Hagey v. Massachusetts Bonding & Insurance

132 attorney’s 16; January 15;

Argued fee allowed affirmed June July 7, & BONDING HAGEY MASSACHUSETTS v. ET AL. CO. INSURANCE 346) (126 (2d) (2d) 836, 127 P. P. and Belt, Bailey,

Before Chief Justice, Kelly, Associate Justices. Band, Brand, Bossman Lusk, Lichty, (Lichty Doxey, Portland & of of Port- John appellant. brief), for on land, respondents. of Snow, Portland, MacCormac by appeal an J. This is Massachu- ROSSMAN, Bonding Company, one of the setts & Insurance two plaintiffs cross-appeal and a the four defendants, plain- from a of court in favor of the decree the circuit against appellant tiffs and both defendants. The surety upon bond J. L. the administrator’s of Hammersly, who administered estate Plympton Kelly, deceased. is the other J. plaintiffs (cross-appellants) defendant. The are four number. is Gertrude niece of de- Hunter, One Lloyd nephew ceased; the second is Woodside, deceased; the third is the administrator of estate Kelly, Plympton of L. J. was a deceased, who brother Kelly; J. and the fourth is the administrator Kelly, estate of Lou B. deceased, who was another Plympton Kelly. Kelly brother J. Both L. J. Kelly living Plympton

Lou B. at the time of J. Kelly’s death. The decree under attack set aside an probate department order of the of the circuit court county for Multnomah which was entered October 22, approved report 1935, and which the final of Ham- mersly. Having surcharged Hammersly’s done it so, account with the additional sum of $13,197.16 and judgment against entered both defendants for judgment against surety amount. To the it added attorney’s surety only $1,500 an fee. The is the appellant. probate

The decree set aside the order court approved Hammersly’s final account finding prior entry Hammersly its guilty by deceiving of a devastavit. It found that the heirs concerning the of value some of the assets of the Kelly Plympton assisting pres- J. and estate, in the against of false claims entation the Hammersly estate, wrongfully attorneys him took associated with and two $13,197.16. from the estate leaving Kelly Plympton 1933, 18, died October J. approximately Included $100,000. estate an worth large constituting among a estate was the the items Eight days corporate municipal bonds. amount of and probate Kelly’s there was admitted after death signed 11, he 1933. his document which October will ($41,- bequeathed part of estate a substantial the It possessed Northrop, 614.62) who one Jessie 0. Kelly property she claimed worth which $13,391.59 recently given she under threat her, later, but which had residuary, as well as Since was suit, returned. she specific, legatee, property if this would have been hers though attempted gift valid, the will was even incomplete. Northrop ap Mrs. and another were Upon appearance pur pointed of the executors. ported into contract will the heirs entered written Reilly, Kerrigan L. T. M. three —Ronald L. the aforementioned J. em —which validity ployed to contest the of the will. begun 1933, The contest was November 20, Kelly’s In re Estate, successful. 150 Or. 46 P. See provisions (2d) of the 84. contract between One attorneys required pay heirs and the former to attorneys, per in the of success, to the event “50 cent any money, property, bonds, stock or other assets Kelly Northrop, P. left to one J. Jessie G. said equivalent of said will or its under terms cash, equivalent agreed upon by cash to be amount of said parties at the hereto time of distribution of said estate, property or shall sum be the and that such entire fee of parties.” will It be observed that the size second recovery Northrop fee was one-half from Mrs. one-half of estate. —not After court entered its decree in favor the circuit appointed the order which the exec- contestants, Hammersly appointed utors and was revoked ad- Reilly Kerrigan attorneys. ministrator. became his appointment Hammersly April of was made day, pursuant requirements 1934,and on the next to the Oregon (now § § of 11-211, Code 1930 19-218, O. C. A.), undertaking signed by L. he filed an himself and appellant this the denomination of $60,000, which said: Obligation

“The Condition of the above is such that Joseph Hammersly appointed Whereas the L. has been County, Oregon, Ad- of Multnomah Circuit Court Plympton ministrator of the Estate of the Said J. Kelly, Hammersly Joseph “Now, if the said L. shall faith-

fully perform his trust as such Administrator accord- ing full force obligation then law, this to be void, otherwise in ’’ in law.

Concurrently filing Hammersly with the of bond, appellant agreement and the effected an between them- pursuant § whereby selves, to 101-1402, O. C. L. A., appellant enjoyed Hammersly joint control personal property all over of the estate. Thereafter signature the administrator’s checks bore the of both Hammersly gain defendants, and could access to the belonging vault in which the securities to the estate kept only surety. with the consent of the years entry Two one-half after the of the final closing order this suit was filed. The sentence of the complaint quote charges which we now makes the principal consequence appeal (the in this individual McClure, named mentioned in the sentence, was Kelly’s nephew Plympton and is deceased wife J. appeal): with this not concerned * * plaintiffs the said time unknown to at a “* agreed conspired Hammersly attor- with the other neys should as administrator that the said distributing amount of said the entire net instead of and under and McClure heirs at law estate to said paying pretense three to the said property under said con- or fees due them amount pay to himself and and make over retainer, tract said other amount of large disproportionately two injury property and to the of said estate they pre- that should law; at the said heirs detriment knowing discourage heirs at law from the said and vent preventing unjust them from distribution said about knowledge complete having full and access to the and a by misleading them from time and estate, of said details said details.” about to time attorneys, a plaintiffs that the under contend The distributing heirs pretense to the one-half gave bequest, Northrop them far less than one-half to complaint part kept themselves. the other and ("1)Hammersly paid main contentions: three submits wrongfully $4,000 associates his two himself and up Hammersly, splitting the heirs (2) between fees; recovery Northrop, attorneys Mrs. from and accepting part which was less into the heirs deceived Hammersly (3) never accounted for one-half; than possession. We shall now into his that came all assets particulars. more contention with the second state approved although say the order which that heirs they signed at which the vouchers final account they contemplated should receive into that time pay the estate and then all assets of hands their Hammersly procedure. attorneys, did not follow that contrary, heir items to each he delivered To the falsely represented to one-half amounted lie days Ham- Three before this occurred heirs’ share. mersly’s making approved. In final account had been Hammersly employed inventory split-up this by September appraisal in 1933. But which were filed Hammersly split-up, made the the bonds when The heirs claim that $10,303.66. had increased value ignorant fact and that the of that Hammersly kept of it. and his associates were aware the bonds. just principally upon

It is men- circumstances plaintiffs rely tioned that the to sustain their statement Hammersly “paid and made over to himself and disproportionately large said other two property amount of the said estate.” One-half of produces $4,000 added to $10,303.66 $4,045.33less than judgment the amount of the $13,197.16. The size of — only just the latter is due not two items men- tioned, but also to the fact that the circuit court found failed to account all for assets that possession. his came into We shall now review the being but the time evidence, will confine ourselves charges. first two August Hammersly, as 15,1935, administrator, filed objections his final account. No were offered, and on September an order 16,1935, was entered which allowed Hammersly’s accounting fees, additional found final things regular,” “in all and him directed to make dis- “according tribution to law.” About the same time Kelly signed September L. B. a voucher, dated 19, said: 1935,which * *

“* hereby acknowledge do to have received Joseph Hammersly, from L. administrator of the estate Plympton Kelly, part deceased, J. one-third of all

money property remaining unappropriated and other belonging and in the hands of said administrator and hereby estate, said and I do release and dismiss the Joseph sly L. said said Hammer as administrator as afore * * *." surety his Kelly, Lloyd L. Woodside and Hunter J. Gertrude signed exception similar that the vouchers, with by signed each of one the two heirs last mentioned acknowledged receipt part of a one-sixth of the estate. closing a final order 22,1935, entered,

October which declared:

“ * * * it is ordered that the above-entitled estate hereby closed, and that ad- and the same is the said be discharged, that the ministrator be said bondsman * * exonerated be July, August September pre- June, In ceding meetings of the four estate, the distribution Keilly’s the heirs and the held were meeting September was on office. the 19th of days entry three after the of the order month, approved the final account. The heirs claim they filing of the had no actual notice of the final hearing. of its contents or time for the account, claim is But, that their true. We believe reasons apparent, report, later become the final if which will given not have them information of read, would con- concerning sequence a distribution of the estate. Ac- appellant’s cording approval brief, the to the order of “that the estate be distributed: one-third to directed Kelly; Kelly; Lloyd Lou one-third to one-sixth L. J. and one-sixth to Mrs. Woodside; Gertrude Hunter; only being they Although heirs of the deceased.” should have been the order, directions those were followed in absent and the distribution. meetings. Generally, just four mentioned have We and they their wives heirs, attended were Reilly Kerrigan possibly attorneys. were and three away Kerrigan from the was in fact, absent from one; which transactions months while the state for about two occurring. Reilly presided describing over arewe Sep- attorneys. meetings spoke At the for the and meeting Hertz, name whose is accountant, tember an present. He had assisted with some Although nothing of the estate records. was said in the July August meetings split-up and about a June, recovery Northrop, helped from Mrs. Hertz in the meeting September compute the details of the one put Up which was into effect. that time the discus- sions had been about a distribution of the estate. It will attorneys only be recalled that the were interested Northrop bequest about one-half of the Manifestly, among estate. a distribution of the estate quite the four heirs would have been different from a split-up Northrop bequest among attorneys heirs. occupation of the heirs had been for the most part farming. experience None them had had consequence meeting with bonds. In the June the at- torneys urged agree upon heirs a division of the property. They especially property, mentioned the real which consisted of two ranches and some tracts in Port- given copy land. Each heir was of the combined in- ventory appraisement. told the heirs closing of the estate would be if hastened agree upon a would division. Let us now consider how attorneys brought about a division between them- Northrop bequest. selves and the heirs of the worthy fi that a First of all it of observation duciary relationship existed between relationship appellant argues the heirs. that that decree hold was terminated when the court entered its ing Kelly do not so construe the will invalid. We attorneys situation and administered believe that duty upon part the estate as of the contractual which they they signed undertook when the aforementioned agreement. Hammersly administrator the When became fiduciary relationship him and the heirs be between attorneys came two-fold. He was still one of heirs’ Reilly Kerrigan, to them he, and as such like and owed good he took administrator, utmost faith. As fiduciary relationship. prin an additional himself Taylor, ciple 142 483, in Matthews v. Or. is thus stated quote: (2d) we 806, from which now 20 P. the of the administrator is trustee of

“An or executor in an or beneficiaries estate, interested heirs, being Wells 125 Wood, administered. v. will (263 54); Re Roach’s 50 Estate, Pac. Or. 38, 46 Or. duty 118). the trustee in And it is the Pac. 186 (92 fully dealing gard inform them re with beneficiaries to property of the and the nature of their the value Byrne, 149 Fed. Lud 457, 465; in it. interest ington Jones v. (86 580).” N. W. 571, Wis. 208 Patton, v. § Bogert 12. Trustees, on Trusts and also See right it is clear that the heirs had a From the above about told them the estate. to believe what us of the record convinces examination Our attorneys. complete reposed confidence forego which caused the heirs to factor One ’ accept property the real and bonds voluntary realty repeated a advice that division of the closing expense hasten a of the estate. would save accepted that advice and all of the The heirs selected property. Only part of it in the real was included Northrop bequest, attorneys’ and since the fee was bequest, they based one-half the value of that only part belonged were interested in the which had bequest. concerning the invalid The advice the ranches city accompanied tracts was vari- statements, ously phrased, grade, that the bonds of low were many Although of them worthless. attor- neys had detailed record which showed what bonds, Northrop recovery, etc., were still left of the the heirs By meetings had none. the time of the four several part Northrop bonds which had formed a re- covery had been sold for sums which had quanti- not been mentioned to the heirs. Likewise two represented by receipts, ties of wheat, warehouse part Northrop bequest were also a of the had been sold prices not disclosed to the heirs. corporations by Some of the whose bonds were held by attorneys the bankrupt estate were said the to be reorganization. Reports by and under made creditors’ corporations displayed committees cf these were at the meetings. municipal corporations Two of the whose by bonds were held the estate were also in trouble. A ’ report protective written a bondholders committee city brought of the Astoria of before one of the meetings. urged It a reduction of interest rates and an just extension of time. The statements mentioned con- cerning municipalities corporations the and insolvent they mingled But were true. were so with references to general they the bonds caused the heirs to view municipal corporate all of the and bonds with disfavor. attorneys papers mentioned some concerning re- organization, reduction of interest rates, etc., which

they signed by eventu- said would have be whoever ally general rep- the bonds. The trend of the received heirs these resentations induced the to believe possibly securities of low value and undesirable. corporate municipal the We, course, bonds, mean and government that the not the issues. We are satisfied mistakenly September, 1935, that the believed, heirs no more than the amounts indicated bonds were worth inventory appraisement filed in 1933. But in the already by September, said, as we have bonds 1935, actually in value a fact $10,303.66, had increased did not disclose to the heirs. Prior to Hammersly, September, administrator, had 1935, many pursuant an sold, court, order bonds forming Northrop bequest, part which were referring. we have to which been the same kind as those higher prices much than them He received for appraisers placed them. That values which the development, circumstances, informed as other as well Reilly Hammersly and that bonds of this kind at least substantially in market value since increased had longer appraisement no in- correct prices nor the iden- obtained Neither to value. dex mentioned to the heirs. tity bonds was rec- the fact that mentioned haveWe they agree upon a division heirs that ommended urging they were so that while estate Reilly, property. real re- especially mentioned meeting, July “It was swore: decided ferring to the property pieces meeting of real each one what that at them the rest of were to— that and wanted, them of they of that was cash outside or wanted that all having been settled, attor- That equivalent.” its preparation with the themselves of neys busied next meeting report. August the administrator’s final Kerrigan possibly important was not an one. Reilly were absent from it. September meeting.

We come now to the In its private course to a the aforementioned Hertz retired Kerrigan. Kerrigan room After an hour or so slip paper upon and handed to returned each heir belonging which had been written the items (the proposed heir) estate which it was he should prepared private take his share. The lists were in the Kerrigan helped room. Hertz and swore that Woodside compilation in the list. Woodside denied their statements. areWe inclined to believe that he told helped figures, the truth. But if he with the he acted ignorance he, since like the other three had heirs, concerning no truthful information the value of the bonds. neither he nor Likewise knew what items bequest Northrop Upon remained the estate. slip among entered, each there was other items, parcel property expressed of real for which the heir had preference. given Kelly The one to L. J. reads:

‘ ‘Maupin ranch 8,250.00 $ Rosenberg note 82.48

Government bonds 1,255.00 Cash 2,318.58

Total $11,906.06” per Kelly’s of L. about 70 cent Thus, J. share was property. portion given real A similar to L. B. Kelly. Approximately part one-half of Mrs. Hunter’s property given about was real one-sixth of realty realty. mortgages Woodside was had in value since 1933. increased None the lists given any corporate the heirs contained or municipal bonds. contemplate not

It is seen that the lists did a dis- compliance in of the the estate, tribution court’s They a looked forward to division of the North- order. rop bequest attorneys a

between the heirs and the remaining parts the of all heirs of the distribution only prop- the words, In other lists included not estate. Northrop erty from Mrs. recovered but also heirs’ part the remainder of the estate. Such distributive any proposition had not been discussed at a unless an occasional conferences; loose word found transcript of evidence denotes consideration of that subject. Seemingly, split-up Northrop bequest a attorneys’ they minds when obtained not was judge approval probate final order from two September meeting. days That before the order called among of the estate the heirs, a distribution and not Hammersly why split-up. When was asked he a did not replied: comply up— he “We order, with that drew exactly say I it was wouldn’t formal —not stat- well, they very ing the amounts had informal received— they figured matters hadn’t out, —and the other these thing something slips, or or another, and one like that, got something, prepared, they them or hadn’t get very closed we anxious to the estate so could were The other two were a distribution.” make question which was submitted the direct asked just quoted. produced the answer and which keep attorneys purposed items which split-up not mentioned at in the non-discussed showing paper meeting exhibited their and no municipal corporate bonds intended shares. any the heirs. As we shall not been seen had computation of several records is neces show, later sary the value of the items ascertain in order to attorneys kept attorneys claim for themselves. The meetings agreed that in the of the four course the heirs appraised distribution the values should be employed. agreement We do not believe that an to that effect ever if it it made, but was was immaterial because concealed from the heirs the ’ bonds increase in value. we have from the said, As it difficult to ascertain probate attorneys kept. record items which the beginning judge trial Near the of the the trial said: you “Where is this statement the final settlement you got I can a had, so follow this little better. Have anything here which would indicate to me what the attorneys got they got and what I have so can them segregated?” request His for that information was during Beilly repeated several times the trial When judge was stand the witness trial declared: “Inasmuch as this final account order does not divulge happened in detail what estate, this would you up exactly make a statement each what heir expenses paid received, what were for this, that, and the you attorneys and what other, received. It has not been you yet. regarding me, done Will do that for Shortly he estate?” added: “This final order or final up figure account here is mixed so that I can’t it out myself. good experience pro- I had a deal of have * * up bate matters. draw me a You statement produced stand, while the witness a Hertz, sheaf penciled explanation sheets accounts which judge caused the trial to remark: “Well if now, I can get yesterday, I. what asked either from this man attorneys, you a or final it will a account, save lot of just much time. That sheet there is Greek to me as During the other.” Hertz’ cross-examination the trial judge requested Reilly give said: “Now I Mr. rue get help final account. this Now accountant here can * * final account here so we can understand it *. I suggest go would we let him off un- stand, witness questions you ask less there are some other want to get particularly, and that account out and let’s find out ** * simple.” that is how it distributed. Now approving request was never met. The order closing final not indi- and the order do account, final attorneys received. the heirs or the either cate what split-up place alleged had took the heirs When the composing papers the estate’s files ex- seen none inventory appraisement. cept It seems that copy where the office the final account agree meeting September with the trial We occurred. divulge disposition which was judge does not that it the estate. made of meeting September return to the

We now Seemingly, heirs. no handed to the lists which were slips produced. when occurred discussion acquiesced. silently instance, For one them The heirs slip figured gave he that when me the “I testified: get. figured why, the stuff we would I there, * * * lawyers; got you lawyers had we We things. why That is one figure reason we those all you figuring ourselves. We trusted more do didn’t “I testified: it boys.” of the heirs left to the Another testimony attorneys.” of these two heirs The reflected discussing the all four. Without matter attitude the attorneys through they accepted offered, the their what way It in latter. this that the in confidence attorneys got place municipal took division corporate securities. judge of the trial decision memorandum remaining clarity facts that need men states displayed he in interest which commendable tion. The great weight. eliciting decision to facts entitles his quote: We now *

“* * up physical in- time, assets to that All the custody Hammersly, cluding bonds, etc., to the heirs at the time of the were not exhibited and so-called attorneys two settlement. administrator and the divulge did not to the heirs at the time the settlement that these bonds had increased in value, although appears they from the evidence it had knowledge actual of such increase value of some of prior experience The heirs, bonds. thereto, had no regard or to bonds their values, relied particulars. administrator and his in all meeting, At such Mr. an Hertz, accountant, selected by the administrator, went over the accounts in the presence of up at least one of the heirs and made a list explanation that, this and an of which he could not give meaning at the trial, and the of which the court does receipt signed general not understand. Later, each heir that he had received his distributive share, being there no enumeration of the various items each had received. The record is silent what the ad- ministrator or the other two received as their share of the estate. The evidence shows that after moneys final account was filed were received and probate disbursed the administrator, but the record is silent as to these report being- transactions, no further being made and no further order entered other than closing an order exonerating the estate and the bonds- day man, dated 22nd of October, 1935. on, “Later in 1937, the heirs discovered for the first time that the attorneys, administrator and his receiving fifty per instead of greatly cent, had received whereupon present in excess thereof, suit was ’’ instituted. ignorance of their because of We satisfied that are accepted as their the heirs value the bonds true substantially properties were shares of which the estate given Their to them. have less than should been value objections ignorance file to no likewise induced them Hammersly’s to final account. briefly concerning the facts

We shall now state Hammersly fees. in the form of disbursed $4,000which plaintiffs to base their claim said, As we have misrepresentations equitable only upon con- relief, cerning also a claim value but bonds, Hammersly surreptitiously two that and his associates appellant in fees. con- $4,000 took from the estate attorneys taken. It and the $4,000 cedes was taking ground justify $2,000 consisted on the an fee the other $2,000 administrator’s Kerrigan Reilly Ham- for their services to fee to mersly, from administrator. The decree surcharging appeal the administrator taken, has been ($4,000), held that the contract from this sum quoted already contemplated have that no which we charge be would made for additional add the estate. We administration before appointed aforementioned Mrs. per- Northrop associate, and her had executors, part of the work a substantial of adminis- formed approximately They paid $5,000 for their tration. services. knowledge Hammersly’s had no

The heirs inten- charge for his services as nor administrator; tion charge of the other two the intention Hammersly. Seemingly, services the at- their for torneys thought making no at the entertained outset of representative charge their services this ca- pacity. Reilly, explain- witness, For as a instance, ing sly’s ap- Hammer heirs, what he said to the after charges against pointment, possible about gen- in a testified: “The heirs were informed estate, way expense, eral there were certain items for in- the exact amount of the inheritance tax of stance, heirs, each of the and the exact amount estate question I at time tax, and believe that there was some about whether or not a sufficient amount income paid government. tax been had to the federal Rut in general way they given approx- a were to understand imately the share that each would receive.” It will be nothing he said observed that to the heirs about an attorney’s charged fee nor an administrator’s fee to be in connection with the administration. Yet such a size- it seemingly $4,000, able sum as had been in mind, would have been mentioned. When the first half of the no claim $4,000 taken, was made that it was exacted in connection with administration. This first $2,000 pursuant payment was taken to an order entered probate department June 1934, which said: hereby adjudged Kelly ordered and “It is L. J. allowed, be out of the funds of the the sum of estate, upon attorneys’ for dollars on account $2,000.00 fees by him in incurred the contest will P. J. Kelly, deceased.” Note should be taken that the allowance was not for for services, administrative but services “in the con- test of the will” allowance to the Kelly, attorneys, L. a but to J. brother of the deceased, attorney. The not an order of who was allowance was petition “allowing your pursuant petitioners a made of $5,900.00 the sum as reasonable fees vacating setting purported aside the said will.” day Ham- order was entered On the same pay- mersly, $2,000 drew a cheek for administrator, Kelly, it and handed L. J. who endorsed it able to endorsing attorneys. They it. it cashed without Kelly, concurrently check, his endorsement of the acknowledged receipt payment signed of $2,000 atty. 19, 1934, “ac’t court order June fees will con- attorneys admit their that, since contract test.” per Northrop bequest as them to 50 cent of the entitled compensation contesting the will, for their services payment. $2,000 not entitled this judge, in to make sure that the $2,000

The trial order actually accepted on account of the contest of the was inquiries Reilly he will, made several of when was instance, stand. For he asked whether the witness attorney. Kelly L. an The answer was: “No. J. breaking Kelly $2,000 Mr. was allowed for of will Kelly, judge Plympton deceased.” the trial Next, “Why you through Kelly inquired: run in did it this Why necessary?” way? was that an- round-about “The situation was at the time follows: swer no indication that we there was would be allowance Supreme litiga- It Court. was still in in successful the $2,000 it is seen that was taken so Thus, tion.” compensation have some would their this event that court in the reversed the cir- services In other words, $2,000 decree. was ob- cuit court’s services rendered not for tained, but administration, by per wrongfully covered for services the 50 cent quoted. previously which We come contract now payment. $2,000 second probate department, July pe- 25,1935, Hammersly, him authorized “to withdraw the tition paid which said sum is to $2,000 be $1,000 as sum partial payment for the administrator of said estate attorneys’ legal $1,000 fees for the services connection said estate.” That order was made pursuant petition signed by Hammersly ato recited: represents “Tour administrator further that he successfully through

has carried on the estate a con- appeal Supreme test of a will now on to the Court performed extraordinary services on behalf of the Kelly, extraordinary P. estate of J. and is entitled to compensation your so rendered, and that administra- employed attorneys performed tor has who have ex- traordinary compensation services, and are entitled to for their services.”

Again it is seen that no mention was made of the special agreement whereby were to be compensated bequest with one-half made to Mrs. Northrop, and likewise it is seen that fees were asked again upon representation earned contesting accounting the will. In his final purported said: “At the time the said will was set aside order of this court, court allowed L. J. Kelly, as contestant, the sum of Two Thousand ($2,000.00) attorneys’ dollars, to be allowed on fees for the successful contest worthy of said will.” It paper notice that the said that the allowance Avasto Kelly, “L. J. as contestant.” It aat.11 be recalled that it attorneys, Kelly, was the and not who obtained the money. Kelly testify, L. J. did having not he died six prior months to the trial. The final account, after mentioning July the order of 25, 1935, closed Avitha prayer that the court attorneys’ allow additional administrator’s fees. The approved order which Hammersly, final account alloAved as administrator, an attorneys a similar sum. Thus, and his $1,000 additional attorneys was allowed. $6,000 that total seewe actually only taken and that explained was $4,000 original employed this because the procedure was in the measurement of the not deductible was $2,000 it However, was never returned. taxes. inheritance Seemingly, the third allowance which was it was taken. attorneys, Reilly, in a

Mr. one of the three letter totaling appellant, mentioned the three orders taken from the $4,000 and the $6,000 fees, Referring to the last of the three above- estate. mentioned he wrote: orders, “ * * * open It was stated in court that this sum of $2,000 not be in addition to the allowed $2,000 would Kelly breaking of will Mr. for the but would to be with controversy to avoid sum, in substitution for that Department. Tax This was the State Inheritance and administrator received done nothing addition, assets, out of the above I have referred. check to which $2,000.00 “In of the fee of the with the settlement already deducted from their $2,000 this fee as heirs, reality, having them that, been received so fully has been accounted for and the $4,000.00 entire any attorney will be unable to show fee or heirs against charged fees were heirs out- administrator agreement.” contract of their side agree just quoted: do not statement We any attorney be unable to show that fee “the heirs will charged against administrator fees were or the heirs agreement.” outside of their contract We are satisfied in addition to the contract $4,000, sum, was taken from the estate. judge,

The trial in his memorandum decision, re- ferring Reilly’s said: letter, attorneys’

“The $4,000 and administrator’s fees are not to be deducted inasmuch as the entire fee mentioned clearly in the contract item, covered this ad- by January by mitted 3rd, 1938, letter of written Reilly bonding company.” Mr. to the interpretation agreement. We concur in that of the knowledge We are satisfied that the heirs had no anything being accounting asked in the final for administration services. The contract and the pursued by attorneys course of conduct induced the charge heirs to believe that no of that kind would be being made. Those the circumstances, the heirs did not pertain- examine the final account search of entries ing objections to fees, and likewise made no to the final accounting.

The above concludes our review the evidence. We regret print more than necessity can indicate the writing anything which reflects these three at- torneys. interpreting In what we written have it must Reilly be Kerrigan borne mind that are not parties proceeding. to this Lest words chosen us might correctly not reflect what inwas we mind, many employed have in language instances attorneys.

It will be observed trusting that the heirs, their at- torneys, (1) accepted as their shares of the estate the property items of entered slips which attorneys September distributed at the meeting, (2) thus received less than their ignorant shares; were the fact that took from the estate (3) in fees; $4,000 unaware of the fact that the Northrop more than one-half received they (the heirs) (4) had bequest; not know that did objections they possessed valid and that been deceived subsequently Hammersly’s final account and to his discharged; (5) being petition the vic- presented be objections (the heirs) to made no deceit, tims of Hammersly’s petition for his and to the final account way discharge, favorable to Ham- and in this orders mersly would not have been entered entered which known. truth been had the appellant’s first contention is: an administrator’s of final settlement of “The order subject judgment to a final not collateral account is except fraud.” extrinsic or collateral attack Yielding final same the order of settlement the to judgments efficacy that attaches to decrees of (In Estate, 365, 157 courts of law re Anderson’s Or. (2d) v. 45 P. 1013; Lane, 13, P. Froebrich Or. 76 71 Rep. Am. St. and Conant’s 351, 106 634; Estate, Or. 1018), yet, according to 73 P. Froebrich v. 530, Lane, subject supra, an order is to be set if it such aside by complainant “superinduced and the is fraud, free ’’ negligence upon part. and fault inattention, from his Judgments, § law, Prom Restatement of the quote: we “Subject general equitable (see to considerations equitable

§§516-519), judgment relief from a valid granted party injured thereby to to the action will be judgment was based if the fraudulent claim or litigate he did not defense which because he “ fraudulently (a) party misled the other to believe that he had no claim or the action or defense, “(b) ^{[*] [*]} *." accompanies

From the the state- Comment jnst quote: made, ment we (a) to to in rule stated this Clause is limited “The applies in mentioned this Comment but cases been con other there has no situations where fact litigation owing one

tested of the to the successful fraud of *# *” parties. Among Comment, this illustrations which follow following: we find the

“A B, has to know is trustee for who no reason A In has embezzled from him. funds the settle- accounting ment of A the trust estate makes a final which he fails to mention a number of trans- business involving profit estate, actions for the such transac- having Judgment tions not been entered his books. improper rendered accordance with the account. proceedings After it is too late take further in the Equitable may B action, discovers facts. relief be granted him.” carefully by We have the studied authorities cited appellant, especially supra, v. Lane, Froebrich but they harmony § do not believe that are out of with 510 stating legal of the court, Restatement. This principle employed language under consideration, sim- Oregon-Washington ilar to the Restatement. See R. (2d) & N. Reid, 602, Co. v. 155 Or. 65 P. 664, and State (2d) Vincent, v. 152 52 P. Or. 203. an For excellent subject Pomeroy’s Equity of the treatment see Juris- (5th ed.) §§ prudence 919a and 919b. principle equity jurisprudence

The which just subjects we have taken notice the order of final by plaintiffs. settlement to the attack made it attorneys, by The and his misleading administrator the value of bonds, heirs as to induced them, not only permit to to retain bonds worth representations bnt indicated,

$10,303.66more than they had no them into a belief addition deceived they discharge. objections petition Had his for his they they would have known not been deceived objections possessed sus- if be which, voiced, would concerning the true tained. The same observations are improper fees. of the administration allowance petitions made like- those allowances were which security. caught in a false state of the heirs wise disregard attorneys’ limited contract, of their which recovery per compensation from to 50 cent their Northrop, development the heirs Mrs. which anticipate: supra. Froebrich v. Lane, not bound to presentation by They know of the did not petitions accordingly fees, for of the unwarranted they ought object nor knew that neither objection. occasion had just in the manner described that It was approved final obtained the order which his account discharged him. obtained the next order which objections petitions ex- Valid to the for both orders objections misrepresentations concealed the isted, but Reverting § Restatement, from the heirs. equity grants from a it will be observed that relief judgment equitable plaintiff if the in the suit was “fraudulently party misled the one to the action to believe that he had no claim or defense.” We believe principle directly applicable that that to the situation misrepresentations us. The before continued to deceive any the heirs until it was too late for them to take action being probate true, court. That circuit court impeach approved authorized to the orders Hammersly, discharged final account of the him and appellant surety. the as his released

159 the appellant under Finally, contends the signed it liable for the taking render not which does it practiced heirs in the distri fraud which was sly’s in Hammer act bution of the estate. It claims splitting up Northrop bequest between heirs no on on the other was the one side and the part quoted a of his We in duties as administrator. preceding part paragraph material under signed. taking appellant 19-218, Section O. C. undertaldng pursuant given, L. to which the A., “upon sureties renders nonliable condition faithfully per such executor or administrator shall according form the of his trust duties to law.” surety appellant private signs is like a not who a bond compensated corporate accommodation, as an but is surety. surety A of the kind first mentioned is a favor beneficiary ite of the law and is the of the rule of juris. type surety But strictissimi the other is dealt way. Fitzgerald with in a different v. Neal, 113 Or. Guaranty 103, 645, P. Surety 231 Neilson v. Title & Judge Mary 422, 81 Or. P. 1151. Co., Parker, Casualty (2d) v. land Co. Fowler, 31 Fed. stating

A. L. R. 1375, the manner in which a com pensated surety regarded by is law, said: “A com pensated surety is in effect an insurer.” He added: “Its contract will be construed as an insurance contract strongly party parties protected in favor most or thereby.” compensated surety In other words, is taken at his appellant’s word. Such construction of undertaldng liability does add to its but it makes liable to same extent as the administrator whose signature alongside appellant’s. that of the appellant, support of the contention which just stated, we have cites decisions which we shall now Rep. N. 172, 50 58 Ohio St. Culver, v. review. Culver purpose com- of a suit instituted for E. was 505, (L. Culver) an ac- pelling A. to render defendant Twenty-six years counting. of the institution before appointed his brother were suit the defendant and their deceased father executors of the estate of daughter. bequeathed was three and a his sons Twenty years filing heirs suit the four before family agreement. signed form a a contract in the of by wrought It of claims held settlement some against his sister and brothers and division defendant of their of the clauses of some of father’s estate. One agreement said: making purpose of a full and final “Now for the owing said claims, of all or demands to the settlement * * * by parties L. A. of the other either Culver any agreed or it is and understood that and all claims by owing any parties L. A. of aforesaid demands owing any by parties are or him to of the said Culver discharged regard hereby to the canceled and without and how in which claims demands arose or manner *” * * evidenced. are writing signed years after this was the de- Nineteen years fendant’s sister fifteen after the writ- died, ing brother, who had him the defendant’s served with joint During executor, as died. the lifetime those of two persons no one claimed that the defendant was still but after the death estate, executor of the of the second by them the suit under review was filed the widow joint brother who had served of the deceased as ex- The court held whatever ecutor. the defendant writing concerning the execution of the after had done property by him sisters’ his brothers’ done agent capacity not in the as their executor of father’s estate. his deceased 22 La. Ann. an v. action Hebert, Hebert npon Tbe administrator, an bond. administrator’s partition upon had, estate, order to facilitate tbe tbe request upon beirs, assets; tbe sold estate’s but tbe materially and conditions from terms different those permitted departure tbat law. Tbe court beld this agent him tbat, rendered of the beirs and tbe there- agent capacity sale fore, be made tbe and not in bis liability administrator. It was beld tbat there nowas undertaking. part Tbe of tbe decision says: appellant relies which tbe surety signs

“The tbe bond with reference to tbe regulating law the duties of tbe administrator, and against securing his own recourse tbe latter. He knows requires property that the law tbe administrator to sell or on for cash twelve months’ credit.” v. 50 Mich. 15 N. Abbott, 479, W. 559, was Durfee action an on a debt bond. Tbe defendants were the among executor and sureties. Tbe created, bis will bequests years. payable other in items, two two At appointed tbe time tbe executor delivered to each of legatees, promissory payable cash, tbe not but bis note years they accepted two hence, tbe notes in lieu legacies. legatees of tbe of tbe One was a minor, tbe age. Concerning the latter, other was tbe court beld acceptance of tbe that her note released the sureties. holding it In so said: ‘ principal lawful to with ‘It deal tbe was in such way change liability, tbe terms his

a as without of the sureties.” consent v. Schwartz,

Schwartz Conn. 271, 132 Atl. 461, legatees appeal by an ap- an two from was order which proved corrected tbe as administrator’s final account. only paid legacy was bat each $1,990.45,

Each admin- was credited $1,500 The other $490.45. par- legatee, apon the with the consent istrator, legatees par- price which the chase of basiness chasing mis- was free from from him. The transaction representations are conditions of the sale de- and the completely sastaining fair. In in the decision scribed approved final accoant, decision order said: illegality in the manner in no intrinsic “There was discharged obligation appellee his to dis-

which tribute respective appellants their in the shares to the apparently the bal- case, he held If, as estate. ance they might no cash, the form for distribntion legal apon payment its to them in have insisted doabt they might agree apon also with him some Bat tender. mntnally satisfactory having plan, sabstitate and, payments himself he is entitled to credit so, done it.” in accordance with made Searcy, Rep. Pyke (Ala.) 4 Porter’s we From v. qaote: perform mast administrator his daties

“The law, as defined and established:— obedience to the refers, that the condition of the bond it is to this may agreed any rale which be between himself not to a rale or one interested the estate. If creditor, agreed adjustment shoald be on between the admin- of and a variant from the and which creditor, law, istrator sarety’s go change scope of the ander- would to prejudice, sarety taking, probable his woald not compliance. well settled, a It is that the be bonnd to sarety discharged, creditor, if the withoat his con- ’’ give principal agrees time to the debtor. sent, controversy in had been sabmitted The claim to arbi- whereby payment in a manner the time tration as a arbitration was extended. resalt of the The decision sarety thereby released. that the was held

163 Casualty Atl. State, 49, v. 162 Md. Aetna Co. legatee by of the 45, was an action tbe state for the nse against surety The on the bond administrators. legatee. deceased the husband of One of was appointed upon her he administrators was was son; petition; responsible attorney. her The the other was a Pay- surety payment plead of the distributive share. by ment was made a check in the full amount of the legacy legatee. administrators handed to the signed The latter endorsed her check, release for shortly share and distributive returned the check to kept proceeds. her son. He cashed it and its The court legatee payment held that the had received and that by was she bound release. 166, 167

Estate P. Yorba, Cal. based upon by application purported ap an heir for the pointment of herself as administrator anof estate of years presentation a decedent who died 65 before petition. Shortly after the death the deceased’s will probated, an order was entered which settled the discharged. executor’s accounts the executor was appellant petition solely ground based her on the no for order the distribution of the estate was ever entered. court held otherwise that as fact, issue an addition said: as here the “Where heirs devisees have as- among to divide the estate sumed themselves, and their acquiesced has been division and acted many years parties all at interest, we think estopped ques- and their successors should be held validity disposition tion thus made.” Hardy, The facts Parker v. 200 Wash. 318, 93 (2d) appellant 431, which P. cites but does not other- mention, are so dissimilar to wise those before ns that

164 having yield nothing of that will review decision principles of bearing upon The us. issues before the employed indicated the as those law are the same it above reviewed. decisions

Tynan P. likewise 693, Kerns, v. 119 Cal. nothing ours that so dissimilar to arose out facts any light upon deciding our the case can shed said in presented problem. her In who creditor, that case a administratrix had been dis- claim a month after the charged, the review an instituted action under to secure proceedings. of the administration She annulment fraudulently administratrix had under- claimed that the of the estate as when truth $5,000 estimated value doing and that in so $25,000, she misled value making judge probate into the notice to creditors of ten months. She also claimed four months instead published purposely administratrix notice newspaper plaintiff which in a did to creditors saying: these contentions court brushed aside, read. appellant think that actual notice which “We issuing decedent, and the death of of letters had of the inventory, respondent, administratrix, car- put it notice circumstances sufficient to ried with appellant inquiry particular of the fact of complains, thus had notice and she ‘constructive she * ” * V fact itself appellant quotes part which the of the decision reads: stages proceedings, at all of the various

“At appellant of the estate, the final distribution least until adequate remedy ordinary had she exercised had an rights. diligence protection prudence her against culpable negligence Equity relieve or will not Ignorance alleged fraud will laches. inexcusable ** appellant’s laches, not excuse found that the It will observed that the court be plaintiff facts, of all the material whether was aware any irregularity publication in the or not there completeness, the sake of notice to the creditors. For appellant’s says following brief that the we add quoted support Tynan it the statement which from v. Layne, supra; v. Kerns, Hankins 48 Ark. 544, 3 S. v. 588, Belle 37 Or. 61 P. 821; Brown, W. Bren 1024; Rep. Alexander, 349, 19 9, ner v. 16 Or. P. 8 Am. St. 301; Pomeroy Equity Jurisprudence, pp. p. on 538-542and only plaintiff 2459. The other citations which the makes support in contention now under consideration are sections 24 C. J., three Executors Adminis will trators. We now take notice of them. Section 2562, p. says surety 1067, that a is not liable for acts of an performed administrator which were not within the scope p. of his official duties. Section 2571, 1071,states subject surety liability that the bond does not if wrongful by act was done the administrator “in ’’ capacity. some other and distinct It adds: property “It follows that, where the of the estate by, representative to, transferred and retained capacity, in another the sureties on the administrator’s liability.” bond are released from further Section 1072, declares: p. by any “The sureties are released conduct on the part persons agree- interested in the estate or by liability

ments the sureties’ would be altered acquiescence and increased. The of a distributee in a wrongful application by of trust funds an adminis- trator releases the administrator and his from sureties liability beneficiary, person to such and where the in- jured by representative default has the means satisfying voluntarily the claim in hands, his thereby discharges he it, surrenders the sureties to the against proceedings of such Laches extent means. ’’ may principal release the also sureties. authorities which we

Let us determine whether the just court indicate the circuit erred have reviewed attacked decree. when it entered the anything disagree with do not that we We believe think, We how- held the above-mentioned decisions. parallel in none of them those facts ever, wise obser- instant case. comes to mind the There by delightful Judge vation made Curtis Bok’s char- Judge reported: which is thus acter, Ulen, years five he found that this “After on Bench deepened. perhaps, than view, had was less a view It his For one of cases an accretion of consciousness. point pure there were ten ruled of law that was by personality that were determined the behavior litigants. made more law that was each year, important the less it seemed.” Herring, p. 146. Backbone of the Bok, equi- of deal with the Some the above authorities principle appellant’s brief table laches. men- of argue subject, the tions the same but does not tardily. plaintiffs’ suit was filed Our examination plaintiffs acted record us that the the satisfied required degree promptness. the by appellant made

The chief contentions are holding (1) a demand that its authorities Ham- mersly scope did not act within of his duties as Northrop bequest divided when he administrator attorneys; (2) and the heirs between when the accepted attorneys gave what the them heirs and did upon production of all insist the assets re- surety appellant Hammersly’s as on leased bond. then the circuit correct, If either of those contentions is court erred.

It be that the cases will observed appellant depends, one, unlike instant were free by an administrator distributees who had been deceived something accepting as their distributive shares into than the amount due. It is safe to assume that in less (especially Abbott, v. each of them v. Schwarts Durfee Casualty State) v. Schwarts, and Aetna Co. court appeared it would have reached a different result if had that the executor defrauded the distributee.

Although by ap- none of cited the authorities pellant dividing bequest declares that act be- performed tween an heir and one of if creditors, his scope an or administrator, executor is outside the powers, yet prepared his official duties and we are ordinarily to believe that such must be the case. We generally part think that it is no of an administrator’s misunderstanding official duties to intervene in be- legatee tween a and one of his creditors. If he does, dispute and if in settlement of the he divides the be- quest ordinarily two, between the his act should be position attributed to some other relation than his as representative. surety the estate’s In that event, the responsible his administrator’s bond would not be wrong if for his he committed one. proceeding going

In arewe to deal with the al- leged though split-up parties fully consum- validity. mated it. The fraud, course, of denied it Our goal, course, ultimate to determine whether Ham- mersly committed the fraudulent conduct in his re- administrator; lation as appellant unless did he the guilt. liable is not for his Directly case. of this facts to the revert let us

Now Hammersly made question bearing whether the capacity or of administrator split-up in his the we which five circumstances are relation other some representations controlling: (a) The false are believe Hammersly by made heirs were which deceived the aforementioned in the course associates his purpose of facilitat- meetings held for which ing words, in other estate; administration of Hammersly by spoken as ad- the false words were engaged ad- work of in his ministrator while he department, probate (b) of the The order ministration. by appellant, interpreted directed one- the estate to the beneficiaries —not to distribute complied it. Had he with half but all of estate, only partially, fully act his that order instead capacity performed in his official would have been discharge His administrative duties. and in of his compliance partial dif- it, think, we was of no kind, split-up (c) was made the course ferent purpose meeting called for the of ef- of a which was fecting bringing of the assets and of distribution administration of the estate. It is a com- a close the monplace that both the distribution of the assets and winding up per- of the administration are duties administrator and that formed are em- powers (d) conferred him. braced within Kerrigan gave paper slips to the heirs in meeting, September split up and which it is said bequest, only Northrop mentioned not items which Northrop bequest, part of the but had been also other belonging general properties to the estate and in which Northrop had no had interest. Mrs. Likewise the at- torneys no interest in those had items, for their 50 properties per the confined to cent share was Northrop. Thus we had intended for Mrs. see been slips, part proposed that a distribution least, the at order, the court’s of the assets in obedience with (e) split-up and the distribution were concurrent The September slips paper passed acts. when were the of may place. the distribution did not take It around, signed (the day be that some deeds were on that evi- vague upon subject), but dence that the distribution of the vault cash contents had to wait for days appellant or three until two the would lend its necessary signature. Thus we see that the distribution split-up parts and the of the same act. have

We mentioned the fact that the representations performing made their false while acts They gained of administration. their intimate knowl- edge the and of of of assets the value the latter while possession purpose the of various items of administration. bondholders’ committees of As- corporations of toria and of some the insolvent whose reports bonds were owned the estate sent their they representatives because were the gave turn, of estate. In heirs credence to the attorneys’ representations weight opinions to their they attorneys possessed because observed knowledge concerning intimate the bonds. hesitancy believing have no

We that since sly up split Northrop bequest Hammer concurrently general distribution of the pur with the assets for the facilitating pose latter and thus promptly more closing his administration the estate, his action was scope powers. within of his Both he and the heirs regarded why and we it, so know no reason we should any way. interpret it in other appellant further contends that the authori holding previously reviewed demand a that when

ties slips paper, were handed the which did the heirs duty, it was their if assets, mention all appellant’s liability upon bond, to retain the its cared Hammersly produce all of assets demand They argue all of them. heirs’ and distribute acquiescence speak up in their Ham failure to mersly’s Northrop bequest proposed division undertaking. Any holding, it from its other so released liability. they its alter and increase claim, would just presuppose the The mentioned that contentions attorneys, September on the effected heirs and previous agreement of an which altered their some sort relationship appellant’s affected the liabil- and which anyone ity. to not, We believe that went however, do meeting entering September purpose into for the of the existing altering any purpose agreements nor the for of purpose relationship. meeting for the The was called pos- having distribute the assets his purpose and the heirs there the session went receiving portions. heirs were Moreover, their upon split-up. agree position to the terms of a no they no information of this: had accurate reason is recovery Northrop of the value left of the what was we have both of the before, items. As said of those receipts and several the bonds wheat warehouse part bequest a had been sold had formed money spent. September been 19 and the had On knowledge we and, left unless heirs had no of what was they were evidence, have overlooked some item never certainty brought. It is a much wheat told how price they received for were never told that Accordingly, these farmers, bonds. to hold that four agreed compelled grope in had the dark, who were attorneys, split-up upon the the three terms of yield possessed triumph who accurate would data, legalistic especially art common That is over sense. did not true view of the fact that the tell they keep. proposed heirs be- what items We they testified the heirs told the truth when lieve they attorneys, trusting their trusted them, given. They way took what was assumed that operated. doing In the law other words, bargaining making agreements. no and were no very meeting they signed fact that at end of the receipts, agreements, strongly and not warrants the just made. It be statement will recalled in the appellant parties which the case, Culver relies, signed agreement. a formal In short, the at heirs, September meeting, acted the advice and attorneys. promptings of their It is our belief that no day agreements were made on that and that the heirs anything appellant’s never did which altered the liabil- ity upon undertaking. its by appellant all

In of the decisions cited the the court sought partici- to ascertain the real intention pants in the transactions under review. That is, to tried determine whether the individual who made acting capacity division of the assets was in his official as or in administrator some other relation. In each exactly instance the court viewed the transaction in the any layman intelligent same manner as would have inappropriate interpretations No done. strained or sought. legal principles the transaction No novel were employed, possible exception were of those in the Hebert case where the court was confronted with a Louisiana it statute which made unlawful for an any to credit

estate, assets, in the sale of its extend year. that is likewise than one We believe it more duty in the instant case to seek the real intention our meeting September participants held in the on whatever, hesitancy expressing have no 19. We everything by Ham- that which done conclusion mersly September meeting scope in the was within the powers and that the of his administrator, duties nothing ap- or increased the heirs which altered did liability undertaking. pellant’s its disposes of all contentions The above advanced appellant. have mentioned all of the We not au depends, gave upon which it but careful at thorities In no belief, each of them. our error adverse tention to appellant was committed when the decree was to the appear previously Lest it that the vouchers entered. signed, the heirs Ham mentioned, which which mersly appellant it to the before released the showed explain appellant, we misled the that those assets, property papers not the items of which did indicate proposed receive, the heirs should that it was appellant when vouchers were knew shown it nothing. it Moreover, heirs had received that does they signed appear the heirs knew when that those papers intended to show them to the appellant. cross-appeal judgment contends

The heirs’ presents $13,954.14. It increased three should be con- an item of concerns $508.35 One which tentions. computation an error a claim that based court determined the circuit made when amount judgment. The second claims any fee for the services not entitled re- restoring the estate the items of property sulted de- Northrop claimed the Mrs. which $13,391.59 worth By shortly prior includ- gave to his death. her ceased attorneys’ Northrop bequest ing these items amounts claim The third $6,695.79. fee was increased upon in the North- inclusion $6,750 is based parcels property worth rop bequest of real of two say in the be excluded heirs should which the $13,500, computation ’ per cent fee. We shall now consider the first of these three con- grows item tentions —the This item out of $508.35. Hammersly’s erroneously the fact that final account during totaled his “disbursements made administra- $13,396.85 tion” as true sum when the was $19,397.25. judge, determining judg- The trial the amount of the by Hammersly’s ment which he entered, was misled employed error and as the total of the disbursements It $13,396.85. will be from recalled an averment of the quoted complaint preceding paragraph ain that the prayer judgment only upon is based, the two irregularities have we taken notice, but also an averment that did not distribute heirs entire estate. In order to ascertain the judgment amount of the and whether the averment just noted was sepa- true, circuit court made two computations rate based data found in Ham- mersly’s records. computation

In the which we Avillnow review the judge (1) appraised trial showed that value of the (2) receipts estate was $90,005.87; and disbursements during administration converted that amount $87,- (the (3) 220.78; $10,303.66 increase in the value of the bonds) produces when to $87,220.78 added a total of (4) $97,524.44available for distribution; the amount by Hammersly distributed to the heirs and the afore- 174 (5)

mentioned McClure was $61,718.18; and the sum just mentioned when from $97,524.44 deducted leaves Hammersly $35,806.26,the amount for which failed to judge account. To that amount the trial added $4,000, attorneys’ creating the unwarranted of fee, total Hammersly chargeable. $39,806.26for which was computation yielded other a like result. It was based upon the that value of items which the records showed attorneys kept. the

Having chargeable that was determined computation with next ascertained the the $39,806.26, attorneys fee to were entitled amount of the which the per A contract. their cent determination under necessary proper was since the fee that amount was against eharge Hammersly’s the favor credit the fee one-half the size of was Since $39,806.26. computation proceeded bequest, Northrop Northrop re- have much Mrs. would how ascertain as total valid. The been sustained had the will ceived any bequest, been before deductions had her value computing In that $67,051.44. as was determined made, original appraised was added to $10,303.66 sum, Northrop the re- Mrs. was bonds. Since value necessary legatee, siduary $67,- to deduct from it was of adminis- expenditures made in the course all 051.44 judge expenditures $7,- trial added To tration. Northrop payable upon taxes the inheritance 087.28, aggregating bequest, $8,000 two sums but he deducted if the will had been incurred not have been which would expenditures making the deduction In sustained. Hammersly’s error in total- misled was the court only expenditures ing $13,396.85. and deducted his already Hammersly’s have were, we disbursements spent predecessors $2,385.21. His $19,397.25. shown, that amount is the $21,782.46, The total of the two place at the should have deducted which been are now concerned. which we

Continuing, computation ascertained Northrop have received net amount which Mrs. would thus of that or $54,567.31. $27,283.65 One-half seen, determined as amount of the fee. As we have took Deduct- $39,806.26. from estate ing from sum have $27,283.65 we $12,522.61, paid (sums which court added to the three $674.55 account) after the final and thus determined judgment $13,197.16 was the amount should be entered. cross-appellants’

In the the brief circuit court’s computations analyzed are and attention is to directed the erroneous use of the $13,396.85as amount of dis- during bursements whereas the administration, correct cross-appellants sum was $21,782.46. The show, how- judge’s computations trial ever, the made some deductions are which included in the sum $21,782.46 of adjustments judg- that when have been made the ment be should increased The brief filed $508.35. surety cross-appellants’ in answer to the brief does question accuracy any computations of adding which we reviewed nor of need $508.35 judgment to the in to order make it conform to the

demands of the account.

We are satisfied that must be to the $508.35 added judgment. attacked

It is seen from the above took they from the estate in fees to $4,000 which were not kept entitled and the entire in increase the value of ($10,303.66) the bonds if whereas had acted hon- estly they given would have to the heirs one-half the $5,151.83.

increase or The total of these two sums just $9,151.83. Bnt we have net shown that the amount for which to $13,705.51 failed account was ($13,197.16 computed by judge, plus $508.35, as the trial employing due to his mistake in amount erroneous disbursements). Therefore, the difference between $13,705.51 and or the amount $9,151.83, $4,553.68, is improperly by Hammersly taken from for the estate which we can no find record whatever. sum consists of one-half $9,151.83 $5,151.83, the increase plus bonds, the value of the unauthorized $4,000, attorneys’ fee. we that we three Thus, see have items: (a) bonds; One-half the increase the value of the attorneys’ (b) (c) $4,000 fee; unauthorized taken for have ex- the amount which we no $4,553.68, planation total of the is $13,705.51 whatever. The three employed judg- should be the amount which ment. contention of the cross- have the second said,

As we not entitle at- appellants the contract did is that causing Northrop any torneys Mrs. return fee property she $13,391.59 worth the estate gave shortly prior her to his death. the deceased claimed judge this sum of $13,391.59 included trial Northrop’s share, $54,567.31. It Mrs. net value of total of that sum, $27,283.65, one-half recalled bewill attorneys’ fee. the size of became ’ attorneys character serv successful value to the estate not are substantial and their ices Northrop by Mrs. heirs. claimed that questioned by gift property a to her were the de items these gift attorneys a that if in contended was ceased. Kelly completed prior Plympton it was by J. tended suit, and advice of threat Under his death.

m whereby prop compromise affected a was heirs, erty paid Northrop Mrs. and the estate was returned gift incomplete an Mrs. North $3,000. one, If rop, property under the have will, would received by residuary in favor. virtue of the clause her She specific residuary legatee. a both a believe We that no error court was committed when the circuit determining included these items the total value of Northrop’s bequest. Mrs. by

We are satisfied that no error is revealed third contention. It is a based contention that in determining bequest the value of the made to Mrs. Northrop, one-half of which became the amount attorneys’ parcels property fee, two of real situated in Portland should have been excluded. ofOne these was appraised as worth $11,500, and the other as $2,000. The heirs concede that at least the former would have property Northrop become the Mrs. if the will had been declared valid. Both, virtue of the distribution, property Kelly adjusting of L. became the who, J. gave distribution, note' in the by mortgage upon secured $6,750 denomination parcels. The these two sold the note and mortgage assignee mortgage to an who foreclosed the Kelly assignment defaulted. This when of error largely upon (a) three based contentions: the two tracts appraised (b) for more their than value; the at torneys wrongfully mortgage; (c) through took the Kelly lost the benefit the foreclosure of the distribution. at ’’ They argue equity good th conscience $6,750 judgment. be added to the We have should considered all these but contentions, the merits of are not satisfied possess any merit. 178 by disposes submitted of all contentions

The above judgment parties. follows that the decree and It the must the be increased to extent of the circuit court judgment the decree and increased, As thus $508.35. are affirmed. July respondent attorney’s ior lee oí allowed

Motion Attorney’s Fee Allowance or On 346) (127 (2d) P. provisions of Based the J.

ROSSMAN, plaintiffs § for C. L. the move an order A., O. 101-134, judgment sum of as an $1,000 in the the to include attorney attorney of their this fee for services in judgment court The of the circuit included court. attorney plaintiffs’ in for services of $1,500 resisting appellant, motion, in court. circuit says: provision giving

“The of our Code to the suc- against plaintiff in an action an insurance cessful company attorney penal nature, in its an fee is punish company designed for an insurance defending unjustifiably an action. Counsel for appellant that court not believe this will feel does just it not have a an instant that did well- for securing judicial determi- founded reason liability.” nation of its appellant fact then directs attention court allowed aforementioned sum circuit generous says “was that the award $1,500

the extreme.” appellant view that could

We share properly it a determination that was entitled to believe liability. by We this court of its are satisfied it was improper prompted no motives. But we do not penal the aforementioned statute is believe If nature. it must be defined or we would classified, compensatory. term it See (2d) 1 P.

2 A. L. R. Title Trust v. & Co. 517; Fidelity Guaranty Co., United & 467, 1 P. States 138Or. (2d) (2d) 1100,7 P. 805. We have no reason think ing circuit court’s award of $1,500 was un plaintiffs’ pleadings reasonable in amount. The repeatedly Marshaling attacked the circuit court. no evidence was small task.

Considering large ap sum involved this peal presented and the ap nature of the issues pellant, attorney it is our belief that an award $1,000 performed fee for the services in this court is reason able. The motion will, therefore, be sustained.

Case Details

Case Name: Hagey v. Massachusetts Bonding & Insurance

Court Name: Oregon Supreme Court

Date Published: Jan 15, 1942

Citation: 127 P.2d 346

Court Abbreviation: Or.