Laybourn v. Bray Shifflet

This is the second appeal to this court. The former appeal will be found in 190 S.W. 1159. The appellees, Bray Shifflet, sued appellant, Laybourn, upon a contract of employment as attorneys to represent and prosecute certain litigation between appellant and the Spaulding Manufacturing Company in the state of Iowa, which contract is in writing and dated September 30, 1912, executed and signed after the case had been tried in the lower court, but afterwards appealed, reversed, and sent back for new trial. The contract stipulated, among other things, that appellees had charged appellant $1,000 for their services, $500 thereof paid by note, the remaining $500 to be paid on the expiration of the statutory period for appeal of the case, and, if appealed, $100 additional for services to be rendered in the Supreme Court and $200 additional in the event of reversal of the judgment, and retrial in the lower court. Recovery was sought on the $500 note and the other $500 stipulated for after the time for appeal and the $100 for services rendered in the Supreme Court. It is alleged that the appellees were employed to establish appellant's claim against the Spaulding Manufacturing Company for the sum of $4,124.13, upon which suit was filed in Poweshiki, Iowa; that about the same time the Spaulding Manufacturing Company entered suit against appellant to recover about the same sum and in the same court; that thereupon appellant dismissed his suit against the company, and by proper pleadings denied that he owed the company the amount sued for or any part thereof, setting up his claim of the amount due him and the further sum of $295.87 for caring for certain property. The amount sued for by the company was claimed to be due it by appellant for moneys received by him belonging to the company while acting as agent for the company in Texas, appellant claiming the amount so retained by him as due him for commission on sales, and which sum he had retained and applied on the amount due him. Upon reversal of the case by the Supreme Court of Iowa and upon its return to the district court, where the suit originated, the Spaulding Company dismissed its suit against appellant, and it is alleged under the law or that state the dismissal carried with it a determination of appellant's claim against the company. There are two other counts in the petitions, Nos. 6 and 7, by which appellees pleaded in the alternative to recover on the original contract, and by the seventh count, if for any reason they should not be able to recover on either contract, that they recover the value of their services, which they allege to have been of the reasonable value of $1,500.

The answer of appellant, as well as the petition of appellees, is quite voluminous, but we think it may be stated that the first ground for defeating the contract of employment alleged by appellant is that appellant was desirous of securing attorneys not connected with the Spaulding Company at that time, and would not be during the course of the litigation then in hand, and that the appellees represented that they were not then so employed by Spaulding Company, and agreed that they would not accept employment as such during the pending litigation; that appellees breached their agreement and thereafter accepted employment from the company. It is also alleged that appellant was induced to enter into the contract sued upon dated September 30, 1912, by "misleading, false, and fraudulent representations, statements, and conduct" of appellees and to employ the appellees as attorneys and to execute the contract and note upon which this suit is based. One of the grounds of fraud was, as alleged, that Spaulding, some time in September, 1912, retained appellees as the company's attorneys, which was concealed from appellant; that one of the attorneys offered to confess judgment for Spaulding, but afterwards the case was tried in which appellant obtained judgment; that the contract was executed a day or two after appellant obtained judgment, was secured from appellant upon the definite and positive assurance that the record was in such condition as to assure affirmance and would be affirmed by the Supreme Court, and appellant fully protected thereby; that appellees intended thereby to secure an unjust advantage of appellant. There is a long recital of acts on the part of appellees in order to show acts and conduct in connection with the Spaulding Company to prevent a recovery on the part of appellant and to interfere with other employment secured by appellant with another company. It is also alleged that in obtaining the contract the appellees took advantage of their relation to him and superior knowledge as lawyers to obtain the contract without making that full and complete statement of facts that is required of an attorney dealing with a client, and it is again alleged that the contract was obtained "by the fraud and deception of plaintiffs." It is alleged substantially by both parties that the original contract of employment was made March 13, 1909, and reduced to writing; that thereby appellees were to receive one-third of whatever sum they might recover in the suit above the sum of $2,000. Appellant alleged during the progress of the suit and after certain demurrers were sustained appellees became dissatisfied with their contingent compensation, and also, taking advantage of a favorable verdict, induced appellant to make the contract of September 30, 1912; that under their original contract appellees would have been entitled to only $850. We believe this will be a sufficient statement of the pleadings to understand the issues submitted by the trial court. As there appears to be no complaint that the answer of the jury to the issues submitted or the judgment of the court are without sufficient evidence to support them, and as we conceive it, under the assignments, it will only be necessary to set out the charge and issues together with the jurors' answers, which are as follows:

"(1) An attorney must act toward his client with the utmost good faith and fidelity, and must make known to him the exact status, so far as he is able, of all matters concerning which he is employed.

"(2) Fraud is never presumed, and must be established by preponderance of the evidence by the party alleging same as grounds for avoidance of a contract.

"(3) Expressions of opinion as to what could or would be done in the future are not such false representations as to entitle one to avoid a contract on the ground of fraud.

"(4) The burden of proof is upon the plaintiff to prove the material allegations in their petition by a preponderance of the evidence, by which is meant the greater weight or degree of credible testimony.

"(5) This case is submitted to you upon special issues and you will answer the following questions:

"Question 1. Did plaintiff Bray promise Laybourn in discussing with him the execution of the contract of March 13, 1909, that he, the said Bray, would not accept employment from or be under the influence of the Spaulding Manufacturing Company during the progress of any litigation that might grow out of the differences of Laybourn with the Spaulding Manufacturing Company? A. No.

"Question No. 2. If you have answered the foregoing in the affirmative, then did said Bray breach his promise to the defendant Laybourn? A. ______

"Question No. 3. Was the contract of March 13, 1909. at any time mutually abandoned by the parties? A. Yes.

"Question No. 4. Did Bray make misleading, false, and fraudulent representations and statements to Laybourn to induce Laybourn to employ him as his attorney and to enter into the contract of September 30, 1912? A. No.

"Question No. 5. Was the contract of September 30, 1912, reasonable, fairly made, and entered into between the parties after an honest, full, and fair understanding of all material matters relating thereto? A. Yes.

"Question No. 6. Did Laybourn, after he had full knowledge of all the material facts and circumstances concerning the manner in which plaintiffs had conducted his litigation with the Spaulding Manufacturing Company, agree to pay plaintiffs according to the contract of March 30, 1909? A. Yes."

On these findings the court rendered judgment for appellees for the sum of $1,356.19, which is the amount called for in the contract of September 30, 1912, together with interest thereon up to the date of the judgment.

Appellant presents assignments to issues Nos. 1 and 2, which assignments assail the issues because it is asserted the court placed the burden on appellant to show fraud on the part of appellees in securing the first contract. In other assignments it appears to be the contention of appellant that it rested with appellees to show the utmost good faith in accepting the employment as an attorney and in entering into a contract for compensation. This rule does not apply until after the relation of attorney and client exists. It would he a harsh rule if an attorney could not recover a fee contracted to be paid under employment until he shows he acted in good faith and disclosed fully to his proposed client all of the conditions before he know them or could positively know them. The rule does not apply to a mere contract whereby the attorney's compensation is fixed upon employment. Rabb v. Goodrich,46 Tex. Civ. App. 541, 102 S.W. 910; Stanton v. Embry, 93 U.S. 548, 23 L. Ed. 983; Cooley v. Miller, 156 Cal. 510, 105 Pac. at page 986; Elmore v. Johnson, 143 Ill. 513, 32 N.E. 413, 21 L.R.A. 366, 36 Am. St. Rep. 401; Ward v. Yancey, 78 Ill. App. 368.

The assignments complaining of issues 1 and 2, however, are not tenable on other grounds. The issue submitted in No. 1 was: Did Bray promise Laybourn, in securing the contract of March 13, 1909, that he would not accept employment from or be under the influence of the Spaulding Manufacturing Company during the progress of any litigation that might grow out of the differences of Laybourn and Spaulding? The jury found there was no such promise. Issue No. 2 was only to be answered in case the jury answered issue No. 1 in the affirmative. The jury did not answer issue 2, manifestly for the reason that they were not required to do so under the directions of the court and their answer to the former issue. It is evident these two issues were submitted on the pleadings of appellant setting up a breach of the contract, and do not refer to the issue setting up fraud and the violation of the fiduciary relationship.

The sixth and eleventh assignments assert error in the submission of issue 4, because it placed the burden on appellant to prove affirmative fraud, while he was only required to show a lack of good faith and scrupulous fidelity as attorney in the litigation; that the question was misleading and confusing, in that it intermingled the original contract and the latter contract at the time the relation of attorney and client existed. In answer to issue 3 the jury found the contract of March 13, 1909, was mutually abandoned by the parties, and also found in answer to the fourth issue that Bray did not make misleading, false, and fraudulent representations and statements to induce Laybourn to employ him as his attorney and enter into the contract of September 30, 1912. The issue did not put the burden on appellant, as asserted in the assignments. We do not think there was error in submitting issue No. 4, as to whether there was fraud on the part of appellees. The answer, paragraph 9, with some 17 subdivisions thereof, charge fraud in the inception of the employment and in procuring the contract sued on. The court, as nearly as possible, submitted the issue as pleaded by the appellant. If there was intermingling, as asserted by the assignment, in the issue, it is a clear reflex of the intermingling by the answer. There could be no error in submitting the question of fraud in obtaining the contract, because it is clearly charged in the answer to have induced the contract. If the jury had found fraud, the court doubtless would have refused a recovery. The appellant, by its answer, did not see proper to rely alone on good faith in discharging the trust and confidence arising from the relation of attorney and client, but also he alleged actual and active fraud on the part of appellant in inducing the employment and in making the contract sued on.

The seventeenth assignment asserts error in the fifth issue, in that it is asserted the court did not place the burden on appellee of showing the utmost good faith.

The fourth and fifth assignments assert error in refusing the ninth requested issue, which is:

"Did or did not plaintiff, in discussing with defendant the execution of the contract of September 30, 1912, conceal from defendant anything relative to said contract known to them to be material thereto from defendant's standpoint?"

And also in refusing specially requested issue No. 19:

"Did plaintiff exercise the utmost good faith and scrupulous fidelity toward defendant in connection with the execution of the contract of September 30, 1912?"

It will be perceived that the trial court instructed the jury that an attorney must act with the utmost good faith and fidelity and must make known to his client the exact status, so far as he is able, of all matters concerning which he is employed. He also told the jury that the burden was upon plaintiff to prove the material allegations of the petition. In connection with this charge, the court, by issue, asked them:

"Was the contract of September 30, 1912, reasonable, fairly made, and entered into between the parties after an honest, full, and fair understanding of all material matters relating thereto?"

We do not believe the jury would fail to perceive, in making the contract, that appellees must have acted with the utmost fidelity to appellant; that the contract must have been reasonable and fairly entered into and upon an honest, full, and fair understanding. The jury could have found no concealment of any material matter relative thereto after they found it was entered into upon an honest, full, and fair understanding. It could not be full if part of the material matter was concealed.

The nineteenth issue requested, it does not appear to us, would have added any force. The jury were told the appellees must act with the utmost good faith, and in the light of that charge they found that the contract between the parties was reasonable, fairly made and entered into, and only after an honest, full, and fair understanding. We believe this was all that was necessary to submit the issue to the jury. It would appear that the issue as submitted was founded by the court largely upon the language used by this court on the former appeal. 190 S.W. 1160. Contracts between attorneys and client are scrutinized closely because of the relation existing between them, and when it is shown no unfair advantage is taken — that is, that the attorney had acted honestly after full and fair disclosure — we cannot see why the client should not be liable on his contract when it is reasonable, as found by the jury in this case. The parties had the right to abrogate their former contract in the absence of fraud or undue influence on the part of the attorneys, exercised by reason of their relation to appellant as such. There is no assignment asserting that the latter contract was more advantageous to the appellees than the former or no contention so presented in this court as to require a discussion of that question. We think from the facts shown by the record that there was additional work required after the employment; that is, by the institution of another suit which was filed and evidently required additional labor. Headley v. Good, 24 Tex. 232; Clarke v. Faver, 40 S.W. 1009. There is a discussion by appellee in this court by which they seek to show that the compensation was no more under the new than the old contract. This we shall not undertake to determine. The jury found under the facts of the case that the new contract, as entered into, was reasonable. This finding is not attacked by a specific assignment, and only, if at all, by argument or influence. We believe there was no reversible error in refusing the two issues requested and in issue No. 5 as submitted, and we do not think it subject to the criticism offered by the assignment.

The third assignment asserts error in refusing the seventh special charge. This was a general charge for a verdict if certain facts were found true. The case having been submitted on special issues, such a charge would have been improper if it had been otherwise correct, which we are inclined to think it was not.

The eighteenth and nineteenth assignments seek a reversal on the ground that the verdict was not signed by the foreman of the jury. It appears by the bills of exceptions and the trial court's qualification thereof that the court submitted the case on special issues; that after each issue the jury wrote its answer upon the same sheet of paper upon which the court submitted we issue. After the jury returned their verdict, the court had each issue read over to them, together with their answer thereto, and inquired as to whether that was their verdict, to which the jury responded in the affirmative. There appears to have been no objection made at the time, but afterwards the court had the foreman recalled and had him sign the same as foreman. It has been held repeatedly in this state since Dunlap v. Raywood, 43 Tex. Civ. App. 269, 95 S.W. 43, that the statute as to signing the verdict by the foreman of the jury is directory only, and, if properly received, will not require it to be set aside. Railway Co. v. Jones, 178 S.W. p. 861; Crosby v. Stevens, 184 S.W. 711; Calvin v. Neal, 191 S.W. 791, at pages 793, 794; Barker v. Ash, 194 S.W. 467; City of Henderson v. Fields, 194 S.W. 1004. It is held in the above cases that the objection made after the verdict has been received and the jury discharged came too late.

All the members of the jury declared the verdict to be the one agreed to by them, and in such case the formality of signing is waived. Crosby v. Stevens, supra, and the authority there cited. The mere fact that the trial court afterwards required the foreman to sign the verdict did not affect the verdict returned by the jury into court, and at which time, in response to the court's interrogation, they affirmed it as their verdict.

There was no error in sustaining the objections to the testimony of which complaint is made in the twentieth, twenty-first, and twenty-second assignments.

We think there was no error shown in permitting the appellees to read the letters of appellant forwarded to them, of which complaint is made in the twenty-third assignment. The letters were not wholly propositions of compromise, but consisted of certain declarations which, as we conceive it, were more favorable to appellant than against him. No injury resulted to him, and no error is shown in their admission.

The twenty-fifth, twenty-sixth, and twenty-seventh assignments complain at the action of the court in refusing certain issues and charges. These issues and charges are not set out in the brief, but we are referred to the transcript. We do not think the assignments properly briefed. They will be treated as waived.

Under the twenty-eighth assignment there is no statement of what the evidence was which was objected to on cross-examination. Under the statement made in the brief it would appear that the cross-examination of appellant was directed to some of the grounds urged by him in his answer; at any rate, no error is pointed out by the assignment or statement.

There are many assignments which appear to raise the grounds discussed by us heretofore, but which are not specifically mentioned in this opinion. All the assignments are therefore overruled. We believe a rehearing should be granted in this case, and that our former judgment should be set aside reversing the judgment of the trial court, and that the judgment of that court should be affirmed; and it is so ordered.