Court Opinion

ID: 5449625
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:17:05.916283+00
Date Added: 2024-06-11T08:32:20.138489
License: Public Domain

BEATTY, C. J., dissenting.
I dissent from the order denying a rehearing in this case, because I think an erroneous construction has been given to the contract of the parties and a precedent established which can never fail to work an injustice as often as it is followed.
When the defendants employed the plaintiffs to perform the necessary legal services incident to the administration of the estate of which they were executors, without any express agreement as to compensation, there was, of course, an implied agree*663ment to pay the reasonable value of the services. But if it can be justly inferred from the nature of the transaction that they had each in mind, and expected to be governed by, a particular rule or method of ascertaining such reasonable value, then that is as much a term of the contract as the agreement to pay. The contract of the defendants was like any other implied contract, and their promise such, and such only, as can be reasonably inferred from all the circumstances. If I order a sack of flour from a grocer, the promise which the law implies is that I will pay the reasonable value of the flour as determined by its current market price at the time and place of delivery, and this because market price is the generally accepted standard of value, and is, therefore, presumed to have been the thing intended and understood by buyer and seller. But suppose current market price not to be the accepted standard of value. Suppose, for instance, that some board or officer is invested by law with the power to ascertain and fix the value of provisions. In that ease the only promise the law could imply from a simple order for the delivery of a sack of flour would be a promise to pay its value as determined by such board or officer. Now, to apply this illustration to the case in hand: When an executor, administrator, or other trustee employs an attorney to serve him in his representative capacity in the care and due administration of the subject of the trust, they both know that the services are to be rendered, not for the personal advantage of the trustee, but solely in the interest of the beneficiaries of the trust—not for the executor, but for the distributees of the estate. They both know that it is not just that for such services the trustee should pay out of his own pocket a sum in excess of that allowed by the court in the settlement of his accounts; and the attorney knows perfectly well that the trustee does not expect or intend to be held to a personal liability beyond the sum allowed by the court. They both know that the reasonable fees of the attorney are a charge upon the trust fund, because it is made the duty of the chancellor, or probate court, in settling the accounts of the trustee, to ascertain and allow such reasonable fee as a preferred claim. By express mandate of the statute (Code Civ. Proc., sec. 1616) it is made the duty of the probate court, in settling the account of an executor, to *664allow—and necessarily to ascertain—his reasonable expenses in the care, management and settlement of the estate, including reasonable fees paid to attorneys for conducting the necessary proceedings or suits in court. The amount so ascertained is all that the executor can take out of the trust fund to reimburse himself, and, if he may be compelled by the attorney in another forum to pay a larger sum, he must lose the difference. Now, this being the law, known to the parties, and vitally affecting the relation upon which they are about to enter, the question to be determined is, What understanding is to be inferred—what promise implied—as to the rule and mode of ascertaining the attorney’s compensation in the absence of an express agreement? To me it seems perfectly clear that the only reasonable inference is that the attorney expects to receive, and the executor expects to pay, only that reasonable compensation which the probate court in the settlement of the executor’s account shall ascertain and allow, and if such is their understanding such necessarily is their contract.
Of, course, no attorney would be bound to accept the employment on those terms, but if he is unwilling to do so it is for him to insist upon an express agreement of a different character. The duty of having the agreement made express, if he intends to hold the executor to a personal liability for a sum in excess of the court’s allowance, devolves upon him especially, because from the very nature of the transaction he must know that the executor cannot intend deliberately and advisedly to incur an indefinite and perhaps serious personal liability for the sole benefit of heirs and legatees.
It is no argument against this position to say that the executor cannot make the estate liable to the attorney, and that the allowance on account of the attorney’s fees is made, not to the attorney himself, but to the executor. The question is not as to the power of the executor to subject the estate to a liability, but as to the extent and measure of his own liability. It is conceded in the opinion of the court, and is unquestionably true, that the executor can, by express stipulation, limit his liabilitv to the amount allowed him out of the estate; and the only question we have to determine is, whether, in the absence of such express stipulation, the law will imply the same thing. The *665question, in other words, is whether the law will adopt a presumption which in nine cases out of ten will correspond with the fact, or a presumption which in nine cases out of ten will be directly contrary to the fact.
Moreover, this proposition that the executor cannot subject the estate to a liability to the attorney, and that the allowance of attorney’s fees is made to the executor and not to the attorney, in addition to being an utterly false quantity in the discussion here, is all the more deceptive because while it is formally and technically true it is substantially false. If it is the duty of the probate court to apply the funds of the estate to the payment of the fees of the attorneys employed by the executor, and if the fees allowed to the executor merely pass through his hands to the attorney, the proposition that- the executor cannot subject the estate to the liability has nothing substantial to rest upon.
The decision in Dwinelle v. Henriquez, 1 Cal. 387, is not in conflict with the conclusions above stated. All that is there decided is, that by a general retainer the administrator of an estate incurs a personal liability. That, however, is not the question here. Concede the personal liability of the executors, the question still remains, How is the extent of that liability to be determined? My contention goes no further than this: That it is tó be determined by the express stipulation of the parties, if it is express, and, if not express, by the tacit understanding which ought to be inferred from the nature of the transaction—an understanding, that is to say, that the attorney will claim no more than the probate court will allow; that he will not subject his own client to a loss and damage which he well knows he does not intend to incur.
The court, in noticing the argumentum ab inconvenienti urged by counsel for respondents, suggests that the hardships involved in the rule here announced are more apparent than real, because, they say, the executor or administrator will commonly be able to procure counsel of ability who will agree to render their services for such compensation as the court will allow from the estate. This is undoubtedly true. I have no doubt that counsel of ability do commonly render their services for the amount which the court allows, and that without any ex*666press agreement, and without any idea that in accepting such allowance they are doing more or less than they and their client understood they would do, though nothing was said on the subject. The suggestion of the court, however, does not meet the real difficulty. The executor, or administrator, though he can protect himself against a personal liability by an express agreement, will rarely think of doing so, simply because he will not he aware of the necessity of making an express agreement until it is too late.
Besides the injustice to individuals which must occasionally result from the rule of this case, a more serious mischief is involved. Henceforth every executor or administrator who is not protected against a personal liability beyond the amount allowed for attorneys’ fees in the probate court, will be compelled, in order to avoid risk of loss to himself, to urge a large and liberal allowance, for fear that in another forum a still higher estimate may he pleaded upon his attorney’s services, for which he will Be answerable. Instead of being free to protect the estate against an exorbitant demand, he will have an interest in sustaining it. Considerations of public policy, therefore, no less than of justice, require the construction of this contract for which the lespondents contend.
I think the judgment of the superior court should have been affirmed.