I join Mr. Chief Justice Kemp in concurring in the opinion of Mr. Justice Peters to the effect that no legal bar exists to estop the trustees from taking statutory commissions on rents received for school buildings leased to the federal government during periods covered by the trustees' 57th and 58th annual accounts. I concur with the chief justice that a right vested in the trustees by authority of Act 88 of Session Laws 1943 (now R.L.H. 1945, § 9757) to take payment of commissions at the percentage rates prescribed by it on all income received while such rates were applicable to charitable trusts during the beginning portion of their 58th annual account period and that the legislature did not intend to disturb such right by subsequently changing those rates in the enactment of *Page 139 Act 149 of Session Laws 1943 (now R.L.H. 1945, § 9758), but dissent from his application of the third, fourth and fifth percentage rates of Act 149 in respect to the balance of the year's income received during the latter portion of the accounting period beginning with the effective date of Act 149 which application in my opinion is violative of its legislative intendment. I concur with Mr. Justice Peters in his construction of Act 149 that it operates prospectively under which its last percentage rate is applicable to such balance but dissent from his construction that that Act also operates retrospectively under which he applies its first five percentage rates on the income received prior to the effective date of the Act, such construction and application in my opinion being without due regard to the right vested by authority of Act 88 and the legal character of past payments of commissions at the rates prescribed by that prior legislation.
Any method of computing trustees' commissions is in itself purely a matter of procedure but a change therein by statute reducing such commissions would be a matter of substance in respect to rights which had already vested under the old method. This is clearly apparent in regard to rights to commissions, computed at existing statutory rates, which have been approved and allowed by the court prior to enactment of the statute changing those rates. The question, however, presented by this appeal does not concern rights vested judicially but does concern those vested by authority of legislative enactment during the accounting period and before the statute changing the method of computation in reduction of commissions was in existence. In the absence of such intervening legislation, the application of the statute edicting the change is strictly that of an adjective law, which when in force at the time of allowance of an account controls the computation of commissions for the entire accounting period and *Page 140 applies retrospectively to reported transactions antecedent to the statute's enactment in the absence therein of words of exclusion. (Estate of da Silva, 31 Haw. 78; In re Potter, 175 N Y Supp. 598.) Yet, it is not a true retrospective law nor has it retrospective operation in the sense that it reverts to and modifies a pre-existing state of right. It rather is prospective in the sense that it applies only to a ruling to be made in the future, albeit with retrospective application in respect to transactions in the past which come up for adjudication. On the other hand, in the case where the operation of a law would revert to and modify a pre-existing state of right, pertinence of the general canon of construction becomes evident that it takes a clear expression of legislative purpose to justify any retrospective operation that would tend to destroy or impair a vested right, the basic presumption being that the legislature does not intend to enact laws which operate oppressively and unreasonably. This is consonant with the presumption that the legislature intends to enact prospective laws unless the contrary intent is expressed or necessarily implied. Such rule of construction where a contrary intention does not appear is a matter of statute in this jurisdiction. (See R.L.H. 1935, § 5, now R.L.H. 1945, § 4, which reads: "No law shall have any retrospective operation.") It is within the well-recognized principle that retrospective laws are not favored and that all laws will be construed as being prospective unless the language employed imperatively requires a contrary construction. (SeeOleson v. Borthwick, 33 Haw. 766; Robinson v. Bailey,28 Haw. 462; In re Kalana, 22 Haw. 96, 107.) Thus where retrospective operation would tend to prejudicially affect a vested right or the legal character of past transactions and no language in the statute changing the method of computing commissions either directly or indirectly indicates an intention to operate retrospectively, *Page 141 the statute should be construed as a prospective law. When applied to an account rendered after its enactment such statute so construed would not operate to modify the legality of past takings of commissions, the right to which vested by authority of prior legislation at the then existing rates of computation.
During the accounting period of the trustees' 58th annual account covering the fiscal year beginning July 1, 1942 and ending June 30, 1943, Acts 88 and 149 were enacted. Act 88 became law on April 30, 1943. It authorized a course of action for the taking payment of commissions by trustees generally but continued the existing method of computing such commissions. Act 149 became law on May 11, 1943. It did not alter the course authorized by Act 88, but changed the existing method of computing commissions in charitable trusts where the income is over one hundred and five thousand dollars. Thus the course and change inaugurated by these two amendatory Acts were in force and applicable to charitable trusts at the time of allowance of the 58th annual account and have not since been repealed or amended. Neither Act contains words of exclusion. Consequently in that they both relate to procedure, the Acts should be given retrospective application in the sense of applying to future rulings concerning past transactions unless such would retroact against a vested right. Although conceded and patent that no vested rights would be disturbed retrospectively by application of Act 88 to the 58th annual account, it is urged that by virtue of the authority of that intervening Act a vested right accrued with which a retrospective operation of Act 149 would interfere. Consequently whether such a right did vest and would be so affected must first be ascertained before the legislative intent of Act 149 in respect to its operation can be determined.
The legislative purpose of Act 88 is to legalize the past *Page 142 practice of taking commissions at applicable rates on portions of the annual income as they are received and to make it apparent that such commissions are then and so payable regardless of whether the trust is a charitable or an ordinary one. (See Sen. Jo. 1943, p. 449.) It amends section 3793 of Revised Laws of Hawaii 1935, continuing the existing method of computing commissions but omitting the provision that "* * * such commissions to be allowed upon each accounting when made * * *" and substituting the new provision that "* * * such commissions to be payable as and when such income is received * * *." This substitution invokes a change of procedure without affecting any pre-existing state of right. It creates a divergence from the time an account is rendered to the times throughout the accounting period when portions of the year's income are received whether it be from day to day, month to month, or one part of the year to the next. Thus relating to procedure with no words of exclusion, the Act applies retrospectively to the trustees' 58th annual account in respect to past payments of commissions on income received at the existing rates continued by the Act so long as those rates are applicable to charitable trusts. However, before the period covered by their account terminated, Act 149 became effective and changed the method of computing commissions in charitable trusts. Hence, thereafter the rates continued by Act 88 are inapplicable to charitable trusts and consequently Act 88 applies retrospectively to only those past payments reported by the account on income received before the effective date of Act 149. During that time, income was received and the trustees were lawfully entitled by Act 88 to take payment of commissions thereon at the then applicable rates continued by it. Such legislative authority endowed them with substantially a right of property to a sum of money made certain by a fixed method of computation, the right *Page 143 to be enjoyed instantly. This right was complete and consummate before Act 149 came into existence. It is a right vested by statute and a right so closely attached to applicable rates of computation that any retrospective and reductive change therein by subsequent legislation would impair it and prejudically affect the legality of past payments of commissions in exercise of it. Such is the statutory right with which retrospective operation of Act 149 would interfere.
The primary problem confronting this court is that of construing the legislative intent of Act 149 relative to its retrospective operation. In this connection it is unnecessary to decide what effect the vesting authority of prior legislation may have had upon the powers of the presiding chancellor in relation to the right vested by it when an account subsequently comes before him for adjudication. Likewise it is unnecessary to decide whether that right may be subsequently disturbed by him, this court being concerned not with judicial disturbance but with legislative interference. Suffice it to say that every adjudication involving vested rights no matter how vested necessarily implies a judicial inquiry into all the material circumstances surrounding the vesting thereof in the exercise of the court's ancient function to determine as a matter of law that such did vest and, upon affirmative determination thereof, their protection becomes the court's duty unless there be equities outweighing such duty, the courts of this territory being specifically required by statute to have in their decisions "due regard to vested rights." (R.L.H. 1935, § 3577, now R.L.H. 1945, § 9578.) In my opinion, such duty and requirement, however, does not infringe upon any of the chancellor's powers in equity to enforce and regulate the execution of trusts or to scrutinize the account of the trustees and see that it adheres to the purposes of the trust and complies with the law. His powers *Page 144 of supervision remain unaffected. He may decide that the full amount of commissions taken was not granted by statute and surcharge the difference. He may find the services not commensurate with the right vested by statute. He may conclude that the trustees are guilty of malfeasance and misfeasance in office resulting in irreparable harm. He may strip or deprive the trustees of commissions taken and order them refunded, but he cannot modify the legal character of the original taking nor alter the fact that the right thereto at the then applicable rates did vest on the receipt of income upon which such were computed.
The legislative purpose of Act 149 is to distinguish between the aggregate commissions to be paid trustees in charitable trusts and those in ordinary trusts where the income is over one hundred and five thousand dollars, no distinction being made where the income is not over that amount. (See Sen. Jo. 1943, p. 538, and compare the Act's percentage rates and apportionments of income with those continued and provided by Act 88.) This purpose is accomplished by amending Act 88 so as to separate charitable trusts from ordinary ones and to limit commissions to be charged by trustees in charitable trusts to a new method of computing such commissions. This method retained the existing first two higher percentage rates and first two lower brackets of income first received as continued by Act 88 but confined Act 88's last and third percentage rate of five per cent which that Act applied to all over five thousand dollars to a new bracket of the next one hundred thousand dollars and then limited commissions to three new and descendingly lesser rates on income received thereafter. Such automatically would reduce the aggregate commissions of trustees in charitable trusts from those in ordinary trusts when the income exceeds one hundred and five thousand dollars. The Act therefore may be interpreted as a prohibition against applying the old *Page 145 rate of five per cent on the excess income and a requirement that the new and lesser rates be applied in its place.
In that as a matter of fact a part of such excess as reported by the trustees' 58th annual account was received prior to the effective date of the Act on which as a matter of law the right to take payment of a commission at the rate of five per cent vested by authority of Act 88, a retrospective operation of Act 149 would interfere therewith and prejudicially affect the legal character of the past taking of such payment. Consequently there being no expression of legislative intent or necessary implication thereof that the change of method of computation provided by Act 149 should operate in retrospect to prohibit the taking of payment at the old rate on that part of the excess income which was received in the past or require the application of the new and lesser rates thereon, the general canon of construction is applicable, it being presumed that the legislature had knowledge of Act 88 and did not intend subsequently to take away or impair a right vested by the authority of such prior legislation. The Act therefore must be construed as being a prospective law. Thus construed it does not operate unjustly against a vested right but operates only to prohibit trustees of charitable trusts from taking further payment of commissions at the rate of five per cent on that part of the income reported in their annual account which is over one hundred and five thousand dollars and received on and after the effective date of the Act on which excess there is a requirement to immediately employ instead of the superseded old rate three new and lesser rates thereafter as they may be applicable until the end of the accounting period.
Hence it follows that the lower court properly approved the payment of commissions in the trustees' 58th annual account at the rates of computation prescribed by Act 88 on income first received from the beginning of the accounting *Page 146 period up to the effective date of Act 149, the approval being in protection of and in due regard to the legal character of the past taking of payment of a commission on such income which is over one hundred and five thousand dollars at the rate of five per cent, as well as the right to do so which vested by authority of Act 88, and being in harmony with the prospective operation of Act 149 and its construed legislative intent to leave such character and right intact.
In respect to the final portion of the income received thereafter to the end of the accounting period, the lower court approved commissions thereon at the first five higher rates of percentages prescribed by Act 149. The appellant specifies such as error, contending that the last and lowest percentage rate should have been applied. In my opinion the appellant's position is well-founded.
Section 4713 of Revised Laws of Hawaii 1935 (now R.L.H. 1945, § 12574) makes it compulsory to file annual accounts, article thirteen of the will creating the trust requiring the trustees to do substantially the same thing. Act 88 expressly designates the income as being "received during each year." It brackets that income into two successive and graduated segments first received together with all the income thereafter and correlates such divisions to three descending rates of percentages respectively for the purpose of computing the aggregate commissions to be charged on the total income received for the year. Act 149 adopts the first two lower brackets prescribed by Act 88, as well as its correlated first two higher percentages, and provides three additional brackets, together with all the income received thereafter, to which it correlates three lesser rates of percentages. It thus makes six divisions of income instead of three, each synchronized to a different percentage rate, for the purpose of not only computing the aggregate commissions to be charged but also *Page 147 to reduce such commissions in charitable trusts from those allowable in ordinary trusts. Act 149 refers to "income of the estate" without designating whether it is the annual income or stating the period during which such is received. Construing the Act in pari materia with section 4713 and Act 88 as a part of the same law within a harmonious system of laws the word "income" can mean only annual income, which is the income received during the period covered by an annual account. Each of its brackets in addition to the excess of the total of such bracketed portions thus designates a definite segment of the whole of the annual income received and, after the first one, each segment depends for its significance upon the one immediately preceding. Comparably, each percentage rate represents in orderly sequence a step in the computation of the aggregate commissions on the total annual income, attaching and becoming applicable as such income progressively reaches and goes beyond the point at which its correlative bracket begins until the next succeeding rate attaches and applies accordingly. To apply a percentage rate to a segment of the annual income to which the rate is not correlated by the Act would violate its intendment and either impair the right of the trustees to be paid a higher commission or unjustly enrich them at the expense of the trust estate. The application of the proper percentage rate to a particular segment of the year's income is a severable matter and not one pertaining to the application of the entire schedule of percentages "oftener than once a year" as prohibited by the Act. It depends upon an interpretation of the clear language and meaning of the statute in setting forth that schedule and in correlating it with the integrated scale of successive and graduated segments of annual income. Hence the prohibition against more than one application of the percentage schedule within a year is not material nor is the prohibition of Act 88 *Page 148 against applying its first two higher rates oftener than once a year either material or applicable to the application of the proper rate in Act 149's schedule to a particular segment of the annual income.
The total annual income received during the accounting period of the trustees' 58th annual account is $1,453,517.92, of which $1,220,763.70 was received prior to the effective date of Act 149 and $232,754.22 thereafter. In other words the receipt of the $232,754.22 immediately followed that of the $1,220,763.70 to complete the year's income of $1,453,517.92. It is apparent that it is well "over five hundred and five thousand dollars" and that therefore the only applicable rate to such excess income is that of "one per centum" as correlated thereto by the Act. Hence the Act entitles the trustees to be paid a commission in final settlement of the aggregate commissions for the year at that rate in respect to the $232,754.22 last received and nothing more, the trust estate having a reciprocal right not to be charged thereon at a higher rate.
The lower court in effect considered, contrary to fact, that the $232,754.22 is the first part of the annual income received instead of the last part. This resulted in the erroneous application of the first five higher percentage rates of Act 149 instead of the last and lowest, in spite of having approved and allowed commissions on all the first part of income in the sum of $1,220,763.70 at the rates prescribed by Act 88. Hence it is apparent that the lower court's final settlement of the aggregate commissions for the year ending June 30, 1943, prejudiced the estate and is in error. The trustees' 58th annual account should therefore be remanded for further proceedings consistent with this opinion, with which those of the other justices are alternately in harmony.
Consequently, in accordance with the determinant which the opinion of Mr. Justice Peters, that of Mr. Chief *Page 149 Justice Kemp and mine collectively have upon this appeal, it is the order of this court that the portion of the appealed from decree of Honorable A.M. Cristy entered December 15, 1944, which approved and allowed the trustees' 57th annual account be affirmed, that portion dealing with their 58th annual account which approved and allowed commissions on income received prior to May 11, 1943, the effective date of Act 149, be also affirmed, but that portion dealing with their 58th annual account which allowed and approved commissions in respect to income received on and after such effective date be reversed and the cause remanded with instructions to modify said decree so as to limit the computation of a commission in respect to such income to the rate of one per cent, the several justices unanimously agreeing that the trustees are entitled to statutory commissions on rents received from the school buildings leased to the federal government reported as a part of the annual income in both accounts, the majority of the justices in their written opinions agreeing that the commission in respect to that segment of the annual income received on and after the effective date of Act 149 as reported in the 58th annual account is limited to and should be computed at the rate of one per cent, and all the justices concurring in the conclusion that the foregoing remand represents the composite result of their opinions.