Houts v. Dunham

NORTONI, J.

This is a suit for money had and received. Plaintiff recovered and defendant prosecutes the appeal. The action was instituted and judgment given against George P. B. Jackson as defendant in his lifetime. Since the appeal was perfected, Mr. Jackson departed this life and the cause has been revived and now proceeds against his administrator, Harvey G. Dunham. Plaintiff is a member of the bar, engaged in the practice of his profession at Warrens-burg, Missouri, and during his lifetime Mr. Jackson was a member of the bar engaged in the practice of law, first at Sedalia and afterward in St. Louis. About 1891, the mercantile firm of Minter Brothers at Sedalia employed George P. B. Jackson, Esq., as their attorney to prosecute a suit for them on a libel against the Bradstreet Commercial Agency and he instituted the suit in the circuit court of P'ettis county at Sedalia. Soon after the suit was instituted, defendant therein, the Bradstreet Commercial Agency, procured a change of venue and the cause was transferred to the circuit court of Johnson county at Warrensburg for trial. Thereupon, Mr. Jackson communicated to plaintiff that he desired to engage his services as co-counsel for plaintiff Minter Brothers in that case. Plaintiff signified his willingness to accept employment in that behalf and was informed by Mr. Jackson that his compensation would depend upon the fact and the amount of recovery, or, in other words, the fee would he a contingent one. In this plaintiff acquiesced, and entered upon the discharge of the duties of his employment as co-counsel in the case.

A few months thereafter, hut before the trial, Mr. Jackson employed as well Mr. Suddath, another prominent member of the'Warrensburg bar, as co-counsel in the case, and it seems this employment was had, too, under a like arrangement as that with plaintiff, Mr. Houts. In December, 1893, a trial of the libel suit, which consumed five days, was had in the circuit court at Warrensburg and resulted in a verdict for plaintiff, Minter Brothers, for $30,,000’. At this trial, plaintiff, Mr. Houts, and Mr. Suddath assisted throughout and performed what appears to have been highly satisfactory services. A motion for a new trial was filed by defendant thereafter and sustained by the court. The case was then continued from term to term for a number of years until the February term, 1898 when a second trial was had, which resulted in a verdict of $27,000 in favor of plaintiffs therein, Minter Brothers. Both plaintiff, Mr. Houts, and Mr. Suddath participated in this trial as well, and it appears that they looked after the matters of motions for costs, continuances, etc., during the several years the cause was pending and while Mr. Jackson was in St. Louis. An appeal was perfected in the casé to the Supreme Court and, though Mr. Jackson prepared the brief and argued the case on appeal, it appears he submitted the brief to his co-counsel at Warrensburg for their approval. The judgment of $27,000 recovered in the second trial of the libel suit was affirmed by the Supreme Court, and it appears that in the meantime Mr. Jackson took an assignment of the judgment from Minter Brothers for the purpose of paying himself, plaintiff and Mr. Suddath ahead of other creditors who might garnish the same. The evidence is conclusive that the judgment was assigned by Minter Brothers to Mr. Jackson in trust for the purpose stated. Indeed, Mr. Jackson so stated the fact to be. After its affirmance in the Supreme Court, the Bradstreet Commercial Agency, defendant in the libel suit, paid to Mr. Jackson the full amount of the judgment and interest thereon, to-wit, $35-,595. After having collected this amount, Mr. Jackson notified his clients, the Minter Brothers, to call at his office for a settlement, and this they did, Though it apears Mr. Jackson had been paid a small retainer prior to the institution of the suit, his compensation thereafter was to be contingent on the amount and the fact of recovery in the libel suit. After deducting some expenses pertaining to the litigation, Mr.’Jackson turned over to Minter Brothers $16,000 and retained, under an agreement with them, $16,745 of the amount of the judgment for himself and co-counsel. According to the evidence of Mr. Jackson, his agreement with Minter Brothers then made was to the effect that he should pay plaintiff $500 and Mr. Suddath $500’ for their services aud retain the balance of $15,745 as compensation for his own services. But the proof for plaintiff touching this matter which consists of the evidence of the two Minters goes to the effect that no definite amount was settled upon at the time as compensation for plaintiff and Mr. Suddath. The Minters gave testimony tending to prove that Mr. Jackson retained $16,745 of the proceeds of the judgment as compensation to himself and his co-counsel, this plaintiff and Mr. Suddath, and that nothing whatever was said concerning the particular amount any one of the attorneys should receive. Immediately after having -settled with Minter Brothers and accepting the trust with respect to this fund of $16,745 for the payment of counsel, Mr. Jackson wrote plaintiff, as he did also Mr. Suddath, and inclosed to each his check on the Merehants-Laclede National Bank of St. Louis for $500 in payment for tlieir services. Plaintiff and Mr. Suddath forthwith wrote Mr. Jackson a joint letter to the effect that they had each received his check for $500 and did not fully understand the matter; that if it were intended in full settlement for their services, they each declined the proffer, but if only on account, they would so treat it. A few days thereafter Mr. Jackson wrote both plaintiff and Suddath that the checks so forwarded to each were intended to be in full payment for their services in the cause. Several letters passed betwen the parties concerning this matter, through all of which it appears both plaintiff and Mr. Suddath declined to accept the checks tendered, and they were never cashed. Mr. Jackson refused to permit the parties to cash them as on ncpount and they refused to accept them as full compensation. Plaintiff, insisting that he is entitled to reasonable compensation for his services, instituted this suit for money had and received against Mr. Jackson, on the theory of a promise made by Jackson to Minter Brothers, which inures to his benefit.

Throughout the case it appears that Mr. Jackson did not become personally responsible to either plaintiff or Mr. Suddath at the time of their employment, for though he negotiated the employment, he did so expressly on behalf of his client, Minter Brothers, with an understanding that the compensation should be wholly contingent upon the fact and amount of recovery. In no sense does the suit proceed as though Jackson became responsible personally to plaintiff in the first instance but instead it is averred in the petition that the employment of plaintiff was through Jackson, acting for Minter Brothers.' Though the petition proceeds against Jackson as for money had and received, in accordance with the facts and under the circumstances above stated, it proceeds, too, for a recovery as on quantum meruit for the reasonable value of plaintiff’s services in and about the cause of Minter Brothers, which is alleged to be the sum of $4,186.25) o.r one-fourth of the amount which Mr. Jackson retained as compensation for himself and co-counsel, and for this amount recovery was had.. Because of this element of quantum meruit so introduced in this case for money had and received against Mr. Jackson, it is earnestly argued the judgment should be reversed. That Mr. Jackson became a trustee for .the benefit of plaintiff and Mr. Suddath under the arrangement whereby he accepted the sum of $16,745 for the purpose of compensating himself and co-counsel is conceded. But the extent or amount to which plaintiff and Mr. Suddath should participate in this trust fund is by no means agreed to, for according to the evidence of Jackson, their interest consisted of $500 each, while according to the evidence of the Minters, no amount whatever was fixed touching that'matter'. Of course, under the original contract of employment made through Jackson for Minter Brothers, both plaintiff and Suddath are. entitled to reasonable compensation for their services rendered.

That an action for money had and received will lie against Jackson on his agreement with Minter Brothers under which he retained $16,745 for the purpose of compensating himself and co-counsel, no one can doubt, provided a definite and determinate sum of that fund was by agreement of the parties set apart to each. In such circumstances, the case would amount to no more than the usual one where a promise made by one party, as A to another, B, for the benefit of a third, C, is declared upon and enforced according- to its express terms. Such are the cases of Hall v. Marston, 17 Mass. 574; Deal v. Mississippi County Bank, 79 Mo. App. 262. But here the facts reveal a more difficult problem, indeed, as appears from the theory of plaintiff’s case and the proof in his behalf, for no definite or determinate sum to which he was entitled was agreed upon and determined by Minter Brothers and Jackson when the trust was settled and Jackson charged with the duty of executing' it. As before said, the suit proceeds for money had and received but it carries with it an element of quantum meruit as well, while the authorities declare the general rule to be that in order to sustain the action of money had and received plaintiff must show that defendant has received some specific sum for his use. [See Chitty on Contracts (12 Ed.), 76, 77; Chitty on Pleadings (16 Ed.), 364; see also Douglass v. Skinner, 44 Conn. 338; Maxwell v. Longenecker, 82 Ill. 308; Glasscock v. Hazell, 109 N. C. 145.] A standard, modern work thus expresses the rule: “As appears from the numerous decisions on the subject, in order to sustain an action for money had and received, plaintiff’s claim must be for a determinate amount, unless in those cases in which defendant has expressly promised to pay a particular sum.” [See 27 Cyc. 854, 855.] Because of this, it is argued the judgment should be reversed, for the reason that though the petition is for money had and received the court submitted the issue quantum meruit 'to the jury. 0'f this it may be said that the issue on quantum meruit is tendered by the petition, for it in express terms claims a recovery for so much as the services of plaintiff were reasonably worth. The issue touching, and the recovery for, -the reasonable value of plaintiff’s services was, therefore, not extraneous to the petition though it may in some degree infringe upon the general and ancient rule above stated, pertaining to the action of money had and received. However, under Sec. 1727, R. S. 1909 of our code, there is but one form of action for the enforcement or protection of private rights and the redress or prevention of private wrongs. By this and other provisions of the code, the nice distinctions between the common law forms of action have been abolished and their substance alone remains. [See Huston v. Tyler, 140 Mo. 252, 263, 36 S. W. 654, 41 S. W. 795.] Obviously, it is the duty of the court to shape and mould this substance in accordance with the equitable principles reflected throughout the code, so that the ends of justice shall prevail and the spirit which giveth life be not impaired through an adherence to the cold letter of ancient technical rules. Moreover, the action of money had and received is of equitable origin, proceeding from the maxim ex aequo et bono, to the end of affording a remedy for the recovery of money in the possession of one which in good conscience belongs to another. Because of this, the action is favored in the law and it is said the tendency is to widen its scope, for it is recognized to be a flexible form of procedure commingling and administering equitable doctrines as well as those of the law. [See Clifford Banking Co. v. Donovan Commission Co., 195 Mo. 262, 288, 94 S. W. 527; Crigler v. Duncan, 121 Mo. App. 381, 99 S. W. 61; Jenkins v. Clopton, 141 Mo. App. 74, 121 S. W. 759; Moses v. McFerlan, 2 Burr. 1005.]

On viewing the matter here in judgment precisely ' as it is, it appears Jackson voluntarily assumed the office of trustee and received from Minter Brothers the' fund of $16,745 under an express agreement to account to plaintiff for so much thereof as the services rendered by him to Minter Brothers in and about the Bradstreet litigation were reasonably worth. Of the subject-matter, Mr. Jackson was fully advised, for he himself had employed plaintiff for Minter Brothers under a contract through which the compensation depended entirely upon the fact and amount of recovery. Further, Jackson personally knew the amount and value of plaintiff’s services, for as attorneys, they labored throughout together. Having thus voluntarily assumed the obligation mentioned and made the express promise to Minter Brothers for the benefit of plaintiff, Jackson should be estopped, on the principles of natural justice alone, from denying plaintiff’s right to proceed against him as for money had and received to Ms nse to the amount of the reasonable value of such services. Where an express promise to pay appears, the authorities seem to recognize a valid distinction touching a broader right to proceed and recover in tliis'form of action than where the promise is merely implied or raised by the law, and this broader right arises from such express promise alone; at least, this is the thought we glean therefrom. [See 27 Cyc. 854, 855; Collins v. Phelps, 3 Day (Conn.) 506.] It would seem to be a just doctrine, for no one is injured by being required to answer according to the full measure of his express promise. . That money had and received is a proper form of proceeding on the facts in judgment here, if the amount involved were a determinate one, is not to be questioned and we discern no just principle which should preclude plaintiff from enforcing the express agreement made by Jackson with Minter Brothers for his benefit. As developed on the trial and found by the jury, this agreement was that defendant would account to plaintiff for the reasonable value of his services to Minter Brothers and in the particular circumstances of the case we believe the proceeding and course pursued to obtain relief a proper one. It certainly comports with the precepts of natural justice and good conscience and entails no result upon defendant other than that which he voluntarily assumed by his express agreement. The matter of the reasonable value of plaintiff’s services to Minter Brothers was fully and fairly submitted to the jury by instructions given for both plaintiff and defendant, and the jury were expressly directed that no liability could be enforced against defendant Jackson except for the reasonable value of plaintiff’s services rendered to Minter Brothers, the client of both. .

. In his answer, defendant pleaded that he had mailed to plaintiff a check for $500' in full satisfaction for his services and that plaintiff had retained and appropriated the check to his own nse. At the trial, plaintiff introduced defendant’s letter and also the check, which had never been cashed, in evidence and introduced as well a letter signed by himself and MrSuddath declining to accept the checks in full satisfac tion. Several letters passed between the parties touching this matter. The letters of defendant to plaintiff urged that the check should be received in full satisfaction for plaintiff’s services and that such was a reasonable compensation therefor, while the letters of plaintiff to defendant touching the same matter each insisted that the check would not be accepted in full satisfaction and that plaintiff’s services were worth much more than that amount. These letters reveal that each side argued therein in support of his position. No objection was made by defendant to those letters written by him to plaintiff, but objections were made to receiving in evidence all of the letters written by plaintiff to defendant in answer thereto. It is argued the court erred in admitting these several letters of plaintiff in evidence, but we are not so persuaded. The letters of plaintiff when introduced together with those of defendant were entirely competent as tending to prove he had not appropriated the check to his own use and that no accord and satisfaction obtained in the ease. The entire correspondence was introduced seriatim and it pertained to the res gestae of an affirmative defense pleaded in the answer, for it tended to and did disprove such defense. It was proper that all of these letters between the parties touching the forwarding of the check and plaintiff’s rejection thereof should go to the jury in order that all might be considered in determining as to whether or not plaintiff had appropriated the check to his own use as alleged in defendant’s answer. [See Hammond v. Beeson, 112 Mo. 190, 201, 20 S. W. 474.]

A considerable portion of defendant’s brief is devoted to plaintiff’s hypothetical question. It is a long one and seems to have been carefully prepared. We will not incumber the opinion by setting it out here but dismiss the matter by saying that after carefully considering all of the arguments directed against it, we regard none of them as possessing sufficient merit to operate a reversal of the judgment. Under this question, expert witnesses for plaintiff, in expressing an opinion as to the reasonable value of plaintiff’s services to Minter Brothers and the amount he should recover, took into consideration the fact of the amount of the recovery and the further matter that plaintiff’s fee was contingent upon the fact and amount of the recovery. It is earnestly argued that this was error, for it is said the mere fact that plaintiff’s fee was contingent in and of itself reflects no light whatever upon the reasonable value of the services he performed. In accordance with the rules of strict logic, such may be true but certainly plaintiff was entitled to the benefit of the express agreement made between himself and Mr. Jackson for Minter Brothers at the time of his employment. By the very terms of this agreement as testified to by both plaintiff and Jackson, plaintiff’s compensation was to depend upon the fact and amount of the recovery. It was to be determined by reference thereto. No one can doubt, for it is a matter of common knowledge, that attorneys usually receive larger fees when they are so contingent than when positively agreed upon. The authorities declare that if a specific contract for a contingent fee is made and the amount of such fee is not agreed upon but is to depend entirely upon the fact and the amount of the recovery, such fee may be sued for on a quantum meruit and it'is competent for the expert witnesses in giving the reasonable value of such services to take into consideration the element of contingency. In the circumstances of such a contract, we regard the matter of the contingency of the fee as a just and proper element for consideration. [See 3 Am. & Eng. Ency. Law (2 Ed.), 420, 421, 422, 423.] The authority cited says: “It is a recognized rule that an attorney may properly charge a much larger fee when it is to he contingent than when it is not so.” [See, also, Ellis v. Woodburn, 89 Cal. 129; Smith v. Couch, 117 Mo. App. 267, 272, 92 S. W. 1143; Frink v. M’Comb, 60 Fed. 486, 490.]

Among others, defendant requested and the court refused defendant’s instruction No. 2 as follows: “If you believe from the evidence that the terms of the employment of the plaintiff agreed upon between him and the defendant as the agent of Minter Bros, were that the compensation of the plaintiff, in the ca’se of Minter Bros. v. Bradstreet, should be determined by this defendant at the conclusion of said case of Minter Bros. v. Bradstreet, and that at the time of settling with Minter Bros., this defendant did fix plaintiff’s compensation in the aforesaid case at $500- and secured that amount from Minter Bros, for plaintiff, then plaintiff is not entitled to recover anything in addition to said sum of $500' in this case.” It is argued the court should have given this instruction as it was competent for Mr. Jackson and plaintiff to make an express agreement that Mr. Jackson should determine the amount of plaintiff’s fee. Though such be sound doctrine, the court was justified in refusing this instruction if the evidence did not warrant it. The instruction requested hypothesizes the facts as though it appeared plaintiff agreed that his fee “should be determined” by Mr. Jackson. We find no evidence to the effect that plaintiff agreed Mr. Jackson should “determine” his fee. What Mr. Jackson said at the time of the employment to Mr. Houts was, “If you want a fee now, I will get it. If you want to wait and take a chance of being able to get a better fee, then you can do that — just as you please,” and Mr. Houts thereupon agreed to wait until the litigation had concluded, which was twelve years thereafter. Furthermore,- it appears from a letter from Mr. Jackson to Mr. Iiouts that Jackson did not understand the arrangement as hypothesized in this instruction. In this letter, Mr. Jackson explains to Mr. Houts that, at the time of the settlement with Minter Brothers when he accepted the $16,745' for himself and other counsel, he provided in such settlement that Mr. ITouts and Mr. Suddath were to have $500' each for their services. Concerning this, Mr. Jackson wrote, “Of course, I did not have any right to conclude you as to the demand you may make against the Minter Brothers for your services but I have given you the circumstances of the settlement that was made.” From this it appears that Mr. Jackson did not understand that he had authority to determine plaintiff’s fee, for he expressly disclaims it and upon carefully scrutinizing the evidence given by him at the trial, it is entirely clear that he did not so testify. Such being the state of the proof, the court very properly refused the instruction above copied.

Though we will not prolong the opinion by discussing all of the arguments advanced' for a reversal of the judgment, it may be said they have all been fully considered and we believe the case was fairly tried without reversible error. The judgment should be affirmed. It is so ordered.

Reynolds, P. J., and Caulfield, J., concur.

Case Details

Case Name: Houts v. Dunham

Court Name: Missouri Court of Appeals

Date Published: Jan 9, 1912

Citation: 162 Mo. App. 477

Court Abbreviation: Mo. Ct. App.