Egbert v. Brooks

Headnote

A voluntary trustee without contract for compensation, is not entitled to any in equity; though he is entitled to have his expenses paid, and to be saved from loss.

Appeal from chancery, before Bayard, Ch. Justice; Harrington, Layton and Milligan, Judges.

The case was, that Mary Oliver (complainant,) having a judgment against James Bradford for $2,191 41, assigned said judgment to Abraham Egbert (defendant,) in trust for Elizabeth C. Bradford, (the wife of James Bradford and sister of Mary Oliver,) for her separate use and for her children — the assignee to collect and apply the same to their separate use. The trustee received under this judgment from time to time large sums of money, and disbursed the same, or a part thereof, according to the trusts of the assignment, but being involved in several law suits in defence of the judgment which was attacked by other creditors of Bradford as being without consideration, and having incurred great trouble and expense in the premises, the trustee claimed to be allowed therefor out of the fund.

On a bill filed by the cestuis que trust, the chancellor took an account of the trust fund received, allowing the trustee for all payments to the cestui qui trust, and all payments in prosecution of the several suits at law, for fees and costs, and for his actual expenses attending court, but refused to allow him any compensation for care and trouble in the execution of the trust, on the ground that it was voluntarily assumed by him, and that in the declaration of trust there was no agreement or stipulation for such compensation.

The decree found a balance of $250 61 in his hands; which, with interest, amounting to $385 51 in all, he was ordered to pay the complainants.

The declaration of trust recited the assignment of ihc judgment,

and declared that it was made “for the express purpose of its proceeds to be applied unto Elizabeth Bradford, and after her decease to her children:” and covenanted on the part of the trustee, that he “would use his endeavors to apply all the aforesaid monies that might come into his possession for the true intent and meaning of said assignment, and to account for the same as it might come to his hands, and if possible to be applied in the purchase of part of the farm of James Bradford, which will soon be sold on account of certain judgments.”

appellant, objected to the chancellor’s decree, 1st. Because he refused to make any allowance to Egbert for his services and time in collecting and disbursing the trust funds, though the trusteeship involved several lawsuits in de-fence of the judgment assigned, and the personal services of the trustee were proved to be worth $500. They admitted that, as a general rule, it is the doctrine of courts of equity not to allow commissions to trustees; but the rule, though preserved for the sake of the system, is constantly varied from in extraordinary cases by indirect allowances. The rule is considered a hard one. Where the person is not strictly and technically a trustee, the court will allow compensation. And the court will often indirectly make an allowance to the trustee, as by an allowance to the agent or bailiff of the trustee. A trustee has been allowed to employ an accountant, and pay him out of the trust funds. (3 P. Wins. 294; l Vern. 144; 1 P. Wms. 140; 1 Vern. 316; 3 Mad. Ch. Rep. 147; 24 Law Lib. 228; Lewen on Trusts, 449.) 2d. The services rendered by Egbert did not fall within the trusteeship as created by the paper in evidence acknowledging the trust; and for these services beyond that undertaking, he was entitled to compensation. He was bound by this paper only to apply the trust fund; not to collect it.; not to enter into a series of lawsuits in defence of the judgment. These services ran through seven years of his life; were beyond anything contemplated by the parties at the time of the assignment; and were acknowledged and remuneration promised by Mrs. Bradford. 3d. They objected to the allowance of interest and costs as against the trustee. (12 Vesey 386; 10 Law Lib. 84, Willis on Trustees, [178;] 24 Law Lib. 231; Lewen on Trusts, 456.)

replied that this trustee had voluntarily assumed the duty of collecting and applying the money; that there had been great delay in executing the trust; that the proof of extraordinary trouble was unsatisfactory; and that the principle was well settled that a trustee voluntarily accepting a trust without stipulating

for compensation, is not entitled to any compensation for his services, nor to anything but the payment of his costs and expenses. The duty is entirely honorary. Such is the settled' rule of all courts of chancery. ( 1 Johns. Ch. Rep. 39 , 527.) The trustee is liable also for interest. He held the money for years in his hands — used it— refused to account, and held out until he was compelled by chancery to account. Costs were properly allowed against him because of his laches and violation of the trust.

The Chancellor now stated the reasons of his decree: — The case below was presented first without the written declaration of trust which was lost, and not found until after the bill and answer. Standing thus, the trustee was at the mercy of the complainants, because there was nothing shown authorizing the trustee to invest the money in land. On the declaration being found, I directed a supplemental bill and answer to be filed, for the purpose of bringing it to his relief.

I allowed the trustee his entire account; and would have made him some allowance for care and trouble, if I had not considered myself bound by the rule of equity that as a voluntary trustee, without stipulation for compensation, he was not to be allowed compensation. I thought, also, that the evidence, apart from the declaration of trust, showed that the undertaking of Egbert was intended to be honorary and without compensation. I considered that this undertaking bound him not merely to passive, but to active exercise of the trust; to collect, as well as to receive and apply.