Hines v. Copsey

This is an appeal taken by Frank T. Hines, Administrator of Aeterans’ Affairs, from a portion of an order of the Probate Court of Mendocino County, settling the thirteenth annual account of the guardian of the estate of Raymond Copsey, an incompetent person. Raymond Copsey, the incompetent person, was a veteran of the World War, having enlisted on September 7, 1917. His entire estate consisted of funds derived from the government of the United States, in pursuance of the World War Insurance Act, and other federal statutes providing for federal aid to soldiers who served in said war, which estate had been administered since June, 1922, by his sister, Lena Copsey, under letters of guardianship issued out of said probate court. In August, 1935, she presented to said probate court her thirteenth annual account in which she sought to have the Bank of America National Trust and Savings Association appointed as guardian in her place and stead, and also sought to have the court fix and determine a reasonable allowance monthly for the support of the aged father and mother of the incompetent. The said account set forth in detail the various sums of money received from the United States government at the rate of $100 per month as compensation payments, and the sum of $11,945, received in pursuance of the allowance on June 6, 1935, of a claim for permanent disability benefits under a World War insurance certificate for total permanent disability at the rate of $57.50 per month from June 19, 1918, and paid in a lump sum to the guardian of the incompetent person by the United States government. The account also showed the total disbursements for the period subsequent to the last annual accounting of $1,022.69, which left a balance of $17,581.36 in the hands of the guardian. The guardian petitioned in said account that the court fix a reasonable fee to be paid to her as guardian, and also that the court fix a reasonable fee to be paid to her attorney, A. L. Wessels, for his ordinary services as attorney for the guardian since the date of the filing of the previous annual account, and also fix and determine “a reasonable sum to be paid to A. L. Wessels, for his extraordinary services as attorney for said guardian, since her appointment as guardian aforesaid on June 9, 1922, in taking all necessary proceedings, in performing all necessary acts, in preparing all necessary forms

In Guardianship of Copsey, 7 Cal. (2d) 199 , 200 [ 60 Pac. (2d) 121 ], the question was presented to this court, upon a motion to dismiss the appeal, of whether the administrator of veterans ’ affairs had the right to take an appeal from such order. It was there hold affirmatively that the administrator of veterans’ affairs was a party aggrieved with a right to

Appellant contends that inasmuch as section 551 of the World.War Veterans’ Act (38 U. S. C. A. 551) fixes the fees which an attorney can receive in matters pertaining to recovery of war risk insurance matters (i. e., at a sum not to exceed $10 for assistance in the preparation of the necessary papers in any application to the veterans ’ administration or, if suit be brought, such sum as a part of a judgment-recovered as the court may allow, not exceeding 10 per cent thereof, and provided that any attempt to solicit, contract for, charge, or receive any fee or compensation, except as so provided, is a misdemeanor), the allowance by the court in this proceeding of a fee of $4,000 to an attorney for services performed in the procurement of the payment of a permanent disability benefit in the sum of $11,945, and $57.50 for the remainder of the life of the veteran, was clearly exorbitant and invalid, and against the express provisions of said section.

Said section 551 of title 38 of the United States Code reads as follows: “Amount permitted to be paid agents or attorneys : SOLICITATION, ETC., OP UNAUTHORIZED PEES OR COMPENSATIONS : punishment. Except in the event of legal proceedings under section 445 of this chapter, no claim agent or attorney except the recognized representatives of the American Red Cross, the American Legion, the Disabled American Veterans, and Veterans of Foreign Wars, and such other organizations as shall be approved by the director shall be recognized in the presentation or adjudication of claims under Parts II, III, and IV of this chapter, and payment to any attorney or agent for such assistance as may be required in the preparation and execution of the necessary papers in any application to the bureau shall not exceed $10 in any one case; Provided, however, That wherever a judgment or decree shall be rendered in an action brought pursuant to said section 445 of this chapter the court, as a part of its

The authority of Congress to fix fees for attorneys on claims against the government, as set forth in section 551, title 38 of the United States Code, has been upheld by the Circuit Courts of the United States. {Lopez v. United States, 17 Fed. (2d) 462; Purvis v. United States, 61 Fed. (2d) 992. See, also Welty v. United States, 2 Fed. (2d) 562.) And in Margolin v. United States, 269 U. S. 93 [ 46 Sup. Ct. 64 , 70 L. Ed. 176 ], the United States Supreme Court affirmed a sentence imposed by the District Court on an attorney for receiving a fee of $1500 as compensation for services in preparing and presenting to the veterans’ bureau a claim for insurance money under the War Risk Insurance Act. The above cited eases deal with cases of competent veterans, and establish beyond dispute that Congress in order to protect veterans from extortionate fees for the performance of services by attorneys and to see that the money allowed to war veterans in insurance is properly and economically administered possesses the constitutional power to regulate charges that can be made for services rendered to applicants for compensation under the War Risk Insurance Act. In view of the fact that incompetent persons are made the special wards of the court, and it is the duty of the court to protect them and their property {Guardianship of Copsey, supra), it would seem to follow as a matter of reason and logic that attorneys’ fees, in excess of the schedule set out in section 551, title 38, United States Code, as permissible to be allowed an attorney for a competent veteran, could not be validly allowed to the attorney for the guardian of an in

However we question whether the fee allowed in the instant ease was justified under the facts before the probate court. The final account set out in minute detail the nature of the work performed by the attorney in the instant case, and the findings of the court upon which the allowance was based, as contained in the order approving the final account, follow the allegations of the petition closely. It clearly and conclusively appears from the record that the $4,000 attorney’s fee was allowed for extraordinary services performed solely in the recovery for the estate of the incompetent of said sum of $11,945 and the future allowance of $57.50 during the lifetime of the incompetent veteran. It further appears that no action was ever brought to recover said amount, but the same was allowed and paid to the guardian upon the presentation of a claim by her to the Veterans’ Administration. Under the terms of section 551, title 38, of the United States Code, it will be noted that in an action brought to recover permanent disability benefits, the court in such action may allow reasonable attorneys’ fees not to exceed 10 per cent of the amount recovered. While we have held that the probate court was not limited by this provision of the United States Code to the amounts therein provided to be paid attorneys in proceedings to collect thereunder, yet in our opinion, this provision does furnish some reasonable standard which courts should follow in allowing attorneys’ fees in cases of this character. The fees allowed in this case by the court were almost four times as large as those permitted by section 551, title 38 of the United States Code in cases where actions were instituted and prosecuted to judgment. Here, as we have seen, no action was brought and the amount was recovered upon the presentation of a claim to the Veterans’ Administration. As a general rule the work and labor involved in collecting an account without suit is far less than where suit is instituted and prosecuted to judgment. That Congress appreciated this view is shown by the provisions of said section 551 wherein the fee to be charged for the preparation of a claim under the World War Veterans’ Act was fixed at =$10, but in case of

We are not unmindful of the rule that the fixing of attorneys’ fees in estates of incompetent persons is largely in the discretion of the probate court. We cannot, however, reconcile the action of the probate court in this instance with a proper and reasonable exercise of the discretion vested in said court. The amount so fixed is so clearly in excess of a proper fee for such services that we think it could only have been allowed through an inadvertence on the part of the trial court, due perhaps to the fact that the allowance was unopposed. It should perhaps be noted here that the final account, a copy of which was forwarded to the administrator of veterans’ affairs, contained no statement of the amount of attorneys’ fees sought to be allowed, but only prayed for the fixing of a reasonable attorney’s fee. The absence of any knowledge that a fee so disproportionate to the value of the services rendered would be asked or allowed may well account for the failure of the administrator of veterans’ affairs to appear in said matter. While we must concede in the face of the decision of the United States Supreme Court in the case of Hines v. Stein, swpra, the right of the state court to fix reasonable attorneys’ fees for services rendered to the guardian of an incompetent veteran, which fees need not coincide with the schedule of fees fixed by section 551 of title 38 of the United

For the guidance of the probate court in arriving at the proper fee to be allowed in the instant ease, it may be appropriate to say that we are of the opinion that a fee which would be allowed to an attorney for a competent veteran if a suit had been brought as set out in section 551, title 38, United States Code, is the maximum fee which may be allowed, and that probably a smaller fee would be more in accordance with the merits of the case. We are also of the opinion that in arriving at a reasonable attorney's fee in the present matter, the fact should be taken into consideration that the attorney in receiving $649.49 for his ordinary services, which was 5 per cent of the gross income for the year in which the bulk of the permanent disability benefit of $11,945 was paid, has already received, at least in part, compensation for his services in securing the permanent disability benefit award.

That portion of the order appealed from fixing the fees of the attorney for ordinary services rendered the guardian of the incompetent is hereby affirmed, and that portion of said order fixing the fees of the attorney for extraordinary services rendered the guardian of the incompetent is hereby reversed.

Shenk, J., Langdon, J., Edmonds, J., and Houser, J., concurred.