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Docket Number

7 Div. 255.

Attorney(S)

Hugh Reed, of Center, for appellant. It not appearing from the averments of the petition that the services rendered were for the common benefit of all the parties, the demurrer should have been sustained. 176 Ala. 151, 57 So. 776; 191 Ala. 195, 67 So. 985; 205 Ala. 219, 87 So. 354. Dortch, Allen Dortch, of Gadsden, for appellees. Where there is a common trust or fund, and suit is instituted by one for the benefit of all, it is not just that one alone should bear the burden. 191 Ala. 195, 67 So. 985; 195 Ala. 547, 70 So. 685; 82 Ala. 213, 2 So. 760; 70 Ala. 534; 105 U.S. 527, 26 L.Ed. 1157; 113 U.S. 116, 5 Sup. Ct. 387, 28 L.Ed. 915. Where there are two final decrees the first can only be reviewed, when appeal has not been barred. 176 Ala. 445, 58 So. 426; 132 Ala. 131, 31 So. 474.

Judges

McCLELLAN, J.

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Smart Summary

Coker et al. v. Coker et al., 7 Div. 255 (Sup. Ct. Ala. Oct. 12, 1922)

Factual and Procedural Background

John W. Coker died in April 1918, a resident of Cherokee County, Alabama. His will exempted the executors from giving bond and directed that the estate be kept together until the testator's younger grandchild reached 21 years (November 1, 1921), and that at distribution a sum not less than $5,000 might be retained for the widow's support. W. H. Coker was the surviving executor. On September 8, 1919, W. H. Coker filed accounts for partial settlement; the probate court confirmed those accounts on November 10, 1919.

While the probate administration was pending, attorneys Dortch & Allen (representing certain legatees and devisees) filed a petition to require the surviving executor to give bond; the executor did not contest and gave bond in the sum of $60,000. On November 27, 1919, those attorneys filed an original bill in equity to remove the administration to the circuit court, representing several legatees and devisees. Prior to and after filing the bill, the executor, individually, purchased interests from legatees and devisees at various prices.

On July 12, 1920, Dortch & Allen filed a petition under Code, § 3010, to have their attorney's fees ascertained and allowed as costs chargeable against the estate. After the executor's demurrer was overruled, the circuit court (Nov. 18, 1920) ruled that the attorneys were entitled to compensation from the estate for services in obtaining the executor's bond and for services in filing the original bill, and referred the question of reasonable compensation to the register. The register reported $50 for securing the bond and $250 for filing the bill. The court sustained the attorneys' exceptions to that report, annulled it, and, upon reviewing the evidence itself, fixed a gross award of $1,250. W. H. Coker, as executor, appealed from the decree awarding $1,250.

Legal Issues Presented

Whether attorneys' fees under Code, § 3010 may be charged against the estate only for services that benefited the common estate (as distinct from services preserving or advancing individual interests).
Whether the services rendered by Dortch & Allen — (a) securing the executor's bond, and (b) filing the original bill and removing the administration to equity — were of benefit to the estate so as to justify allowance from estate funds.
Whether the court's gross allowance of $1,250 was proper on the evidence, or whether remand for further inquiry as to reasonable amount was required.

Arguments of the Parties

Appellant's (W. H. Coker) Arguments

Argued (through counsel Hugh Reed) that the petition did not aver that the services for which fees were sought were for the common benefit of all parties; therefore the demurrer to the petition should have been sustained. (Citations supplied by counsel: 176 Ala. 151, 57 So. 776; 191 Ala. 195, 67 So. 985; 205 Ala. 219, 87 So. 354.)

Appellees' (Dortch & Allen / supporting legatees) Arguments

Argued that when a common trust or fund exists and one sues for the benefit of all, it is equitable that the cost (including attorney's fees) be borne by the fund rather than by the single litigant. (Citations supplied by counsel: 191 Ala. 195, 67 So. 985; 195 Ala. 547, 70 So. 685; 82 Ala. 213, 2 So. 760; 70 Ala. 534; 105 U.S. 527, 26 L.Ed. 1157; 113 U.S. 116, 5 Sup. Ct. 387, 28 L.Ed. 915.)
Contended that earlier decretal rulings could not be reviewed where the statutory period for appeal had expired (citing Harris v. Johnson, 176 Ala. 445, 58 So. 426; U.S. Loan Co. v. Leftwich, 132 Ala. 131, 31 So. 474).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
176 Ala. 151, 57 So. 776	Cited by appellant to support the contention that the petition did not show services were for the common benefit and thus demurrer should have been sustained.	Cited by appellant; the court discussed the governing principle (that §3010 fees must benefit the common estate) but did not specifically rely upon this particular citation in its analysis.
191 Ala. 195, 67 So. 985	Cited by both sides: by appellant re sufficiency of petition; by appellees in support of apportioning fees against a common fund.	The court expressly relied on the principle appearing in Bidwell v. Johnson (191 Ala. 195) that compensation under Code, § 3010 is limited to services beneficial to the common estate.
205 Ala. 219, 87 So. 354	Cited by appellant and as authority regarding allowance of fees under the statute.	The court cited De Ramus v. De Ramus (205 Ala. 219) among authorities establishing that §3010 allows charges only for services benefiting the common estate; the court applied that principle.
195 Ala. 547, 70 So. 685	Cited by appellees in support of the equitable principle that one who sues for the common benefit should not alone bear the burden.	Cited by appellees' counsel; the opinion lists it among authorities but does not expressly base its decision on this specific citation.
82 Ala. 213, 2 So. 760	Cited by appellees for the principle favoring charging common funds for services benefiting all.	Cited by appellees; the court did not expressly analyze or rely on this specific case in its reasoning as set out in the opinion.
70 Ala. 534	Cited by appellees as part of supporting authorities for apportionment against a common fund.	Cited by appellees; the court's opinion does not expressly apply or discuss the decision's specific content.
105 U.S. 527, 26 L.Ed. 1157	Cited by appellees as federal authority for equitable apportionment against a common fund.	Cited by appellees; the opinion does not indicate the court relied on this federal case in its analysis.
113 U.S. 116, 5 Sup. Ct. 387, 28 L.Ed. 915	Cited by appellees in support of principles regarding common funds and equitable charging of costs.	Cited by appellees; the court did not specifically invoke or discuss this decision in its expressed reasoning.
176 Ala. 445, 58 So. 426	Cited by appellees to argue that a prior decretal order cannot be reviewed after the statutory period for appeal has expired.	The court considered this line of authority and held that the rule relied upon (non-reviewability) was not applicable to the interlocutory matter under review (the allowance of fees under §3010).
132 Ala. 131, 31 So. 474	Cited by appellees on the same point concerning reviewability of prior decrees after appeal period.	The court explained that the cited rule (that a final decree can only be reviewed if appeal period not expired) does not apply to the interlocutory administrative act of fixing costs under §3010.
174 Ala. 345, 56 So. 809	Noted in the opinion as part of the line of decisions regarding reviewability and related procedural principles.	Cited by the court as part of the authorities discussing the appellate-review rule; the court used this line to distinguish interlocutory administrative action from final decrees.
164 Ala. 368, 51 So. 17	Cited for the proposition that a matter of ascertainment of costs under a statute may be surplusage in an original bill (Code, § 3219) and that the court's order of reference is an administrative process.	The court relied on Northern v. Tatum (164 Ala. 368) to support its view that the reference and ascertainment under the statute is an administrative step and that final adjudication occurs only when amount is fixed.
Graham v. Graham (Ala. Sup.) 93 So. 660	Cited by the court among authorities on the limits of allowing compensation under Code, § 3010.	Listed among authorities (with Bidwell and De Ramus) for the principle that §3010 fees must benefit the common estate; the court relied on this principle in evaluating the claimed services.
207 Ala. 648	Present in a note referencing Graham v. Graham.	Appears as a citation note in the opinion; the court's reasoning references Graham v. Graham but does not separately analyze this particular citation beyond the note.

Court's Reasoning and Analysis

The court reviewed the procedural posture: appellees argued earlier decretal rulings were not reviewable because the appeal period had lapsed, but the court determined that the interlocutory nature of the fee-allowance proceeding under Code, § 3010 made that rule inapplicable. The court treated the order of reference to the register as an administrative step; a final adjudication occurs only when the amount of compensation is fixed and judicially imposed.

The court articulated the governing substantive rule: attorney's fees chargeable against an estate under Code, § 3010 are recoverable only for services that benefit the common estate rather than services that protect or advance merely individual interests. The court cited Bidwell v. Johnson, De Ramus v. De Ramus, and Graham v. Graham for this principle.

Applying the rule to the evidence, the court concluded:

The service of obtaining the executor's bond, which the executor did not resist, was beneficial to the estate and therefore entitled the attorneys to some compensation chargeable to the estate. The appropriate measure should reflect reasonable value, benefit to the estate, and the necessity of the bond to preserve the estate.
As to the filing of the original bill and removal to equity, the evidence presented did not show that filing the bill produced any benefit to the estate. Many allegations in the bill were disproved or had no effect given the terms of the will (e.g., restrictions on distribution). Subsequent private purchases by the executor of interests from legatees did not increase the estate's assets; they were transactions between individuals and not gains to the estate.
The only possible estate-related benefit from filing the bill would be the removal of the administration to equity; whether such removal materially advantaged the estate could not be determined from the evidence presented and required further inquiry.

The court found that the lower court's allowance in gross ($1,250) was erroneous in amount based on the record. It therefore reversed the decree as to the amount and remanded for further inquiry and adjudication to determine a reasonable allowance for securing the bond and to determine whether the estate derived any benefit from removal into equity.

Holding and Implications

REVERSED AND REMANDED.

Direct consequences:

The circuit court's gross allowance of $1,250 to Dortch & Allen is reversed as erroneous in amount and the cause is remanded for further proceedings to (a) ascertain a reasonable fee for securing the executor's bond and (b) determine whether the removal of the administration into equity produced any benefit to the estate that would justify additional fees charged to the estate.
The opinion recognizes that the attorneys were entitled to some compensation for securing the bond, but the precise amount must be determined upon further inquiry and evidence concerning reasonable value and benefit to the estate.
The court taxed the costs of the appeal against the testator's estate.

Broader implications: The opinion applies and confirms the principle that fees under Code, § 3010 must be for services benefiting the common estate; the decision remands for factual determination rather than announcing new legal doctrine.

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COKER et al. v. COKER et al.

McCLELLAN, J.

This is an appeal by W. H. Coker, as executor of the estate of John W. Coker, deceased, from a decree of the circuit court, in equity, awarding Messrs. Dortch Allen $1,250 as attorney's fee for services rendered in the course of the administration of the estate of appellant's testator. The testator died in April, 1918, a resident of Cherokee county, Ala. The executors were relieved by the will from making bond in the premises.

The testator's will required, among other things, that the property of the estate be kept together, if authorized sales were not made, by the executors or surviving executor until his younger grandchild should attain the age of 21 years, viz. November 1, 1921, and also that if, at the stated time of distribution it should be found necessary by the executors or surviving executor, a sufficient sum of money (not less than $5,000) should be retained from the earnings of which his widow should be supported and maintained. On September 8, 1919, W. H. Coker, the surviving executor, filed his accounts and vouchers for a partial settlement of his and his then lately deceased coexecutor's administrative acts — the latter's from, to wit, August 26, 1918, to the date of his death, and the former's from May 28, 1918, to September, 1919. On November 10, 1919, the probate court, wherein the administration was then pending, passed and confirmed the account through appropriate decree.

While the administration was pending in the probate court — before its removal in consequence of original bill filed by some of the legatees and devisees on November 27, 1919 — Messrs. Dortch Allen filed a motion or petition to require the surviving executor to execute bond for the faithful discharge of his duties in the premises. The executor did not contest the motion or petition, making bond in the sum of $60,000. On November 27, 1919, as stated, these attorneys filed an original bill, praying the removal of the estate from the probate into the equity court. The order of removal was made December 3, 1919. The complainants — represented by these attorneys with one of the persons made a defendant in the bill — were A. H. Coker, H. B. Coker, S.W. Coker, Lizzie Stout, Josie Stanford, Edna Appleton, and Jimmie C. McEldrath, all legatees and devisees under the testator's will. Before this bill was filed W. H. Coker (the executor), in his individual capacity, had purchased from legatees and devisees their proportionate interests in the estate. After this bill was filed, he likewise purchased other proportionate interests of the complainants, paying therefor to them severally amounts predicated of a total estate value approximately twice that manifested, so to say, by the amounts paid for interests purchased by him before the bill was filed.

On July 12, 1920, these attorneys filed their petition, praying the ascertainment and allowance to them of attorney's fee to be taxed and paid to them as costs in the cause; the petition serving to invoke the court's authority under Code, § 3010. After overruling the executor's demurrer to the petition the court, in its decretal order of November 18, 1920, pronounced, apart from other presently unimportant matters, as follows:

"It is further the opinion of the court that said petitioners, Dortch Allen, are entitled to compensation out of the assets of the estate of said John W. Coker for their services rendered in the petition in the probate court to require the executor, W. H. Coker, to execute bond as said executor, and for their services rendered in this court in the matter of the original bill filed by A. H. Coker et al. against W. H. Coker, executor, as aforesaid, et al. But it is the opinion of the court that said Dortch Allen are not entitled to compensation out of the assets of said estate for any other service rendered any of the heirs or devisees of the estate of said John W. Coker, deceased. * * * It is further ordered and decreed that petitioners be allowed compensation from the assets of the estate of John W. Coker, deceased, for services in the matter of the execution of bond by the executor and the bringing of this suit named herein. And it is further ordered that it be, and is hereby referred to the register of this court, to ascertain and report to the court what would be a reasonable compensation for the services of said Dortch Allen, rendered by them in the matter of the requiring said W. H. Coker, executor of the will of John W. Coker, deceased, to execute bond as said executor, and for their services rendered in and about the filing of the bill in this court of A. H. Coker et al., against W. H. Coker, as said executor, et al., on the 28th day of November, 1919."

On March 22, 1921, the register reported the ascertainment of $50 as a reasonable attorney's fee for the service resulting in the giving of bond by the executor, and $250 for filing the original bill mentioned, and also accompanied these findings with the statement that he based his conclusions upon a "strict construction" of the order of reference, and without considering the results or benefits or the amount involved." The court, on April 9, 1921, sustained the exceptions of the attorneys to the register's report, annulled it, and proceeded itself to ascertain and fix, by reference to the entire evidence, the amount, in gross, of $1,250 as reasonable compensation for the attorneys' services in the premises — holding to be "too narrow" and erroneous the register's construction of the order of reference.

The assignments of error assail the conclusions expressed in the decretal order of November 18, 1920, and the sustaining of exceptions to the register's report in its last adjudication in the premises. It is insisted for the attorneys, appellees, that the rulings made in the decretal order of November 18, 1920, cannot be reviewed on the present appeal because the period provided by law for appeal had expired before this appeal was perfected; this upon the authority of Harris v. Johnson, 176 Ala. 445, 58 So. 426, and U.S. Loan Co. v. Leftwich, 132 Ala. 131, 31 So. 474. Other decisions in that line were noted in Dickens v. Dickens, 174 Ala. 345, 353, 56 So. 809. That rule is not applicable to the interlocutory matter now under review. The object of the statute (section 3010) is to have ascertained an element of cost in the cause or proceeding. It has been decided under a related statute, Code, § 3219, that such matter is surplusage in an original bill whereby relief or action within the statute's purview is sought. Northern v. Tatum, 164 Ala. 368, 375, 376, 51 So. 17. The act of the court in ordering reference, even following upon declaration of the basis or bases for compensation under the statute (section 3010), is an administrative process solely; an adjudication in any final sense being made, alone, when the amount of compensation is fixed and the obligation to pay it judicially imposed upon the estate or fund subject to the court's control.

The assignments of error bring under review the proceeding and basis and the pronouncement of the court's conclusion in respect of the subject-matter of the petition for allowance of attorney's fee. Since the court in its discretion might, originally and without ordering the reference, have itself ascertained and determined the whole inquiry presented by the petition, neither the register's report nor the action of the court upon exceptions to it is material, in view of the conclusion attained by the court upon the testimony afforded by the written evidence.

Compensation for professional legal services that may be imposed as a charge upon the estate or fund under Code, § 3010 is for those services, only, that are of benefit to the common estate as distinguished from such services rendered in presenting or preserving the individual interests of parties to the cause or proceeding. Bidwell v. Johnson, 191 Ala. 195, 198, 199, 67 So. 985; De Ramus v. De Ramus, 205 Ala. 219, 87 So. 354; Graham v. Graham (Ala. Sup.) 93 So. 660. That the professional service rendered by these attorneys in requiring the executor to make bond — a requirement he did not resist — was to the advantage of the estate seems not to be contested. For that service these attorneys were entitled to be compensated in some amount from the funds of the estate.

207 Ala. 648.

The measure of that compensation should be determined from evidence of its reasonable value and benefit to the estate as a whole, considered in connection with the necessity or the want of necessity for such bond to preserve the estate from impairment or loss through improper conduct of the executor. If the executor was faithfully discharging the duties imposed by the will — including retention of the estate and its management as the will directed — the requirement of a bond of him was of much less benefit to the estate than had the contrary been true.

As to the only other possible item of charge upon the estate for professional services by the petitioning attorneys, viz.: the filing of the bill, we see no escape from the conclusion, under the evidence, that neither the filing of the bill nor any consequences that are shown to have resulted therefrom did redound or have redounded to the benefit of the estate. The bill is still pending, demurrer having been filed; but the material matters of a controversial nature averred therein appear to have been made the subject of elaborate testimony on the hearing of the petition of the attorneys. It is averred in the bill that the executor was largely indebted to the estate; but this was disproved on the hearing referred to. It is averred that he has not accounted for or distributed to the parties any of the moneys of the estate; but this he could not do under the before-stated terms of the will. The charge that the executor had appropriated to his personal advantage assets of the estate is not supported in the evidence. The averment that the executor was about to sell his entire interest in the estate situated in Alabama to Dr. McWhorter, with a view to avoiding accountability for his derelictions in respect of his executorship, was — in the absence of evidence showing indebtedness to the estate by the executor or dereliction in the premises to assure against which he gave bond — a matter of no importance to the estate, having no effect to increase or to preserve the estate of the testator. W. H. Coker, the surviving executor, lived in Georgia. Nevertheless the will expressly committed to the custody and care of the surviving executor the personal assets and income of the estate, the much larger part of which was real property, and invested him with wide discretion and powers as to the sale of personalty belonging to the estate.

The bill further averred that the executor was an unfit person to serve the trust, and sought his removal as executor. Nothing was shown at the hearing had on the petition of the attorneys that would have justified his removal. The insistence, in effect, is that, because W. H. Coker (executor), individually, subsequently purchased proportionate interests of legatees and devisees at figures in excess of the purchase price of proportionate interests bought before the bill was filed, the value of the estate was approximately doubled. The insistence is not to be justified; no additional assets of the estate being gained through or in consequence of the filing of the bill. The value manifested by these subsequent purchases was that of trade between individuals selling and buying. The estate derived no benefit therefrom, whatever the purchase prices agreed upon between the individuals dealing. The estate was no greater than it was before the dealings.

The only possible basis for compensation of the petitioning attorneys for services beneficial to the estate from the filing of the bill is referable to its effect to remove the estate from the probate into the equity court. The administration of a trust was involved in the execution of the testator's will. Whether the thus invoked action was of material advantage to the estate — if beneficial at all, it was so as respected the estate itself — may and should be ascertained through considerations and evidence not made available through the testimony now presented.

The evidence does not warrant the conclusion that the petitioning attorneys have bound themselves to forego their right, if established, to be compensated within and as the statute (Code, § 3010) provides. If those at whose instance the bill was filed have obligated themselves to compensate the petitioning attorneys, if their claim for fees is not allowed and enforced against the estate, that fact does not deprive these attorneys of such right under the cited statute as they are able to sustain.

The court made an allowance in gross. Under the evidence that finding was erroneous in the amount allowed. The cause is remanded for further inquiry and adjudication in respect of allowance of reasonable attorney's fee for inducing the making of the executor's bond and in respect of the possible benefit the estate derived from its removal into equity on the bill by them filed. The decree is reversed for error in its amount, and the cause is remanded. The costs of the appeal will be taxed against the estate of the testator.

Reversed and remanded.

ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.

COKER v. COKER