I agree with the prevailing opinion that respondent should be allowed to recover the sum of $75 expended for costs of his administrator's bond. *Page 375
The question of the amount of fee to which respondent is entitled for his services as an administrator is one not free from difficulty. The majority of the court express concern that a stranger to the estate, having no legal preference to serve as administrator, may unnecessarily diminish the assets of the estate by receiving the statutory fee for his services, when one having a legal preference to serve in that capacity, might be willing to serve without fee, or for less than the fee authorized by statute. As said by Mr. Justice Latimer,
"Preferred parties entitled to letters of administration as a matter of right should not be required to pay a proportionate part of the fees of administrators, or the attorney's fee for a stranger, when they have neither lost their rights to preference nor participated in the erroneous appointment. Neither should the distributive shares of the estate be unnecessarily diminished by costs and expenses incurred by one who has no interest in the residue."
With this general principle I agree. However, the erroneously appointed administrator and his counsel, who have acted bona fide, are in good conscience entitled to some compensation for the beneficial services they have rendered to the estate.
In order to protect the assets of the estate, insofar as possible, from being diminished by their being paid out for administrator's fees, the prevailing opinion treats the errouneously appointed administrator as a de facto special administrator from the date of his appointment, and limits the amount of his fee to that allowed a de jure or statutory special administrator, namely the reasonable value of his services in preserving the assets of the estate. Such a rule may, in many instances, work satisfactorily. But there may be some cases where the reasonable value of work performed in preserving the assets of the estate may exceed the statutory administrator's fee. In such cases, the object sought to be attained by the rule laid down in the majority opinion will be defeated. And in cases where the appeal from the order appointing the erroneously appointed administrator is taken near the end of the time allowed for *Page 376 appeal, the erroneously appointed administrator may have substantially completed the work of administration. To deny him compensation for such services may work a substantial injustice to him. For the erroneously appointed administrator is not an outlaw. From the time letters of administration are issued, at least to the time superseders bond is filed, he is a de facto if not a de jure general administrator.
Probably the best view from a purely theoretical standpoint would be to hold that the erroneously appointed administrator is a de facto general administrator from the date of his appointment until surpersedeas bond is filed, and a de facto special administrator from the date supersedeas bond is filed until his letters of administration are revoked by the court. Under this view, such an adminstrator would be entitled to a pro rata share of the statutory administrator's fee for services rendered by him during the period he was a de facto general administrator, and in addition thereto, to a fee for the reasonable value of his services in preserving the assets of the estate during the period he was a de facto special administrator. I think this rule would be technically and theoretically correct, but it might in some cases, result in the estate being burdened with excessive administrator's fees. I therefore suggest the following as a practical rule which will accomplish, substantially, the object sought to be attained by the majority, and will also be fair to the erroneously appointed administrator:
The court should first determine what amount will be allowed as administrator's fees for the particular estate. In fixing the amount, the court should be guided by Section 102-11-25, U.C.A. 1943, which fixes the administrator's fee at a fixed percentage of the value of the estate, and which further provides that in the event extraordinary services are rendered by the administrator, such services may be compensated by an additional allowance, but the total fee allowed shall not exceed twice the amount of the specified percentages. The statute thus places a *Page 377 ceiling on the amount that may be allowed as administrator's fees. I think this ceiling is equally applicable to a case of this sort, where because of an erroneous order of the court, two separate administrators have been appointed. The compensation of an erroneously appointed administrator whose appointment was contested by the beneficiaries of the estate should not be such as to run the total charge of administrators' fees above that amount which would have been paid for the same services had the person entitled to be named as administrator been appointed in the first instance. This seems to me to be the cardinal rule governing compensation whatever we may call the wrongly named administrator or whatever duties he has performed either as a de facto special or general administrator.
The total administrator's fees will then be the statutory percentage plus any additional amount within the statutory ceiling which the court may allow for extraordinary services performed by either or both administrators.
These fees should be apportioned as follows:
(1) The statutory administrator's fees should be divided between the two administrators in proportion to the value of the ordinary services performed by each; provided, that in no case shall the erroneously appointed administrator receive more than the reasonable value of the services actually performed by him. In apportioning the fees the court will take into consideration the value of the services performed by each as general administrator, and also the value of the services performed by the erroneously appointed administrator as a de facto special administrator or conservator. In order to determine the proper portion to be received by each, it will probably be necessary for the court to determine the reasonable value of the various services rendered by each.
The rule which I here suggest can be better explained by some examples. Assume an estate for which the statutory administrator's fee is $1000. A is the erroneously appointed administrator, and B is the rightfully entitled administrator. *Page 378
(a) The reasonable value of the ordinary administrative services performed by A is $100, the reasonable value of his services as a conservator is $100, and the reasonable value of the services of B, as general administrator, is $300. A has 100 + 100 performed 40 per cent of the total services (__________); but 500 since 40 per cent of the statutory administrator's fee is $400.00 (.40 x 1000), which is greater than the reasonable value of the services performed by A, he will be entitled to receive as his share of the statutory fee only $200, the reasonable value of the total services rendered by him. B will receive the remainder as his share, $800 ($1000 — $200).
(b) The reasonable value of A's ordinary services as general administrator is $200, the reasonable value of his services as special administrator is $300, and the reasonable value of B's ordinary services as general administrator is $500. A's portion 200 + 300 of the statutory administrator's fee is $500 (_________ x $1000); 1000 500 and B's portion is likewise $500 (____ x $1000). 1000
(c) The reasonable value of A's ordinary services as a general administrator is $400, the reasonable value of his services as a conservator is $600, and the reasonable value of B's ordinary services as a general administrator is $1000. A's share of the 400 + 600 statutory administrator's fee is $500 (_________ x $1000) and B's 2000 1000 portion is $500 (____ x $1000). 2000
In further explanation it may be said that the erroneously appointed administrator (A), receives as his share of the administrative fees either (1) the reasonable value of the ordinary general administrative services rendered *Page 379 by him plus the reasonable value of the services rendered by him as a conservator; or (2) that proportion of the statutory administrator's fee which the value of his ordinary services as general administrator and the value of his services as special administrator bears to the total value of all administrative services rendered to the estate by both administrators (excepting those services termed extraordinary general administrative services) whichever is less.
In fixing a value on the services performed by the de facto special administrator, the court should take into consideration the amount of time, skill, judgment, and work involved in performing the duties of a conservator. And in fixing a value on the services of general administrators the court should be guided by the fact that one of the chief reasons for allowing a general administrator's fee is to compensate the administrator for the risk and responsibility he assumes for a proper distribution under order of the court, of the assets of the estate. Hence, the administrator who must make the final accounting (in the examples, B) will in the ordinary case be entitled to a substantial portion of the statutory fee for the responsibility of properly distributing the assets of the estate. It appears that the court below failed to give sufficient weight to this factor.
(2) If either administrator has performed extraordinary services the court should make an additional allowance for such services, subject to the previously mentioned limitation that the aggregate amount of both the statutory fee and the extra allowance shall not exceed twice the amount of the statutory commission. Sec. 102-11-25, U.C.A. 1943.
If the total value of the extraordinary services performed by both administrators is less than or equal to the maximum allowed for those services by statute, each should be compensated on a quantum meruit basis for the services performed by each. If the total value of the extraordinary services rendered by both exceeds the statutory maximum, *Page 380 then the statutory maximum, must be divided on a pro rata basis. This may be illustrated by further examples, based on the same hypothetical facts used in examples (a), (b) and (c), supra.
(d) A renders extraordinary services as a general administrator of the reasonable value of $100. B renders no extraordinary services. A should be allowed an additional $100 fee.
(e) Both A and B render extraordinary services of the reasonable value of $500. Each should be allowed an extra $500 fee.
(f) A renders extraordinary services as de facto general administrator of the reasonable value of $1500 and B renders extraordinary services of the reasonable value of $500. A should 1500 be allowed an additional fee of $750 (____ x 1000), and B should 2000 500 be allowed an additional fee of $250 (____ x 1000). 2000
This appears to be a complicated formula for apportioning the respective value of services, but fortunately it is seldom that a person not interested in the estate is appointed administrator over the protest of the beneficiaries. I see no other way of giving to each of the administrators his proportion of the value of the normal and extraordinary services which he has performed and yet not exceeding the ceiling beyond which the estate should not be burdened because of the erroneous appointment of a contested administrator.
As to attorney's fees, I think counsel for each administrator should receive that proportion of the attorney's fee to be allowed, as the value of the legal services beneficial to theestate rendered by him bears to the total value of the legal services rendered to the estate. I agree with the majority that the services of respondent's counsel on the *Page 381 appeal from the order appointing respondent as administrator are not allowable from the funds of the estate.
In any event, neither the amount of the administrator's fees and attorney's fees nor the proportion of such fees to be allowed to each of the respective administrators can be determined until final accounting is made. At any time before the estate is closed unforeseen developments may require additional time and work on the part of the administrator and his counsel. This will in most cases not only result in a greater administrator's fee and attorney's fee, but also a greater proportion of the whole being allowed to the second administrator and his attorney. It was error to attempt to pro-rate the attorney's and administrator's fees prior to the final accounting.
As pointed out by Mr. Justice PRATT, under the provisions of Section 102-14-19, U.C.A. 1943, all lawful acts in administration upon the estate performed by an erroneously appointed administrator, are as valid as though the order appointing him were affirmed. I therefore see no reason why respondent should not be allowed to recover costs of publishing notice to creditors. The prevailing opinion takes the view that respondent knew that the order appointing him as administrator would be appealed, and therefore he should have performed only those duties necessary to preserve the assets of the estate until this court had ruled on the appeal. To this view I must dissent. Although at the time respondent was appointed, counsel for appellant stated in open court that an appeal from the order would probably be taken, I do not think such was sufficient to stay the hand of the erroneously appointed administrator. Appeals may be threatened in the heat of contested legal proceedings, which never materialize, because counsel after calm reflection determines that such an appeal would not be wise. Until notice of appeal is served, and supersedeas bond is filed, the erroneously appointed administrator should proceed with the administration of the estate. He is not bound to allow the appeal time to elapse, before he commences his administrative *Page 382 duties, as distinguished from his caretaker duties. Otherwise, the administration of the estate might be unnecessarily delayed and for expenses necessarily incurred in performing these administrative services, the erroneously appointed administrator should be recompensed.
In summary my conclusions are these:
(1) The erroneously appointed administrator is, from the time of his appointment until a supersedeas bond is filed, a de facto general administrator, and has all the rights and duties of such. He is entitled to be reimbursed from the assets of the estate for any expenses necessarily incurred by him in performance of these duties.
(2) From the date supersedeas bond is filed, to the date his letters of administration are revoked, the erroneously appointed administrator is a de facto special administrator, with the limited duty of preserving the assets of the estate. Any services attempted to be rendered in further administration of the estate are not compensable, nor may he be compensated for costs incurred, except those costs necessary to preserve the assets of the estate. What constitutes preservation of the assets of the estate will depend upon the exigencies of each case.
(3) The services of the erroneously appointed administrator should be compensated for, on a proportional basis or quantum meruit basis, whichever is less, as indicated heretofore.
(4) The services of counsel for the various administrators should be compensated on a pro rata basis as heretofore indicated.
(5) The fees to be allowed the administrators and their attorneys should not be determined until administration of the estate is completed, nor should such fee be proportioned among the respective administrators and their counsel until administration of the estate has been completed.
As to that part of the prevailing opinion allowing respondent to recover the costs of his administrator's bond, remanding the case for further proceedings to determine the fees to be allowed respondent and his counsel, and denying the *Page 383 right of respondent's counsel to fees for services rendered on the appeal of the order appointing respondent as administrator, I concur. As to that part of the opinion denying respondent costs incurred by him in publishing notice to creditors, I dissent. The trial court should be instructed not to make any determination of fees to be allowed, until administration of the estate is completed.