Louis v. Bird

SHENK, J. An appeal has been taken from an order in each of the above-entitled proceedings, authorizing the testamentary trustee to sell sufficient of the trust property to pay attorney’s fees totaling $1,000 before distribution to the remaindermen.

This court denied motions to dismiss said appeals in Matter of Smead’s Estate, 12 Cal. (2d) 20 [82 Pac. (2d) 182], the opinion in which is referred to for a more detailed statement of the facts. By its decision therein this court dismissed appeals from the consolidated decree which settled the trustee’s accounts, provided for payment of $1,000 from the trust estate to the trustee’s attorney, and ordered distribution to the remaindermen after payment of such fees. Those appeals were dismissed on the ground that they were taken too late. Appeals from orders denying motions to strike a notice of intention to move for a new trial and a modification of the decree settling the trustee’s accounts were dismissed on the ground that the orders were nonappealable. It was held that the order to sell the trust property was an appealable order. Subsequently a motion to dismiss the appeal from that order, made on other grounds, was denied.

[206]The appellants, who are the remaindermen, contend that that portion of the decree which provided for payment of the attorney’s fee directly to the attorney and out of the trust estate before distribution to the remaindermen was beyond the court’s jurisdiction. They insist that that portion of the decree is void and may be attacked collaterally on this appeal, notwithstanding the fact that the decree has long since become final. It is urged that the court had no power to order payment of the fees directly to the attorney, nor any power to make payment thereof a condition precedent to the distribution of the corpus of the trust, and that the proper procedure would have been to make an allowance of the attorney’s fees as a credit on the trustee’s account.

The controversy arose by reason of the fact that the court found that the trustee was indebted to the estate in a sum larger than the amount of the attorney’s fees ordered paid. The indebtedness of the trustee resulted from certain losses suffered by the trust estate, and judgment was rendered in favor of the remaindermen against the trustee in the amount found to be due from him.

The appellants concede that the decree and order for sale of property pursuant thereto are proper when the subject-matter is the estate of a decedent, referring to section 911 of the Probate Code. But they contend that the estate here involved is a trust as distinguished from a decedent’s estate, and that section 1122 of the Probate Code, within the chapter on “Administration of Trusts”, is the applicable section. Section 1122 does not include provisions similar to section 911 (formerly a portion of section 1616 of the Code of Civil Procedure). It is claimed that pursuant to section 1122 the court had power only to allow attorney’s fees as a credit to the trustee in accordance with the practice prevailing in the administration of decedents’ estates prior to the amendment of section 1616 of the Code of Civil Procedure, adopting the provisions which now comprise section 911 of the Probate Code, citing Estate of Ogier, 101 Cal. 381, 385 [35 Pac. 900, 40 Am. St. Rep. 61], Estate of Kruger, 143 Cal. 141, 144 [76 Pac. 891], and Golden Gate Undertaking Co. v. Taylor, 168 Cal. 94, 97 [141 Pac. 922, Ann. Cas. 1915D, 742, 52 L. R. A. (N. S.) 1152].