The complaint herein seeks a declaratory judgment with respect to the payment of commissions to the plaintiff as guardian of George Strawbridge, Jr. and Diana D. Strawbridge.
The facts in connection herewith are as follows: On September 21, 1930 John T. Dorrance departed this life, leaving a last will and testament dated May 15, 1928, which was admitted to probate by the Surrogate of Burlington County on October 2, 1930. This will represents a very carefully considered and detailed plan for the disposition of testator's assets. The will itself consists of some 35 typewritten legal size sheets. Under paragraph 14 of said will the testator established a trust under the terms of which, after an intervening period of 16 years, he distributed the income in its entirety to his widow and children in specified proportionate shares, with the proviso that upon the death of any of his children their respective shares of income should be paid to their children during minority, with the remainder to said grandchildren upon reaching their majorities. Margaret Dorrance, a daughter of the testator, was entitled to receive under the terms of said will a one-sixth share of said income. Said Margaret Dorrance died on July 31, 1953, having theretofore married the plaintiff George Strawbridge, and having had two children by him, George Strawbridge, Jr. and Diana D. Strawbridge. The court has heretofore appointed the plaintiff George Strawbridge as general guardian of his two children above named. The trustees have made the payments due under the will to the said George Strawbridge as guardian.
The question with which the court is now confronted is whether, for the purpose of the computation and payment of commissions to said guardian, the money so paid to him by the trustees should be deemed income or corpus.
In order to determine the question we must remember the theory upon which a guardian receives commissions. The policy of the law in an overwhelming majority of jurisdictions in the United States is that fiduciaries are to have reasonable compensation for the time, trouble and skill
expended in managing the funds paid to them and in executing the terms of their appointment. 2 Perry on Trusts & Trustees, p. 1543; 39 C.J.S., Guardian and Ward , § 162, p. 279; 25 Am. Jur., Guardian and Ward , § 182, p. 112.
It would seem, at first blush, that this question must have been adjudicated on innumerable occasions by some of the courts of the United States. I am satisfied that the research of all of the litigants involved in this matter has been most particularly exhaustive. However, neither able counsel for the plaintiff, nor George Warren, Esq., guardian ad litem for the infant defendants, a respected and able member of the Bar of this State, has been able to discover any case directly in point. This court has as well conducted its own research and has found a great paucity of decisions.
Of the cases cited by counsel, the two most closely in point are Title Insurance & Trust Co. v. Duffill , 191 Cal. 629, 218 P. 14 (Sup. Ct. 1923), and In re Grasty's Estate , 165 Md. 240, 167 A. 69 (Ct. App. 1933). In the former of these two cases there was involved the following question: whether money received by a trustee in the hereafter particularized circumstances was income or corpus under a section of the California Code. The facts there were as follows: a husband, by a trust agreement made in contemplation of divorce, agreed to convey to a trustee for the benefit of his then wife, one-quarter of any property or interest he might in the future receive from his mother's estate, and that the said wife would be entitled only to the income from such one-quarter interest. Subsequently, the husband's said mother, by will, bequeathed and devised all of her property in trust, so that the aforesaid husband received only the income thereof, one-quarter of which he paid to his divorced wife's trustee. The court there held that the portion so received by the trustee was income to which the wife was entitled, and not corpus , which was required to be reinvested. The court there said [191 Cal. 629, 218 P. 20]:
"This income is not received by plaintiff from the mother's estate. It is income from property received by Harry from his mother's estate, the portion of which, under the terms of the August agreement,
at once passed to plaintiff. In other words, the income receipts to plaintiff are not directly from the mother's estate, but are receipts from the income of its equitable property interest in a portion of the corpus of the testamentary estate. There is no more justification for holding that these receipts are corpus merely because they are in the hands of plaintiff as a trustee than there would be in saying they constituted corpus if the time of possible physical segregation of the trust properties had not been postponed by reason of the testamentary trust, and distribution of the mother's estate had been made. Under those circumstances, one-quarter of Harry's share of the property received (not the income it might produce) would have constituted the corpus of the trust in plaintiff for Martha's use, and she would have been entitled to have paid to her all the net income derived therefrom through plaintiff's administration of the fund. The interposition of the trust for Martha does not act to change the nature of the income."
"The theory that Harry Duffill received at his mother's death a beneficial interest in the property belonging to her, and that his subsequent receipts, therefore, are not directly from her, but are receipts from the income of his property, finds support in what we believe to be the status of the equitable interest and estate of a cestui ...