris 335, is not in point. The question there Avas Avhether the trustee, the cestui que trust, being an annuitant, should deduct his commissions out of the income as it Avas paid over. If the appellants here had paid over the gross income to the life-tenants Ave do not think they could successfully claim commissions on such income out of the corpus of the estate. But for so much of their care and management of the real estate as was directly and palpably for the interest of the remaindermen, Ave think they are entitled to be paid. The learned judge Avho made the adjudication alloAved the appellants $2000. We would not be disposed to reverse his decision upon the question of amount unless for clear error. The testimony reported by him as to the extent of the care and labor bestoAved is not full. Yet, as to a portion of the real estate, it is not difficult to see that a commission on the rents ayouM not be an adequate compensation for its management. Stouton farm, by far the most valuable portion of this estate, is located on the outskirts of the city. It is in the immediate vicinity of improvements, and streets have been opened through portions of it. There is no class of property that requires more constant care than rural property in the out-lying wards of a large city. The opening of streets through this property required attendance upon road juries, and involved claims for damages and assessments for benefits. There was responsibility also. The liability of such property to municipal liens requires constant vigilance. The title may be swept away by a judicial sale upon a judgment recovered without notice to the real owner, upon a claim filed against an unknown reputed owner. The pittance received by the appellants as a commission on the rents of this valuable property is no proper compensation for the care and management of it for nineteen years. We think, therefore, that it was error to set aside the adjudication. From the facts, as presented, the amount fixed by the learned judge appears reasonable. We are asked by the appellants to increase it. We do not feel justified upon the evidence in doing so.

We think the court below also erred in reducing the amount allowed for counsel fees. The accountants Avere put upon the defensive by an attempt on the part of the eestuis que trustent to surcharge them with a large sum for alleged laches in the matter of rent and taxes. This attempt failed, and very properly. The entire claim of the accountants for the care of the corpus of the estate was also resisted. This claim has been allowed in part. An offer' Avas made by the accountants to refer the question of their commissions to the arbitrament of Joseph A. Clay, Esq., an Orphans’ Court laAvyer of ripe experience. This offer the eestuis que trustent declined, although advised by their counsel to accept it. It thus appears that the charge for counsel fees was the result of their OAvn unsuccessful litigation. Their oavu conduct rendered it a necessity. Nor is the amount unreasonable. It is but just to the appellants to say that this estate appears to have been managed not only with care and fidelity, but also with economy. We notice no charge for professional services during the continuance of the trust, except one of $23.50 in an injunction case. The litigation incident to opening streets through the farm appears to have been conducted without cost to the estate for counsel fees. Under the circumstances the amount claimed Avas moderate and ought to have been alloAved.

The decree is reversed and set aside; the adjudication made at chambers is approved and confirmed, and distribution .ordered to be made in accordance therewith; the costs of this appeal to be paid by the appellees.