In re the Judicial Settlement of the Accounts of Stevens

114 A.D. 607, 99 N.Y.S. 1070, 1906 N.Y. App. Div. LEXIS 2149

Opinion

McLennan, P. J.

It may be assumed that the Surrogate’s Court had authority, in its discretion, to make suitable allowances to the special guardians of the infants represented by them respectively, payable out of their respective shares of the estate for the services rendered by them in taking and prosecuting the appeal in question; but if such allowances were grossly excessive and such as to indicate an abuse of discretion, it becomes the duty of this court to reverse the decree, and to that extent protect the estate of such infants.

When the decree appealed from was made it appeared that $20,000 had already been allowed to such guardians for services rendered by them in this proceeding on behalf of such infants, in addition to the expenses, costs and disbursements incurred, the amount of which does not appear, and all such expenditure, so far as it has yet been made to appear, has not resulted in any advantage to such infants, or either of them. Whatever services were rendered upon the hearing before the Surrogate’s Court and prior to the entry of the decree settling the trustees’ accounts were fully paid for, and as appears by the affidavits the investigation made by the respondents preparatory to and upon such hearing, both as to the law and the facts, was most exhaustive and complete, so much so that it is apparent that the proper presentation of the appeal to this court could not have required very much additional research. \

An affirmance of the decree appealed from involves the assent on the part of this court to the proposition that the respondents have fairly and reasonably earned $7,500 for services rendered in taking and prosecuting the appeal in question, although practically every question involved had been presented to and argued before the Surrogate’s Court, and where the appeal to this court practically involved only a repetition of the points urged before that court. In passing it is proper to call attention to the fact that if there be added to the allowances made in the decree appealed from the costs and disbursements directed to be paid out of the shares of the estate of such infants respectively, it will be seen that such appeal has cost such infants the sum of at least $9,313.66. If the allowances complained of are approved, there will have been paid to the special guardians of the three infants named out of their respective shares the sum of $27,500 as compensation for the services rendered by them as special guardians in this proceeding, in addition to all costs, disbursements and expenses made or incurred by them ; and we are informed in the moving papers that in the opinion of such guardians the case must yet go to the Court of Appeals for final determination. The allowances which may be made for services rendered and expenses incurred in connection with such appeal to the court of last resort cannot, of course, at this time be even estimated. If $7,500 is a proper compensation for bringing and prosecuting an appeal to this court from a decree of the Surrogate’s Court, which resulted in no advantage to the client, where every question involved had been previously investigated and such investigation paid for, what may we expect the charge to be when an appeal is taken to the highest court of the State, although the determination of that court may be equally barren of results to the clients ?

In determining the amount of compensation which an attorney should receive for legal services rendered by him to a client in any litigation, it is proper to consider the advantages resulting to such client because of such services. In this case the litigation has so far been wholly barren of any results of advantage to the clients. We should also consider the amount of time spent by the attorney in doing the work for which compensation is asked. In this case the allowances made give to one special guardian $20 for each day, including Sunday, between the time when the decree appealed from was made and the argument of such appeal in this court, and to the other special guardian $10 per day for each of said day's. But previously they had received $20,000 for making investigation and research of the questions involved upon such appeal. They had been paid for such investigation and research by a previous decree of the Surrogate’s Court $20,000, which covered a period of a little less than fifteen months from the time they were appointed as special guardians until the decree was entered from which the appeal in question was. taken; so that the respondents, by the allowances made, in case the decree appealed from is affirmed, will have received more than $1,300 per tnonth as compensation for their services from the time they were appointed special guardians of the infants named until the submission of their appeal to this court, and this in addition to their costs, expenses and disbursements, all, of course, made payable out of the shares of the estate to which the infants represented by them were entitled.

In fixing the compensation of attorneys for services rendered in any litigation, the. amount involved may properly be considered. In the case at bar, while the amount of the trust estate was large, it is apparent that howsoever the questions raised by the respondents’ appeal might be determined, was of comparatively little importance to the infants represented by them. It is unnecessary and would not be appropriate at this time to enter upon a discussion of those questions, or as to, how the infants would have been affected had the contention of the respondents prevailed. Suffice it to say that so far as appeared before the Surrogate’s Court such infants, by the contest made by their special guardians, had no interest involved except such as was conceded by their trustees, and, as we have seen, that view of the case has been unanimously affirmed by this court. In other words, the special guardians of such infants assumed to test the correctness of the disposition of the trust estate proposed to be made by the surviving trustees under the will of Julia A. Brooks, deceased, which contest, if the allowances in question shall be sustained, will have entailed a loss to such infants of from $27,500 to $40,000 without any possible advantage to them, unless, as is suggested, an appeal may be taken to the Court of Appeals, and in that court the judgment of this court and the decree of the Surrogate’s Court shall be reversed. And in case such reversal should be had, the advantage resulting to the infants represented by the respondents would hardly equal the expenses incurred. -

We appreciate also that the compensation paid to an attorney for services rendered by him should depend somewhat upon the novelty or intricacy of the question-of law involved. In this case, while undoubtedly the question of law involved is not free from doubt, and presents many interesting features, it cannot be said to be in any sense unusual or extraordinary, and the contention of the respondents was rejected unanimously by this court.

On applying all these tests to the determination of what compensation should be awarded to an attorney for services rendered to a client, we find in this case no advantage resulting to the client; also, that considering the days possibly spent, the charge is exorbitant. The amount involved in the litigation in no sense justifies the allowance. We think no such intricate or difficult question of law was presented by the petition of the surviving trustees and the objections thereto by the respondents as to require such legal services as to justify the allowances made. The facts all being admitted or stipulated^ leaving only a bare question of law to be determined, the work necessary to its proper solution could well be done for one-third of $27,500, the allowances already made to the respondents in this case in addition to all costs, disbursements and expenses incurred by them.

Upon the facts we are constrained to hold that the Surrogate’s Court abused its discretion in the premises; that there was absolutely no justification for allowing $7,500 as compensation for taking and conducting an appeal to this court from the decree of the Surrogate's Court, when, as it appears, the respondents had previously been paid for all services rendered by them, and which made or ought to have made them competent to present the issues to this court without additional research or investigation.

It is, however, urged that this court has no power to review the action of the Surrogate’s Court in making the allowances in question upon appeal by the trustees, because such trustees are not i; aggrieved ” within the meaning of section 2568 of the Code of Civil Procedure. The argument is in effect that no matter how mi justly and improperly the estates of their respective cestuis que trnutent may have been depleted by the allowances made, such trustees are powerless to prevent such spoliation provided the Surrogate’s Court authorizes the same. Such argument is based , upon the suggestion that such trustees as such have no concern as to where the estate of which they are trustees shall go, or how it may be distributed,

We tliink the proposition is fallacious, and that the numerous cases cited by the respondents are not authority for their contention. Each of the cases cited only lays down the rule that trustees may not prosecute an appeal from a decree which does not affect them and where all of their cestuis que trustent are of full age and competent to manage their own affairs and assent to or acquiesce in such decree.

We think no case can be found in ■ which it has been held that where a trustee of an infant's estate is improperly and by an abuse of discretion directed by a Surrogate’s Court to pay over the funds belonging to such estate such trustee has no right of appeal to the Supreme Court of this State, to the end that such abuse of discretion may be corrected. To illustrate the principle contended for by the respondents': Suppose the Surrogate’s Court had made allowances to the special guardians, the respondents upon this appeal, for the entire amount of the respective shares of the estate of such infants, amounting, we will assume, to $100,000, more or less. Is there no way by which such a palpable abuse of power could be corrected ? The Supreme Court has ample and inherent .power to prevent such wrong- affecting the property of an infant, and so although the special guardian of such infant may be the instigator of such outrage.

Thus far we have only considered the power of the Supreme Court to prevent or rectify a wrong done to the property or estate of an infant. We consider that the Supreme Court has absolute power, subject only to review by the Court of Appeals, to protect the person and estate of infants and other incompetents, and that upon appeal to this court an abuse of discretion exercised by any inferior court to the detriment of such infant may be corrected. The Supreme Court of the State of Hew York has the inherent power requisite to protect the property and estates of its wards, and so even against the decree of ail inferior court which tends to jeopardize or destroy the interest of such ward. We think no citation of authority is necessary to support the proposition that if it comes to the knowledge of the Supreme Court by appeal by a trustee that the estate of an infant or other incompetent person in his hands is about to be plundered, whether under and by virtue of 9 decree of a Surrogate’s Court or otherwise, the Supreme Court has the power to prevent the consummation of such wrong. Under tile circumstances disclosed by the record in this case we assume to exercise such power, and so notwithstanding it is suggested that the infant represented by the chief respondent will very soon be of full age, is acquainted with the circumstances of this appeal, and does not protest. Such infant, until he reaches his majority, is, so far as legal principles are involved, the ward of this court the same as if of tender years ; and we know of no rule which should be applied for the protection of the estate of the one and disregarded as to the other.

It is also ui’ged on behalf of the respondents that the allowances made by the learned Surrogate’s Court were a matter of discretion, and for that reason this court has hq power to review. Much of what we have previously said applies to this contention. We, however, admit that this court may not review the discretion exercised by a Surrogate’s Court in a case of this character the same as it might the exercise of discretion by a Special Term of the Supreme Court. This court cannot make the order; it cannot make the allowance which should have been made in this case. Yet we think that where the decree made by the Surrogate’s Court involves an abuse of discretion, we have ample power to vacate and set aside the same. In Matter of Selleck (111 N. Y. 284, 290) Judge Gray said : >c I think, however, that we may properly hold that the exercise of discretion by the surrogate is somewhat qualified by the words in section 2557 1 as justice requires,’ and that the presence of these words would authorize the interposition of an appellate court, where there had been an abuse of discretion and a violation of justice. Broad as the language of the sections is, I think the Legislature should not be deemed to have intended that there should be no redress in cases of an abuse of discretion by the surrogate, and that that view finds support in the words quoted.”

In conclusion we state that in our opinion the allowances made are grossly excessive and involve an abuse of discretion by the Surrogate’s Court for the reasons:

First. That when such allowances were made there had not been a final determination of the controversy;

Second. Because practically all the work necessary in order to present the appeal in question to this court had been done and had been previously paid for by allowances to the respondents made by the Surrogate’s Court before the appeal in question was taken ; and

Third. Because it is apparent to us that for the services necessarily rendered in the taking and presentation of such appeal to this court the compensation allowed was grossly excessive.

In our opinion no allowance of any substantial amount should have been made for taking and conducting the appeal in question until the issues therein involved were determined by the Court of Appeals, where the respondents assert the case must go for a final determination of the rights of the parties.

It follows that so much of the decree as is appealed from should be reversed, with costs to the appellants payable out of the estate.

All concurred, except Kruse, J., who dissented upon the ground that the allowance being payable out of the fund of the infant, neither the trustee nor any other party interested in the estate is aggrieved thereby except the infant, and neither he nor his general guardian objects thereto.

Decree so far as appealed from reversed, with costs to the appellants payable out of the estate.