Hudson v. Smith

• Decision Date: 20 May 1965
• Docket Number: No. 14386,14386
• Citation: 391 S.W.2d 441
• Parties: Cecil Blaffer HUDSON, Appellant, v. J. Edwin SMITH et al., Appellees.
• Court: Texas Court of Appeals

Page 441

391 S.W.2d 441

Cecil Blaffer HUDSON, Appellant, v. J. Edwin SMITH et al., Appellees.

No. 14386.

Court of Civil Appeals of Texas, Houston.

May 20, 1965.

Rehearing Denied June 10, 1965.

Levert J. Able and Miller B. Walker, Jr., Houston, and R. Dean Moorhead, Austin, for appellant.

Al Schulman and W. James Kronzer, Houston, for appellees.

BELL, Chief Justice.

This is an appeal from a judgment in favor of J. Edwin Smith and the law firm of Smith & Lehmann of which he was a member, by which recovery was had of the sum of $130,000.00 as an attorney's fee for services rendered by Smith as an attorney in representing Mrs. Hudson in her divorce suit, together with an attorney's fee allowed appellees' attorney for representing them in this suit. The jury found that a reasonable fee for Smith's services in the divorce suit was $165,000.00. Admittedly he had been paid $45,000.00 and this was credited on the judgment. The jury also found $10,000.00 to be a reasonable fee for the attorney employed by appellees to prosecute this suit. The suit was for $300,000.00.

For several months during the year 1960, appellant and her then husband were having extensive and severe disagreements concerning budgetary matters and the handling of their children. Appellant wished to have an attorney available to consult with her from time to time on these matters. She reached an agreement with Mr. Smith on a retainer of $150.00 per month. She had not at such time decided upon filing suit for divorce. In the latter part of 1960 she decided to file a suit for divorce and on November 1, 1960 Smith filed a suit on her behalf seeking a divorce, custody of the two children, and a division of community property.

On January 20, 1961, Smith wrote appellant a letter setting forth the terms of the agreement with regard to the attorney's fee that would be paid for Smith's handling of all matters involved in the divorce proceeding. The substance of the letter was that Mr. Smith could not set his fee because he did not know the full extent of the litigation that would be involved. He then set out the guides that would be followed in fixing the fee. They were as follows:

1. The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to properly conduct the cause.

2. The customary charges of the Bar for similar services.

3. The amount involved in the controversy and the benefits resulting from the services.

There then followed the statement that these were applicable guides designated by Canon 11 of the Code of Ethics of the State Bar of Texas, Vernon's Ann.Civ.St. following article 320a-1 and Canon 12 of the American Bar Association. There was also the statement that if appellant questioned the reasonableness of the fee, Mr. Smith, upon request, would submit the matter to the court for determination as to whether it was reasonable. It was further stated that attempt would be made to have the fee adjudged against Mr. Hudson, but it was pointed out this must finally be determined by the court but if any part of it was adjudged against Mr. Hudson it would be deducted from the total fee earned.

From September or October, 1960, when Mrs. Hudson determined she would sue for a divorce, until some time in October, 1962, Mr. Smith was the sole attorney for Mrs. Hudson. While Mr. and Mrs. Hudson and their attorneys were engaged in a proceeding before a Master in Chancery, who had been appointed by the court, Mrs. Hudson, on October 8, 1962, sent a telegram to the Master stating Mr. Smith no longer represented her. She then engaged one attorney to represent her in the phase of the suit pertaining to the divorce and another firm to handle the phase with regard to her property rights. However, it appears that Mr. Smith was retained to remain in the case to consult and advise with other counsel. Thereafter, Mr. Smith cooperated with and assisted other counsel. Unquestionably the overwhelming amount of the work done was done by Mr. Smith prior to the entry of other counsel and other counsel usefully employed the results of his work, which he readily made available to them, in their negotiations for settlement. Finally, in March, 1963, a property settlement agreement was reached and a judgment for divorce, without real contest, was rendered in favor of Mrs. Hudson and she was granted custody of the children subject to certain rights in Mr. Hudson.

Appellant, for reversal, makes the following basic claims:

1. The court was in error in quashing a subpoena duces tecum that had been issued for the individual income tax returns of Mr. Smith for the years 1958 through 1962 and in not examining the returns to see what information was material to the controversy. Too, that these errors were compounded by the refusal of the court to permit the introduction of material parts of such returns so appellant could perfect her bill of exception. Related to these complaints is one that it was error for the court not to allow interrogation of Mr. Smith about his income for these years and that appellant was not allowed to perfect her bill of exception by developing such facts through questioning Mr. Smith.

2. The court erred in excluding a letter from Mrs. Smith to Mrs. R.L. Blaffer, mother of Mrs. Hudson, dated October 12, 1962. The substance of the letter asked Mrs. Blaffer to assist in obtaining payment of a bill rendered to Mrs. Hudson a month before. It also related to Mr. Smith's then being ill.

3. The court erred in admitting in evidence the letter from a successor attorney to Mrs. Blaffer setting out the terms of his employment by Mrs. Hudson. It was written in order to obtain a guarantee of the attorney's fee by Mrs. Blaffer. It contained a statement dealing with the emotional state of Mrs. Hudson. It was also executed by Mrs. Hudson.

4. The court was in error in excluding testimony concerning a fee charged by another law firm in a previous divorce proceeding between the Hudsons.

5. That it was error to allow attorney's fees for the attorney employed to bring this suit because there had been no requisite demand by Mr. Smith for his attorney's fee prior to filing this suit.

6. There was error on the part of the Judge of the 133rd District Court of Harris County in striking appellant's Second Amended Original Answer when it had been permitted to be filed by the Judge of the 61st District Court of Harris County.

Appellant contends that each of these asserted errors was of a quality to require reversal. Nowhere is it claimed by a point of error, or an assignment, that the amount of the judgment is excessive. The position of appellant is that the judgment would not have been for as great an amount had it not been for the asserted errors and thus each of them was harmful. There was really no contention on trial that there was not some additional attorney's fee owed though a general denial put appellees on proof of such fact. However, even appellant's witnesses testified a reasonable fee for the work done would be from $75,000.00 to $90,000.00.

Mr. and Mrs. Hudson were married in 1945. Each was, at the time, wealthy in their respective right. Each owned oil and gas interests, other real estate, corporate stocks and valuable paintings. Mr. Hudson was head of Hudson Engineering Company and Hudson Oil & Gas Company. During the marriage of the parties their respective separate estates increased in value and there was the accumulation of a community estate. The parties, through their respective representatives, sought to keep their respective separate estates and the community estate segregated. There is evidence that each purportedly kept a set of accounts on their respective separate estates and each had an account purporting to represent community receipts and expenditures. We take it that Hudson kept a set of accounts representing what he considered to be a separate estate accummulation and what he considered constituted community receipts and disbursements. The same is true of Mrs. Hudson. As is usually true, there resulted, to some extent, a co-mingling of the estates or at least both parties so claimed. As is so frequently true, when love is gone suspicion and bitterness take its place. The result is, particularly where the various estates aggregate several million dollars, as is true here, there is a necessity for detailed examination of the facts to determine property rights. Too, each parent becomes convinced that only he or she has the welfare of their children at heart and that he or she only knows what will best serve the children's welfare.

The record in this case will give an idea of the magnitude of the work done on the divorce case by Mr. Smith. The direct examination of Mr. Smith, which elicited a statement of the work he did and the time he spent, alone covers 478 pages of the statement of facts, and the whole of his examination, including cross-examination, covers some 680 pages. The attorneys for both sides used the same hypothetical question to propound to the expert witnesses. It catalogued the work done by Mr. Smith and was 74 legal size pages long. We should here note that appellant, in using the question for one of her witnesses, eliminated the time Mr. Smith testified he spent, and with regard to her other witness additionally eliminated the statement that Mr. Smith was responsible for securing the divorce settlement. The whole statement of facts contains 1013 pages. We have read the entire statement. In addition, there are 60 exhibits as a part of the record, many of which are several pages long. We have familiarized ourselves with them. There are various pleadings, orders, inventories and appraisals that were a part of the divorce proceedings. Not in the record are various voluminous depositions taken in connection with the divorce proceedings as well as the testimony taken before the Master in Chancery. While they are not in the record, the evidence reflects the time spent in...