Gillette v. Newhouse Realty Co.

• Decision Date: 31 July 1929
• Docket Number: 4783
• Citation: 75 Utah 13,282 P. 776
• Court: Utah Supreme Court
• Parties: GILLETTE v. NEWHOUSE REALTY CO

282 P. 776

75 Utah 13

GILLETTE v. NEWHOUSE REALTY CO

No. 4783

Supreme Court of Utah

July 31, 1929

Rehearing Denied December 13, 1929.

Appeal from District Court, Third District, Salt Lake County; Wm. M McCrea, Judge.

Action by C. A. Gillette against the Newhouse Realty Company. Judgment for plaintiff, and defendant appeals.

REVERSED and REMANDED, with corrections.

Fabian & Clendenin, in Salt Lake City, for appellant.

L. E Cluff and Henry D. Moyle, both of Salt Lake City, for respondent.

ELIAS HANSEN, J. CHERRY, C. J., and STRAUP, EPHRAIM HANSON, and FOLLAND, JJ., concur.

OPINION

ELIAS HANSEN, J.

The defendant prosecutes this appeal from a judgment rendered against it in favor of the plaintiff for the sum of $ 3,400. The judgment appealed from is for professional services rendered by the plaintiff in the capacity of an attorney at law for the Bonneville Hotel Company. After the plaintiff rendered the services which form the basis of this action the defendant purchased certain property from and assumed and agreed to pay certain obligations of the Bonneville Hotel Company. The plaintiff contends that his claim against the Bonneville Hotel Company for professional service is one of the obligations which the defendant assumed and agreed to pay. The facts established by the evidence are as follows: From prior to March, 1912, until January, 1925, the Bonneville Hotel Company was a corporation engaged in operating the Newhouse Hotel at Salt Lake City, Utah. Plaintiff is an attorney at law and has been engaged in the practice of law for about 20 years. Plaintiff was a director and the secretary of the Bonneville Hotel Company during all the time it was engaged in operating the Newhouse Hotel. He also acted in the capacity of its general attorney. J. H. Waters was the managing director of the Bonneville Hotel Company during the time involved in this controversy. As a part of its business in conducting the Newhouse Hotel the Bonneville Hotel Company operated an elevator for the convenience of its guests. The elevator was installed by the Otis Elevator Company under a contract with the Bonneville Hotel Company. On March 21, 1922, the elevator, while being operated by the Bonneville Hotel Company at the Newhouse hotel, dropped to the basement from the mezzanine floor causing injury to a number of passengers who were on the elevator. Among the persons injured were Mrs. Estella Waters, the wife of J. H. Waters, managing director of the Bonneville Hotel Company, Mrs. Florence Allgood, Mrs. Glenna A. Sutton, Mrs. Gertrude Berg, all sisters of Mrs. Waters, E. H. Berg, the husband of Mrs. Gertrude Berg, Elmer Berg, a brother of E. H. Berg, and Ruth Snow. Each of the foregoing persons brought an action to recover for their injuries sustained in the accident. The first action begun was brought by Elmer Berg against the Bonneville Hotel Company alone. In the other actions the Bonneville Hotel Company and the Otis Elevator Company were sued jointly. The plaintiffs claimed that the Bonneville Hotel Company was negligent in the manner in which the elevator was operated at the time of the accident, and that the Otis Elevator Company was negligent in the manner in which the elevator was installed.

When the action of Elmer Berg against the Bonneville Hotel Company was begun the plaintiff and A. L. Hoppaugh of the law firm of Dey, Hoppaugh & Mark were employed to defend the Bonneville Hotel Company. The contract of employment was entered into on behalf of the hotel company by J. H. Waters its managing director. So far as appears Waters did not consult the board of directors of the Bonneville Hotel Company concerning the matter of employing counsel to defend the company. The terms of plaintiff's employment are contained in a letter written by him, which letter reads as follows:

"Salt Lake City, May 5, 1922.

"Bonneville Hotel Co., Salt Lake City, Utah. Gentlemen: Confirming the conversation had with your Mr. Waters today. I beg to advise that in the case of Berg vs. Bonneville Hotel Company, et al., I will accept a retainer of $ 250.00, together with $ 50.00 per diem while engaged in Court in trial of this case.

"In regard to any other cases that might be brought against the Hotel Company, growing out of the accident to the elevator, I will agree to assist in the defense of these cases without any retainer whatsoever, with a payment of $ 50.00 per day for all time consumed in actual trial.

"In regard to any case which may be brought against the Otis Elevator Company. I agree to assist in the trial of that case and receive for my services $ 50.00 per day, while in the trial together with 10% of any amount recovered.

"If this meets with your approval, please advise me.

"Yours very truly, C. A. Gillette."

The Bonneville Hotel Company by its managing director, J. H. Waters, accepted the offer contained in the foregoing letter.

The trial of the case of Elmer Berg against the Bonneville Hotel Company resulted in Berg securing a judgment. No appeal was taken from the judgment. According to plaintiff's testimony he and his associate succeeded in fixing responsibility for the elevator accident upon the Otis Elevator Company during the trial of the case of Elmer Berg against the Bonneville Hotel Company.

The next case growing out of the elevator accident to be begun and tried was that of Gertrude Berg against the Bonneville Hotel Company and the Otis Elevator Company. The trial of that case resulted in Mrs. Berg securing a judgment against both the Bonneville Hotel Company and the Otis Elevator Company for the sum of $ 9,000. The Otis Elevator Company appealed from the judgment. This court affirmed the judgment, 64 Utah 518, 231 P. 832. The Otis Elevator Company paid to Gertrude Berg the amount of the judgment together with interest and costs. The plaintiff testified that when the case of Gertrude Berg against the Bonneville Hotel Company and the Otis Elevator Company was begun he and Mr. Hoppaugh informed Mr. Waters that the situation had entirely changed, and that they desired other arrangements as to their fees, that they and Mr. Waters on behalf of the Bonneville Hotel Company entered into a new or amended agreement as to attorneys' fees, that it was then orally agreed that plaintiff should be paid, in addition to the $ 250 retainer and $ 50 per day, a sum equal to 10 per cent of any amount which the Otis Elevator Company should pay to persons injured in the elevator accident, which would result in relieving the Bonneville Hotel Company from liability on account of the injuries sustained by the passengers who were injured when the elevator dropped. Similar arrangements were made with Mr. Hoppaugh. The plaintiff further testified that after the Otis Elevator Company paid the judgment rendered against it in favor of Mrs. Berg, he and Mr. Hoppaugh requested Mr. Waters to pay to each of them 10 per cent of the amount of the judgment secured by Mrs. Berg, that Waters said that he preferred to defer payment until all of the cases were disposed of, and that the attorneys agreed to wait. At about the time of this conversation Mr. Hoppaugh wrote the following letter to the Bonneville Hotel Company:

"Salt Lake City, May 4, 1922.

"Bonneville Hotel Company, Newhouse Hotel, Salt Lake City. Gentlemen Concerning our conversation with Mr. Gillette and with respect to the case of Elmer Berg vs. Newhouse Hotel, and any other litigation which may arise as the result of the accident occurring on March 21, 1922, at which time your elevator No. 2 carrying Berg and other passengers dropped to the basement, causing injury to a number of persons, we beg to advise you:

"There seems to be, from your statement, no question concerning your liability. Although you had no knowledge of the affair and were innocent and guilty of no act of negligence or other wrong-doing, nevertheless the law holds you responsible for the acts of your agent. The Otis Elevator Company stands in the position of your servant or agent and through negligence in the installation of this elevator in some way the injuries occasioned to Mr. Berg and others were caused. Your remedy seems to be to compel the Otis Elevator Company to respond in judgment and to either indemnify you or directly make good to the parties injured. You may be sued alone, in which event, of course, you must in turn sue the Otis Elevator Company, or if the Otis Elevator Company is joined with you as co-defendant you should make it appear as clearly as possible that the injury was due--not to your own direct act, but was the result of negligence of the Otis Elevator Company without fault on your part. This is all upon the assumption that there was negligence, and, we take it from the evidence which you have submitted, that the accident was not due to crystallization of the steel cable but to faulty installation. If it were possible to avoid liability honestly, of course, we would suggest defending squarely upon the merits. Since, however, this does not seem possible, there remains but one course for you to pursue, viz.: Bring out the facts fairly and honestly, see that no excessive damages are recovered and show that the accident was not due to any direct act of yourself but (if it resulted from negligence at all) the negligence was the negligence of the Otis Elevator Company and that you are only responsible because that corporation was your agent.

"Since in our judgment, there is no escape from liability by you, it is obvious that to the extent that judgments are collected,--not from you but from the Otis Elevator Company--you are relieved of the payment of moneys which you must otherwise pay to compensate the parties injured. There may be possibly the right of contribution on the part of the Otis...