206 Mich. 515 | Mich. | 1919
Lead Opinion
This litigation results from a controversy between Hatch, McAllister & Raymond, a firm of attorneys of Grand Rapids, Michigan, and their former client, Lillian Boyle, concerning their charges for services while they were under retainer and employed as her attorneys, for that portion of their work in the litigation which related to the bill of exceptions, briefing, and arguing her case in this court. The case is found reported under the title of Boyle v. Waters, in 199 Mich. 478. The principal suit arose out of a personal injury which Miss Boyle sustained upon the railroads of the defendant companies,. Through her brother and attorney, who was the head of the firm of Boyle, Mott & Miller, of Chicago, Illinois, she retained the firm of Hatch, McAllister & Raymond, of Grand Rapids, as attorneys to assist Mr. Boyle and to represent her in the prosecution and conduct of said litiga
“Agreement is that for all work for Supreme Court, including settlement of bill of exceptions and brief work, we are to have at the rate of $100 a day; at the end, when plaintiff gets her money, if she does, we are to have $350 in addition; the per diem is payable whether we win or lose.”
The Ann Arbor Railroad Company refused to honor the check or draft because of the insufficient indorsement, and the petitioners were obliged to reimburse the moneys advanced on the check. Thereupon this petition was filed for an order establishing a lien on the $15,000 judgment for the amount of the claim for services of $2,232.21. A tender was made by the defendant to the petitioners of $582.21, which is the amount claimed to be due the petitioners in accordance with the contract testified to by Mr. Boyle, and $10 for services in the taxation of costs in the circuit court, and other additional expenses, and at the conclusion of petitioners’ testimony counsel for the defendant in the petition demurred to the evidence and asked the court to direct a verdict of no cause of action. The issues were, however, submitted to the jury and resulted in a verdict in favor of the petitioners in the full amount of their claim. Whether or not the learned trial judge erred in not directing a verdict as requested is the first question which merits our attention.
The original contract arrangement for services, made by Mr. Boyle, who was acting as attorney for
“In this State it has been held that as to contracts made between the attorney and his client, subsequent to the employment, which are beneficial to the attor*521 ney, it is incumbent upon the latter to show that the provisions are fair and reasonable, and were fully known and understood by the client” — citing cases.
The rule is thus stated in 2 Ruling Case Law, p. 1038 (part of § 120):
“A number of decisions take the view that not only are contracts between an attorney and his client as to compensation made after the commencement of the relation to be closely scrutinized, but that such contracts are presumptively invalid on the ground of fraud, and that the burden of proof is on the attorney to show the fairness of the transaction, in that the compensation provided for does not exceed a fair and reasonable remuneration for the services which have been rendered or which it is his duty to render. The attorney must show that the contract was free from all fraud, undue influence, and exorbitancy of demand, and it is usually held that by way of establishing its fairness the attorney should show that the contract was entered into by the client freely and with a full understanding as to his rights and as to the effect of the instrument, and that he gave his client full information and disinterested advice.”
It is the contention of counsel for petitioners that Mr. Boyle in his relation to the making of this contract was acting as the alter ego of his sister, the defendant in this petition, and that she is chargeable with all the knowledge possessed by her brother, as special counsel, with whom the contract in question, it is claimed, was made on her behalf. With this, however, we cannot agree, as we are inclined to the view, and think it is a just conclusion, that the rule contended for by the counsel for petitioners should not be held to apply where the fiduciary relation existing between attorney and client is established and a new contract is claimed to have been made, beneficial to the attorney. The duty rested upon the petitioners, not only to show that the provisions of the new contract were fair and reasonable, but that they were
“Where the employment is arranged through an agent, a client’s liability depends on the authority of the agent to bind him in that respect, and the scope of the agent’s authority depends on the rules and. principles of the law of agency.”
And in the following section it is said:
“As an attorney has no implied power, under a general retainer, to employ associate counsel, the client is not liable to counsel so employed, unless he has authorized the employment, or has ratified the act of the original attorney in employing assistance, with full knowledge of the fact that the attorney so employed is to look to him for compensation.”
In this case the original employment of the associate counsel is not contested.. If the contract was not authorized in advance, it has been ratified. But if an attorney has no implied power to employ counsel at the expense of the client, much less would he have any implied authority to alter a contract of employment of associate counsel already entered into by granting him a greater fee than he had originally agreed to accept for the same work. Hence, petitioners must show, not merely that Mr. Boyle was authorized to employ counsel at the time the original agreement was made, but that he had a separate and distinct authorization to increase the rate of compensation at a time when counsel were legally bound to perform the services at the old rate, or, failing in this, that the client ratified the new contract, with full knowledge of its terms and of her rights in the situation which had developed. There is no testimony
In view of this conclusion, it will be unnecessary for us to discuss the other interesting questions raised on this appeal concerning the admissibility of the self-serving statement made by Mr. Hatch in his journal and the other questions raised by appellant’s counsel in their brief.
The judgment must be reversed and a new trial granted, with costs to the appellant.
Ostrander, J. Not questioning any of the principles stated in the opinion of Brother Kuhn, I am impressed that their application is questionable. For an attorney to deal with a client is one thing, but when the. client employs or uses her own attorney, and her brother at that, to negotiate for her, to make her bargain with her other attorneys, then I think the rule stated ought to be modified. In my judgment, the case presents a question of fact. Mr. Boyle was not deceived, nor was he imposed upon. He was entirely conscious of the rights of his sister in the premises. If he ended, by payment, one contract for the services of petitioners and proceeded then to make another contract, there can be no question of his perfect right to do so and none of his sister’s responsibility. He was doing what his sister had turned over to him to do. • Petitioners were not dealing with her, but with her attorney. The law of agency need not bother us. Boyle was attorney for his sister — represented her, by her consent.. Did he make a new bargain? He says he did and informed his sister about it. Was it the bargain which petitioners say was made? That is the question and, as affecting it, I am impressed that the memorandum made by Hatch was incompetent evidence. The- trial court required
Dissenting Opinion
(dissenting). I am in accord with the conclusions reached by Mr. Justice Ostrander in this case save in this respect: I think the memorandum made by Judge Hatch was competent, and therefore admissible in evidence, in view of the conditions existing at the time of its admission. Jones on Evidence» §§ 171, 293, 294.
I am of the opinion that the judgment of the trial court should be affirmed.