Burr v. McEwen

The state of the pleadings in this cause is such as would not have admitted of the wide range taken in the argument, if the parties had confined themselves to the allegations of the bill; but as it is desired by both, that all matters which have been discussed, shall be now finally decided, without regard to the frame of the pleadings, the court will consider the whole case.

There is no controversy about the existence, or the general objects of the trust, though they were undefined, resting in an implied confidence that certain things should be done, which seem to have been well understood between the parties, as is evidenced by their conduct, till the death of Mr. Blod-jet, in 1813 or 1814. The trust was a peculiar one in all respects; it was highly beneficial to Mr. Blodjet, by preventing a sacrifice of the property for his debts, as well as having it as a fund, on the faith of which his and the pressing wants of his family were supplied; but to the defendants it was a continued burthen, without any resulting benefit, except indemnity and reimbursement. In its execution the trustees have acted with acknowledged fidelity, without even the imputation of any view to their own profit, in those matters wherein they are charged with negligence, or the unauthorized application of the proceeds of the property. During the life of Mr. Blodjet, every thing was confided to the discretion of the defendants, he was conusant of their proceedings without any complaint, nor till the filing of the bill, does there appear to have been any objection to their conduct by any persons claiming the benefit of the resulting trust. This is therefore not one of those cases where a court of equity is called on to correct the abuses of a trust, by persons having in their hands the estates of minors, or others who cannot supervise the management of their own property, or where productive property has been so mismanaged as to call the trustee to a strict account; still less where the trust fund has been impaired or lost. In this ease, the trustees after having paid debts far exceeding the value of the whole property at the creation of the trust, held a portion for the heirs of Mr. Blodjet, more valuable now than the whole was then; a court of equity cannot overlook these considerations. During the first fifteen years of the trust, the trustees were accountable only to Mr. Blodjet, for the manner of its execution; neither his personal representative, nor his heirs, can call them to any account for what they did with his approbation: he had the sole right to direct plans for the disposition and improvement of the property, which they could carry into effect after his death, in perfect conformity with the conditions of the trust. From the nature and terms of the trust, and the relative position of the parties, the trustees were bound to act with judgment, discretion and fidelity, in the management and disposition of the property; with such diligence and care, as they would bestow upon their own; but they ought not to be held answerable for acts or omissions which would not be deemed culpable in managing their own concerns, even when acting according to their own judgment. For their conduct, which was known to Mr. Blodjet, and not disapproved, or for any thing done pursuant to his directions, they are in no wise accountable, however imprudent or injudicious it may have been.

The first item in the account of the defendants, which is objected to, is the payment of taxes accruing after 1814. As taxes are a lien upon property which is unoccupied, for which it may be sold (9 Serg. & R. 112); or if occupied, the payment enforced by a distress upon the tenants (10 Serg. & R. 255); the trustees were bound to pay them, if in funds, or if not, were at liberty to pay them, it being evidently for the benefit of cestui que trust. This objection is therefore overruled.

It is next objected that the defendants have charged for improvements on the premises, made after the death of Mr. Blodjet. In their answer, the trustees aver that these improvements were made pursuant to the directions of Mr. Blodjet, and according to his plans; this averment is supported by the evidence, without any contradictory proof. These improvements were the finishing the buildings commenced by him before the trust arose; they were made after the payment of the debts charged upon it, and when there could be no solid objections to complete the arrangement projected by Mr. Blodjet, for the accommodation of himself and family, and the ultimate division of it among his children. This objection is also overruled. Insuring the buildings against fire, was a proper precaution, especially when they were unoccupied; we have during the present term decided that it is a proper charge. This exception is therefore disallowed.

It is next objected that the defendants have charged for fees paid to counsel for defend*820ing this suit. A charge for professional advice, as to the manner of executing a trust, is undoubtedly proper; but a charge for professional services in conducting or defending a suit, is on a different footing. At the present term we have decided, that a plaintiff in an action of trespass for taking goods, cannot recover counsel fees paid for prosecuting a suit in a case where compensatory damages only could be recovered (Atlantic Ins. Co. v. Conard [Case No. 627]); not because such charge may not have been reasonable, but because we were aware of no rule of law to justify it. If we could feel at liberty to sanction such a charge in any case, it would be in this; the principle however has not been recognized in equity, that a trustee shall be allowed his professional expenses in the litigation of his accounts, however fair they may be found on investigation. This exception is therefore- allowed, so far as a charge is made for fees to counsel in defending this suit The next exception is to the charge of a commission for services. Whatever may be the rule in courts of equity in England, or in other states, it is well settled in Pennsylvania, that all trustees are entitled to compensation for their services in the execution of the trust, whether there is any provision or agreement touching it or not. The amount of such compensation depends on the nature of the trust, and the fund or property; as the execution of the trust is more or less burthensome to the trustee, the compensation varies accordingly. In this case we think the most liberal rate of compensation ought to be allowed, taking into view the situation of the property of Mr. Blodjet and his family, the conduct of the trustees, and the ultimate result of their proceedings, which has proved highly beneficial to those now entitled to the property. As the defendants have specified no sum which they claim for their services, but submitted its amount to the court, we have felt justified in looking to all the circumstances of the case and parties, which, though they afford no reason for withholding from the trustees what is justly due to them, are not -without their influence in inducing us to disallow a part of what the auditors have deemed a proper compensation for valuable and disinterested services.

The complainant next objects to the account, that the defendants are not charged •with rents. As neither the original or amended bill contains any charge for the maladministration of the property, we are not at liberty to consider this exception in any other respect than as an offset to the claim for compensation. There is no pretence that any rents have been received, or any evidence that the renting the property formed any part of the trust; its objects were a sale to pay heavy debts, to preserve and improve the residue for Mr. Blodjet’s family. The land was uninclosed, Mr. Blodjet gave no directions to inclose or rent it; after the trustees had been enabled by sales to effect all the purposes of the trust, they held the property, subject to the decree of a competent court, for the final execution of any resulting trust. Under such circumstances, it was neither their duty, nor would it have been proper for them to have incumbered the property with a lease, as they did not know at what time they might be called on to execute a deed and surrender the possession. Besides, .the residence of Mr. Blodjet in one of the buildings, with his acquiescence in the conduct of the trustees in suffering the property to remain in statu quo, would conclude his representatives from making this charge, either as a substantive claim, or an offset to services otherwise entitled to compensation. The subsequent occupation of the house by Mrs. Blodjet, the silence of her trustees, and the whole conduct of the trustees, and cestui que trusts, make such a claim inequitable in every view. This exception is therefore disallowed.

The next is, for not charging the trustees with the alleged value of the piece of ground sold to Mr. Powell; not because any more was received by them than they have accounted for, but because they sold for an inadequate price, nor is any collusion between them and Mr. Powell pretended. This exception comes within the same rule as the preceding one; the charge having been reserved till the hearing, can be considered only as an offset to compensation. Prom the account, it appears that this piece was sold at the rate of 10 dollars the square perch, or 1,600 dollars an acre, nearly double the price at which another part of the property was laid off in payment of a debt due the heirs of Mr. Sergeant. That the sale was made in good faith, and for a fair price, cannot be doubted; the trustees were not bound to sell at auction, but were left at their discretion as to the time and mode of sale; though it was their duty to sell for its value, they were under no legal or equitable obligation to be governed by the value which the peculiar situation of this triangular piece gave it, to enable Mr. Powell to have a front on the turnpike. A court of equity will not hold trustees accountable for not exacting the uttermost from the necessities of others, they will hold a trust fairly executed, if the trustee has converted real estate into money, at its fair value in the market. We have not been satisfied, that a better price could have been obtained by a sale at auction, or that this piece of property was not sold at its full value. This exception is also overruled.

The remaining exception is for not charging the defendants with interest on a balance in their hands in July, 1814. Had the trustees made a charge for their services at the date of the account, it would have made the balance in their favour; or if they had charged interest on their advances prior to the sales, it might have been proper to open, an interest account: as none has been open*821ed, and this matter has entered into onr consideration in fixing the amount of compensation, this exception is disallowed. The report of the auditors is therefore confirmed, with the exception of the allowance of 400 dollars for counsel fees in defending this suit, and the amount of compensation, which, under the circumstances of this case, is limited to 1,500 dollars.