Calhoun v. Massie

• Citation: 64 L.Ed. 843,253 U.S. 170,40 S.Ct. 474
• Decision Date: 17 May 1920
• Docket Number: No. 294,294
• Parties: CALHOUN v. MASSIE
• Court: United States Supreme Court

253 U.S. 170

40 S.Ct. 474

64 L.Ed. 843

CALHOUN

v MASSIE.

No. 294.

Argued March 11, 1920.

Decided May 17, 1920.

Mr. Charles F. Consaul, of Washington, D. C., for petitioner.

Mr. James R. Caskie, of Lynchburg, for respondent.

Mr. Justice BRANDEIS delivered the opinion of the Court.

The Omnibus Claims Act (Act March 4, 1915, c. 140, 38 Stat. 962), made appropriations for the payment of 1,115 claims arising out of the Civil War which had, from time to time during the preceding 28 years, been referred by resolution of the House or of the Senate to the Court of Claims for investigation, either under the Bowman Act (Act March 3, 1883, c. 116, 22 Stat. 485), or under the Tucker Act (Act March 3, 1887, c. 359, 24 Stat 505), or under section 151 of the Judicial Code (Comp. St. § 1142). Among the claims which that court reported favorably was one of Bland Massie, which had been referred to, it by resolution of the House on February 3, 1911.¹ By section 1 of the Omnibus Claims Act (page 989), the Secretary of the Treasury was directed to pay Massie $1,900. Section 4 of the act (page 996), provided as follows:

'That no part of the amount of any item appropriated in this bill in excess of twenty per centum thereof shall be paid or delivered to or received by any agent or agents, attorney or attorneys on account of services rendered or advances made in connection with said claim.

'It shall be unlawful for any agent or agents, attorney or attorneys to exact, collect, withhold or receive any sum which in the aggregate exceeds twenty percentum of the amount of any item appropriated in this bill on account of services rendered or advances made in connection with said claim, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be fined in any sum not exceeding $1,000.'

Massie had executed on April 18, 1911, an agreement as follows:

'Fee Agreement.—This agreement witnesseth: That I, Bland Massie, of Tyro, Nelson county, Virginia, have employed C. C. Calhoun, of Washington, D. C., as my attorney to prosecute my claim against the government of the United States for property taken by the federal forces during the late Civil War, and in consideration of his professional services in the prosecution of said claim I hereby agree and bind my heirs and legal representatives, to pay him, his heirs or legal representatives as a fee a sum equal to 50 per cent. of the amount which may be collected upon said claim, said fee to be a lien on any warrant which may be issued in payment of said claim.'

Calhoun prosecuted Massie's claim before the Court of Claims and secured the allowance of a motion to transmit its report to Congress,w hich thereafter made the appropriation above stated. On May 5, 1915, the government paid the $1,900 by means of two treasury warrants, one for $380 (20 per cent. thereof), made payable to Calhoun, the other for $1,520 (80 per cent. thereof), made payable to Massie. Calhoun demanded of Massie a further sum of $570, equal to 30 per cent. of the claim. Payment was refused; and he brought this suit in a state court of Virginia to recover the amount, claiming that the warrant for 20 per cent. had been accepted by him without waiving or releasing his right under the contract to the balance. A declaration setting forth in substance the above facts was demurred to on the ground that recovery was prohibited by section 4 of the act under which the appropriation was made. The demurrer was sustained and judgment entered thereon was affirmed by the Supreme Court of Appeals of the State of Virginia (123 Va. 673, 97 S. E. 576). The case comes here on writ of certiorari (249 U. S. 596, 39 Sup. Ct. 289, 63 L. Ed. 794); Calhoun having contended in both lower courts, as here, that section 4 deprives him of liberty and property guaranteed by the Fifth Amendment to the federal Constitution, and hence is void.

For nearly three-quarters of a century Congress has undertaken to control in some measure the conditions under which claims against the government may be prosecuted. Its purpose has been in part to protect just claimants from extortion or improvident bargains and in part to protect the treasury from frauds and imposition. See United States v. Van Leuvan (D. C.) 62 Fed. 52, 56. While recognizing the common need for the services of agents and attorneys in the presentation of such claims and that parties would often be denied the opportunity of securing such services if contingent fees were prohibited (Taylor v. Bemiss, 110 U. S. 42, 45, 3 Sup. Ct. 441, 28 L. Ed. 64) Congress has manifested its belief that the causes which gave rise to laws against champerty and maintenance are persistent. By the enactment from time to time of laws prohibiting the assignment of claims and placing limitations upon the fees properly chargeable for services² Congress has sought both to prevent the stirring up of unjust claims against the government and to reduce the temptation to adopt improper methods of prosecution which contracts for large fees contingent upon success have sometimes been supposed to encourage. The constitutionality of such legislation, although resembling in its nature the exercise of the police power, has long been settled. Marshall v. Baltimore & Ohio Railroad Co., 16 How. 314, 336, 14 L. Ed. 953; United States v. Hall, 98 U. S. 343, 354, 555, 25 L. Ed. 180; Ball v. Halsell, 161 U. S. 72, 82, 84, 16 Sup. Ct. 554, 40 L. Ed. 622.

The provision in the contract sued on purporting to give a lien upon any warrant issued was void under section 3477 of the Revised Statutes (Comp. St. § 6383). Nutt v. Knut, 200 U. S. 12, 20, 26 Sup. Ct. 216, 50 L. Ed. 348. It is urged that the act here in question should be construed as limiting only the proportion of the specific funds received from the government which may be applied to payment of attorney's fees; but the second paragraph of the law leaves no room for construction. It provides that:

'It shall be unlawful for any * * * attorney * * * to * * * receive any sum which in the aggregate exceeds twenty per centum' of the claim.

Calhoun contends, however, that if the act is construed as limiting the amount recoverable from a claimant upon his personal obligation, it is void as applied to contracts in existence at the time of its passage, at least where, as here, the services contemplated had then been substantially performed.

That an act limiting the compensation of attorneys in the prosecution of claims against the government is valid also as to contracts which had been entered into before its passage was expressly held in Ball v. Halsell, supra. The act there in question was passed 17 years after the date of the contract, and the attorney had performed important services before its enactment. Here, it is said, substantially all the services required of Calhoun had been performed when the act was passed. The difference in the percentage of services performed cannot here affect the legal result. An appropriate exercise by a state of its police power is consistent with the Fourteenth Amendment although it results in serious depreciation of property values; and the United States may, consistently with the Fifth Amendment, impose for a permitted purpose restrictions upon property which produce like results. Lottery Case, 188 U. S. 321, 357, 23 Sup. Ct. 321, 47 L. Ed. 492; Hipolite Egg Co. v. United States, 220 U. S. 45, 58, 31 Sup. Ct. 364, 55 L. Ed. 364; Hoke v. United States, 227 U. S. 308, 323, 33 Sup. Ct. 281, 57 L. Ed. 523, 43 L. R. A. (N. S.) 906, Ann. Cas. 1913E, 905; Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U. S. 146, 40 Sup. Ct. 106, 64 L. Ed. ——. The sovereign right of the government is not less because the property affected happens to be a contract. Louisville & Nashville Railroad Co. v. Mottley, 219 U. S. 467, 484, 31 Sup. Ct. 265, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671; Union Dry Goods Co. v. Georgia Public Service Corporation, 248 U. S. 372, 39 Sup. Ct. 117, 63 L. Ed. 309. Here, unlike New York Central v. Gray, 239 U. S. 583, 587, 36 Sup. Ct. 176, 60 L. Ed. 451, a performance of a substitute for the obligation undertaken and later prohibited by the statute is impossible, because the act forbids the collection or receipt of any compensation in excess of 20 per cent.

In the case at bar there are special reasons why the contract cannot prevail over the statute enacted later. At the time when the contract was entered into there was no legislation, general or special, which conferred upon Massie any right of recovery even if he should establish to the satisfaction of Congress that his claim was equitable. A statute making an appropriation to pay the claim was thus a condition precedent to liability on the part of Massie to Calhoun; and the thing contracted for was Calhoun's aid in securing its enat ment. The aid was to be given by representing Massie before the Court of Claims. But both of the parties knew that, although Calhoun might have success before the Court of Claims, Congress would still be free to refuse both to recognize the claim as an equitable one and to make an appropriation for its payment. They also knew that, if it concluded to grant relief, Congress was free to do so upon such conditions as it deemed proper. Compare Ball v. Halsell, supra, 161 U. S. 82, 84, 16 Sup. Ct. 554, 40 L. Ed. 622; Kendall v. United States, 7 Wall. 113, 117, 19 L. Ed. 85. In view of the past action of Congress limiting attorney's fees, referred to above, it was at least conceivable when the contract was made that Congress might, as it proved,³ be unwilling to enact any legislation without assuring itself that the benefits thereof would not inure largely to others than those named in the act. Assent by Calhoun to the insertion in the act of a condition such as this, which he might reasonably have contemplated would be required to insure its passage,...