St. James Orphan Asylum v. McDonald

107 N.W. 979, 76 Neb. 625, 1906 Neb. LEXIS 320

• Court: Nebraska Supreme Court
• Decided: May 3, 1906
• Docket: No. 14,315
• Status: Published

Opinion

Jackson, 0.

The plaintiffs in error made a claim against the estate of Joseph Creighton, deceased, for attorney’s fees on account of services performed by them in litigation arising out of a contest of Mr. Creighton’s will. Their claim was rejected in the county court and an appeal taken to the district court, where their petition was dismissed on general demurrer. From the judgment of the district court dismissing their petition they prosecute error.

Briefly stated the cause of action set out in the petition is: That Joseph Creighton died on October 16, 1893, leaving a will. Mary B. Shelby, a daughter, was his only heir at law and was named as executrix; By the terms of the will property to the value of $50,000 was devised to the children of Mrs. Shelby, subject to a charge of #15 a week for the support of the testator’s sister-in-law, and property to the value of $150,000 was devised to the Right Reverend James O’Connor, Roman Catholic bishop of Omaha, in trust for such charity as he might designate, an orphanage preferred, and in the event that the testator should, survive Bishop O’Connor, the property devised to him in trust should go to his successor as bishop of Omaha; the property so devised was substantially all of his estate. Bishop O’Connor died during the lifetime of Mr. Creighton and was succeeded by Right Reverend Richard Scannell. Mrs. Shelby refused to accept the trust of executrix under the will.. Bishop Scannell conveyed the trust property left to him under the terms of the will to the St. James Orphan Asylum. Bishop Scannell, in conjunction with the orphan asylum, submitted Mr. Creighton’s will to the county court for probate, and in that behalf employed the plaintiff Smyth as an attorney to conduct the probate proceedings. Mrs. Shelby contested the will and was successful in the county court, an appeal was taken to the district court, where after three separate trials she was again successful, and the case was then appealed to the supreme court, where the judgment of the district court was reversed and the cause remanded. Another trial resulted in a verdict favorable to the validity of the will, which upon appeal to the supreme court was affirmed. In the meantime Mrs.. Shelby had been appointed administratrix of her father’s estate, and conducted the administration thereof until the-validity of the Will was established and it was finally admitted to probate, when Richard S. Berlin was appointed administrator with the will annexed. A controversy over the settlement of the accounts of Mrs. Shelby as administratrix resulted in further litigation, conducted, as the petition alleges, on behalf of the orphan asylum by Mr. Smyth, assisted by Mr. Cowin whó became associated as counsel after the appeal to the district court from the order of the county court refusing to admit the will to probate. This litigation resulted in a judgment against Mrs.. Shelby for something over $5,000, which was paid. Mr. Berlin died, and Chas. G. McDonald succeeded him as administrator. A guardian ad litem, was appointed in the probate proceedings for the beneficiaries under the will who were minors. He filed an answer in behalf of his wards and procured one expert witness to testify in support of tbe will. No other service was performed by him.. Tbe litigation extended over a period of several years, and Messrs. Smyth and Cowin were required to devote a large amount of time in tbe preparation and conduct thereof. Tbe beneficiaries and Messrs. Berlin and McDonald, as administrators, accepted tbe benefits of tbe litigation and adopted tbe services of tbe plaintiffs in that behalf.

No question is raised as to tbe sufficiency of tbe petition, if, as a matter of law, it is within tbe power of tbe court to require tbe payment of fees to counsel for tbe successful litigant out of tbe funds belonging to tbe estate. Tbe matter of allowing costs and attorney’s fees to an unsuccessful litigant in a proceeding to contest a will has several times been before tbe court. In Mathis v. Pitman, 32 Neb. 191, an order of tbe district court taxing costs against tbe estate was affirmed. In Seebrock v. Fedawa, 33 Neb. 413, costs and fees of counsel for tbe unsuccessful contestant were both allowed as a charge against tbe estate. In Wallace v. Sheldon, 56 Neb. 55, Mathis v. Pitman and Seebrock v. Fedawa, supra, were expressly overruled, and it was held that tbe courts are not invested with tbe discretion to award costs and attorney’s fees to an unsuccessful contestant of a will, solely for tbe reason that be undertook tbe contest in good faith, Mr. Justice Norval dissenting. In Atkinson v. May’s Estate, 57 Neb. 137, thfe court followed its bolding in Wallace v. Sheldon, supra, and it was there broadly stated that “tbe estate of a decedent is not liable to an attorney for services rendered bys him for and at tbe request of a legatee under decedent’s will in a congest thereof.” In that case, like all others determined in this court, tbe question was one of tbe allowance to tbe unsuccessful litigant, and we do not regard it as so conclusive of the case, where tbe question involved is tbe allowance of attorney’s fees to tbe successful litigant, as to preclude further investigation. We do not doubt tbe power of tbe court to allow attorney’s fees out of tbe estate of a decedent in proper cases involving the contest of a will. Had some one other than Mary B. Shelby instituted the contest proceedings, and she, as executrix, had employed counsel to defend the will and succeeded in the conduct of the defense to the extent of securing the will to be admitted to probate, the fees of her counsel would be a proper charge against the estate. McIntire v. McIntire, 192 U. S. 116.

It is urged in behalf of the plaintiffs in error that their position is the same as though they had been employed by the executrix to defend the will. This claim has considerable merit. In the case of McIntire v. McIntire, supra, speaking of the item of attorney’s fees, it is said:

“On the allowance of the account it was charged against the estate. We are of opinion that the charge was proper. There is no contest over the amount. It was the proper business and duty of the administrator to defend the will, and he was entitled to a reasonable allowance for what he had to pay in doing so. The only just alternative would be to charge counsel fees as costs against the losing party, which would have been less favorable to the appellant. The general proposition is not disputed, hut it is said that in this case the legatees retained the counsel and therefore ought to pay them. The other legatees as well as the administrator no doubt had a share in calling the counsel in. But that did not matter. The services were services to the estate in maintaining the testator’s will, they were adopted by the administrator, and the usual rule must prevail.”

The services performed by counsel in resisting the contest of the will, and the results obtained, were the same as they would have been had they been performed at the solicitation of the executor.' The estate of Joseph Creighton was left in trust for certain purposes, and it is a general principle that a trust estate must bear the expenses of its administration. Stone v. Omaha Fire Ins. Co., 61 Neb. 834. In that case counsel was consulted and finally employed to secure the appointment of a receiver for-an insolvent corporation. A receiver was appointed, who afterwards retained the services of the same counsel, and it was held that be was entitled to compensation ont of tbe trust fund, not only for bis services as attorney for tbe receiver, but for services performed by bim in consultation and securing tbe appointment of tbe receiver. Tbe case was determined upon tbe broad principle that, where one of many parties having a common interest in a trust fund, at bis own expense, takes proper proceedings to save it from destruction and to restore it to tbe purposes of tbe trust, be is entitled to reimbursement either out of tbe fund itself or by proportionate contributions from those who accept tbe benefit of bis efforts. Mr. Commissioner Sedgwick, tbe present chief justice of this court who wrote tbe opinion in that case, cited tbe cases of Mathis v. Pitman and Seebrock v. Fedawa, supra, as sustaining tbe general proposition, recognizing tbe similarity of principle involved in those cases with tbe one then in band. Tbe case presented by tbe petition is one, in our judgment, that requires an equitable apportionment of tbe costs and attorney’s fees. In tbe brief of defendant is contained a recital of certain facts, outside tbe record of course, but worthy of notice in view of our conclusion that tbe judgment of tbe district court must be reversed. They relate to tbe depleted condition of tbe specific devise to tbe children of Mrs. Shelby, owing to tbe expensive litigation in which tbe estate has been involved, including compensation to counsel other than plaintiffs’ and it may be that when all tbe facts are fully disclosed it would be found inequitable to compel a contribution on tbe part of-tbe minor litigants. These, however, are matters proper for consideration upon an investigation into tbe merits. Tbe case before us is determined upon tbe record as it stands, and we are agreed that upon that record tbe judgment of tbe district court should be reversed and tbe cause remanded for further proceedings. We so recommend.

Albert, C.., concurs. Duffie, C., not sitting. 1. Decendent’s Estate: Attorney’s Fee. The estate of a decedent is not ordinarily liable to an attorney for services rendered by him for and at the request of a legatee under decedent’s will, in a contest thereof. AtHnson v. May’s Estate, 57 Neb. 137. 2. Eormer opinion, ante, p. 625, overruled.

By the Court: For the reasons stated in the foregoing, opinion, the judgment of the district court is reversed and the cause remanded for further proceedings.

Reversed.

The following opinion on rehearing was filed January 5, 1907. Former judgment vacated and judgment of district court affirmed:

Barnes, J.

This case is now before us on a rehearing. Our former opinion will be found ante, p. 625, where the facts involved in this controversy are stated. By referring to that statement it appears that by the will of the late Joseph Creighton about three-fourths of his largé estate was given to one Bishop O’Connor, and his successors, in trust, to establish or endow an orphanage; that by a conveyance or assignment made by one Bishop Scannell, who was the successor of Bishop O’Connor, said legacy was given to the St. James Orphan Asylum. By the terms of the will the daughter of the deceased, Mary B. Shelby, who was his only heir-at-law, was disinherited, and the remainder of the estate was given to her children. She was named as executrix of the will, but refused to act in that capacity •and declined to have the will probated. The St. James Orphan Asylum presented the will for probate.. Mrs. Shelby contested, and was successful in the county court. After much litigation, however, the will was finally admitted to probate, and one Richard Berlin became the administrator thereof, but was later on succeeded by one Charles G. McDonald. The St. James Orphan Asylum employed. Mr. Smyth of the Omaha bar as its attorney to establish the will, and secure for it the legacy mentioned therein. During the pendency of the proceedings Mr. Cowin was employed to assist Mr.. Smyth in conducting the litigation, at the conclusion of which they filed their claim in the county court of Douglas county, asking for an allowance of $7,000 as counsel fees, and that the same be made a charge against the estate.. The claim was resisted by the administrator, and was disallowed by the county court. An appeal was taken to the district court, where a demurrer to the claimants’ petition was sustained and their action witnessed. They thereupon brought the action, by appeal, to this court, and in our former opinion it was held that “a decedent’s estate is properly chargeable with fees paid to counsel for services rendered in successfully defending the will against attack, and this rule ordinarily should not be departed from in a case where the contest is instituted by the person named in the will as executor, and the defense is conducted by counsel employed on behalf of a legatee.” This holding seems to have been based on the decision in McIntire v. McIntire, 192 U. S. 116, 48 L. ed. 369. A careful examination of that case inclines us to the belief that the learned commissioner who wrote our former opinion misapprehended the nature and scope of that decision. What was really held therein was that a decedent’s estate is properly charged with counsel fees paid to counsel for services rendered for an administrator with the will annexed in defending the will against attack, although certain of the legatees, as well as the administrator, had a share in calling in such counsel. That this rule should not be applied to-a case where the services were not rendered for the administrator and legatees jointly seems clear. In the case at bar the services were rendered for and at the instance and request of the principal legatee under the will and against the executrix named therein, who refused to accept the trust, and contested the validity of the will. It is true that in the case of Mathis v. Pitman, 32 Neb. 191, and in Seebrock v. Fedawa, 33 Neb. 413, 29 Am. St. Rep. 488, counsel fees for the unsuccessful contestant were allowed as a charge against the estate. But in Wallace v. Sheldon, 56 Neb. 55, both of those decisions were expressly overruled, and it was held that the courts are not invested with the discretion to award attorneys’ fees to an unsuccessful contestant of a will solely for the reason that he undertook the contest in good faith. Later on, in Atkinson v. May’s Estate, 57 Neb. 137, it was broadly stated that “the estate of a decedent is not liable to an attorney for services rendered by him for, and at the request of a legatee under decedent’s will in a contest thereof.” And this has become the settled law of this state on that question. Not only is this the better rule, but it is supported by the great weight of authority in this country. In In re Donges’s Estate, 103 Wis. 497, it was held that in a proceeding for the construction of a will counsel fees, except those of an executor, are not taxable as costs against the estate. And it was said in the opinion:

“In suits for construction of wills it is proper for the executor, whether plaintiff or defendant, to employ counsel to the end that the questions of law involved may be properly brought before the court Whether he should employ counsel to present in the spirit of advocacy one or other or both of the antagonistic interests which may be involved by the construction, will often be a question of difficulty. Too often the counsel employed by the executors are in’ practical effect the ardent advocates of one side of a controversy between individual interests, in which the executor, as such, should have no choice. Obviously, such advocacy should not be compensated out of the common fund if its opposition is not to be also, and courts should be cautious in allowing for services ostensibly rendered to executors, but in spirit and effect rendered to one of the opposing interests, which should bear its own expenses. The field of discretion in controlling and ap-' proving conduct of executors and trustees is a broad one, however, and the court in each case must be guided by the conditions and circumstances there present. In the case at bar, in this court at least, the services of counsel on botli sides have been rendered, not to the executors, but to the respective claimants upon this estate, who should each bear the expense therefor which he has incurred.”

It must be conceded that there is no statutory authority in this state for the allowance of the claim in question against the estate. But it is argued that the court in the exercise of its general equity powers may treat the. estate as a. trust fund and make such allowance. This contention was denied in Estate of Cole, 102 Wis. 1, where the following cases were cited as a basis for that opinion: Rose v. Rose Beneficent Ass’n, 28 N. Y. 184; Downing v. Marshall, 37 N. Y. 380; Devin v. Patchin, 26 N. Y. 441; Lee v. Lee, 39 Barb. (N. Y.) 172. Indeed, it seems settled by the weight of authority that the allowances which can properly be made against the estate in such cases are counsel fees for the executor, and the claim for what is known as taxable costs, or in other words, the statutory fees incurred in the litigation. It seems to us that the rule announced in Atkinson v. May’s Estate, supra, is not only supported by the great weight of authority, but is a most just and equitable one. In the case at bar Mrs. Shelby certainly was not benefited by the establishment of the will of her deceased.father. If she had succeeded in defeating.it, or if there had been no will at all, she would have inherited the whole of the estáte, and her children, at her decease, probably would have received it, less the portion expended during her lifetime. So it seems clear that the proponent of the will, the St. James Orphan Asylum, was the party most beneficially interested in establishing its validity and having it probated. Through the efforts of the claimants herein, it succeeded in obtaining the legacy in question, which was, as before stated, about three-fourths of the whole estate. To tax the balance of the estate with the payment of counsel employed by the proponent, or with any portion thereof, would seem to be unjust and inequitable, and in direct opposition to the rule announced in tbe case last above mentioned. So we are of the opinion that the claim in question should not be made a charge upon the estate, but that the St. James Orphan Asylum, the party benefited by the services rendered by counsel, should be required to pay such claim out of the legacy which it secured through the efforts of its attorneys. This evidently was the view of the matter entertained by the district court and this meets with our approval.

For the foregoing reasons, our former judgment is vacated and the judgment of the district court is hereby affirmed.

Judgment accordingly.