Shelley v. Bixby
Shelley v. Bixby
Opinion of the Court
Plaintiff W. Frank Shelley, an attorney at law, appeals from a judgment in favor of the defendants. Under one cause of action he sought to recover fees allegedly due under a written contract whereby defendants employed him and two other attorneys to render legal services. Under another cause of action he sought to recover the reasonable value of legal services allegedly rendered.
On December 21, 1936, the defendants Elizabeth Irving Bixby and Lillian Odisho Bajón, as parties of the first part, and W. Frank Shelley, George D. Higgins and Franklin P. Bull, attorneys at law, as parties of the second part, entered into a written contract, prepared by said attorneys, whereby the first parties employed said attorneys “to represent them” and “attend to their legal matters pertaining to their interest” in the estate of Fanny Bixby Spencer, deceased. The contract also provided that for said services so rendered by said attorneys the first parties would pay to said attorneys one-fourth of any moneys secured by the first parties from the estate. The recitals in the contract, under the “Whereas” clauses (except the second one which is unintelligible), were to the effect that the first parties were beneficiaries under the will of said deceased; that they were dissatisfied with a decree of the court, and desired to have the matter of their rights as beneficiaries under the will “and the trust established thereunder further litigated and determined”; that the second parties were attorneys at law; that the first parties were desirous of employing said attorneys to represent them in all matters “touching their interest” in said estate as the same may appear under the will, or under the trust established by the will, or under “the attempted trust established by the decree of the Court”; and that the attorneys were willing to accept the employment and give it their best endeavors. (The contract, except for the signatures, is shown in the footnote.
Mr. Higgins was a plaintiff herein, but before the trial he settled his claim for $250 and dismissed the action with preju
For approximately three years before the contract was made the defendants had been engaged in litigation wherein they were attempting to set aside two certain trusts affecting their interests under the will of Fanny Bixby Spencer, deceased. Under one of the trusts, made December 22, 1930 (referred to as the “private trust”), the defendants and the other residuary legatees in the Spencer estate assigned to the Security-First National Bank their interests in all property they might receive under said will, and the bank delivered to them its declaration of trust in exchange therefor. The other trust (referred to as the “court trust”) was imposed upon the residual assets of the Spencer estate, which included the interests of defendants, by the decree of distribution in said estate on February 3,1933, and the same bank was the trustee.
Prior to making the contract the defendants herein had commenced an action against the bank, as trustee of both trusts, to terminate the trusts. The judgment of the trial court therein denied relief to plaintiffs therein (defendants herein), and upon appeal therefrom the judgment was affirmed by the Supreme Court of this state on September 18, 1936. (Bixby v. Security-First Nat. Bank, 7 Cal.2d 424 [60 P.2d 862].)
The court herein found that said attorneys had independent offices and were not associated together as a firm, but undertook the employment as a special partnership or joint venture; that prior to making the contract the defendants explained to plaintiff Shelley and the other two attorneys the proceedings which had theretofore been taken- by them in the litigation to free their interests from the trusts, and particularly the decision of the Supreme Court affirming the adverse judgment of the trial court; that said plaintiff represented to defendants that there were grounds to seek a review in the Supreme Court of the United States of the decision of the Supreme Court of this state, and also that defendants could obtain relief from the decree of distribution “by bringing” an action in the federal court asking relief upon the ground that the decree of distribution was unconscionable and upon other grounds; that defendants entered into the contract in reliance upon the representations of plaintiff Shelley
The court also found that about July 30, 1937, the defendants wrote to said attorneys expressing dissatisfaction with their representation of defendants and expressing a desire to terminate the contract; that as a result of negotiations thereafter attorneys Higgins and Bull on behalf of, and as members of, said special partnership agreed to cancel said contract and to accept a note of defendants for $250 in full payment for all services theretofore rendered under the contract; that a formal cancellation of the contract was signed by Higgins and Bull on January 13, 1938, and they withdrew as attorneys for defendants, and the note in favor of Mr. Higgins was delivered to Mm, but Mr. Bull refused to accept the note tendered to him by defendants and he wrote across the face thereof the words hereinbefore quoted (to the effect that the defendants were under no obligation because the services resulted in no benefit to them); that plaintiff Shelley was tendered a note upon the same terms as the notes which were tendered to the other attorneys, but he refused to accept it; that on February 11, 1938, on motion of defendants, he was removed as attorney for defendants; that good cause appears for writing said letter of July 30,1937, and reasonable grounds appear for the request to terminate the contract, and defendants were fully justified in securing the cancellation of the contract.
The court also found that neither of the trusts was set aside or modified in any manner prior to the termination of said contract by reason of any proceedings in court commenced by said attorneys, and that neither of said defendants received any money or property from either of said trusts, prior to the termination of the contract, by reason of any action of any Mnd commenced or carried on by said attorneys or in any manner whatsoever.
The court found further that plaintiff Shelley, on his voluntary petition, was adjudicated a bankrupt on September 14, 1937, and was discharged in bankruptcy on July 5, 1938.
It was stipulated that the defendants first received money from the trusts about March 31, 1939, and that the amount then received by each was $304.80. Thereafter each defendant received various payments in cash aggregating $1,254, and also
The court trust provided that certain monthly payments were to be made to certain beneficiaries, and an annual payment to one of them, until a certain amount had been paid or until a sum of money had accumulated in the hands of the trustee equal to 125 per cent of all future payments that might become due to those certain beneficiaries under the trust. The trustee of the court trust continued to make those payments from the time the trust was created in 1933 until March, 1939, at which time it had accumulated sufficient cash on hand to create the 125 per cent fund, which fund amounted to $20,225. Upon the hearing of the trustee’s fifth account, rendered in March, 1939, the court ordered that the balance of the assets in the court trust, after retaining the 125 per cent fund, be distributed to the private trust.
The private trust, which was made by all the seven residuary legatees in the Spencer estate, provided that it might be modified by the agreement of the parties. After plaintiff Shelley had been removed as attorney for these defendants, the parties to the private trust agreed to and did modify it so that it provided that the trustee might resign and new trustees be appointed and that distribution might be made from time to time. On March 31, 1939, about 14 months after Mr. Shelley had been removed as attorney for defendants, the bank resigned as trustee of the private trust and five of the beneficiaries, including these defendants, were appointed trustees. The new trustees then distributed to each of the beneficiaries the sum of $304.80, above mentioned. Later they distributed to each of the beneficiaries 503% shares of the Jotham Bixby Company and 63%c> shares of the Alamitos Land Company. [From the 125 per cent fund retained in the court trust each beneficiary received at later dates additional sums which aggregated the $1,254 above mentioned.]
Appellant contends that the court erred in finding that his right to compensation was contingent upon the results of the litigation and services of the attorneys. He argues that the court should have found that the contract operated as an immediate assignment to the attorneys, at the time the contract was made, of one-fourth of the interests of the defendants in the trusts as compensation for such services as might thereafter be rendered by them. His argument is based upon the provision in the contract that, “It is agreed that whatever
At the trial there was uncertainty on the part of appellant as to the theory upon which he sought to recover. The first cause of action in the complaint appears to be based on the theory that the contract was for a contingent fee and that he was entitled to damages, in the amount of one-fourth of defendants’ interests, because he had been wrongfully discharged and was thereby prevented from performing the services, which he could have performed. His counsel (not present counsel) contended that it was not a contingency contract, but was an immediate assignment to the attorneys. Also his counsel contended that his claim to a portion of defendants’ interests was by reason of an equitable lien. Early in the trial his counsel said, concerning the second cause of action to recover the reasonable value of services, that he did not think that quantum meruit was a proper cause of action. Near the close of the case he said in effect that he had not elected to abandon the quantum meruit cause of action. Also at the trial there was confusion on the part of appellant as to the date which he considered to be the date he was discharged. In his complaint he alleged that he was discharged on December 15, 1938. His counsel contended that the discharge occurred on July 30, 1937. In his deposition appellant testified that the contract and employment were never terminated.
As to appellant’s theory of the case, it is clear, however, that he did not seek to recover upon the basis that he had performed the contract. He did not claim that he had done anything which resulted in benefit to defendants, except as to one matter and that was he had prepared and filed an
As to the date of termination of the contract, the court found that Mr. Bull and Mr. Higgins signed a formal cancellation of it on January 13, 1938, and the court concluded that the contract was terminated by agreement of the parties on that date. Apparently the reasoning of the court in arriving at that conclusion was (1) that since plaintiff Shelley was adjudicated a bankrupt on September 14, 1937, and since the three attorneys undertook the employment under the contract as a special copartnership, that the partnership was dissolved by plaintiff Shelley’s bankruptcy (Civ. Code, § 2425) and that the two' nonbankrupt partners had the right to wind up the partnership affairs (Civ. Code, § 2431) ; and (2) that the two attorneys, as members of the copartnership comprised of the three attorneys, had a right to agree upon a termination of the contract which would be binding upon appellant irrespective of appellant’s bankruptcy. Appellant argues that the matter of his bankruptcy is immaterial because he was discharged as an attorney for defendants on July 30, 1937, (when the letter was written by defendants) which was before he was adjudicated a bankrupt. By reason of the conclusions herein as to other points of this appeal, it is not necessary to determine whether the said two attorneys could terminate the contract by reason of the bankruptcy. The finding that the three attorneys undertook the employment as copartners is supported by the evidence. Appellant testified that the three attorneys represented defendants as associate counsel, that they were working together, and that they were acting collectively. Under the contract the defendants employed the three attorneys as a group and defendants were entitled to have the combined legal talents of the three attorneys applied in their behalf. On January 13, 1938, Mr. Bull and Mr. Higgins wrote the following across the face of the contract: “Los Angeles, Calif. January 13, 1938 We, the undersigned do hereby cancel and release the makers hereof from any lia
The findings of the court, that there was good cause for having written the letter of July 30, 1937, that there were reasonable grounds for the request in the letter to terminate the contract, and that defendants were fully justified in making the request and securing the cancellation of the contract which thereafter took place, are supported by the evidence. The said letter stated, among other things, in referring to the contract that “We are accordingly hereby terminating it,” That the evidence is sufficient to support these findings is indicated in the discussion hereinafter made regarding the finding that appellant did not use proper professional skill or ability.
Appellant contends that the finding that he failed to prosecute with proper professional skill or ability the various proceedings had and taken on behalf of defendants is not
The finding that the services rendered by each of the attorneys were without value to the defendants and failed to secure any relief for them is sustained by the evidence. By reason of the conclusions herein it is not necessary to
The judgment is affirmed. The appeal from the order denying his motion for a new trial is dismissed, such order not being appealable.
Shinn, Acting P. J., and Kincaid, J. pro tern., concurred.
A petition for a rehearing was denied June 18, 1947.
“ Agreement
“This agreement, made and entered into at the city of Los Angeles, County of Los Angeles, State of California, on the 21st day of December, 1936, by and between Elizabeth Irving Bixby and Lillian Odisho Bajón, of the County of Los Angeles, State of California, parties of the first part, and W. Frank Shelley, George D. Higgins and Franklin P. Bull, of the same place, parties of the second part.
WITNESSETH
“That, Whereas, the parties of the first part and each of them are beneficiaries under the last will and testament of Fanny Bixby Spencer,
“And Whereas said executors, their attorneys and The Security-First National Bank of Los Angeles, a corporation, in its various capacities, especially as Trustee under the said will and under the decree of the Court, setting aside the trust provided for in the will and the provisions for the residuary legatees, and making a new trust and putting all the property bequeathed to the residuary legatees into said new trust:
“And Whereas said parties of the first part are dissatisfied with said decree, and are desirous of having the matter of their interest and rights as beneficiaries under the will of the deceased and the trust as established thereunder further litigated and determined according to the law as laid down by statutes of the State and the Constitution of the United States;
“And Whereas said W. Frank Shelley, George D. Higgins and Franklin P. Bull, the parties of the second part, are and each of them is and attorneys-at-law, duly authorized to practice law in all the Court_ of the State of California (both Federal and State);
“And Whereas said parties of the first part are desirous of employing said parties of the second part to represent them in all matters touching their interest in said Estate of Fanny Bixby Spencer, deceased, as the same may appear under the will of the deceased or the trust established by said will or the attempted trust established by the decree of the Court;
“And Whereas said parties of the second part are willing to accept said employment and agree to devote the necessary time and give to the said employment their very best endeavors;
“Now This Agreement Witnesseth: That the parties of the first part do hereby employ the parties of the second part to represent them and each of them and attend to their legal matters pertaining to their interest in said estate.
“It Is Therefore Mutually Agreed that for said services so rendered by the parties of the seond part, said parties of the first part will pay to said parties of the second part one-fourth of any and all moneys secured by them or either of them from said Estate. It is agreed that whatever moneys are received by the parties of the first part from said estate, one-fourth thereof shall be the property of the parties of the second part.
“The parties of the first part further agree to pay the dosts and expenses incurred in any and all litigation connected with said matter, and that they will reimburse from said Estate the parties of the second part for any payment by them of necessary expenses in and about said litigation or matter pertaining to said estate.
“In Witness Whereof the said parties have hereunto set their hands this 22nd day of December, 1936.”
Case-law data current through December 31, 2025. Source: CourtListener bulk data.