In re the Trust Estate of Wichman

27 Haw. 780, 1924 Haw. LEXIS 23
CourtHawaii Supreme Court
DecidedMay 6, 1924
DocketNo. 1528
StatusPublished
Cited by7 cases

This text of 27 Haw. 780 (In re the Trust Estate of Wichman) is published on Counsel Stack Legal Research, covering Hawaii Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Trust Estate of Wichman, 27 Haw. 780, 1924 Haw. LEXIS 23 (haw 1924).

Opinion

OPINION OP THE COURT BY

PETERS, C. J.

On April 10, 1923, the Hawaiian Trust Company, Limited, a corporation organized under the provisions of chapter 184, R. L. 1915, as trustee under the will and of the ■estate of Henry F. Wichman, deceased, under a power of sale to it granted by the terms of the trust by the will of said decedent created, sold through its real estate department certain real estate forming a part of the trust corpus of said estate upon the proceeds of which, by its first annual accounts filed in the circuit court of the first circuit on November 1, 1923, in addition to a commission of 2y¿% as “moneys * * * received * * i:' from sales of real ■estate,” it prayed the allowance of a 5% brokerage commission. The accounts were duly referred to a master who recommended their approval but the circuit judge being in doubt as to the legality of the allowance to a [781]*781trustee of a brokerage commission upon tbe sale of real estate made by it in its individual capacity as a “realtor” in addition to the 2y2% allowed by law reserved the question to this court for its opinion.

Upon the cause being docketed in this court the trustee alone appeared, whereupon the court appointed A. M. Cristy, Esq., amicus curiae herein.

The trustee contends that the sale of real estate requires expert knowledge and hence the service in making a sale is a special or extraordinary one for which if performed by a trustee, • who is himself a “realtor,” extra compensation should be allowed; that the prevailing commission in this jurisdiction, and the minimum commission permitted by the Honolulu realty board, to be charged by its members, of whom the trustee is one, for the sale of real estate, is 5% and hence the trustee is and was entitled to receive a commission of 5% in excess of the 2i/2% charged upon the proceeds of sale.

On the other hand the amicus curiae contends that the statutory fees applicable to trustees are exclusive; that if not exclusive and additional compensation for special or extraordinary service is allowable thereunder, the sale of real estate is not such a service; that if the sale of real estate may be considered a special or extraordinary service, in the event that the services of a person to make such sale become necessary, the trustee, although himself a broker, should not be permitted to make such sale and charge a commission thereon but should employ an independent broker, the commission to be charged including a profit and the trustee being prohibited by law from deriving any profit from the handling of the trust estate; but if it be permissible for a trustee who is a broker to make a sale in his individual capacity and charge extra compensation therefor such compensation should be measured by the actual service performed and not by the pre[782]*782vailing' brokerage rate or any arbitrary rate fixed by a realty board of which the trustee is a member.

In England it was formerly the unqualified rule that no compensation was allowable to fiduciaries “from the view that trustees should derive no benefit from their trust, nor have power to lessen its value.” Estate of Molteno, 3 Haw. 288, 291 and cases cited. Nor, for similar reasons, were fiduciaries, who by reason of their professional attainments exerted superior, special or extraordinary attention to their duties as trustee, allowed compensation upon the ground that (in the case of a trustee who was also a solicitor) “a trustee cannot be permitted to make a profit of his office, which he would do, if, being a party to a cause as trustee, he were permitted, being also a solicitor, to derive professional profits for acting for himself as such party.” Cradock v. Piper, 1 Mac. & G. 664, 677 (41 Eng. Repr. 1422, 1426). As said in New v. Jones, 1 H. & Tw. 633, 635 (47 Eng. Repr. 1562, 1564) : “In point of prudence and propriety, and as a guard over the estate, I am of opinion that it would not be proper that a solicitor, who is a trustee, should be distinguished from an ordinary trustee. If a trustee, who is a solicitor, acts as a solicitor, he is not entitled to charge for his labor; he is entitled only to be paid his costs out of pocket.” (See also Scattergood v. Harrison, Mosely 128 (25 Eng. Repr. 310), Avhere factorage was denied a trustee; and Sheriff v. Axe, 4 Russ. 33 (38 Eng. Repr. 717), where the trustee Avho was also a commission agent was denied commissions on consignments.

In America, however, a different rule prevails due no doubt to the difficulty in securing persons competent to act as trustees without pay. In almost all of the States of the United States commissions are allowed fiduciaries either by express statute or upon broad principles of equity, and where statutory commissions are not exclusive [783]*783compensation has been allowed trustees for special or extraordinary services. (Harris v. Martin, 9 Ala. 895; Marks v. Semple, 20 So. (Ala.) 791, 794; Clark v. Knox, 70 Ala. 607, 617; Willis v. Clymer, 57 Atl. (N. J.) 803, 804; Shirley v. Shattuck, 28 Miss. 13, 26; Perkins’ Appeal, 108 Pa. St. 314, 318; Turnbull v. Pomeroy, 3 N. E. (Mass.) 15, 16.)

Emoluments have always been attached to the office of fiduciary in this jurisdiction. Section 2542, E. L. 1915, Avhich is section 1281 of the Civil Code of 1S59 as amended, specifically provides for commissions to be paid to executors, administrators and guardians including commissions upon the proceeds of sale of trust corpus. The provisions applicable are as follows: “Executors, administrators and guardians shall be allowed the following commissions upon all moneys received and accounted for by them, that is to say: Upon all moneys received representing the estate at the time of the institution of the trust, such as cash in hand and moneys realized from securities, investments, and from sales of real estate and personal property other than interest, rents, dividends and other profits coming due after the inception of the trust, two and one-half per centum.” And although there is no specific statutory provision for commissions to be paid trustees the courts exercising original equity jurisdiction have uniformly followed the schedule of fees applicable to executors, administrators and guardians and this practice has met with the approval of this court. (Estate of Lunalilo, 13 Haw. 317; Estate of Ena, 23 Haw. 335.) Moreover Avhere the administrator (see re Estate of Hiram Maikai, 3 Haw. 522) or guardian (see Guardianship of Humeku, 15 Haw. 394) was also an attorney and exercised professional services on behalf of and for the benefit of the estate additional compensation has been allowed. By the same token trustees who were also [784]*784attorneys have been allowed additional compensation for professional services rendered on behalf of and for the benefit of the trust estate. (Re Estate of Ena, supra.) The result of these decisions is, that in this jurisdiction trustees, similarly as executors, administrators and guardians, are entitled to have and receive the statutory commissions granted the latter; that these statutory commissions are not exclusive and when a trustee who is also an attorney performs necessary professional services on behalf of and for the benefit of the estate he is allowed reasonable compensation therefor in addition to the statutory commissions.

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Cite This Page — Counsel Stack

Bluebook (online)
27 Haw. 780, 1924 Haw. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-trust-estate-of-wichman-haw-1924.