Burnett v. Graves

• Decision Date: 08 March 1956
• Docket Number: No. 15656.,15656.
• Citation: 56 ALR 2d 1,230 F.2d 49
• Parties: Coy BURNETT and Mel Dar Corporation, Appellants, v. Ireland GRAVES, J. Chrys Dougherty and Joe R. Greenhill, individually and as members of partnership of Graves, Dougherty & Greenhill et al., Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

56 ALR 2d 1, 230 F.2d 49 (1956)

Coy BURNETT and Mel Dar Corporation, Appellants, v. Ireland GRAVES, J. Chrys Dougherty and Joe R. Greenhill, individually and as members of partnership of Graves, Dougherty & Greenhill et al., Appellees.

No. 15656.

United States Court of Appeals Fifth Circuit.

February 13, 1956.

Rehearing Denied March 8, 1956.

R. L. House, House, Mercer & House, San Antonio, Tex., Enright & Elliott, Los Angeles, Cal., for appellants.

John W. Stayton, Black & Stayton, Austin, Tex., for appellees.

Before BORAH and BROWN, Circuit Judges, and WRIGHT, District Judge.

BROWN, Circuit Judge.

Having lost, then won, Burnett v. Mar-Tex Realization Corp., Tex.Civ.App., 250 S.W.2d 612, Burnett and his family corporation, Mel Dar Corporation now appeal from the judgment entered on a jury verdict awarding $80,000 (plus $5,000 attorneys' fees) to their attorneys¹ for their successful reversal on appeal.

The nature of that litigation² and its intrinsic merit is now of secondary importance. But even the briefest consideration of it is convincing that it was an important case in which the stakes were high presenting difficult questions challenging the resourceful ingenuity of skilled advocates, and the battle pressed without quarter by leading protagonists in the field of Texas Oil & Gas Law. Not unnaturally the client, vindicated finally in the rightness of his cause, asserts that what transpired was always inevitable and what was simple did not, merely by adverse verdict and judgment, become complex. The attorneys, pointing to the irrefutable proof of an adverse judgment understandably assert that nothing is so uncertain as a jury verdict or a judge's decision, so that an appeal from an adverse judgment suffered at the hands of counsel since displaced by clients, deserves the descriptive "difficult and complex" and all of the diligent skill which that implies.

A threshold procedural point in the judgment against Burnett, personally, is urged with great vigor. Jurisdiction over Burnett in the case, filed in the state court and removed for diversity by defendants, was obtained by Attachment, art. 275 et seq., Rev.Civ.Stat. of Texas, Texas Rules of Civil Procedure 592 et seq. The plaintiffs' Statutory Attachment Bond had Aetna Casualty & Surety Company as a single corporate surety instead of two sureties as literally required by art. 279.³ Claiming that this noncompliance would have voided the service in a state court, East & West Texas Lumber Co. v. Warren & Son, 78 Tex. 318, 14 S.W. 783; 5 Tex.Jur. 214, § 47; Citizens National Bank of Godley v. Pollard, Tex.Civ.App., 31 S.W.2d 508; Burnett insists that the Federal Court, on proper motion as made here, must do the same. Hisel v. Chrysler Corporation, D.C.W.D.Mo., 90 F.Supp. 655. Appellees meet this head-on relying on arts. 7.01, 7.02, Texas Insurance Code, V.A.T.S., as authorizing a single, corporate surety.⁴

We agree. The purpose is plainly evident: recognizing both the business world's well-founded apprehension over the frequently unpredictable liabilities from serving as personal surety and the widespread growth of reputable, financially responsible insurance and related corporations providing bonds and guarantees for compensation, the legislature meant to, and did, determine that whenever and wherever surety bonds were required, a single⁵ corporate surety would comply. It was not the repeal, express or implied, of a special by a general act, cf. Sam Bassett Lumber Co. v. City of Houston, 145 Tex. 492, 198 S.W. 2d 879; 39 Tex.Jur. 149, 150, § 81; Jefferson County v. Board of County & District Road Indebtedness, 143 Tex. 99, 182 S.W.2d 908; it was the express declaration of an overriding policy, stated in sweeping and emphatic terms, to bring this phase of the judicial and governmental machinery in harmony with modern business developments. McCaskey Register Co. v. Gooch, Tex.Civ.App., 31 S.W.2d 324; International-G. N. Ry. Co. v. Smith, Tex.Civ.App., 269 S.W. 886, (error dismissed); Commonwealth of Massachusetts v. United North & South Development Co., 140 Tex. 417, 421, 168 S.W.2d 226, 228.

Mel Dar Corporation likewise insists that there were no services rendered for it, and consequently it should be exonerated without further inquiry. We do not agree. Mel Dar was a party in the appeal proceedings, and its interests were placed in Appellees' hands for full protection. It had a great deal at stake. If Mar-Tex won, all Mel Dar had was a recovery of $513,000 as good faith development costs, and the working interests which it had under the lease from Burnett would be lost altogether. That Burnett's name was nearly always singled out in the briefs, or the emphasis was on him as the moving figure detracts none from Mel Dar's substantial financial interests successfully preserved by the appeal. Moreover, in the long negotiations over the disputed fees, it was Mel Dar's check for $15,000 which was twice tendered to appellees. All of this evidence was ample to permit the jury finding that services of value to Mel Dar were rendered imposing on it the obligation to pay a reasonable fee. See Robert v. Goldman, Mo.App., 299 S. W. 55; International & G. N. Ry. Co. v. Clark, 81 Tex. 48, 16 S.W. 631; Baum v. McAfee, Tex.Civ.App., 125 S.W. 984; Morrison v. Reece, Tex.Civ.App., 266 S. W. 815; Babcock v. Glover, Tex.Civ.App., 174 S.W. 710 (error refused).

This brings us then to the only real question of substance — whether the jury verdict for $80,000 was reasonable or so excessive as to be without foundation. In assaying this, it must be remembered that we are dealing with a verdict of a jury and having himself demanded one, Burnett cannot complain that a jury might have been more liberal than would a judge. We test this verdict as we would any other and, finding ample evidence to support it, approve it as would a Texas Court, Hirsch v. Dearing, Tex.Civ.App., 151 S.W.2d 949; Southland Life Ins. Co. v. Norton, Tex. Com.App., 5 S.W.2d 767. We decline, if we could, Sunray Oil Corp. v. Allbritton, 5 Cir., 187 F.2d 475, rehearing, 5 Cir., 188 F.2d 751; Wright v. Paramount-Richards Theatres, 5 Cir., 198 F.2d 303, any more than would a Texas court, to disregard the jury verdict and retry the claim or arrive at any independent judgment. Cf. Campbell v. Green, 5 Cir., 112 F.2d 143.

The trial with its hundreds of pages of testimony was concerned primarily with the value of the services performed. This involved two principal facets — the nature of the litigation and the money value of its fruits. On both, there was an abundance of convincing, trustworthy evidence. On the first, some of the outstanding advocates⁶ of the Texas Bar, familiar with the problems of Texas Oil & Gas Law, accustomed to handling large and important cases, collecting imposing fees, familiar from study of the briefs and records in the appeal case, and advised through hypothetical assumptions on dollar values, testifying to fees considerably in excess of that finally fixed, characterized this litigation as difficult, complex, uncertain, fraught with much danger, and the handling of it by appellees as reflecting skillful ingenuity. Weighing heavily in their estimates was the acknowledged capacity of formidable adversaries with their known repute as aggressive, vigorous, tenacious fighters at the Bar.

These experts, as well as several of the appellee attorneys detailed⁷ the underlying reasons why the case was deemed difficult and complex. That this inevitably put laymen, the jurors, in judgment upon intricate, abstruse legal theories, weighing the stratagems of articulate craftsmen, determining whether lawyers had, in fact, or ought to have, labored⁸ so long or written so much was, of course, the unavoidable consequence of demanding a jury. There was an overwhelming body of evidence containing intrinsic reliability that, starting as they did with a case lost by another, only the most diligent, plodding, thorough, persistent research, drafting and redrafting, preparing and amending briefs, counterbriefs, reply briefs, would satisfy the high demands of professional diligence.

The money value of the fruits of victory was likewise established with substantial evidence. If Mar-Tex won, Burnett and his company, Mel Dar Corporation, would lose the value of the 60% working interest. Testimony from sources qualified to fix the value of oil reserves, after deducting the costs of development and determining the present value of operating profit on an 8% discount factor, established a market value for this working interest in excess of $2,000,000. Burnett and his experts, to be sure, put the value at much less based on factors and differentials which the jury, under the evidence, was permitted to, and apparently did, reject. Even assuming that market value would require a deduction of the total of income taxes⁹ payable on revenues produced from the property whether owned by an individual or a corporation, the evidence showed the value to a corporation was not less than $1,336,781 and for an individual $661,344. The value in any case was substantial and the jury had ample basis for finding a market value for which the property could and would be sold, at a figure as high as $2,000,000.

A jury was chosen as the instrument to determine what lawyers did, what they ought to have done, and what the value of those activities was in economic terms to the clients Burnett and Mel Dar. Under instructions submitting the proper standards¹⁰ with a wealth of persuasive, acceptable testimony, they have fixed it. It is reasonable. It is legal. It is approved.

There is no merit whatever in the contention that the value of the services of each of the attorneys who worked on the case should have been submitted for separate determination by the jury. The defendants are fully protected by paying all with the apportionment left amongst themselves. And to have cut it up would have been an unrealistic disregard of the actual...