Affirming in part, reversing in part.
The suit is by the widow and heirs, a son and daughter, of the late George Panke, to recover of the Louisville Trust Company $2,801.65, retained in excess of the maximum statutory compensation to which a personal representative was entitled at the time and now (Section 3883, Kentucky Statutes, now KRS
It is fair to the present management of the Louisville Trust Company to say that the transactions occurred before receivership and reorganization of the institution, although it appears the present company must pay the judgment.
Panke's will, probated in January, 1926, placed his entire estate in the hands of the Trust Company, as trustee, until his youngest child should become 40 years old. He also nominated it as executor. A contest of the will by his two children, with the support of the widow, resulted in its being set aside in March, 1928. The judgment became final in June of that year. Although the Trust Company's authority as executor terminated when the will was annulled (Douglas' Adm'r v. Douglas' Ex'r,
We pause here to respond to the argument of the Trust Company that the court had lost jurisdiction and was without authority to reinstate the case because more than sixty days had elapsed since the order of dismissal. The filing of the motion in time suspended the judgment and kept jurisdiction. The court's delay in acting on the motion cannot be permitted to prejudice the parties. Reinstatement of the case was within the court's power and jurisdiction. Petty v. Wilbur Stock Food Co.,
From this time on the case moved with reasonable dispatch. The defendants pleaded that the plaintiffs had agreed to the payment of the questioned fees, and also that through laches they had lost their right to claim recovery. The chancellor sustained the plea of laches in defense of the suit to recover the attorneys' fees, but held it not applicable to the claim of excessive compensation that the Trust Company had paid itself because the allowance of such compensation is statutory; and, furthermore, because there had been no prejudice through loss of evidence necessary to a defense. However, the abatement of the interest was on the ground of laches.
Since the Trust Company's authority as executor terminated on the setting aside of the will, as we have pointed out, it thereafter was an executor de son tort and during that period its actions subjected it to strict liability without any of the rights of a fiduciary. Rudd v. Rudd,
The estate as appraised for the Federal Estate Tax was in round figures $160,000, of which $24,000 was personal property, and $136,000 real estate. The acting executor looked after the real property, for which it received commissions of 5% of the rents. No claim is made against it on that account. It did nothing else in relation to the real property. The fee, which it paid itself, $4,000, is the equivalent of 16.68% of the value of the personal property, whereas the maximum fee allowed by the statute for ordinary services is 5% of the receipts and disbursements. KRS
The sole defense of the Trust Company on this item of administrator's fees is that the parties agreed to it. The evidence to that effect consists solely of the testimony of the then vice president and trust officer, who had severed his connection with the Trust Company in 1930 and moved to a distant state. Quite naturally, his memory was not clear, as is manifested by some equivocations and admissions, as well as by contradiction of some of the statements by the records. The testimony of Mrs. Panke is supported, in part, by her daughter, and the circumstances are stronger to the effect that she never agreed to such fees but objected to the amounts. It is quite clear that the Trust Company's officer did not make a full and complete disclosure as to the statutory fees, but impressed upon Mrs. Panke the idea that it was entitled to that sum as a matter of law. A review of the evidence would be of little value. It seems sufficient to say that after a full consideration we conclude that it supports the finding of the chancellor.
We think the court was in error in allowing interest from October 5, 1930, which was two years from the *Page 584
date of the Trust Company's qualification as executor. Doubtless that is rested on the provision of Sec. 3859, Kentucky Statutes, now KRS
The abatement of interest from November 19, 1934, to June 5, 1941, a period of six years, seven months and sixteen days was rested on laches. The period is that in which the plaintiffs took no step in the prosecution of the suit. During that time the Trust Company had gone through receivership and reorganization, but that does not seem to have caused any prejudice to its rights in relation to this item. It is shown that in the reorganization $1,300,000 in assets of the old company were set aside for the payment of claims, and the plaintiffs made no claim against that fund. It was exhausted, but it appears that the new company assumed liability for any additional amount necessary to satisfy such claims as these. It may be observed that the defendant had the right at any time to call up the case for trial or to move for its dismissal for want of prosecution, but it did nothing. In any event, the equitable rule of laches does not apply, for this claim is based on a statute and interest on it would follow as a question of law. We think the judgment was erroneous in these two particulars.
It is an interesting question whether the trial court was correct in denying recovery of any part of the $5,000 paid the attorneys on the ground of laches after the filing of the suit. There was much more evidence on this branch of the case tending to show that the delay prejudiced the rights of the defendant than in the matter of interest, for both of the attorneys had died and their respective estates had been settled. And there was loss of other evidence also. It is not necessary to consider the question, for we have reached the conclusion that the fee was not excessive. The executor was responsible for and was administering an estate of $160,000. *Page 585
Mr. H.M. Peckinpaugh, who had been Panke's attorney, was retained as counsel and was frequently consulted about many questions arising in the administration. It appears that the family posed these questions and made frequent calls upon the executor for information. There were three suits by or against the executor in which Mr. Peckinpaugh represented it. One of them went to trial and the others were settled. When the will was contested it was the duty of the executor to employ counsel and defend it. McMillen's Ex'rs v. McElroy,
Wherefore, on the appeal by the Pankes, the judgment as to the attorneys' fees is affirmed. On the appeal by the Trust Company, it is affirmed to the extent of the principal sum and is reversed on the cross-appeal to the extent that it denies interest for the full period from July 21, 1928. *Page 586