American Jewish Joint Distribution Committee v. Eisenberg

70 A.2d 40, 194 Md. 193, 1949 Md. LEXIS 398
Court of Appeals of Maryland·Decided December 15, 1949·No. [No. 48, October Term, 1949.]·Published·Cited by 25 cases

Opinion

Delaplaine, J.,

delivered the opinion of the Court.

These two appeals were taken by American Jewish Joint Distribution Committee from orders passed by the Orphans’ Court of Allegany County in the estate of Martha W. Stern, deceased.

Miss Stern, a resident of Frostburg, died on October 4, 1946, leaving an estate appraised at $250,404.59. By her will she made specific pecuniary bequests totaling $98,500 and gave the residue of her estate to appellant. She appointed Loraine Eisenberg, appellee, her executor and directed that he be allowed 3 per cent as commission for his service.

The executor, in his first administration account filed November 4, 1947, allowed himself 3 per cent commission on $95,000. In his second account filed in March, 1949, he allowed himself 3 per cent commission on 56,680.42, and also allowed his attorney, Edward J. Ryan, a counsel fee of $4,000. When appellant’s attorney informed Mr. Ryan that he considered a fee of $4,000 excessive, Mr. Ryan replied that he intended to ask for $6,000 more in a later account. Appellant thereupon filed exceptions to the second account, alleging that the commission on any amount after the first $20,000 of the estate should not exceed the statutory limit of 2 per cent, and that the counsel fee was excessive.

On April 29, 1949, the Court dismissed the exceptions and allowed the executor 3 per cent commission on the entire estate, and authorized a counsel fee of $10,000 for services rendered by the executor’s attorney up to that time. The first appeal is from that order.

The first question on the first appeal is whether the direction in the will that the executor be allowed 3 per cent as commission for his service authorizes the Or *198 phans’ Court to allow such commission in excess of the maximum statutory limit. The Testamentary Act provides that the commissions, which shall be at the discretion of the Court, shall be not under 2 per cent nor exceeding 10 per cent on the first $20,000 of the estate, and on the balance of the estate not more than 2 per cent. Code 1939, art. 93, sec. 5. While it is not within the province of the Court of Appeals to review the commissions of executors and administrators as fixed by the Orphans’ Court within the limits prescribed by the statute, this Court may review a decision of the Orphans’ Court which transcends its limited power in this respect. Newton v. Johnson, 173 Md. 166, 169, 195 A. 312; Cearfoss v. Snyder, 182 Md. 565, 568, 35 A. 2d 235. The determination of the amount of commissions of executors and administrators is entirely within the discretion of the Orphans’ Court, except that the exercise of discretion is limited between the amounts fixed by the statute as minimum and maximum commissions. Dalrymple v. Gamble, 68 Md. 156, 11 A. 718; In re Watts’ Estate, 108 Md. 696, 701, 71 A. 316. We have held in a number of cases that a testator cannot by any provision of his will deprive his executor of the commissions allowed by the statute, for such a privilege would have the effect of repealing the statute. McKim v. Duncan, 4 Gill 72, 85; State, to Use of Manning v. Baker, 8 Md. 44, 49; Handy v. Collins, 60 Md. 229, 45 Am. Rep. 725; Schloss v. Rives, 162 Md. 346, 351, 159 A. 745. However, there is nothing in any of these cases that suggests that a testator cannot give his executor more than the maximum commissions allowed by the Statute. In Handy v. Collins, 60 Md. 229, 232, 45 Am. Rep. 725, the Court’s language is that a testator “cannot deprive the executor of such commissions, nor cut them down, nor take away the discretion vested in the Orphans’ Court.” We hold that a testator has the right to leave his property as he sees fit, and hence the statute does not prevent him from leaving to his executor more than the statutory commissions, either in the form of a bequest or by means of larger commis *199 sions than are allowed by the statute. Compare Schloss v. Rives, supra.

The second question is whether the Orphans’ Court was justified in allowing a counsel fee of $10,000. Prior to 1937 there was no provision in the Testamentary Act authorizing in express terms the allowance of counsel fees by the Orphans’ Court. The Act authorized an allowance for “costs and extraordinary expenses (not personal) which the Court may think proper to allow, laid out in the recovery or security of any part of the estate.” Code Supp. 1935, art. 93, sec. 5. It was under this general statutory provision that counsel fees were allowed out of estates. This Court held that under the explicit language of the statute, counsel fees could be allowed out of an estate only for services which were in some way beneficial to the estate either by the enlargement or protection of it. Mudge v. Mudge, 155 Md. 1, 141 A. 396; City of Baltimore v. Link, 174 Md. 111, 114, 197 A. 801. The statute has been twice amended by providing expressly for allowance of counsel fees. In 1937 the Legislature provided that for legal services rendered to an estate by an attorney, the Orphans’ Court may, on the attorney’s own petition, allow him such sums as it may deem reasonable as an expense in the administration account. Laws of 1937, eh. 441, Code 1939, art. 93, sec. 7. In 1939 the Legislature amended the statute by providing that the administrator’s costs may include “reasonable fees for legal services rendered upon any matter in connection with the administration or distribution of the estate in respect to which the Court may believe legal services proper.” Laws of 1939, ch. 511, Code 1939, art. 93, sec. 5. However, it cannot be supposed that the Legislature, if it had the power, intended that counsel fees shall be allowed for services not rendered to the estate, or for services for which some one else has been paid, e.g., the preparation of Federal estate tax return or non-professional services which the executor is required to perform and for which he receives commissions. Moreover, it is well settled that the Orphans’ *200 Court, in allowing counsel fees, must exercise sound judgment and discretion, and from a breach of discretion an appeal will lie to the Court of Appeals. Sullivan v. Doyle, 193 Md. 421, 431, 67 A. 2d 246, 250.

Canon 12 of the Canons of Professional Ethics, which were adopted by the American Bar Association in 1908 and by the Maryland State Bar Association on June 25, 1948, provides: “In fixing fees, lawyers should avoid charges which overestimate their advice and services, as well as those which undervalue them.

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American Jewish Joint Distribution Committee v. Eisenberg, 70 A.2d 40, 194 Md. 193, 1949 Md. LEXIS 398 (Md. 1949).

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