Lappy's Estate, In re

• Decision Date: 24 November 1954
• Citation: 277 P.2d 781,202 Or. 571
• Parties: In the Matter of the ESTATE of Peter LAPPY, Deceased. STATE LAND BOARD OF OREGON, Appellant, v. Kirill Grigorievich SOVENKO and Tatiana Grigorievna Polozhanskaya, Respondents.
• Court: Oregon Supreme Court

Page 781

277 P.2d 781

202 Or. 571

In the Matter of the ESTATE of Peter LAPPY, Deceased.

STATE LAND BOARD OF OREGON, Appellant, v. Kirill Grigorievich SOVENKO and Tatiana Grigorievna

Polozhanskaya, Respondents.

Supreme Court of Oregon, Department 2.

Argued and Submitted Oct. 20, 1954.

Decided Nov. 24, 1954.

Catherine Zorn, Asst. Atty. Gen., Salem, argued the cause for appellant. With her on the briefs was Robert Y. Thornton, Atty. Gen.

P. A. Schwabe, Portland, argued the cause for respondents. On the brief were Haas & Schwabe, Portland.

Before LATOURETTE, C. J., and WARNER, ROSSMAN and LUSK, JJ.

LUSK, Justice.

This is an appeal by the state of Oregon acting through the State Land Board from an order of the Circuit Court for Multnomah County, Probate Department, allowing an attorneys' fee and certain costs and expenses.

On August 21, 1946, the United States National Bank of Portland (Oregon), administrator of the estate of Peter Lappy, deceased, filed its final account with said court in which it was averred:

'VI.

'That the Administrator of the estate and its attorney have diligently searched for heirs of the said deceased, and have been unable to find any in the United States, but have been advised that the deceased has heirs in the Union of Soviet Socialistic [sic] Republics; that notice has been served on the Administrator by the State Land Board of the State of Oregon that under the provisions of Section 61-107-OCLA the said heirs in Russia would be unable to inherit and that the State Land Board of the State of Oregon claims an escheat in this estate.

'VII.

'After payment of such additional expenses as may be incurred in the closing of this estate, the compensation of the Administrator and of its attorney, E. F. Doyle, the State Land Board of the State of Oregon is entitled to have the balance of the money and property of the estate distributed to it in accordance with the provisions of Section 61-107-OCLA.'

The administrator prayed for an order, inter alia, as follows:

'That upon payment of such additional expenses as may be necessary to closing this estate and the Administrator's fee and Attorney's fee as may be allowed by the court, The Administrator be authorized and directed to transfer and deliver unto the State Land Board of the State of Oregon, the balance of the moneys and property remaining on hand.'

The estate consisted entirely of personal property.

On September 10, 1946, the State Land Board filed a petition for an order escheating the clear proceeds of the estate to the state of Oregon.

Thereafter Kirill Grigorievich Sovenko and Tatiana Grigorievna Polozhanskaya, residents and national of the Ukrainian Soviet Socialist Republic, one of the republics of the Union of Soviet Socialist Republics, filed their answer to such petition praying that the estate be distributed to them as the sole next of kin and heirs at law of Peter Lappy, deceased, and also filed objections to the final account and petition for distribution based upon the same grounds. The claimants were represented by their attorneys, Messers Haas and Schwabe. There was an extensive hearing in which the issue presented was whether or not, at the time of the death of Peter Lappy on January 27, 1946, the claimants could inherit personal property under the statute which makes the right of a nonresident alien to take personal property in this state by descent or inheritance dependent upon the existence of a reciprocal right upon the part of citizens of the United States to take personal property in like manner within countries of which such alien is an inhabitant or citizen. O.C.L.A. § 61-107. See In re Estate of Krachler, 199 Or. 448, 263 P.2d 769. The court held that there was no such reciprocal right at the time in question, and entered a decree escheating the clear proceeds of the estate to the state of Oregon, but further decreed that the claimants were entitled to recover from the estate 'their costs and expenses hereby fixed and allowed in the sum of $502.55, and an attorneys' fee to Haas & Schwabe, their attorneys, hereby fixed and allowed in the sum of $2,000.00.' It is from this portion of the decree that the state has appealed. The principal question is upon the propriety of the court's allowance of an attorneys' fee. Various items of the so-called 'costs and expenses' are also challenged though the state does not contend that the court did not have discretion to order claimants' statutory costs and disbursements to be paid out of the estate. We will consider first the question of attorneys' fees.

The general rule is that attorneys' fees are not recoverable except pursuant to a contract, express or implied, or unless provided for by statute. Here the attorneys had a contingent fee contract with the claimants, but it is not contended that this contract binds the estate. 'It is a familiar rule', we said in Re Faling's Estate, 113 Or. 6, 17, 228 P. 821, 825, 231 P. 148, 'that the right of an attorney at law to collect payment for his services depends on the fact of his employment.' See, also, In re Gratton's Estate, 136 Or. 224, 228, 298 P. 231, 79 A.L.R. 517. There is no statute authorizing allowance of the fee in question. If the order can be supported at all it is only by application of the doctrine of Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157, that a trust estate must bear the necessary expenses of its administration. The Supreme Court said in that case:

'* * * It is also established by sufficient authority that, where one of many parties having a common interest in a trust fund, at his own expense takes proper proceedings to save it from destruction and to restore it to the purposes of the trust, he is entitled to reimbursement, either out of the fund itself, or by proportional contribution from those who accept the benefit of his efforts. This has long been the rule in relation to proceedings for restoring property to the uses of a charity, which has been unjustly diverted therefrom.'

See, to the same effect: Kinney v. Uglow, 163 Or. 539, 584, 98 P.2d 1006; In re Faling's Estate, supra, 113 Or. 20, 228 P. 821, 231 P. 148; Wemme v. First Church of Christ, Scientist, 110 Or. 179, 212, 219 P. 618, 223 P. 250; 107 A.L.R. 750, annotation.

In the Faling's Estate case this doctrine was considered in its relation to a claim for compensation by attorneys who instituted and carried to a successful conclusion a suit for the purpose of having a will declared invalid and void on the grounds of mental incapacity and undue influence and securing the admission to probate of an earlier will. The attorneys had entered into a contingent fee contract with an heir and certain legatees. The court, in an opinion by Mr. Justice Brown which elaborately reviewed the authorities, concluded that the attorneys were entitled to a reasonable fee out of the estate on the theory that the expense was incurred for the benefit of the estate as a whole, and that the case was to be distinguished from those holding 'that, when a contest is narrowed down to the personal interests of proponents and contestants, claims for attorneys' fees against the estate should be denied.' 113 Or. 33, 228 P. 830. The following excerpt from the opinion shows why the court thought that the services of the attorneys benefited the estate:

'This is not a mere contest among the heirs and legatees in the matter of distribution of the estate. The contest proceedings preserved the real legacies and devises from destruction at the hands of Strong and Mead, who had taken possession of the property under a fraudulent will. By virtue of the contest and the establishment of the will of 1911, the property of the estate was secured from the graps of wrongful executors and fraudulent devisees, and preserved for the Children's Home and the smaller legatees.' 113 Or. 32, 228 P. 830.

The opinion in the Faling's Estate case calls attention to the fact that the authorities are divided on the question of the allowance of attorneys' fees payable out of the estate to one contesting a will--some denying the right altogether, others making the allowance depend upon whether there is reasonable ground for the contest, and still others upon the contestant's success. See cases in annotations 69 A.L.R. 1058, 1059; 10 A.L.R. 806-809. In the Faling's Estate case, as we have seen, attorneys' fees were allowed to the successful contestant.

In In re Carlson's Estate, 156 Or. 597, 68 P.2d 119, we held that an estate should not be charged for expenses incurred by an executor in seeking to sustain a will which he did not honestly believe was the last will of the deceased. In In re Lobb's Will, 177 Or. 162, 191, 160 P.2d 295, 306, we said that, provided an executor acts in good faith, the court has discretion to allow him, whether successful or not, the reasonable expenses incurred in defense of a will; but, as the executor claiming expenses in that case was the sole beneficiary under the will, which was set aside, we held that in seeking to sustain the will he was 'subserving his personal interests alone' and that 'The successful contestats ought not to be charged with his expenses in that regard.' In In re Gratton's Estate, supra, 136 Or. 232, 298 P. 231, 79 A.L.R. 517, an attorney employed by an heir of the deceased to contest a will and who was unsuccessful was denied compensation out of the estate. The decree in the Circuit Court was for the contestant, but on appeal this court reversed. We answered the contention that the attorney's services benefited the estate by observing that, had his client been successful, 'he would have deprived other beneficiaries of any of the property involved, and he would have had, as the court below gave him, one-half of the personal property and all of the real property of the estate, subjec to the dower of his mother.' An executor who unsuccessfully resisted a contest of the will was allowed his costs and disbursements payable out of the...