Clifton v. Clark , 83 Miss. 446 ( 1903 )

1. LAWYERS. Partnership. Contract. Death. When contract terminatedby. Where a contract is made with an attorney at law for professional services and it is contracted or understood that he alone is to render the service, or that his skill is depended upon exclusively, the death of the attorney terminates the contract, although he be a member of a copartnership of lawyers.

2. SAME. When contract not terminated. A contract for the joint professional services of a copartnership of lawyers, each member of the firm being a general practitioner, is not, however, one in which the continued existence of any one member of the firm is essential to its completion and performance.

3. SAME. Right of client to abrogate the contract. Where a contract is made for the professional services of a firm of lawyers, and one of them dies before the completion of the services, the client thereupon has the option of abrogating the con-tract by discharging the survivor, paying for services previously rendered. 447 83 Miss.] CLIFTON v. CLARK. Statement of the case.

4. SAME. Duty of survivor. On the death of one member of a partnership the survivor is bound unless discharged by the client, to complete all executory contracts of the firm, and he cannot exact from the client compensation for so doing greater than that which the copartnership was to receive.

5. SAME. Failure of client to discharge survivor.

On the death of one member of a law partnership if a client of the firm fail to exercise his right to discharge the survivor and permit him to render the services, he will be liable on the contract made with the firm to the same extent as if neither of the partners had died, and the estate of the deceased member will be entitled to recover its just proportion of the fee.

6. SAME. New contract with survivor.

On the death of one member of a law partnership a new contract between the client and the survivor will not defeat a recovery by the estate of the deceased partner against the client, since the survivor cannot abandon the business of the firm and contract to the detriment of the financial interest of his deceased partner's estate.

7. SAME. Right of survivor against estate of decedent.

The right of a survivor of a legal copartnership to claim an enhanced share of a fee because of services rendered after the death of his late partners is not here involved, the parties in interest having adjusted that matter by agreement. The bill of complaint in this case was filed by appellees, doing business under the name ``'Clark, Hood Company," against the executors of the estate of J. A. Blair, deceased, to recover the sum of $ 390.55 on a claim duly probated against said estate, being balance due on open account by Blair at the date of his death. The executors filed a cross bill claiming as an off-set fees due by complainants to Blair for legal services rendered. To this cross bill a demurrer was filed, which being overruled, answer was made and depositions taken on both sides. On final hearing the chancellor dismissed the cross bill as not being sustained by proof, and granted a decree against the estate of Blair for the amount sued for. From that decree appellants, the executors of Blair, prosecuted this appeal. So far as material to the decision of the case the following are the undisputed facts disclosed by this record:

J. A. Blair and W. D. Anderson composed a firm of lawyers located in Tupelo, and doing business as counsellors and attorneys at law and general practitioners throughout the state of Mississippi. Under the terms of their partnership contract J. A. Blair, the senior member of the firm, received three-fourths of all the fees, and W.D. Anderson, the other member, one-fourth. On September 5, 1895, Clark, Hood Company, B. T. Clark Co., and John Clark and B. T. Clark, as surviving partners of R. B. Clark Co., entered into a written contract of employment with the legal firm of Blair Anderson, whereby the said Blair Anderson were employed to manage and conduct certain litigation then pending in which said Clark, Hood Company, individually and as, a firm, and the Clarks, also, as surviving partners, were interested. This litigation, to a large extent, consisted of claims pending against the estate of R. C. Clark, deceased, and certain other matters growing out of the administration of said estates. The consideration of the employment was that the said contracting parties agreed to pay Blair Anderson a stated fee of $ 1,200, and a contingent fee of twelve and a half per cent upon all sums which the said attorneys might succeed in having allowed by the court against the estate of R. C. Clark. The pending litigation proceeded for a period of over three years, during more than two years of which time there was a continual taking of depositions in the case needed in the preparation of the same for a hearing before the auditors and the chancery court. During the year 1898 J. A. Blair, the senior member of the firm, being in feeble health, procured the services of W. H. Clifton, a practicing attorney, to assist him in the preparation and trial of the Clark estate matters, and Clifton did render material assistance. After the case was prepared for trial, but before it came on for final hearing, J. A. Blair died, in November, 1898. After the death of Blair appellees. Clark, Hood Company, agreed that Clifton and Anderson, in conjunction with their other attorneys, should continue in the prosecution of the pending litigation, provided it would not cost the said Clark, Hood Company any more money for lawyer's fees. This understanding was agreeable to both Clifton and Anderson, but in consideration of the f act that the death of Blair would entail more labor upon Anderson, the executors of Blair agreed that he, Anderson, should receive one-third of the contingent fee for which the Clarks and Hood had contracted, instead of one-fourth his interest as evidenced by the terms of the copartnership contract. between Blair and Anderson. Subsequently, Clark, Hood Company, on account of a disagreement with another of their lawyers, by which he refused certain additional services which. Clark, Hood Company demanded of him, without additional compensation, refused to abide by the understanding with Clifton and Anderson, and finally attempted, so far as related to the representatives of Blair, to terminate the contract relations which had existed between them and the firm of Blair Anderson. Thereafter W. H. Clifton still tendered his services and held himself in readiness to dicharge the duties of attorney and counsellor at law in and through said litigation, but his services were declined.

On January 10th, after this attempt to abrogate the contract with Blair Anderson, the Clarks and Hood made another contract with W. D. Anderson by which they employed him for the contingent fee of one-third of twelve and a half per cent of the amount which might be recovered, to proceed with the conducting of the litigation, for the managing of which they had contracted with Blair Anderson, in the lifetime of Blair. The duties devolved upon Anderson by this new contract were identical with those imposed upon him by the original contract made with Blair Anderson, and the compensation was the same agreed on between Anderson and the executors of Blair. After the execution of this new contract with Anderson the litigation proceeded under the management of Anderson and Robins, the other lawyer of Clark, Hood Company, who had also been employed in the lifetime of Blair. The result of this new arrangement was that Clark, Hood Company paid out for lawyer's fees a considerbale amount less than they would have been required to pay had Blair lived, and the litigation been proceeded with under the existing contracts. After the final termination of the litigation, which resulted favorably to Clark, Hood Company, the executors demanded Blair's portion of the contingent fee, which they claimed was due his estate under the contract with Blair Anderson . This relief, as before stated, was denied by the chancellor, and forms the basis of this appeal.

It is urged by appellants that the chancellor misconceived the law applicable to the state of case made by this record, and that there are several different theories under which they are entitled to recover. It is said that the facts disclosed by the unsuppressed depositions show conclusively that during the lifetime of Blair it was agreed by all parties in interest that, on account of Blair's failing health, Clifton should be substituted in his place and stead, and that this was in effect the making of a new contract. Again it is said, that after Blair's death this agreement was ratified by appellees and Anderson and Clifton, as the substitute of Blair, were continued in charge of said litigation, and thereby appellees became bound to ``the estate of Blair for the amount of the contingent fee agreed on. Finally it is urged that as appellees continued Anderson in control of the business entrusted to his late firm, they are by their acts estopped from claiming that the contractual relations existing between themselves and Blair and Anderson were terminated by the death of Blair, and that this was the waiver of any rights. which they may have had of dissolving the relation of attorney and client.

The first two contentions are controverted by the appellees, and there is a sharp conflict in the testimony, and if these were the only questions involved in the case we would hesitate to disturb the finding of the chancellor upon the question of fact. It is manifest that, if Clifton was empowered by the clients to take Blair's place after Blair's death, or if they agreed to the substitution of Clifton in the place of Blair in his lifetime, the question would be absolutely free of doubt, because then it would not be a question of the rights arising upon the dissolution of a partnership, but would be a plain, simple suit upon a contract made and entered into between parties still living.

The grave and important question involved in this litigation is presented by the remaining contention of appellants. The case here presented is that of a contract made between clients and a firm of attorneys, general practitioners, who agree to perform certain legal services for certain compensation, partly absolute, in part contingent on ultimate success. Upon death of one of the firm before a final termination of the litigation the survivor completes the services and conducts the litigation to its final and successful conclusion. What is the legal principle applicable to the case stated? The determination of this question necessitates the consideration of the relative rights and duties existing between attorney and client, and, as incidental to the main question, the duties and obligations imposed upon the survivor of the firm of attorneys.

The general rule in reference to contracts for special, personal services is accurately and clearly stated in the case of Cox v.Martin, 75 Miss., p. 238, where it is said: "It is clear that wherever the continued existence of the particular person contracted with — the contract being executory — is essential to the completion of the contract by reason of his peculiar skill or taste, death terminates the contract; as, for example, contracts of authors to write books, of attorneys to render professional services, of physicians to cure particular diseases, of teachers to instruct pupils, and of masters to teach apprentices a trade or calling.'' We adhere to this statement of the law in all cases to which it is applicable, but the case at bar is essentially different in its material facts from the case of Cox v. Martin. This is not a contract with any special attorney to render professional services; the continual existence of no particular person is essential to the completion of the contract; the successful consummation of the contract or the rendition of the services contracted for here does not depend upon the peculiar skill or tastes of any named individual; this is a joint contract with a firm of attorneys who are both general practitioners. We reiterate: Where a contract is made with an attorney, and it is specially contracted or understood, that he, alone, is to do the work, or to render the services, or that his skill exclusively is depended upon, and then the death of the attorney terminates the contract, whether he be alone or a member of a firm. And so where a client enters into a contract with a firm of attorneys for certain legal services to be rendered, for a fee stated, or upon an implied promise to pay the value of the services rendered, and contracts, as here, for the services of both members, and one of that firm dies before the contract is finally completed, the client then has the option of abrogating the contract entirely by discharging the survivor, settling for services previously rendered, and employing other counsel to conclude his pending litigation. This we understand to be the full extent of the decision of this court in Dowd v. Troup, 57 Miss., 296. It is there held that the client permitting the surviving partner to proceed with the services for which the firm had been previously fully paid, could not be called on to pay any additional compensation to the individual member who had in fact performed the services. That case does not pass on the question, nor is it presented for necessary decision here, as to what compensation, if any, the attorneys would be entitled to recover for services rendered previous to the dissolution should the client exercise his right of choice, and terminate the employment, where the fee under the contract was entirely contingent upon success. We intimate no opinion on this point. But see as illustrative:Wright v. McCampbell, 75 Tex., 644; Landa v. Shook, 87 Tex., 609;Badger v. Celler, 41 Hun., 599; Smith v. Hill, 13 Ark., 174; Littlev. Caldwell, 101 Cal., 553.

The contract which shows the basis of the case at bar shows that the employment of Blair and Anderson was a joint employment of both members of the firm to render certain specified services and to manage and conduct certain matters then in litigation. This contract entitled the clients the the services of the firm, but was not a contract for the individual services of any named member of the firm. Either partner may attend to the business entrusted to a firm of attorneys, for the act of each is the act of all, and such a general contract does not give the client the right to demand that any particular member of the firm shall render the services or conduct the litigation. Eggleston v.Boardman, 37 Mich., 14; Page v. Welcapt, 81 Mass., 536.

So that when one member of a firm of general practitioners, employed under such a contract dies, it becomes the duty of the surviving partner to hold himself in readiness to perform the services required of the firm under the contract, and to complete the unfinished business for the benefit of the client. This doctrine is impliedly recognized in the case of Dowd v. Troup, supra, where the surviving partner was denied extra compensation for services rendered after the death of his partner, and this conclusion can only be supported on the ground that the duty of completing the contract devolved on him as surviving partner. And it is there expressly stated that the surviving partner in rendering such services "was but discharging his own obligation as a member of the partnership."

Inasmuch as a general employment of a firm of attorneys is a joint employment of the members, and it is the duty of each to discharge the joint obligation, one member of the firm cannot, upon dissolution of the partnership, whether by death or other-wise, refuse to carry to completion all executory contracts which were in force at the date of such dissolution. Walker v. Goodrich, 16 Ills., 341; Polsley v. Anderson, 7 W. Va., 202; Johnson v. Bright, 15 Ills., 464; Smith v. Hill, 13 Ark., 173.

With the possible limitation that they might be entitled to some additional compensation from the estate of his deceased partner for services rendered in winding up unfinished business, we see no reason why the general rule applicable to commercial partnerships should not apply to surviving partners of firms of attorneys. Having jointly undertaken the business entrusted to the partnership, each partner was under obligation to conduct it to the end; they owed this to the client and to each other. The very basis of every partnership is that there is "an implied obligation on every partner to exercise due diligence and skill, and to devote his services and labors for the promotion of the common benefit of the concern." Starr v. Case, Admr., 59 Ind., 491; Story, Part, secs. 182, 331; Denver v. Roane, Exer., 99 U. S., 355;Osment v. McElrath, 68 Cal., 466.

As to the executory contracts only partially fulfilled the death of one partner does not absolve the other from the duty of rendering the services contracted for, and the active functions of the partnership are continued in existence until full performance by the surviving partner. This principle is applicable to partnerships between attorneys as to executory contracts when the individual personal services of the deceased partner was not especially contracted for. Sterne v. Goep,Admr., 20 Hun., 396; Bates' Part, sec. 711; Denver v. Roane, supra.

And in upholding the doctrine that this duty devolves on the surviving partner and is one of the risks and obligations assumed by him in the formation of the partnership, the supreme court of California inLittle v. Caldwell, 101 Cal., 553, says:

"This rule is particularly applicable in the settlement of the partnership accounts of attorneys at law, when the firm has been dissolved by the death of one member leaving contracts not fully performed, often constituting a large part of the assets of the partnership, and which it is the duty of the survivor as far as possible to complete and preserve for the benefit of the firm.

"While it is certainly true when a professional partnership between attorneys at law is dissolved by the death of one, the survivor is entitled to his own future earnings, and is not required to make an allowance in the settlement of the partnership accounts for what may be termed the good will of the partnership, or for the profits of such future business as may have been given to him by former clients of the firm, still, in regard to unfinished business intrusted to the firm, and which the client permits the surviving partner to complete, such contract of employment, although not capable of assignment, is still to be viewed by a court of equity as an asset of the partnership; and it is none the less an equitable asset, when, as in this case, the compensation for such services is entirely contingent upon the final success of the litigation in which the services are to be rendered."

In a class of cases beginning with McGill v. McGill, 2 Metcalf, 258, it is stated as the general rule that the death of one of the firm of attorneys terminates the contract, but that the firm is entitled to compensaion for services rendered during he continuance of the engagement, and the reason for the conclusion is thus stated:

"A contract with a lawyer, the performance of which requires the exercise of professional skill, is personal in its character. The service of the person employed is indispensable in the performance of the contract. Lawyers are employed in professional business because the client has confidence in their integrity and in their qualifications." We have no fault to find with the language here employed in all cases where applicable. A contract with a professional man for his individual services as pointed out in Cox v. Martin, supra, is always personal in the sense that it is terminable by death, and that performance of it cannot be demanded of his personal representatives, and it is also true that such a contract is terminated by death when the service of the person employed is indispensable in the performance of the contract. But, as herein already pointed out, the service of no special person is "indispensable in the performance of the contract" in a contract, such as the one under review, with a firm of general practitioners contracted with as a firm and not as individuals. The McGill case ignores absolutely the duty and obligation of the surviving partner to the client and to the estate of his deceased partner. To our mind a very important and material consideration, and which must often vary the general rule so broadly stated in that case.

If, after dissolution of the partnership by death or otherwise, the estate of the retiring partner be liable for the tortious or negligent act of his late partner, in reference to partially fulfilled executory contracts as decided, in the McGill case, Wilkinson v.Griswold, 12 Smed. M., 669, and other cases, it would be illogical and inequitable to deny the representatives of the deceased partner an equitable participation in the compensation accruing by reason of the subsequent performance of such contracts by the surviving partner, and which the survivor was in duty bound to perform for the benefit of the firm.

From the foregoing it necessarily follows that the surviving partner could not of his own motion procure release from this duty or service and refuse to carry out to its ultimate completion, the work which had been intrusted to the firm before the death of his partner. Nor could the client, with the intent of defeating the claim of the estate of the deceased partner, re-employ the survivor of the law firm and thus, by making a new contract, have the benefit, without making compensation therefor of the services of the deceased partner, and by such contract only procure services to which he was already entitled.

Making a concrete application of these general principles to the case at bar, and waiving consideration of all disputed intentions, we find that after the death of Blair, appellees, Clark, Hood Co., attempted to enter into a new contract with Anderson, the surviving partner, by which Anderson was retained in their employ and conducted to a satisfactory conclusion the litigation which had been entrusted to the firm of Blair Anderson.

It is true that the employment of Blair Anderson was a joint employment, and that by the death of one of the partners clients were deprived of his services, but this does not render them the less liable for the compensation agreed on for the good and sufficient reason that one member of the firm did perform the services which the firm undertook to render, and, therefore, the contract was fulfilled. It is also true that the employment of Anderson was by another agreement made after the death of Blair, but equity and good conscience forbid the surviving party to abandon the business of the firm and contract to the detriment of the financial interest of his deceased partner's estate, even when, as in the present case, such action is dictated by an honest but erroneous conception of the law. Nor can the client thus avail himself of the services rendered by the deceased attorney in his lifetime, and then refuse to pay the compensation agreed upon, after, by reason of services, the litigation has been brought, to a successful termination.

It may be that the surviving partner might have an equitable claim for a larger share of the compensation received for his services rendered after the death of his partner, but that question we are not called upon now to decide for the reason that the executors of Blair agreed with Anderson as to what his compensation should be, and that compensation, the record discloses, has already been received by Anderson, and it further appears that with eminent and commendable fairness and consideration, he expressly disclaims any interest in any fees which may be found due the estate of Blair by appellees. Clark, Hood Company, did not take advantage of the option of finally terminating the contractual relations which existed between themselves and Blair Anderson, but contented themselves with allowing the surviving partner to remain in control of and conduct the business to its close, and this was a recognition and a continuance of their original contract, whereby they remain liable to the firm of Blair Anderson for the full amount of the compensation originally agreed on, and as Anderson acknowledges receipt of his interest in that compensation, the remainder to be ascertained by calculations according to the terms of the contract, is now due the estate of Blair.

It is urged by appellees, that viewing the services rendered. by Blair Anderson in the lifetime of Blair, as a part performance of a contract, that then the estate of Blair is not now entitled to further compensation, because upon quantum meruit the firm had been fully paid for all services rendered prior to the death of Blair. This reasoning is without force in the present case. The doctrine of quantum meruit can find no lodgment here. There was no partial performance of the contract in the instant case on which a quantum meruit could be based or calculated; the contract was fully complied with by the rendition of the required services by the surviving partner. The firm was not discharged and settled with up to date of dissolution, but through one member thereof made full performance of the contract. This contract provided for both an absolute and contingent fee; the absolute fee had been paid, the contingent fee depended upon the succssful termination of the suit, all to be due if the suit was won, nothing to be due if the suit was lost. Therefore, the rights of Blair were not fixed until the termination of the litigation, and are now to be ascertained by a calculation upon the amount recovered as the fruits of the services rendered by Blair Anderson, whether as a firm or individually.

It follows, therefore, that the decree of the chancellor denying the relief prayed for by the cross bill of appellants was erroneous. Appellants, as executors of the estate of J. A. Blair, deceased, are entitled to recover the amount, of the contingent fee due under the terms of the contract with Blair Anderson, after first deducting therefrom the 4 1-4 per cent received by W. B. Anderson since the death of J. A. Blair. All parties necessary to a final determination and adjudication by a court of equity of the matters here involved are before the court.

The decree of the chancery court is reversed and the cause remanded for further proceedings in accordance herewith.

Reversed and remanded.