Treadwell v. Nickel

Plaintiff brought suit for $300,000, alleged to be the reasonable value of his services as attorney for the defendants in connection with various inheritance and federal estate tax matters growing out of the trust created by Henry Miller, and covering a period of nearly six years from October, 1916, to August, 1922, and including, also, various matters in -connection with the administration of the estate of Henry Miller. The case was tried before a jury upon the issues raised by plaintiff’s complaint, his amended bill of particulars and defendants’ answer, and resulted in a verdict and judgment awarding plaintiff the amount prayed for and costs, from which judgment defendants have appealed.

In the year 1907, plaintiff was employed “to act as general counsel for” Miller & Lux Incorporated, at a designated monthly salary. The contract of employment is embodied

Prior to April 17, 1913, Henry Miller was practically the sole owner1 of the capital stock of Miller & Lux Incorporated, a Nevada corporation. On the last-mentioned date, by a deed of trust he transferred this stock to his daughter, the defendant Nellie Miller Nickel, and her husband, the defendant J. Leroy Nickel, in trust, they .to collect the rents, issues and profits thereof and pay the income therefrom to Henry Miller during his life, and after his death to sell sufficient stock to pay certain specific bequests, aggregating about $300,000, the income from the property to be paid to

Henry Miller died on October 14, 1916, being at the time of his death a resident of the state of California. At the instance of the defendants, plaintiff filed the will for probate, recorded the deed of trust, and assumed entire charge of all legal matters and litigation connected with the estate and the trust. The estate of Henry Miller, exclusive of the Miller & Lux stock, which was appraised by federal and state officials in varying amounts up to $48,-000,000, and which had been estimated in 1910 by Mr. Miller himself at about $32,000,000, 'Consisted of three pieces of land and certain cash, all appraised at approximately $34,000. The state of California made claim against Miller’s estate for inheritance taxes on a property valuation of $40,000,000, on the ground that the deed of trust was made in contemplation of death. The state of Nevada likewise contended that an inheritance tax was due upon the shares of stock of Pacific Live Stock Company, a California corporation owning a large amount of real and personal property in the state of Nevada, all of the stock of that company being held by Miller & Lux Incorporated. Federal estate taxes, also, were imposed upon the property in the sum of nearly $4,000,000, based upon an appraised value of over $39,000,000. Through failure to file a return, a penalty was levied in an amount equal to half of the tax, which, together with interest and a claimed additional penalty, brought the entire tax to over $6,500,000, demand for the payment of which was made by -the collector of internal revenue, with the threat that unless the tax was paid within ten days the government would proceed to seize and sell the property without suit. Plaintiff expended a large amount of time and labor in contesting the various tax claims and in an effort to have their validity determined, the litigation extending over a period of nearly six years. Plaintiff contends that through his efforts there was eliminated from the amount of taxes, interest, and penalties claimed by the states

When the estate of Henry Miller had been finally distributed, and the inheritance tax litigation was practically concluded, plaintiff requested Mr. Nickel to consider and definitely fix his compensation in the matter. Nickel replied, after considering the matter with others, that it had been decided, as a proper recognition of plaintiff’s services in connection with the estate litigation, to present him with the sum of $50,000. Plaintiff declined to accept this amount, ' stating that in the estate tax matters it had become necessary to fix what would be a fair compensation for his work in that connection in order that the estate could get the benefit of the amount of such fee as a deduction. This amount, $300,000, he considered very conservative, and it was his view that an amount approximating that sum should be paid him. There was some further correspondence between the parties relative to the fee, and no amount being paid, plaintiff brought this action.

Although the record brought here is voluminous, consisting, as it does, of many hundreds of pages of testimony, the ease is a very simple one. It is alleged in the complaint

The important question in the case is whether the services rendered by plaintiff in connection with the estate and trust of Henry Miller were covered by his retainer as general counsel for Miller & Lux Incorporated, under the contract of May, 1907, and “consisted of business and service which plaintiff was called upon to render and which was placed in plaintiff’s hands by defendant J. Leroy Nickel as president and managing officer of said Miller & Lux Incorporated”; or whether the services were rendered under an entirely separate and distinct contract with the defendants. We feel that no good will be accomplished by attempting a minute review of the long transcript of the evidence submitted in the court below. At the outset of the trial plaintiff sought

[1] The parties introduced oral testimony, which is sharply conflicting on every material point, and certain documentary evidence. The ease of the plaintiff rests largely upon his own testimony and evidence of acts of the parties extending over a period of fifteen years. Appellants contend that the evidence does not support the verdict. It requires only a casual inspection of the record to disclose that not only is there a conflict in various material parts of the evidence, but that widely divergent conclusions may be drawn therefrom. On a careful reading of the voluminous record we are most strongly convinced that the case is one in which the findings of the jury are based upon reasonable inferences drawn from the facts proved with such legal sufficiency that the verdict on the facts cannot be disturbed on this appeal.

The plaintiff testified that some time after his employment by Miller & Lux certain transactions took place which, he asserts, conclusively establish the fact that the parties recognized and construed the contract of employment as not requiring the

When Henry Miller died, plaintiff at once conferred with Mr. Nickel about the business that would arise in connection with the estate. There is not, and cannot be, any dispute about the fact that the whole matter of attending to the legal business relating to the estate and trust of Henry Miller was confided to plaintiff and placed in his hands by Mr. and Mrs. Nickel. Mr. Nickel testified that while he made no formal request of plaintiff that the latter attend to the probate of Miller’s will, he deemed it proper that Mr. Tread-well should attend to the matter, as he had been attending to all the business of various interests, including the Las Animas company and all other corporations in which the estate was interested; that in his view the business connected with the estate was merely a continuation; that the interests were identical, and that after the stock in the corporations had been transferred to the trustees the business continued along in exactly the same manner as before. The plaintiff testified that he interviewed Mrs. Nickel to get certain data concerning the affairs of the estate, and sought to impress upon her “that she had a very grave responsibility. She brushed it aside and said, ‘No, I am going to leave it all to Mir. Nickel. ’ ” Nothing was said at this time by anyone

The plaintiff relies upon what he terms a number of significant facts established in the record, and the inferences to be drawn therefrom, which, he argues, tend strongly to corroborate his testimony and to support the finding of the jury that the extraordinary services rendered by him had no connection with the business of Miller & Lux, or its stockholders, but were rendered in pursuance of a separate and independent contract made between the plaintiff and the defendants, and which finding is reflected in the verdict. Whatever may have been the relation of the plaintiff to Henry Miller, while living, or to his personal affairs, such previous relations were severed by Miller’s death. Upon that event the defendants entered upon a new relation to the property of the trust and of the estate of the decedent, for they succeeded to such property, both in the trust and in the estate. The states of California and Nevada and the United States were asserting liens against this property for taxes, which liens sprang into life upon Miller’s death, when they for the first time became claims or specific liens, not upon any property of Miller & Lux Incorporated, but upon the property of the trust and estate to which the defendants had succeeded. Defendants were the two persons in existence who were most interested in disputing these tax claims. It would seem only natural and proper, as was suggested in the oral argument in this case, that the plaintiff, who had been adviser of Mr. Miller in legal matters for many years, and fully understood the nature and extent of his property, and who, of all persons, was probably best informed as to the nature of the trust created by Miller and the testamentary disposition which he had made of the

In all of the proceedings relating to inheritance and estate tax matters the defendants consistently claimed credit for attorney’s fees allowable in the matter of the estate of Miller, the amount of such fees to be deducted from the value of the estate before the taxes were computed thereon. In the proceedings in connection with the demand of the state of California the defendants claimed and were allowed a credit in the sum of $161,195 for attorney’s fees. They also presented a verified claim before the internal revenue commissioner for an abatement and deduction of attorney’s fees before the federal tax should be assessed, computed on the compensation allowed executors and administrators and their attorneys by sections 1618 and 1619 of the Code of Civil Procedure. The federal tax matter was heard before the master in chancery, and a claim was made by the defendants for an allowance of an attorney fee in the sum of $300,000. The respondent points to the magnitude and value of the services rendered by him in connection with the estate and trust of Henry Miller, in support of an argument that to pretend he was to render such services in addition to all the services he was called upon to render to Miller & Lux for an annual salary, which only approached $20,000 during the last years of his connection with the corporation, is to invoke an absurdity. There is much merit in the suggestion.

Appellants’ position is that the plaintiff was employed in October, 1916, to render the services in suit in exactly the same manner as he was customarily requested to attend to business admittedly covered by his salary paid by Miller & Lux Incorporated. They contend that the facts conclusively show that the services were rendered by plaintiff as general counsel of Miller & Lux under his contract of

[2] A contract in writing may be altered by an executed oral agreement. (Civ. Code, sec. 1698.) If there was a subsequent oral agreement modifying the contract between the respondent and Miller & Lux, its object was to exclude from the terms of the employment the requirement, and to set at rest any contention that by virtue of its provisions respondent should also serve the stockholders in addition to attending to the legal business of the corporation. If thereafter the relations of plaintiff and Miller & Lux were governed by such oral agreement, and its object was fully accomplished, the agreement became executed and worked a modification of the original contract of employment. (Civ. Code, sec. 1661.) In such event plaintiff was in position, unhampered by any arrangement with Miller & Lux, to enter into an independent contract with the defendants for the performance of such services as they, individually, might require of him in connection with the trust and estate of Henry Miller, and for an agreed or an implied compensation. [3] Again, a contract is extinguished by its rescission, which may be had by consent of the parties (Civ. Code, secs. 1688, 1689), and a parol -agreement to rescind a con

[4] A parol agreement to abandon or rescind a written contract may be inferred from the acts of the p-'-ties. (Green v. Wells & Co., supra.) Whether or not the whole conduct of the respondent in attending to the affairs of Miller & Lux, and in conducting their litigation, and what he did in his relations with certain stockholders of the company tended to contradict or to support the evidence of plaintiff that there was an abandonment and rescission of his contract of employment by Miller & Lux was an issue of fact for the jury to decide. All of the circumstances under which the employment of respondent by the appellants was arranged were placed before the jury in extenso. It had before it all the antecedent relations of plaintiff and Miller & Lux and these defendants, and what was done by them after the alleged abandonment of the contract. Whether or not, in view of the situation of the parties and their relation to the entire transaction, it was likely or probable that they contracted in the manner claimed by respondent was the peculiar province of the jury to determine. We are not disposed to attempt a further narration of the evidence, or to engage in a discussion as to its weight or significance. The transcript discloses that “the case was regularly argued

It is the contention of the appellants that the trial court committed prejudicial errors in its instructions to the jury concerning the contract of 1907, and concerning the extent and value of plaintiff’s services. Primarily, appellants’ claim is that the court erred in denying their motion for a directed verdict; in refusing two peremptory instructions requested by them directing the jury to find in their favor; and in -giving -a number of instructions submitting to the jury the question whether or not the contract of 1907 between plaintiff and Miller & Lux Incorporated had been changed or rescinded. In support of this claim appellants rely upon the argument made and the authorities cited to uphold their contention that'the evidence does not sustain the verdict. What we have already said, therefore, disposes of these primary objections to the instructions.

[8] Appellants take exception to an instruction (XL) by which the court told the jury that whether or not there was an express agreement by the defendants to pay plaintiff the reasonable value of his services was a question of fact to be determined by it “from all the evidence in the ease.” The instruction was properly given. There was evidence which would support an inference that the defendants expressly agreed to pay plaintiff. [9] An express contract is one the terms of which are stated in words (Civ. Code, sec. 1620), but such a contract need not be in writing. [10] When the contract relied on is oral, its interpretation in the first instance is a question of fact to be determined by the jury. (Smyth v. Tennison, 24 Cal. App. 519 , 521 [ 141 Pac. 1059 ].) The question, therefore, was one of evidence, and it was for the jury to determine from the facts and circumstances proved, including, of course, the con

[11] In one of the instructions (XLa), the jury was told that in determining whether there was any other1 or different contract than that of 1907 it might consider all the circumstances “including the relative amount of work before and after that contract and before and after the death of Henry Miller, and all acts and declarations of the parties during the performance of said services.” In another instruction, concerning the allegation in the answer that the defendants believed that the services in controversy were included by the terms of the contract of 1907, the court instructed the jury that in the determination of that allegation it might consider all of the evidence in the case, “including all of the communications either oral or in writing passing between the parties and -all of the acts of the defendants with relation to the fees of said attorney in connection with the estate and trust of Henry Miller.” It is contended by the appellants that these instructions are objectionable as singling out -and bringing into prominence certain isolated facts and thereby, in effect, intimating to the jury that special consideration should be given to those facts. No reason appears why the court should have singled out portions of the evidence and specially directed that it might be considered. Under the general instructions contained in the full and comprehensive -charge, the jury must have known that such evidence with all other evidence of-facts and circumstances in the case was to be considered by them. Instructions which are framed solely for the purpose of and which simply have the effect of emphasizing some particular portion of the evidence are not to be commended, and are properly refused. (Still v. San Francisco Ry. Co., 154 Cal. 559 , 572 [ 129 Am. St. Rep. 177 , 20 L. R. A. (N. S.) 322 , 98 Pac. 672 ].) Such an instruction was denounced as objectionable in Estate of Martin, 170 Cal. 657 , 672 [ 151 Pac. 138 ], but it does not appear that the reversal in that case was had because of the improper instruction.

[12] By another instruction the court told the jury that the issues of fact for its determination were presented by the denials made in the answer to the allegations of the complaint and by the affirmative -matter pleaded by the

[14] Plaintiff called a number of experts to testify to the value of his services. It is contended by appellants that the trial court erred in refusing to give an instruction requested by them to the effect that the jury should disregard the testimony of an expert witness unless it believed that all the material facts, upon which the hypothetical question propounded to the experts was based, were true. The instruction was properly refused. [15] Expert testimony is to be given the weight to which it appears in each case to be justly entitled. The law makes no distinction between that kind of testimony and evidence of other character. (Rolland v. Porterfield, 183 Cal. 466 , 469 [ 191 Pac. 913 ].) The witness to whom the hypothetical question is addressed assumes the facts stated to be true, and bases his answer upon the assumed ease. The opinion of the witness must, therefore, be brought to the test of the facts in order that the jury may judge what weight his opinion is' entitled to. (Estate of Dolbeer, 149 Cal. 227 , 252 [9 Ann. Cas. 795, 86 Pac. 695 ].)

The appraised value of Henry Miller’s estate which was actually probated was $36,878.44. The statutory attorney’s fees for the usual conduct of the administration of such an estate amount to $1,067.16. (Code Civ. Proc., sec. 1618.) In his amended bill of particulars plaintiff claimed $208,-776.13 for “ordinary services in the matter of the estate and trust of Henry Miller, appraised at the sum of $41,489,226,64, computed according to section 1618 of "che Code of Civil Procedure. ” Appellants requested the trial court to instruct the jury that plaintiff could not recover fees for ordinary services to the Miller trust, as distinguished from the estate, and if entitled to recover at all could be allowed only the sum of $1,067.16, and that there was “no evidence that the plaintiff performed any service for the trust for which the law would allow compensation computed according to section 1618 of the Code of Civil Procedure.” The instruction was clearly misleading and the .trial court properly refused

The plaintiff called a number of attorneys, who were qualified as experts, to testify to the value of his services. The opinions of these witnesses were expressed in answers to a hypothetical question containing the plaintiff’s own

[18] The question does assume facts at variance with the evidence introduced by the defendants, and, of course, in disagreement with the construction placed upon plaintiff’s evidence by them. It was skillfully drawn, as hypothetical questions usually are, to meet the views of the party propounding it. Considerable latitude must be allowed in the choice of facts as the basis upon which to frame a hypothetical question. Every hypothesis contained in the question should have some evidence to sustain it. But while this is true, it is also the rule that it is not necessary, in framing the question, to include a statement of all the evidence in the case. The question may be framed upon any theory of the questioning party which can be deduced from the evidence, and the statement may assume any facts, within the limits of the evidence, upon which the opinion of the expert is desired. It may omit any facts not deemed by the questioner material to the inquiry. (10 Cal. Jur., p. 966, sec. 223.) It is the privilege of a party in such cases to assume, within the limits of the evidence, any statement of the facts which he claims the evidence justifies, and have the opinion of experts upon the facts thus assumed, subject to the limitation that the question shall not be unfair or misleading. (Thompson on Trials, secs. 606-610, People v. Hill, 116 Cal. 562 , 567 [ 48 Pac. 711 ].) Measured by these considerations, the question here was not objectionable.

The second objection urged to the hypothetical question is

It is next contended that the hypothetical question did not make it clear that certain services rendered in connection with a bond issue of Miller & Lux Incorporated were performed for the 'Corporation and not for the defendants. We have no doubt that the learned lawyers to whom the question was submitted clearly understood that the services were performed for the corporation. Objection is now made that the question included facts the evidence of which had been stricken from the record. Respondent admits such to be the fact, but contends that no objection on that ground was made when the question was asked. The objection was that “there is no evidence” of the fact, which would be a sufficient objection, for if the evidence on the fact was stricken from the record, there certainly would be no evidence on the point. The matter stricken out, however, related only to what another attorney told plaintiff concerning the attitude of the newspapers and the public toward the Miller Estate tax litigation, and seems inconsequential in the light of the real issues involved in the case.

The remaining objection pointed out is merely a 'Controversy as to whether plaintiff or another attorney should have credit for the line of conduct of a portion of the tax litigation. No matters have been pointed out to us which amounted to a substantial error in the ruling of the trial court on the hypothetical question.

Appellants complain that the trial court gave contradictory and inconsistent instructions. At the request of the defendants, the court instructed the jury that the contract for legal services, entered into between plaintiff and Miller & Lux in 1907, was plain and unambiguous, and that, unless it had been changed or abandoned, it included the services1 in suit and prevented a recovery by plaintiff in this action. At the plaintiff’s request, it instructed the jury that even though the contract of 1907 was in effect at the time of the alleged employment of plaintiff by the defendants, such contract would not prevent the defendants from entering into

Appellants contend that these instructions are contradictory and conflicting on a most material issue of the case, and that the action of the trial court in giving them constituted prejudicial error calling for a reversal of the judgment. We do not agree with this contention. The situation is clarified when it is remembered that Miller & Lux Incorporated is not a party to this action. We are not now considering what, if any, mutual obligations or restrictions rested upon plaintiff and Miller & Lux Incorporated by reason of the contract of 1907, at the time it is said plaintiff and these defendants entered into the contract here in question. The defendants were not parties to the contract of 1907. There was nothing in its terms or provisions which erected a bar against, or purported to prohibit them from individually entering into an independent engagement with plaintiff, unaffected by anything in the existing relations between plaintiff and Miller & Lux, and agreeing to pay him for his services. The vital question in the case is, Did they do so ? Appellants say they did not, and have attempted to justify their denial by setting up a contract to which they were not parties, but under which they assert plaintiff rendered the services at the instance of, and as chief counsel for Miller & Lux Incorporated. The trial court of its own motion, and again at the instance of plaintiff as just indicated, instructed the jury that a main issue was: Under which of the contracts set forth in the pleadings in the case were the legal services in question performed? By other instructions (XIX to XXIV, inclusive), the court very properly submitted to the jury the question whether or not

The judgment is affirmed.

Richards, J., Lawlor, J., Lennon, J., Seawell, J., Myers, C. J., and Houser, J., pro tem., concurred.

Rehearing denied