American Vulcanized Fibre Company v. Saulsbury
| Citation | 95 A. 1078,28 Del. 510 |
| Court | United States State Supreme Court of Delaware |
| Decision Date | 15 June 1915 |
| Parties | AMERICAN VULCANIZED FIBRE COMPANY, a corporation existing under the laws of the State of Delaware, defendant below, plaintiff in error, v. WILLARD SAULSBURY and HUGH M. MORRIS, late trading under the firm name of SAULSBURY AND MORRIS, and ARTHUR J. SELFRIDGE, plaintiffs below, defendants in error |
Supreme Court, June Term, 1915.
Error to Superior Court for New Castle County, No. 1, January Term 1915.
ACTION BELOW IN ASSUMPSIT (No. 69, March Term, 1914) by Willard Saulsbury and others against the American Vulcanized Fibre Company to recover for professional services. Judgment for plaintiffs and defendant brings error. Affirmed.
The facts appear in the report of the case below, ante 182, 91 A 536.
BRIEF OF PLAINTIFF IN ERROR.
The only questions submitted are that the court below erred:
1. In not allowing under the contract, as shown, a deduction of three thousand dollars, representing the amount paid to the plaintiffs below.
2. In allowing the plaintiffs twenty per cent. upon the seventeen hundred and fifty dollars dividends on the preferred stock held by Mrs. Taylor, which dividends were never paid to her and never passed from the possession of the Fibre Company.
Prior to the tenth day of June, 1913, the plaintiffs below had entered into the relation of solicitors for the Fibre Company and had commenced to act as such solicitors without any arrangement or agreement for a retaining fee, or any agreement fixing the compensation. The contract of employment was complete, as in such case the law implied that the plaintiffs below were entitled to receive for their services what the same were reasonably worth. Stephens v Monges, 1 Harr. 127, Rogers v. Randel, 2 Harr 499; Bayard v. McLane, 3 Harr. 139.
Thereafter, on the twelfth day of June, the sum of three thousand dollars was paid by the Fibre Company to the plaintiff below "as retainer for services in the cause of this Company against the Executors of the late Frank Taylor, and others."
On the ninth day of July a proposition was made on behalf of the solicitors and accepted by a resolution of the directors of the Fibre Company which provided for "compensation for their services at the rate of one hundred dollars per day for each day spent by them in preparation, prosecution and trial thereof from the inception to the termination thereof, and in the event that 20 per centum of the amount recovered in said matters exceeds the amount so paid to them for their services, that they shall be paid a further sum equal to the difference between the sums so paid from time to time for their services and twenty per centum of the amount so recovered."
The acceptance of the proposition, when communicated to the plaintiffs below, was accompanied by the statement as to the understanding of the Fibre Company, that "It is understood that the three thousand dollars paid to you already by this company is a part of the fees contemplated by this resolution."
It is axiomatic that there can be no express contract between parties unless the parties intend to contract about the same subject-matter; that is, unless the minds of the parties meet on a common ground. So where a proposition is made and accepted in different terms, or there is any alteration of the terms proposed, there is no contract. If a party continues to act on the basis of a modified acceptance of an offer, his conduct in so acting will be construed to be an acceptance of the contract as modified. See cases collected in 7 Halsbury's Laws of Eng., 350, 354; U.S. Digest., Tit. Contracts, § 101; 1 Elliott on Contracts, § 47; 1 Beach on Modern Law of Contracts, § 57, 58; 2 Cyc. 173; 9 Cyc. 258, 269, 270; McKell v. Chesapeake and Ohio Railway Co., 175 F. 321.
The mere adoption of the resolution by the directors of the Fibre Company did not constitute a contract unless communicated to the plaintiffs below. 7 Halsbury's Laws of England, 349, and cases cited; Cozart v. Herndon, 19 S.E. 158; Kalamazoo etc., Co. v. Macalister, 40 Mich. 84; Warren v. Danie, 73 Pa. St. 433; Emerson v. Graff, 29 Pa. St. 358; Gabriel v. Bank of Suisun, 78 P. 736.
In the notice of acceptance the plaintiffs below had knowledge that the Fibre Company understood that the three thousand dollars already paid was to be considered as a part payment of the amount agreed to be paid under the contract of employment. A contracting party will be held to that meaning of the words employed which he knew the other party apprehended the words to bear, the words of the contract themselves being susceptible of such meaning. Gucione v. Scott, 47 N.Y. Supplement, 475; Af'd. 53 N.Y. Supplement, 462; Spande v. Western Life Indemnity Co., 136 P. 1189; Counts v. Medley, 146 S.W. 465; Fearnley v. Fearnley, 98 P. 819; Smead, etc., Co. v. Trust Co., 225 Ill. 442, 453, 454; McCarthy v. Ins. Co., 178 Ill.App. 502; Beckham v. Scott, 142 S.W. 80; San Jacinto Oil Co. v. Ft. Worth, etc., Co., 93 S.W. 173; Wells v. Carpenter, 65 Ill. 447; McPhen v. Young, 21 P. 1014; St. Louis, etc., Co. v. Tierney, 5 Colo. , 582; 2 Parsons on Contracts, 498, 564, 566; 2 Page on Contracts, § 1127; 9 Cyc. p. 578, note 99; 11 Cent. Dig. § 730 (a); 5 Dec. Dig., § 147 (1)c; Cowles Elec. S. & A. Co. v. Lowrey, 79 F. 331; Allen-West Com. Co. v. Patillo, 90 F. 628; Leete v. Pacific Mill & Mining Co., 88 F. 957; Af'd. 94 F. 968; St. Paul M. & M. Ry. Co. v. W. U. Tel. Co., 118 F. 497, at 516; Brent v. Lilly Co., 174 F. 877; Scully v. U.S. 197 F. 327, at 343.
The language of the proposition to the effect that the compensation was to cover charges "in the preparation, prosecution and trial of this cause from the inception to the termination thereof," was capable, in the minds of the parties, of the understanding that the three thousand dollars already paid should be taken as part of that compensation.
The three thousand dollars which was paid nominally as a retainer was in no sense a retaining fee. 2 Thornton on Attorneys at Law, § 406, and cases cited.
There is no contract or custom shown in this case or of which this court has any knowledge for the payment of a retaining fee.
In the absence of any express authority, the secretary of a corporation is presumptively authorized to be the mouthpiece of the corporation in its communications with third persons. 2 Thompson on Corporations, § 1509, 1512 and cases cited; Kelly v. Ning Young Benev. Assn., 84 P. 321, 2 Cal.App. 460; Siracusa v. Miller Const. Co., 43 Pa.Super. Ct. 466.
In this case the Secretary was authorized by the Board to convey to the plaintiffs below the understanding of the directors as to the meaning of their acceptance of the proposition.
A corporation may act and confer authority upon an agent to act without the adoption of a formal resolution. 3 Clark and Marshall on Corporations, § 683; 3 Cook on Corporations, § 714, and cases cited.
It would be monstrous if one party to a contract, knowing that a construction had been placed upon such contract, or any of its provisions, by the other party, and had been assented to by the other party upon such understanding, were permitted to place upon the contract, or to ask the Court to place upon the contract, a construction which he knew was not placed upon it by the other party.
The minutes of a directors' meeting are only prima facie evidence of what took place at such meeting, and it may be shown by parol evidence that other things took place, or even that the minutes do not correctly state what transpired. Rose v. Independent, etc., 215 Pa. St., 69; State v. Guertin, 119 N.W. 43; Just v. Idaho, etc., Co., 102 P. 381; Gilson, etc., Co. v. Hampton, 51 Cal. 341; Northland, etc., Co. v. Stephens, 133 N.W. 93; Goodwin v. U.S. etc. Co., 24 Conn. 591; St. Louis, etc. Co. v. Tiernan, 15 P. 544; Gearhart v. Dixon, 1 Pa. St. 224.
With regard to the second question submitted, it will be noted that the twenty per cent. provided for in the contract of employment was "twenty percentum of the gross amount recovered." The word "recovered" means "to get back"; "to retake into possession." Century Dictionary, Webster's Dictionary and Worcester's Dictionary; Leslie v. York, 66 S.W. 751, 112 Ky. 712; Fisher v. Mylius, 26 S.E. 309.
This sum was never the property of any one excepting the Fibre Company. It never passed from the possession of the Fibre Company; it was never "recovered" from any one.
Contracts between an attorney and client based upon a percentage of the amount recovered are not favored by the courts and must be strictly construed in favor of the client. Bayard v. McLane, 3 Harr. 139, 227; 4 Cyc. 988 and cases cited; 2 Thornton on Attorneys at Law, § 419 and cases cited.
Even if such a contract were not subject to any rules of strict construction, the court could not apply to it a meaning contrary to the intention of one of the parties where such intention had been communicated at the time of the making of the contract to the other party.
BRIEF OF DEFENDANTS IN ERROR.
The first question submitted is whether the item of three thousand dollars paid by the Fibre Company to the plaintiffs below on the twelfth day of June, A. D. 1913, as a retainer, was a partial payment under the terms of the contract entered into between the parties on the ninth day of July.
An express contract of retainer was entered into by the resolution of June 12 and completed by the payment of three thousand dollars. Thus far, the transaction was one of retainer and nothing had been said or done by either party respecting compensation for the services to be rendered in the matter.
The rule as to retainers as distinguished from specific services of attorneys-at-law is that upon making an engagement for services, the attorney is to be paid a...
To continue reading
Request your trial