Robert F. Patton, Buchanan, Ingersoll, Rodewald, Kyle & Buerger, Pittsburgh, for appellant.
John J. Kennedy, Jr., Asst. Atty. Gen., Pittsburgh, for appellee.
Jones, C. J., and Eagen, O'Brien, Pomeroy, Nix and Manderino, JJ. Roberts, J., did not participate in the consideration or decision of this case.
Decedent, Henry Mason Reed, died on August 31, 1970, leaving a will appointing the appellant, the Union National Bank of Pittsburgh, and his widow, Elizabeth McCullough Reed, as co-executors thereof. On September 24, 1973, the co-executors filed a Statement of Debts and Deductions with the Westmoreland County Register of Wills claiming as deductions for inheritance tax purposes $81,922.66 in administrative expenses. Included in this sum were executors' commissions of $43,000.00. Thereafter, on October 29, 1973, the Pennsylvania Department of Revenue notified the appellant that the sum of $66,922.66 was deductible. The reason given for the reduction from the amount claimed was the disallowance of executors' fees in the amount of $15,000.00.
Thereafter, the appellant filed a petition for the allowance of deductions pursuant to Section 707 of the Inheritance and Estate Tax Act of 1961.*fn1 After a hearing
was held thereon, the Orphans' Court determined that the amount of $43,000 paid appellant was not a reasonable expense of administration of the decedent's estate. A decree was entered allowing $31,000.00 in executors' fees. Appellant filed exceptions to the foregoing decree and to a subsequent decree of distribution. In both instances exceptions were dismissed. These appeals followed.
It is well-established that a fiduciary is entitled to deduct "all reasonable expenses of administration of the decedent's estate and of the assets includable in the decedent's taxable estate." Act of June 15, 1961, P.L. 373, Art. VI, § 611, 72 P.S. § 2485-611. Further, such deductions have always been held to include the "fair and just compensation for services rendered" by the fiduciary. Williamson Estate, 368 Pa. 343, 349, 82 A.2d 49, 52 (1951); Wolfsohn Estate, 20 Pa.D. & C.2d 639 (O.C.Phila.1960); 1970, P.L. 336, Act No. 108 adding Section 738 to Fiduciaries Act of 1949, 20 P.S. § 320-738. See Fiduciary Review, June 1970, p. 2. Since that which is "fair and just" compensation depends upon the extent and character of the labor and the responsibilities involved, courts will normally assess the nature and quality of the fiduciary's performance before determining the appropriateness of compensation. See Wallis Estate, 421 Pa. 104, 218 A.2d 732 (1966); Strickler Estate, 354 Pa. 276, 277, 47 A.2d 134, 135 (1946).
In this case both the Orphans' Court judge and the court en banc concluded that the work performed by appellant was done with a "high degree of competency."*fn2
Further, the duties performed were found to be those normally performed in estates ...