Haines v. Hay

Mr. Justice Wilkin delivered the opinion of the court: The first error assigned is the allowance of a credit for the items of expense claimed by the administrator. These items were the costs in the circuit court, the costs in the Appellate and Supreme Courts, including the printing of briefs and abstracts, in the former litigation between the cestuis que trust and the administrator over the §10,000 trust fund. The allowance of these expenses was improper. In the first place, the decree of the circuit court, which was entered in that case on June 26, 1891, ordered Bradford, as administrator of the estate of Treat, to pay the costs in due course of administration. That was an adjudication as to the costs in the circuit court and settled by the affirmance of that decree on the former appeal. That decree was also an adjudication of the fact that the §10,000 did not belong to the estate of Samuel H. Treat. Had the cestuis que trust brought suit against Treat in his lifetime, on his declining to recognize his trust relation, the latter certainly would have been liable for costs, and on the same principle his estate must be held, the suit being against his personal representative. The order of the court was not that Bradford pay the costs out of the trust estate, but that he should pay them out of the estate of his intestate, in due course of administration. This litigation was not in the interest of the trust fund, but hostile to it, and no principle of equity will, as we conceive, permit the trust fund to be diminished to pay the expenses of such litigation. (Meek v. Allison, 67 Ill. 46.) An equally strong equity exists against the allowance of the costs in the Appellate and Supreme Courts, and the charges for printing abstracts and briefs. The decree of the circuit court was a protection to the administrator against the claims of all parties to the suit. The appeal taken was manifestly deemed for the benefit and advantage of the estate, and the adverse decision must carry with it the costs to be paid by the administrator in due course of administration. The administrator had no right to pay any of the above items out of funds which in no sense were the property of his intestate in his lifetime, and which it was expressly held in the original action did not pass to his administrator as assets of his estate. The administrator represented the estate, and as such he had a right to make such defense as he thought its interests demanded, and the estate is liable for all costs so incurred, and not the party or estate against whom the defense was unsuccessfully made. The principles of the case of Sherman v. Leman, 137 Ill. 94, are applicable and sustain this view. The next question that arises is, what are the liabilities of the administrator or estate as to interest or profit on the trust fund, after it was ordered by the decree of the circuit court, on June 26, 1891, to be paid over to Haines? That decree was in the nature of a judgment, and ordered Bradford, as administrator of Samuel H. Treat, to pay to Haines, as trustee, the sum of $10,000. We see no reason why this sum should not draw interest at the legal rate from the day the order was entered, the same as any other decree or judgment. When the order was entered it was the duty of Bradford to comply with it, unless the interest of the Treat estate fairly justified an appeal. There is nothing to show that he did not take the appeal in good faith. The money seems to have remained in his hands as administrator, and riot individually, pending the litigation. He is not, therefore, personally liable, but we see no reason why the estate wrongfully withholding the money should not pay interest thereon. The same is true as to Hay after the money came into his hands. To the extent, however, that he individually realized profit from the funds, and to the extent that he wrongfully paid out part thereof, he is personally liable, and in his representative capacity he is liable for the legal rate of interest, as above stated, to be paid in. due course of administration out of the intestate’s estate,—and such should have been the order of the circuit court. Less than this would fail to do justice between the parties. (Knapp v. Marshall, 56 Ill. 362.) To hold that in this case the administrator might take an appeal from the order directing him to pay over the trust fund, without being liable, either personally or in his representative capacity, for anything except the profits actually realized from the money, would be establishing a harsh rule, and one which would often work great hardship. In this case it would justify a temporary perversion of the trust fund. It does not very clearly appear whether the estate has any assets out of which such interest can be collected, but that question cannot, as seems to be thought, affect our decision as to its legal liability. The cross-error is not well taken. The administrator can have no commissions out of a fund which was not assets of the estate upon which he administered, and which the estate, after the entry of the order of the circuit court, had no right to the custody or control of. This trust fund cannot thus be diminished. The claim of an administrator for commissions must be paid out of the estate. The correct view of the order or decree entered June 26, 1891, is not that it was an allowance of a sixth-class claim against the estate, but was an adjudication of the fact that the estate of Treat held $10,”000 which was a trust fund and belonged to the cestuis que trust, and in no sense assets of the estate. The rate of interest should be the legal rate at the time the order to pay was entered. The statute in force July 1, 1891, fixing the legal rate of interest at five per cent, must control. Firemen's Fund Ins. Co. v. Western Refrigerating Co. 162 Ill. 322. We do not think the evidence in the case would have justified any charge against the defendants the Ridgely National Bank, William Ridgely and Charles Ridgely, either on account of the deposits in the bank or the appeal bonds filed. The only order that can be properly entered in this proceeding will be a direction to the custodian of the fund, Charles E. Hay, as administrator, to pay in due course of administration, or against him personally, to the extent that the law so charges him, as above indicated. It follows from what has been said, the judgment of the Appellate Court, and the decree of the circuit court of April 9, 1896, are erroneous, and must be reversed. The decree below is reversed, and the cause will be remanded for further proceedings consistent with this opinion. Reversed and remanded.