Butler v. Young

• Decision Date: 21 March 1939
• Docket Number: (No. 8826)
• Citation: 121 W.Va. 176
• Parties: Carrie Butler, et al. v. Hilda D. Young, et al.
• Court: West Virginia Supreme Court

121 W.Va. 176

Carrie Butler, et al.

v.Hilda D. Young, et al.

(No. 8826)

Supreme Court of Appeals of West Virginia.

Submitted February 7, 1939.

Decided March 21, 1939.

Attorney and Client

A stipulation in a contract between an attorney and client for contingent fees prohibiting the latter from making a compromise without the former's consent is void as against public policy. Nevertheless, its inclusion in a contract otherwise valid will not destroy the legal effect of the remaining provisions.

Appeal from Circuit Court, Kanawha County.

Suit by Carrie Butler and another against Hilda D. Young and others to partition real estate. From a decree dismissing the plaintiffs' bill of complaint, they appeal.

Reversed and remanded.

Fox, President, dissenting.

J. E. Springston and Elmer A. Stone, for appellants. Payne, Minor, Ray & Davis, John V. Ray, and J. Hor- nor Davis, II, for appellees.

Riley, Judge:

This is a partition suit brought by Carrie Butler and J. C. Springston against Charles R. Davisson, Maggie Davisson and Hilda D. Young for the purpose of partition- ing certain real estate of which defendants' intestate died seized. From a decree dismissing plaintiffs' bill of complaint, they appeal.

The part of the record before this Court, consisting of the bill of complaint, the answer of the defendant, Hilda D. Young, and plaintiffs' replication to said answer, presents the single question: What is the legal effect of a stipulation, in a contract between an attorney and client providing for a contingent fee on a percentage basis, expressly prohibiting client from compromising without attorney's consent? Although such stipulations have been before the courts of this country many times, the question presented is novel in this jurisdiction. Under what seems to be the general rule, courts have held such stipulations, and in most cases the contracts themselves, void as against public policy. Davis v. Webber, 66 Ark. 190, 49 S. W. 822, 45 L. R. A. 196, 74 Am. St. Rep. 81; North Chicago St. R. Co. v. Ackley, 171 I11. 100, 49 N. E. 222, 44 L. R. A. 177; Davis v. Chase, 159 Ind. 242, 64 N. E. 88, 95 Am. St. Rep. 294; Kansas City Elevated Ry. Co. v. Service, 77 Kans. 316, 94 P. 262, 14 L. R. A. (N. S.) 1105; Burho v. Carmichael, 117 Minn. 211, 135 N. W. 386, Ann. Cas. 1913D 305, and note 306, 307; Huber v. Johnson, 68 Minn. 74, 70 N. W. 806, 64 Am. St. Rep. 456; Davy v. Fidelity & Casualty Ins. Co., 78 Ohio St. 256, 85 N. E. 504, 17 L. R. A. (N. S.) 443, 125 Am. St. Rep. 694; 5 Am. Jur. 291; 7 C. J. S. 1066. However, provisions against settlement by clients have been upheld in several jurisdictions. Hoffman v. Vallejo, 45 Cal. 564; Fort Worth & D. C. R. Co. v. Carlock & Gillespie, 33 Tex. Civ. App. 202, 75 S. W. 931; St. Louis, S. F. & T. R. Co. v. Thomas (Tex. Civ.), 167 S. W. 784; Wichita Falls Electric Co. v. Chancellor & Bryan (Tex. Civ.), 229 S. W. 649; Gibson v. Texas Pacific Coal Co. (Tex. Civ.), 266 S. W. 137. The Missouri rule provides that the validity of a provision against compromise is dependent upon the presence or absence of facts tending to impeach the attorney's good faith. Lipscomb v. Adams, 193 Mo. 530, 91 S. W. 1046, 112 Am. St. Rep. 500; Wright v. Kansas City, Ft. S. & M. R. Co., 141 Mo. App. 518, 126 S. W. 517; Beagles v. Robertson, 135 Mo. App. 306, 115 S. W. 1042. There are a number of authorities to the effect that the invalidity of an attorney's contract does not prevent a recovery on a quantum meruit basis, where the services are not illegal, either of themselves or by reason of the circumstances under which they are renderd. Rosenberg v. Lawrence (Cal. Dist. Ct. App.), 69 Pac. (2d) 200, opinion approved and adopted by Supreme Court 10 Cal. (2d) 590, 75 Pac. (2d) 1082; 5 Am. Jur. 367; In re Snyder, 190 N. Y. 66, 82 N. E. 742, 14 L. R. A. (N. S.) 1101, 123 Am. St. Rep. 533, 13 Ann. Cas. 441, and note 444, 445; Davis v. Webber, supra; Watkins v. Sedberry, 261 U. S. 571, 43 Sup. Ct. 411, 67 L. Ed. 802, and note; 85 A. L. R. 1365-1370, editorial note to Sapp v. Davids, 176 Ga. 265, 168 S. E. 62. See generally, 27 Columbia Law Review 982; 6 Williston on Contracts (Revised Ed.), sec. 1713. In Dorr v. Camden, 55 W. Va. 226, 46 S. E. 1014, 65 L. R. A. 348, this Court held that where a contingent fee contract is invalid for reasons other than champerty and maintenance, an attorney nevertheless was entitled to recover reasonable compensation for services rendered.

The foregoing survey of the American authorities is by no means exhaustive. It, perhaps, is not very illuminating. However, it discloses a great array of American authority appraising variously in their effect provisions such as the one under scrutiny. Therefore, it follows that the provision in the instant contract should be evaluated on the basis of what would seem to be the sound policy which should govern the relation of attorney and client. Litigation, at least, is always vexatious to parties litigant. In many cases it is costly. Quite often a yielding to reasonable compromise will better serve the interests of the litigants than controversy to a bitter end. With these thoughts in mind, we are prone to adopt the majority rule to the extent only that a stipulation in an attorney's contract against compromise is void. Notwithstanding its invalidity, it does not vitiate the entire contract. If the services to be rendered and the manner of rendition are not mala in se or mala prohibita, as disclosed by the rec- ord, we can conceive of no sound reason which would sustain the position that the invalidity of a provision against compromise will prevent an attorney, who, under the contract, renders valuable services, from receiving compensation. This thought, probably, prompted the rule in the quantum meruit cases. But, here, is it not reasonable to say that, notwithstanding the invalidity of the provision, the contract remains intact and enforceable as though it never contained such provision? The answer lies in the fact that the provision in question was one incorporated for the benefit of the attorney. If, in the first instance, with the provision in the contract, the client was willing to...