The opinion of the court was delivered by: GRAVEN
GRAVEN, Senior District Judge (by assignment).
The plaintiff is a citizen of Cuba. He formerly was a practicing lawyer in Havana, Cuba. In this action he asserts a claim for attorney fees alleged to be owing to him by Edelmira Folla Schenck, individually and as Executrix of the Estate of Maria Cintas Folla, deceased. She is a citizen of the State of New York. She will be referred to as the defendant. The amount in controversy, exclusive of interest and costs, is in excess of $10,000.00.
Oscar B. Cintas was a citizen and resident of Cuba. He had accumulated substantial wealth. He was quite prominent in Cuba. He was a well known collector of paintings. He had at one time served as Cuban Ambassador to the United States. He died in the City of Havana, Cuba, on May 11, 1957. His wife and parents had predeceased him. He left no children or descendants him surviving. His nearest surviving relative was a sister, Mrs. Maria Cintas Folla, who was then around seventy years of age. She was a citizen of Cuba but a long time permanent resident of New York City. Mrs. Folla's husband had predeceased her. They had only one child, Mrs. Edelmira Folla Schenck. She is a resident of New York City. She is the wife of Clyde L. Schenck. Mrs. Folla died testate in New York City on August 14, 1961. Mrs. Edelmira Folla Schenck was the sole beneficiary under her will and is the Executrix of her estate.
On October 7, 1953, Oscar B. Cintas executed a holographic will in the City of Havana which is referred to as the Cuban will. On April 30, 1957, while temporarily in New York City he executed another will referred to as the New York will. Mrs. Folla was not a beneficiary under either will. Mrs. Folla's daughter, Mrs. Schenck, was the beneficiary of a legacy of 25,000 pesos under the Cuban will. She was not a beneficiary under the New York will.
This controversy has its origin in a contingent fee agreement entered into on December 29, 1957, between the plaintiff and Mrs. Maria Cintas Folla having to do with the matter of her obtaining property which her brother owned at the time of his death. The background of that agreement will first be noted. The plaintiff was admitted to the bar of Cuba in 1944. He practiced law in the City of Havana from 1944 until September 19, 1961, when he became a political refugee. He has since resided in New York City.
Oscar B. Cintas' Cuban will contained numerous provisions. Many of those provisions related to specific legacies or devises. It named Luis Vidana as the executor of the Cuban will. A provision was as follows: "To Josefina Tarafa, the aunt of my Graziella (R.I.P.) everything in her name." The Graziella referred to in that provision was an aunt of the testator's deceased wife. The Cuban will also contained the following provision:
"After selling my things in New York intelligently and the money in the bank and also the securities and property of Panamanian Securities, and Corporation Mobiliaria Cintas, S.A. and after paying the taxes and expenses, what remains can be used for charitable purposes so that it benefits the unfortunate, no matter who, and you shall distribute all the money bearing in mind high objectives and the indications I have given herein."
The "you" in that provision referred to the Executor.
The provisions of the will, apart from the two provisions just set out, were such as to leave a large amount of the testator's property subject to residuary disposition. Those two provisions gave rise to the question as to whether either of them constituted a valid disposition of the residuary property. No serious questions were ever raised as to the other provisions of the will and no question was ever raised as to the validity of the execution of the will.
The New York will was as follows:
"I, OSCAR B. CINTAS, a citizen of the Republic of Cuba and a resident of and domiciled in the Borough of Vadado, City of Havana, Republic of Cuba, do hereby make, publish and declare this as and for my Last Will and Testament but relating only to the disposition of such of my property and estate, real, personal or mixed, as is hereinafter referred to.
" ONE : I expressly declare that I elect, pursuant to the provisions of Section 47 of the Decedent Estate Law [McKinney's Consol.Laws, c. 13] of the State of New York that this Will and all the testamentary dispositions herein contained shall be construed and regulated by the laws of the State of New York, it being my intention that the validity and effect of such testamentary dispositions shall be determined by the laws of the State of New York. For this reason I request and direct my Executor to offer this Will for probate in the New York County Surrogate's Court (or such other Surrogate's Court as may have jurisdiction thereof), and I request the Surrogates of such Court to issue letters testamentary to my Executor.
" TWO : I give, devise and bequeath to a New York membership corporation in process of organization under the name Cuban Art Foundation, Inc., which name I request be changed to Cintas Foundation, Inc., all tangible personal property, paintings and other works of art owned by me or by any corporation of which I am the sole or substantially the sole stockholder (including without limitation, Mobilaria Cintas, S.A.) and located in New York City, all deposits in banks located in New York City, all my shares of stock of Punta Alegre Sugar Corporation, a Delaware corporation, regardless of whether registered in my name or the name of any corporation of which I am the sole or substantially the sole stockholder or in the name of any nominee or appointee of mine, and all shares of stock of Panamian Securities, Inc., a Panama corporation, and Mobilaria Cintas, S.A., owned by me.
" THREE : I appoint The Chase Manhattan Bank as Executor hereunder.
" FIVE : I have heretofore made a holographic will and I direct that this Will shall be deemed to revoke my said holographic will only to the extent that this Will expressly disposes of property also disposed of by my holographic will, leaving my holographic will in full force and effect as to my other property.
[Signature and Attestation]"
The Cuban Art Foundation, Inc., the sole beneficiary under the New York will, was incorporated under the laws of the State of New York on April 30, 1957. Its office was in New York City. The purposes of the Foundation, as set forth in its articles of incorporation, were as follows:
"'2. The purposes for which the Corporation is to be formed are to receive and apply funds exclusively for educational purposes, namely, to foster and encourage art within the Republic of Cuba and art created by persons of Cuban citizenship or lineage within or outside the Republic of Cuba, and in furtherance of these purposes:
"(a) to solicit and collect funds and contributions, to receive by gift, deed, legacy, bequest or devise and otherwise to acquire money and property of every kind and description and to administer all the aforesaid property, both as to principal and income;
"(b) to apply such principal and income (i) to acquire and maintain works of art, (ii) without interest or other charges to loan or contribute funds and works of art, or otherwise provide assistance to, organizations operating art museums located in Cuba that are organized and operated exclusively for educational purposes, including any such organization which may own or operate an art museum in the former residence of Oscar B. Cintas located at D & 15th Streets, Borough of Vedado, Havana, Cuba, provided that if conditions in Cuba at any time or times are such as to make it in the opinion of the Board of Directors of the Corporation inadvisable to make contributions or loans of funds or works of art to any such organizations, then to apply such principal and income to the advancement of Cuban art elsewhere in the world and to loan works of art on a temporary basis to such other organizations in North, South or Central America that are organized and operated exclusively for educational purposes as the Board of Directors may deem appropriate, and (iii) to establish fellowships to be known as Cintas Fellowships for the encouragement of artists of Cuban citizenship or lineage to study art within or outside of the Republic of Cuba.'"
One Nunez, a resident of the City of Havana, was a cousin of Mrs. Folla. The reading of the Cuban will of Oscar B. Cintas was had on May 15, 1957. At the request of Nunez, the plaintiff attended that hearing. After hearing the will read he was of the view that it was defective in certain particulars. He was of the view that the two provisions in the will heretofore set forth did not properly or validly dispose of the residuary property and that the testator died intestate as to such property and that Mrs. Folla as his nearest relative and next of kin would be legally entitled to the residuary property as his universal heiress. He communicated his views to Nunez. On May 15, 1957, Nunez, in the presence of the plaintiff, placed a telephone call to the Schenck home in New York. Mrs. Schenck answered the call. Nunez suggested to her that her mother should employ the plaintiff to look after her interests. Nunez then put the plaintiff on the telephone and he discussed the matter with Mrs. Schenck. Mrs. Schenck then and frequently thereafter acted in behalf of her mother. On May 16, 1957, following his telephone discussion the plaintiff wrote a letter to Mrs. Schenck. In that letter he referred to the telephone conversation of May 15, 1957. In it he stated that Mrs. Schenck was given a legacy of 25,000 pesos under the will of Oscar B. Cintas and he thought it was necessary that he act in her name in connection therewith so that she "would not be defrauded." He further stated as follows:
"I should like to confirm to you what I stated in my telephone conversation. I am going to work in this matter in your name taking on and incurring all of the expenses involved during such time as the negotiation of the estate continues and until such time that each one of you comes into possession of what is supposed to correspond to you. At that time, I will receive compensation for these expenses and charge you my fees, and for this reason, I am enclosing herewith a postal money order in your name in the amount of $50.00 in order to cover the expenses which might be incurred in the execution and granting of the powers of attorney from you and your mother."
The powers of attorney were sent enabling the plaintiff to appear in the courts in Cuba in behalf of Mrs. Schenck and Mrs. Folla.
The New York will was filed for probate on or about May 25, 1957, as to which Mrs. Folla was informed. For some years prior Mrs. Folla had been acquainted with Nathaniel A. Devine, an attorney engaged in the practice of law in New York City. Mrs. Folla requested that he come and see her, which he did. She was concerned as to what her situation might be in connection with the New York will. Mr. Devine said he would make an investigation. His investigation disclosed that it was probable that it could be established that the testator had revoked the New York will and he so informed Mrs. Folla. He also informed her that if the New York will had been revoked all of the property constituting the decedent's New York estate would become intestate property and would pass to her as the decedent's nearest relative and next of kin. It was agreed between Mr. Devine and Mrs. Folla that he would be her attorney in connection with the New York estate. Mr. Devine had an office rather than a trial practice. He made it known to her that to carry on the litigation which would ensue it would be necessary for him to secure the assistance of a lawyer engaged in the trial practice and that he intended to have the assistance of Mr. Milton Pollack, a prominent and experienced trial lawyer. That proposed arrangement was satisfactory to Mrs. Folla. Mr. Devine and Mr. Pollack, in behalf of Mrs. Folla, promptly filed objections to admission to probate of the New York will on the ground it had been revoked.
The plaintiff was not and never has been admitted to the practice of law in the State of New York. Neither Mr. Devine nor Mr. Pollack was ever admitted to the practice of law in Cuba.
Mr. Devine and the plaintiff early learned of the employment of each other by Mrs. Folla. Thereafter, for a long period of time, they were in frequent communication.
In July, 1957, the plaintiff commenced a proceeding in a Court of First Instance in the City of Havana referred to as an ex parte proceeding in which it was asked that the Court declare that Mrs. Folla was the universal heiress of the decedent and as such was entitled to the residuary property. It developed that Josefina Tarafa was also asserting that she was the universal heiress under the provision of the will relating to her heretofore set out. It also developed that Luis Vidana, the Executor of the estate, was asserting that all of the residuary property of the decedent passed under the provision of the will heretofore set out relating to the "unfortunate". Soon after the probate of the Cuban will, Luis Vidana caused to be formed under the Cuban law a Foundation, "Succession of Oscar B. Cintas." That Foundation was apparently formed by Luis Vidana for the purpose of receiving and making distribution of the property purportedly provided for the relief of the "unfortunate".
Soon after the plaintiff had instituted the ex parte proceeding, Josefina Tarafa commenced a proceeding in a Court of the First Instance in Havana described as a voluntary testamentary proceeding asking that it be held that the residuary property passed to her under the provision of the will heretofore set out. In connection with her proceeding and upon her application, her attorney was appointed as Judicial Administrator of the estate. Luis Vidana proceeded to assert that the residuary property did not pass to either Josefina Tarafa or Mrs. Folla. As heretofore noted, it was his claim that the provision in the will providing for the "unfortunate" constituted a valid disposition of the residuary property for the benefit of the "unfortunate".
The ex parte proceeding instituted by the plaintiff in behalf of Mrs. Folla was heard in the first instance by a Judge Nodarse. On July 16, 1957, he rendered his decision. He ruled that the ex parte proceeding was not the proper proceeding for the determination of her claimed rights. In his opinion he stated "* * * the said decedent with respect to the said Josefina Tarafa made a true and clear appointment of an heir with universal title * * *." The plaintiff asserts, and correctly so, that the statement of Judge Nodarse that Josefina Tarafa was the universal heiress of the decedent was purely dictum. Mrs. Folla appealed the decision of Judge Nodarse. However, so far as it appears the Cuban courts have at no time decided on the merits the question as to whether Josefina Tarafa or Mrs. Folla was the universal heiress of the decedent or whether the residuary property passed to either of them or to the "unfortunate".
Commencing in May, 1957, the relationship of attorney and client existed between Mr. Devine and Mrs. Folla and between the plaintiff and Mrs. Folla. For several months thereafter there was no definite agreement between her and either of them as to attorney fees. During that period the plaintiff was carrying on litigation in Cuba in behalf of Mrs. Folla, and Mr. Devine and Mr. Pollack were carrying on litigation in her behalf in New York. In connection with the matter of attorney fees, the nature and location of the property left by the decedent is one of pertinence. The decedent at the time of his death owned considerable real estate and a substantial amount of personal property situated in Cuba. He also owned a large amount of personal property either physically located in New York City or subject to the control and jurisdiction of the Surrogate's Court of New York County. That property is referred to as the New York estate. The other property is referred to as the Cuban estate. During his lifetime Oscar B. Cintas had collected many valuable paintings. At the time of his death some of the paintings were located in New York City and some in his home in Cuba. The gross value of the New York estate for inheritance tax purposes was around $7,000,000.00. Included in that estate were paintings having an appraised value of around $2,000,000.00. Because of subsequent developments, the value of the assets of the Cuban estate does not clearly appear. It does appear that such assets were of substantial value. Included in the assets of the Cuban estate were a number of paintings located in Cuba which had a substantial value.
Commencing in the fall of 1957 there were discussions between Mrs. Folla and Mr. Devine as to a contingent attorney fee agreement. The discussions largely centered around what his percentage of any recovery should be and whether that percentage should be applicable to the value of the paintings. Mrs. Folla was opposed to including the value of the paintings in the attorney's percentage. It was her expressed view that the paintings of her brother constituted a "sacred trust" and for that reason should not be included. He in his lifetime had expressed the desire that the paintings owned by him should be held for museum purposes. That is apparently what Mrs. Folla had in mind. Mr. Devine was opposed to the exclusion of the value of the paintings and, as hereafter appears, he prevailed.
In the latter part of December, 1957, the plaintiff came to New York City at the request of Mrs. Folla and over a period of several days had conferences with Mrs. Folla and Mrs. Schenck. Some of those conferences were attended by Mr. Schenck and some were attended by Mr. Devine. The plaintiff discussed with Mrs. Folla, Mrs. Schenck and Mr. Schenck the matter of an attorney contingent fee agreement. The discussion had to do with the percentage of the recovery to go to the plaintiff and whether or not the percentage would be applicable to the value of the paintings.
On December 29, 1957, the plaintiff drafted an agreement as to his compensation which was then signed by him and Mrs. Folla in New York City. The agreement is in Spanish. The translated agreement is next set forth:
"RIVEIRO Y GONZALEZ LAWYERS
Alejandro R. Riveiro Delgado
Havana Bar Association No. 557
Santiago H. Gonzalez Barredo
Havana Bar Association No. 2607
Be it known by these presents that the party of the first part Dr. Santiago Herminio Gonzalez y Barredo, a lawyer, of legal age, married, a native of Havana, Cuban citizen and residing at number one hundred seventy-six Ayestaran Street between Desague and Diecinueve de Mayo in the city of Havana, Republic of Cuba, residing temporarily at the time of signing this instrument in the United States of America, at the Hotel Alamac, located at seventy-first street and Broadway; and the party of the second part, Mrs. Maria Amalia Raida de la Caridad Cintas y Rodriguez, a native of Sagua la Grande, Santa Clara Province, Republic of Cuba, a Cuban citizen, of legal age, a widow, at home, residing at Number three hundred seventeen West eighty-ninth Street (317 West 89th Street) in the city of New York, State of New York, United States of America, hereby agree to the following:
FIRST: By virtue of the fact that Mrs. Maria Amalia Raida de la Caridad Cintas y Rodriguez (referred to hereinafter as 'THE HEIRESS') considers herself with right to the inheritance of her brother, OSCAR BENJAMIN JOSE LORENZO RAMON CINTAS Y RODRIGUEZ, who died in the city of Havana, Cuba, on the eleventh day of May, one thousand nine hundred fifty-seven, has granted to Dr. Santiago Herminio Gonzalez y Barredo (referred to hereinafter as 'DR. GONZALEZ'), registered before the Notary of the Bar Association and District of Havana, Cuba, Dr. Bernardo Carames y Camacho, as per instrument number one hundred ninety-three dated June seventh, one thousand nine hundred fifty-seven, a power of attorney to represent and defend her, to the purpose that said attorney institute any necessary procedures or claims which may be necessary in order that 'THE HEIRESS' may come into possession of the estate of her aforesaid brother.
(s) Dr. Gonzalez. (s) Cintas.
SECOND: By virtue of the fact that 'THE HEIRESS' does not posess at present adequate financial means to permit her to pay the legal or other expenses arising by reason of this suit, ' DR. GONZALEZ' agrees to pay any necessary expenses for this purpose, and to furnish his professional services as a Lawyer wherever necessary, and for whatever time may be necessary until the 'HEIRESS' comes into possession of the inheritance which belongs to her.
THIRD: In consideration of the provisions of the foregoing clauses, 'THE HEIRESS' agrees to pay to 'DR. GONZALEZ' a sum which represents twenty per cent of the value of the property awarded to her, up to the point that said twenty per cent attains the sum of five hundred thousand dollars ($500,000.00); as soon as the compensation of 'DR. GONZALEZ' has reached the amount of five hundred thousand dollars, the percentage corresponding to him under this agreement shall be reduced to TEN PER CENT until the total sum to be received by ' DR. GONZALEZ' reaches one million dollars ($1,000,000 dollars), which sum is fixed as the maximum amount to be received by 'DR. GONZALEZ' as remuneration. It is expressly agreed that the percentages referred to in this Clause are to be calculated on the net value of the inheritance which 'THE HEIRESS' may receive, that is, after deduction of any tax expenses it might be necessary to pay both in Cuba and in the United States of America, said payments to be supported exclusively by the official documents issued by the respective offices in each country. Likewise, it is expressly agreed that from the value of the inheritance which may be awarded to 'THE HEIRESS', there shall be deducted the value of the works of art included in the estate, if the latter should be awarded to her, provided such works of art are made use of by 'THE HEIRESS' for exhibition in Museums in any part of the United States of America or of Cuba, or if the proceeds from the sale of same be donated to welfare or charity purposes, as may be verified to the satisfaction of 'DR. GONZALEZ'.
FOURTH: It is expressly agreed that this obligation is recognized under equal terms and purposes for those who might be the heirs of 'THE HEIRESS' in the event the latter should die before having paid to 'DR. GONZALEZ' the amount corresponding to him under this agreement, such heirs therefore being in the position and capacity of 'THE HEIRESS' for all purposes in this agreement.
By witness whereof, and signed in two copies of a single tenor and purpose in the City of New York on the twenty-ninth day of December, one thousand nine hundred fifty-seven.
(s) Maria A. Cintas viuda de Folla (s) Dr. S. Gonzalez"
On January 2, 1958, Mr. Devine and Mrs. Folla entered into an agreement prepared by the former. The body of the agreement which was in the form of a letter ...