Price, Gaulkin and Sullivan. The opinion of the court was delivered by Sullivan, J.A.D.
Plaintiffs, trustees of the trust established under Article Seventh (c) of the will of Bernard R. Armour, deceased, appeal from the refusal of the trial court to allow them statutory commissions on $377,000 of trust income received by them.
Bernard R. Armour died on December 1, 1949, leaving a will which was admitted to probate in the Superior Court of New Jersey, Chancery Division, on December 19, 1949. In Article Fifteenth of the will testator appointed the president and directors of the Manhattan Company, now the Chase Manhattan Bank, George L. Armour and George F. Lewis, as executors of his will and trustees of the trusts therein created. On January 22, 1953 George F. Lewis, Sr. resigned as co-executor and co-trustee, and George F. Lewis, Jr. was duly appointed in his place and stead.
Article Seventh (c) of the will created a trust of one-third of decedent's residuary estate for the benefit of his daughter, Toby Armour (now Toby Armour Schneider). In substance, the trust provided that the trustees were to collect the income and apply so much thereof as in the discretion of the trustees was necessary for Toby's education, support and maintenance until she became 21 years of age, at which time all accumulated income was to be paid to her, and thereafter she was to be paid all of the net income. On her marriage one-third of the principal of the trust was to be paid to her. The trust terminates on her death, with specified remainder over.
Toby Armour became 21 years of age on September 21, 1957, at which time she received the trust income which had accumulated prior thereto. Since then she had been paid the net income of the trust. On April 19, 1958 Toby Armour married Stephen J. Schneider at which time, pursuant to the terms of the trust, one-third of principal was paid over to her.
Plaintiff trustees in this action asked for the allowance of their first and final account with respect to the portion of the trust income and corpus which vested in Mrs. Schneider on her twenty-first birthday and her marriage respectively, and for the allowance of their first intermediate account as to the remainder of the trust. The trustees also asked for the allowance of corpus and income commissions. Mrs. Schneider filed exceptions to the trustees' request for income commissions on $395,381.02 of income, on the ground that $393,666.67 of such income was estate income received by plaintiffs as executors, who took income commissions thereon as executors and then transferred the money to themselves as trustees. The remaining $1,714.35 came from a trust created by Article Sixth of the will which plaintiffs, as trustees of that trust after taking income commissions thereon, also transferred to themselves as trustees of the Article Seventh (c) trust. The substance of the exceptions was that plaintiffs were seeking double commissions on these particular items of income. The trustees' request for commissions on corpus and on other trust income was not challenged.
The estate of Bernard R. Armour was inventoried at $19,571,513. Its administration was unquestionably complex and difficult. The executors have not yet completed the settlement of the estate. Substantial litigation is still pending and the federal estate tax and the New Jersey inheritance taxes are not yet resolved. About $1,500,000 remain in the estate. In the main, however, the trusts under the will have been fully established, and further distribution to them will be small in amount.
When the executors became possessed of decedent's estate they ascertained that it had little cash or liquid assets. The bulk of the estate consisted of securities and interests, not readily marketable, in 15 wholly-owned or controlled businesses. Without detailing all of their problems and difficulties (which are summarized in their affidavit of services), it is apparent that the executors were confronted with an unusually complicated estate. The liquidation of assets, to be properly handled, took considerable time; in the interim, the executors supervised the operations of the various businesses. On November 29, 1950, about a year after the will was probated, the trust for Mrs. Schneider was set up by the transfer of $168,387.41 in principal from the estate to the trust. Subsequent transfers of principal increased the size of the trust to $1,368,387.41.
Income produced by the estate was also distributed among the various trusts as it became available. The trustees' account shows that between December 1950 and December 1957 $393,666.67 was transferred by the executors to themselves as trustees of the trust for Mrs. Schneider. The record of payments of income is as follows:
December 29, 1950 Cash $121,000.00
November 5, 1951 Cash 40,000.00