Summary
In Fitzpatrick, et al. v. Kellner, 187 Miss. 843, 193 So. 911, with reference to contingent fee contracts, this Court held that if the contract is shown to have been obtained by fraud, mistake, or undue influence, if it is so excessive in proportion to the services to be rendered as to be in fact oppressive or extortionate, if the attorney suppresses the facts of the case, or if he uses any unfairness in securing it, the contract will be held invalid.
Summary of this case from Ownby v. PrisockOpinion
No. 34070.
February 26, 1940. Suggestion of Error Overruled March 25, 1940.
1. ATTORNEY AND CLIENT.
A contract for a contingent fee must be made in good faith without suppression of facts or of apprehended difficulties and without undue influence of any sort, and the compensation bargained for must be fair so that the transaction may be characterized throughout by good faith to the client.
2. ATTORNEY AND CLIENT.
Where testatrix bequeathed interest in her property to her agent but agent only claimed interest which he acquired under contract and conveyances made by testatrix, and where heirs would not have employed attorney to attack will and attorney would have advised heirs that it would be useless to contest the will, if fact regarding contract and conveyance had been known, attorney who rendered valuable services under his contingent fee contract was entitled to reasonable compensation for services rendered but was not entitled to fee fixed by the agreement in view of the mutual mistake of facts.
APPEAL from the chancery court of Washington county; HON. J.L. WILLIAMS, Chancellor.
D.S. Strauss, of Greenville, for appellants.
Without regard to the principle which governs the construction of contracts as between attorney and client, the Supreme Court of this state is committed to the doctrine that a contract will not be so constructed as to render it unfair or unjust, and that in construing a contract the court will look to the situation of the parties, and the conditions surrounding them at the time the contract was entered into.
McCain v. Lamar Life Ins. Co., 178 Miss. 459.
Keeping in mind the general principle that, viewing all the terms of an agreement and all the surrounding circumstances, "it is the duty of courts to give to a contract that construction or interpretation, if possible, which will square its terms with fairness and reasonableness, each party toward the other."
Granberry v. Mort. Bond Trust Co., 159 Miss. 460; Sumter Lbr. Co. v. Skipper (Miss.), 184 So. 296.
I submit that it is not necessary to resort to construction because the contract is plain the appellee was only to receive one-third of any recovery he could make, over and beyond what they already possessed. That they had, and it was not necessary for the appellee to institute any litigation to recover that. As a matter of fact, no recovery of any kind was made by the appellee. His efforts along this line, if successful, would have been detrimental to the appellants. His litigation did not produce anything, but he subsequently became convinced that further prosecution of it would be detrimental to his clients. I submit any other construction would be unfair and unreasonable.
The principles of law heretofore set forth are applied with greater strictness when there is a question of the construction of a contract entered into between an attorney and his client.
A doubtful or ambiguous contract for professional services and for the compensation of an attorney who drew it should be construed in favor of the client.
5 Am. Jur. 356; High Point Casket Co. v. Wheeler, 19 A.L.R. 391; 7 C.J.S. 1063, 1064, 1089; Falloon v. Miles, 2 A.L.R. 840; Fletcher v. Kellogg, 6 F.2d 476; Ridge v. Healy, 251 Fed. 798.
I submit that under the ordinary rules for construction the contract at issue herein does not provide for the vesting of a one-third interest in the property claimed under the 1937 will, but the contingent fee arrangement only applied to property recovered by the appellee for the appellants beyond what was devised to them under that will; and most certainly when the principle which governs the construction of contracts as between attorney and client is brought under consideration, any ambiguity in the terms of the contract will be most strongly construed against the attorney. A construction of the contract as calling for the payment of a fee as contended for by the appellee would render the contract hard, inequitable, and unfair, and this the courts say will not be done.
E.J. Bogen, of Greenville, for appellee.
It is uniformly held that a plain and unambiguous contract should be construed as written.
Restatement of Contracts, Sec. 230.
The Mississippi decisions on the question are annotated under the foregoing section of the Restatement as follows: "A plain and unambiguous contract should be construed as written. Citizens' Lbr. Co. v. Netterville, 137 Miss. 310, 102 So. 178; Continental Casualty Co. v. Hall, 118 Miss. 871, 80 So. 335; and, if possible, all of its provisions will be given effect, Shapleigh Hardware Co. v. Spiro, 141 Miss. 38, 106 So. 209, 44 A.L.R. 393; Harris v. Townsend, 101 Miss. 590, 58 So. 529, unless its literal meaning reduces the contract to an absurdity, in which the literal meaning will yield to the clear intent of the parties to the contract. Turner v. Acker, 2 Miss. Dec. 736. The intent of the parties must be determined from the words they have used (when unambiguous). Mississippi Mut. Ins. Co. v. Ingram, 34 Miss. 215; Goff v. Avent, 122 Miss. 86, 84 So. 134; Stuart v. McCoy, 163 Miss. 551, 141 So. 899. The secret purpose of one party to a contract, not induced by or made known to the other, is not a factor in construing it. Rosenbaum v. Meridian Nat. Bank, 73 Miss. 267, 18 So. 549; Pollock v. Helm, 54 Miss. 1, 28 Am. Rep. 342. Technical rules of construction should not be resorted to when the meaning of a written instrument is plain. Hart v. Gardner, 74 Miss. 153, 20 So. 877; Wood v. Morath, 128 Miss. 143, 90 So. 714. Where contract is plain and unambiguous, a party thereto will not be heard to say that he misunderstood it. Home Ins. Co. of N.Y. v. Cavin, 162 Miss. 1, 137 So. 490."
The contract being plain and unambiguous the chancellor correctly enforced the contract as written.
Even if the contract of employment is susceptible of construction and this court will, as contended by counsel in his brief, inquire into the fairness and reasonableness of the contract the chancellor's construction of the contract as written is not manifestly erroneous but is supported by all of the evidence in the case.
Humphreys v. McLachlan, 87 Miss. 532.
In the case at bar the contract has proven advantageous and profitable to the appellants as well as to the appellee as the direct result of the services of the appellee. When the appellants came to the appellee seeking his advice and services they were in a hopeless condition according to their own statements. They were not receiving enough from the estate for their living and were advised, which was a fact, that the entire estate was in imminent danger of loss by reason of tax sales and probable mortgage foreclosures. Neither T.B. Stone, who was in complete control of the estate, nor the appellants were able to raise the funds necessary to protect the estate from loss. As the direct and sole result of the services of appellee the estate was protected from the impending danger of loss, the appellants have been paid $75 per month for living expenses, and, according to the estimate of their present solicitor, the appellants will receive as their share of the estate approximately $21,000, of which they will owe appellee $7000 under the terms of their written contract with him which was entered into by them willingly, voluntarily, and at their suggestion.
It is respectfully submitted that the decree of the chancellor should and will be affirmed by this court.
Argued orally by D.S. Strauss, for appellant.
Appellee Kellner, an attorney at law of Greenville, intervened, without objection to that manner of procedure on the part of appellants, in the matter of the administration and settlement of the estate of their aunt, Mrs. Kate Archer, claiming that he was entitled to a one-third undivided interest in their share in their aunt's estate as a contingent fee for his services in establishing and recovering for them such share. The cause was heard on bill, answer, and evidence, and a decree was rendered in favor of appellee granting the relief prayed for. From which decree, appellants prosecute this appeal.
Appellants, Adelaide and Annie Fitzpatrick, were the nieces and sole heirs of Mrs. Archer. Leaving off the signatures, the following is a copy of the contingent fee contract involved:
"This agreement between Miss Adelaide C. Fitzpatrick and Miss Annie Nell Fitzpatrick, Parties of the First Part, and Ernest Kellner, Party of the Second Part, witnesseth:
"The parties of the First Part hereby employ the Party of the Second Part to ascertain and recover their interest in the estate of Mrs. Kate C. Archer, deceased, and the Party of the Second Part hereby undertakes said employment upon the following understanding:
"That in the event the Party of the Second Part is unable to make any recovery for the Parties of the First Part he is to receive no compensation whatever, but the Party of the Second Part is to receive one-third (1/3) of any recovery he shall make for the Parties of the First Part, either in kind or in money.
"Witness our signatures, this, the 10th day of March, 1939."
The evidence is without any material conflict. Mrs. Archer died in 1937. She owned lands in this state and in Arkansas worth something like $50,000. She had owned a home in the City of Greenville, which she conveyed, with its furnishings, to appellants some time before her death. In April, 1930, she entered into a written contract with T.B. Stone, by the terms of which she employed Stone to take charge of her property and manage it and attend to all "legal matters" connected therewith. In consideration of such services she bound herself to execute a warranty deed to Stone to one-fourth undivided interest in all of her property of every kind, except her homestead, and, in addition, to execute a will "bequeathing to party of the second part an additional one-fourth interest in and to the remaining portion of her property at her death, except the homestead and its contents." Thereafter, during the same month, she executed and delivered to Stone a deed to a one-fourth undivided interest in all of her lands in Arkansas and Mississippi, except the homestead in Greenville. At her death she left a will, dated the 17th of November, 1936, by the terms of which she devised and bequeathed to appellants a one-fourth undivided interest in all of her real and personal property and to Stone a one-fourth undivided interest in the same, except the home and furnishings. From the death of Mrs. Archer up to April, 1939, Stone had the charge and management of all the property. Appellants were dissatisfied with his management and employed appellee to enforce their rights against the property and Stone. The employment was evidenced by the contract above set out. Thereupon, appellee, on behalf of appellants, filed a bill in the chancery court against Stone in which he sought to set aside the will of Mrs. Archer upon the ground that Stone procured it by undue influence, and, in addition, that it was not properly witnessed. The bill also charged that Stone had mismanaged the estate and asked for an accounting on his part. Appellants as sole heirs of Mrs. Archer, under the law, inherited all of her estate not disposed of by will to someone else. Upon the filing of the bill, Stone employed Mr. Farish, attorney of Greenville, to represent him in the litigation. Mrs. Archer had given a mortgage on the property or some of it to secure an indebtedness of hers. Some of the lands had been sold for their taxes; all of them were being advertised for their unpaid taxes. Appellee and Farish consulted together on one or more occasions in reference to the interests of their clients. They had their clients borrow from a bank in Greenville $5000 with which to pay taxes and other expenses. This loan was secured by a mortgage on the lands. Appellee rendered other services of value to appellants.
Stone never answered the bill. It became unnecessary for the following reasons: After it was filed, appellee learned for the first time of the contract between Mrs. Archer and Stone of April 4, 1930, and the conveyance made in pursuance thereof by Mrs. Archer to Stone May 6, 1930, although both of them were recorded in the deed records of the office of the chancery clerk of Washington County. All along Stone was only claiming a one-half undivided interest in the land. When this information came to appellee he advised them that under the contract and the deed Stone was entitled to a one-half undivided interest in the property regardless of whether the will was valid or not, and therefore it would be useless to go on contesting a will.
Appellee's services not being needed further, he demanded of appellants under his contingent fee contract one-third undivided interest in their one-half interest in the property. This demand they refused to accede to, but offered to pay him a reasonable compensation for his services. This offer appellee declined, and brought suit in the manner above stated to enforce his claim, with the result stated.
It appears that a fair interpretation of the controlling facts is this: When appellants employed appellee to attack the will and obtain an accounting from Stone, if they had known the meaning of the contract and conveyance of May, 1930, they would not have sought to overturn the will; and that if appellee had known of such contract and conveyance he would have advised appellants that Stone had a half undivided interest in the lands, whether the will stood or not, and therefore it would be useless to pursue the contest of the will any further. Appellee's own evidence in the case is to that effect. Putting it differently, when appellee was employed, Stone had a half undivided interest in the lands and was claiming no more. If appellants and appellee had known those facts no steps would have been taken to contest the will. The controlling principles of law are laid down in Section 184, page 360, of volume 5, American Jurisprudence in this language: "A contract for a contingent fee must be made in good faith, without suppression of facts or of apprehended difficulties, and without undue influence of any sort or degree; and the compensation bargained for must be just and fair, so that the transaction may be characterized throughout by good faith to the client. If the contract is shown to have been obtained by fraud, mistake, or undue influence, if it is so excessive in proportion to the services to be rendered as to be in fact oppressive or extortionate, if the attorney suppresses the facts of the case, or if he uses any unfairness in securing it, the contract will be held invalid."
There is no evidence whatever of any fraud practiced on the part of appellee. On the contrary his conduct all the way through evidenced good faith. There was, however, undoubtedly a mutual mistake of facts between appellants and appellee. Appellee did not know of the existence of the contract and conveyance, and if appellants knew of them they were evidently ignorant of their meaning and effect. Appellee is entitled to reasonable compensation for the services he rendered appellants; they were valuable services; they consisted of preserving the property from forfeiture for taxes and necessary counsel in other respects.
Reversed and remanded.