Schield's Estate, In re

• Decision Date: 09 June 1952
• Docket Number: Nos. 42730-42732,No. 1,s. 42730-42732,1
• Citation: 250 S.W.2d 151
• Parties: In re SCHIELD'S ESTATE. SCHIELD et al. v. PHILLIPS
• Court: Missouri Supreme Court

Page 151

250 S.W.2d 151

In re SCHIELD'S ESTATE SCHIELD et al. v. PHILLIPS.

Nos. 42730-42732.

Supreme Court of Missouri, Division No. 1.

June 9, 1952.

Motion for Rehearing or to Transfer to Court en Banc Denied

July 14, 1952.

Maurice P. Phillips, St. Louis, for appellant.

William G. Guerri, James M. Douglas, Thompson, Mitchell, Thompson & Douglas, St. Louis, for respondents.

HOLLINGSWORTH, Judge.

These three cases come to the writer on reassignment. They originated in the Probate Court of the City of St. Louis and present the same issue: Whether under the facts hereinafter set forth that court was justified in refusing to allow David Baron, a licensed and practicing lawyer of the City of St. Louis, a fee of $17,500, or any fee, for legal services rendered the testate estate of William Schield, deceased, now in process of administration in that court.

The refusal of the probate court to allow the fee was based primarily upon its theory that the services rendered by Baron conflicted, or might conflict, with his duties as a testamentary trustee under the will of deceased, in violation of Rule 4.06 of the Supreme Court declaring it unprofessional for a lawyer to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. That court also deemed the fee excessive.

An appeal was taken by the executrix to the Circuit Court from the order denying her petition for the allowance of the fee. Separate appeals were also taken by both the executrix and Baron from an order of the probate court surcharging to the extent of $17,500 an annual settlement filed by the executrix wherein she had taken credit for that amount as a disbursement to Baron in payment of the fee. The probate court appointed Honorable Maurice P. Phillips administrator ad litem to represent the estate in the three appeals. At the trial in the circuit court they were consolidated and tried as one case. The circuit court found that the probate court erred in refusing to allow the fee and in surcharging executrix' settlement therewith, found that $17,500 was reasonable compensation for Baron's services, and rendered judgment accordingly. From the judgment rendered in the circuit court, the administrator ad litem has appealed to this court, where the three cases were also consolidated.

The testator, William Schield, was seventy-four years of age on the date of his death, August 8, 1946. He was survived by his widow, Jennie R. Schield, at that time seventy-two years of age. No children were born of their marriage. They maintained their legal residence in the City of St. Louis, but for many years Mr. Schield was a suffered from sinus trouble and they spent much of their time in California where they maintained an apartment at the Fairmont Hotel in San Francisco.

David Bardon graduated from Washington University Law School and has been engaged in the active practice of law in St. Louis since July, 1916. He represented William Schield from 1928 until Mr. Schield's death in 1946.

Mr. Schield had retired and devoted his time to caring for his investments. He counselled with Baron about his investments and insurance matters, and from time to time told Baron that Baron would have to look after Mrs. Schield in case anything happened to him. Baron had drawn several wills for Mr. Schield, revised others, and drew the will involved in this case. During all of this time Mrs. Schield had also known Baron, and he was her lawyer. Mrs. Schield testified in circuit court that he still represented her personally and as executrix and had her absolute trust and confidence, and that her husband had suggested to her that she have Baron as her advisor and employ him as her lawyer after his, her husband's death.

The will, dated January 31, 1946, and witnessed by three resident citizens of San Francisco, California, was admitted to probate in the City of St. Louis on October 14, 1946. Mrs. Schield was named as executrix, with the further provision that in the event of her death, inability or failure to act, the Mississippi Valley Trust Company, William Henry Schield, a nephew, and David Baron were to act as substitute coexecutors. However, Mrs. Schield qualified as executrix and has continuously served in that capacity.

The will left testator's entire estate, after payment of debts, to three trustees: Mississippi Valley Trust Company, William Henry Schield and David Baron. They are directed to pay the entire income of the trust estate to Mrs. Schield so long as she shall live, except that certain of the income shall be paid to certain named relatives in the event the net annual income exceeds $15,000. The trustees are authorized to encroach upon the corpus of the estate for Mrs. Schield's benefit. Upon Mrs. Schield's death, they are directed to distribute $20,000 to testator's brother, Henry Schield, should he survive her, otherwise the legacy is to lapse; $25,000 to a sisterin-law, Frances Marshall, but if she shall have predeceased Mrs. Schield, then that amount shall be paid over to the Bureau for Infirm and Aged Israelites in St. Louis, Missouri; $3,000 to each of five named persons and $5,000 to another, if they shall not have predeceased testator or his wife. The specific legacies, except legacies of income, are subject, however, to a pro rata reduction if the distributable estate is less than $300,000.

Subject to the aforesaid specific legacies, the entire residuary estate is to be distributed by the trustees upon the death of Mrs. Schield to the following named persons in these proportions: Frances Kaufman Gaggstatter, a niece, 25%; Jack J. Kaufman, nephew, 20%; Marjorie Kaufman Bloom, niece, 15%; Bessie Kaufman Apte, niece, 15%, William Henry Schield nephew, 15%; and Rosalind R. Meltzer, the former widow of his wife's son, 10%.

The will further recites that testator's wife has preferred to forego her statutory and marital rights and has concurred in the terms thereof, but further expressly states 'she shall be entitled to receive her statutory allowance for one year's support * * *.' Prior to Mr. Schield's death Mrs. Schield, in a separate written document, declared her intention to take under the will, and after his death she elected so to do.

The inventory value of the estate was $857,531, and the Missouri inheritance tax appraisal value was $864,486.06. There was, however, a secured indebtedness of $185,000 to the Mississippi Valley Trust Company.

Following Mr. Schield's death in California in August, 1946, Mrs Schield immediately telephoned Baron and requested him to come to California to take charge of matters, with which request Baron complied. He remained in California from August 20th to September 3rd, winding up Mr. Schield's affairs. He caused the will to be filed in the Probate Court of the City of St. Louis on August 28, 1946, and had a commission issued to California for the testimony of the attesting witnesses. The California authorities asserted that the estate should be administered there. After numerous conferences with these officials and furnishing them with adequate evidence that testator was legally a resident of Missouri at the time of his death, Baron convinced them of that fact and procured from them a waiver for the return of some $70,000 of securities kept by Mr. Schield in California.

Following the probate of the will on October 14, 1946, and Mrs. Schield's qualification as executrix, Baron, on the next day, wrote a letter to each of the residuary legatees in which he advised them he represented the estate of William Schield, set forth the substance of the provisions of the will and of the trust therein created, the names of the trustees, and enclosed a copy of the will. Receipt of that letter was acknowledged by all of the residuary legatees. None of them raised any objection to Baron's representing the estate.

Baron has continuously represented the estate since Mr. Schield's death. He estimated he had devoted 650 hours of time in the performance of these duties. He took the testimony of the attesting witnesses to the will. He canvassed the banks and brokerage offices in San Francisco and found $70,000 of securities belonging to testator. His expenses in connection with the trip to California amounted to $377.78, which is included in his claim for a fee of $17,500. He supervised the inventory and appraisal of the value of the estate. In accordance with the provisions of section 462.450 RSMo 1949, V.A.M.S., and the express direction of the will, he prepared and presented the widow's petition for one year's support. This was allowed in the total sum of $30,000. Throughout the years since Mr. Schield's death, he has advised the executrix as to the various and many legal matters involved in the estate, attended to the verification of many claims arising in the State of California, the dealings in connection with the Mississippi Valley Trust Company's secured claim in the sum of $185,000, and prepared federal and state income tax and other tax returns for the years of 1947, 1948 and 1949, and the semi-annual and annual settlements of the executrix. His duties required him to examine numerous insurance policies on the testator's life in the preparation of federal and state tax returns and to hold many conferences with the Internal Revenue Department and the State inheritance tax appraiser.

During the course of the administration, Mrs. Schield brought up the matter of Baron's compensation. He suggested that $17,500 would be reasonable. She stated that sum was too low and suggested at least $20,000. At the trial in the circuit court she testified that she thought $17,500 was 'very, very mild' and reasonable; she had expected to pay more. Baron prepared a petition for her to file in the probate court for the allowance of that amount.

Baron testified that when the petition was presented to the probate court for allowance the judge thereof, Honorable Glendy B. Arnold,...