Galveston, Harrisburg & San Antonio Railway Co. v. Ginther

Ginther, intending to sue plaintiff in error for damages for personal injuries, employed Patterson Buckler as his attorneys, and executed to them the following instrument: "El Paso, Texas, March 26, 1900. — I have employed Patterson Buckler tosue the Galveston, Harrisburg San Antonio Railway Company for $20,000, as damages for injuries sustained by me in consequence of its negligence on February 22, 1900, in the yards at El Paso, Texas, on repair track No. 3. I agree to give, and hereby assign to them one-third of whatever may be recovered in said suit, or by way of compromise. (Signed) Paul Ginther."

The attorneys filed the suit April 6, 1900, and were prosecuting it, when Ginther compromised with plaintiff in error, who, with notice of the rights of the attorneys under the above instrument, paid him $2500 in full settlement. Patterson Buckler intervened in the suit, alleging Ginther's insolvency and the other facts, and sought and obtained judgment against plaintiff in error for one-third of the amount paid to Ginther. This judgment having been affirmed by the Court of Civil Appeals, this writ of error was sued out. The propositions upon which a reversal is asked are:

1. That the alleged assignment was not good, because (a) suit not having been filed when it was made, the cause of action was not one which would have survived the death of the assignor, under the Act of 1895 (Sayles' Stats., art. 3353a), and which was not therefore assignable under that statute; and (b) such assignment was not in accordance with the Act of 1889 (Sayles' Stats., art. 4647), in that it was made before the suit was begun and was not filed and noted on the docket as required by that act.

2. That the contract was contrary to public policy and void, in that it attempted to take away the right of the person injured to compromise his claim.

3. That the instrument was not an assignment, but a mere agreement for payment of a contingent fee.

In the case of Gulf, Colorado Santa Fe Railway Company v. Moore, 68 S.W. Rep., 559, the action was brought by the heirs of the person injured who had died without having sued. The point was made by the defendant and overruled by the Court of Civil Appeals, that the cause of action abated upon the death of the plaintiff's ancestor. This ruling was assigned in an application to this court for writ of error, which was refused. In Railway Co. v. Andrews, 67 S.W. Rep., 923, the question as to the validity of an assignment made before institution of suit was considered and decided in favor of its validity by the Court of Civil Appeals, and, upon application for a writ of error to this court, the same conclusion, after much consideration, was arrived at. These decisions are against the first proposition of plaintiff in error.

As to the second, it may be said that there is very high authority for the doctrine that contracts between attorneys and clients which undertake to deprive the latter of power to end the litigation by settlements or compromises, are contrary to public policy and therefore invalid. But the contract in this case contains no stipulations which make it obnoxious to this objection. It simply entitles the attorneys to a part of any sum realized by judgment or compromise, and this is the only right asserted by them. The instrument can not therefore be held void on this ground.

The third contention is the one on which the writ of error was granted. The instrument does not in terms attempt to assign a present interest in the cause of action, but agrees to give and assigns one-third of "whatever may be recovered" in the suit or by way of compromise. Mature consideration and examination of authorities has convinced us that the instrument operated as an assignment of an interest in the fund when recovered. This was held by the Court of Civil Appeals in Texas Pacific Railway Co. v. Vaughan, 40 S.W. Rep., 1065, 16 Texas Civ. App. 403[16 Tex. Civ. App. 403], upon an instrument in which the language was in effect the same as that before us. The application for writ of error which was refused by this court specifically raised the point. The conclusion is supported by abundant authority. Williams v. Ingersoll, 89 N.Y. 508; Fairbanks v. Sargent, 104 N.Y. 108; Patten v. Wilson, 34 Pa. St., 299. The instrument plainly expressed the intention to assign an interest in a cause of action of which a judgment or compromise was to be the measure, and the expression of this intention, in any language, was all that was required to make an assignment as contradistinguished from a mere agreement to pay so much as a contingent fee. Christmas v. Russell, 14 Wall., 84. While the contract may have left the plaintiff free to compromise, it gave the assignees an interest in the claim which they had the right to have paid in the settlement. This right, when the defendant knew of its existence, could not be defeated by payment to the plaintiff. The position of defendant was that of any other person paying a debt to the original creditor instead of an assignee whose rights were known. Railway v. Vaughan, supra; Williams v. Ingersoll, supra.

Affirmed.