Kirchoff v. Bernstein

• Decision Date: 27 May 1919
• Citation: 92 Or. 378,181 P. 746
• Parties: KIRCHOFF v. BERNSTEIN ET AL.
• Court: Oregon Supreme Court

181 P. 746

92 Or. 378

KIRCHOFF v. BERNSTEIN ET AL.

Supreme Court of Oregon

May 27, 1919

In Banc.

Appeal from Circuit Court, Multnomah County; George R. Bagley Judge.

Suit by Fritz Kirchoff, as administrator of Samuel Kunkel, deceased against Alexander Bernstein and another. Judgment for plaintiff, and defendants appeal. Reversed and dismissed.

Daniel Kunkel died on January 17, 1914. He left an estate consisting of real and personal property of the aggregate value of $98,886.08. The real property embraced three lots located in Portland. Two of these lots were worth $25,000, and the third lot was valued at $4,500. The personal property included cash in bank amounting to $41,265.28, a secured promissory note which was worth $27,500, its face value, and other items amounting to $620.80.

Daniel Kunkel executed a will on December 2, 1912, by the terms of which he named Edward Schiller and Peter Wagner as executors. He devised one-third of his real property to his wife, Anna Kunkel, and the remainder of his estate he gave to his brother, Samuel Kunkel, who resided in Germany. On January 21, 1914, a petition was filed in the county court of Multnomah county for the probate of the will and on January 24 the court admitted it to probate. The defendants Alexander Bernstein and D. Solis Cohen, copartners as Bernstein &amp Cohen, became the attorneys for the executors.

Alexander Bernstein had for more than 20 years acted as attorney for Daniel Kunkel. During this period Bernstein drew several wills for him, including the one which was admitted to probate. When Bernstein prepared the will of December 2 Daniel Kunkel gave him the address of his brother and requested Bernstein, in case of his death, to communicate to his brother, Samuel Kunkel, the fact of his death and the fact that the will named Samuel Kunkel as a beneficiary. In compliance with the request of Daniel Kunkel, the defendants on January 17, 1914, addressed a letter to Samuel Kunkel, informing him of the death of his brother and that he was named in the will as one of the beneficiaries. The letter explained that the defendants were eonveying this information in conformity with a request made by Daniel Kunkel at the time of the execution of the will. Inclosed with the letter was an instrument which the defendants had prepared for the purpose of enabling Samuel Kunkel to appoint Alexander Bernstein as his attorney in fact. After referring to this instrument, the defendants, in their letter, requested Samuel Kunkel to execute the power of attorney and to secure the acknowledgment of the nearest American consul if he desired Alexander Bernstein to act as his attorney in fact. Under date of February 5, 1914, Samuel Kunkel acknowledged receipt of the letter of January 17, and a few days afterwards he forwarded the power of attorney to the defendants, who received it on or about March 3.

On August 5, 1914, Anna Kunkel commenced a contest against the will. Negotiations for a compromise of the contest resulted in a settlement, under the terms of which Anna Kunkel received all the real property freed from incumbrances and all claims whatsoever and the sum of $1,500 for her attorneys, and the remainder of the estate, less taxes and expenses of administration, became the property of Samuel Kunkel.

The contest having been disposed of, the county court, on November 18, 1914, approved the final account of the executors, including an item of $3,500 allowed as compensation for services rendered to the executors by their attorneys, the defendants. After paying all the claims against the estate, taxes, and the expense of administration, there remained for Samuel Kunkel, as his share of the estate, the sum of $27,589.02 in cash and also a secured promissory note for $27,500; and hence the aggregate value of his portion of the estate then remaining was $55,089.02, plus whatever interest may have been due on the note. Besides this aggregate amount of $55,089.02 distributed at the close of the administration of the estate, the sum of $1,000 had been sent to Samuel Kunkel on May 7, and consequently his portion of the estate amounted to $56,089.02.

When Anna Kunkel commenced the proceeding to contest the will, Frank C. Hesse, an attorney who had studied in Germany and possessed a thorough and accurate knowledge of the German language, was retained to assist the defendants. On November 19, 1914, the defendants wrote to Samuel Kunkel, telling him that the final account of the executors had been approved, and that Alexander Bernstein had received from the executors for Samuel Kunkel the sum of $27,589.02 in cash. This letter also informed Samuel Kunkel that "for the professional services of Messrs. Bernstein & Cohen, which have been rendered for you to date," the defendants charged $3,500, and that "for Mr. Hesse's services" Alexander Bernstein had paid $1,000, leaving $20,089.02 in the hands of Alexander Bernstein, after deducting the further sum of $3,000 which the defendants remitted by means of a draft accompanying this letter. In explanation of the fact that only $3,000 was at this time remitted, it is proper to say that in response to a letter written by the defendants on October 1, asking Samuel Kunkel to say "in what manner and how" he wished his money sent to him, the latter, by a letter dated October 23, directed Bernstein to send him "from $2,000 to $3,000 the same way as the first $1,000, and the rest not until after termination of the war." However, Samuel Kunkel subsequently changed his instructions, and under date of November 26 wrote to the defendant as follows:

"Regarding the cash money, I am very much tormented by the children, and therefore request you, after deduction of the advance and charges of every nature, and after you have deducted for yourself the further sum of $1,000 for a Christmas present, to send, in the same manner as the $1,000 draft theretofore remitted to me, in May, everything."

The directions concerning remittances were again altered by a letter dated December 14, and the defendants were ordered to remit in small amounts and at intervals.

Samuel Kunkel died on July 12, 1915. In September, 1916, Fritz Kirchoff, who was at that time the consul in charge of the German consulate in Portland, Or., was appointed administrator of the estate of Samuel Kunkel, deceased; and afterwards, on January 27, 1917, Fritz Kirchoff, as such administrator, brought this suit against the defendants Alexander Bernstein and D. Solis Cohen for an accounting.

The complaint is drawn upon the theory that the legal services performed for the benefit of the executors of the estate were not reasonably worth more than $1,500, and that therefore, for the reasons specified in the complaint, the defendants should be required to pay back $7,500. The complaint avers that, with the intent to take a corrupt advantage of Samuel Kunkel and for the purpose of placing himself in a position to charge and to collect excessive fees, the defendants (a) represented to Samuel Kunkel that it was necessary and proper to employ them and to appoint Alexander Bernstein as his attorney in fact and solicited him to do so; (b) advised him "to have no communication with the resident American consul in Germany" concerning the estate; and (c) concealed from him, "so long as they were able, the amount of said estate, and understated the amount" of the estate. It is also averred that, after having learned of the death of his brother Daniel, Samuel Kunkel, who was a citizen and inhabitant of the empire of Germany, communicated with the German consulate in Portland, Or., "for advice and for the protection of his interests"; that Samuel Kunkel was advised by the German consulate "that it would be wise not to intrust the representation of his interests in the matter of said estate to the defendants herein, whose duties and interests, as attorneys for the executors and in the matter of attorney's fees to be allowed for the transaction of the estate business for the executors, might conflict with the duties of the said defendants in the representation of the interests of the said Samuel Kunkel"; that Samuel Kunkel wrote to the defendants, telling them of the advice given him by the consulate; that the defendants, corruptly intending to take advantage of Samuel Kunkel and for the purpose of protecting their own rather than his interests, wrote to Samuel Kunkel and "falsely represented to him that the object of the German consulate in giving said advice was to get charge of the said business in order to make for itself fees"; that Samuel Kunkel believed the representations of the defendants, left the defendants in charge of his business and interests in connection with the estate, and "took no other or further counsel in relation thereto."

The complaint recites that Anna Kunkel began the contest proceeding on August 5, 1914, and it is then alleged that the defendants immediately began urging a compromise by (a) falsely advising Samuel Kunkel that, even if Anna Kunkel lost the contest, she would, during her lifetime, as the widow of Daniel Kunkel, be entitled to one-half of the income from the two-thirds interest in the real property devised to Samuel Kunkel; (b) falsely advising him that the widow would be entitled to an allowance of $250 per month "so long as the estate should remain unsettled"; and (c) exaggerating, in divers ways, the dangers and difficulties of the will contest, "whereas, in truth and in fact, the said defendants well knew that the said Daniel Kunkel was of sound and disposing mind and memory at the time he had made the said will, and that he had not acted in any wise under undue influence of the said Samuel Kunkel, or of any other person, and that the said contest was sham and pretended, and...