Johnson v. Missouri Pacific Railroad Company

• Court: Arkansas Supreme Court
• Writing for the Court: HART, J. HART, J.
• Citation: Johnson v. Missouri Pacific Railroad Company, 214 S.W. 17, 139 Ark. 507 (Ark. 1919)
• Decision Date: 02 June 1919
• Docket Number: 11
• Parties: JOHNSON v. MISSOURI PACIFIC RAILROAD COMPANY

214 S.W. 17

139 Ark. 507

JOHNSON v. MISSOURI PACIFIC RAILROAD COMPANY

No. 11

Supreme Court of Arkansas

June 2, 1919

Appeal from Baxter Circuit Court; J. B. Baker, Judge reversed.

STATEMENT OF FACTS.

This is an appeal from a judgment of the circuit court dismissing an attorney's claim for compensation in an action for damages for injuries resulting in death to a locomotive engineer alleged to have been caused by the negligence of the railroad company, in whose service he was at the time engaged.

The material facts are as follows: On February 13, 1918, John H Fulson, while running a passenger train of the Missouri Pacific Railroad Company in the State of Arkansas, was killed by his train striking a boulder on the left hand side of the track and thereby violently throwing the engine from the track. There was a sharp curve on the left hand side of the track as it entered a deep, narrow cut, and the railroad company had negligently allowed a large boulder to fall down on the left hand side of the track, lodging there and breaking a rail. Fulson, being on the right hand side of the engine at his post as engineer, was unable to see the boulder as the engine rounded the curve and entered the cut. Fulson was 44 years old at the time of the accident and an intelligent, strong and healthy man. His wife and several minor children survived him. The administrator of his estate for the purpose of prosecuting a suit for damages against the railroad company entered into a contract with an attorney at law as follows:

"1. Whereas, the undersigned has a cause of action against the Missouri Pacific Railroad Company for personal injuries resulting in death to John H. Fulson and needs legal advice and other assistance, and wishes to employ Jo Johnson lawyer, of Fort Smith, Arkansas (phone 110), and is dependent on said cause of action as an asset and security upon which, if possible, to employ counsel and secure expense moneys, and,

"2. Whereas, the said Jo Johnson has consented to accept such employment, and to arrange for all moneys as may become necessary for such expenses, on the terms as proposed by the undersigned, and only on condition that all of said terms and conditions shall be faithfully and fully carried out and performed.

"3. Now, therefore, I, the undersigned, of the address stated with my signature, have made, constituted and appointed, and by these presents do make, constitute and appoint, the said Jo Johnson my true and lawful attorney and agent, both in law and in fact, for me and in my name, place and stead,

"4. To conduct and manage to full and final settlement, and to fully settle, by suit or otherwise, my said cause of action, and he to employ any assistant counsel or expert witnesses, or other help of any character, by him deemed probably beneficial to the interests of my cause of action; my said attorney to advance moneys to pay expenses in all courts, change of venue, appellate or otherwise, and all things to be done according to his best judgment and discretion.

"5. My said attorney has agreed to lose all of his said expense moneys and charge me no fee in event of failure, and in event of success we have agreed that he shall first deduct from the proceeds all expenses or charges outside of his fee, and then shall retain half the remainder as his fee for his services, and shall deliver the remaining half to me; provided, if he shall have loaned me any separate money for my personal use, he shall deduct that from my share and shall have ten per cent. per annum interest on his cash advancements.

"6. In consideration of the chances my said attorney has agreed to take, and the burdens he has agreed to carry, as stated, I have specially agreed not to in any way interrupt his management of my cause of action.

"7. My part to be not less than $ 10,000 and I have privilege of accepting the railroad company offer of compromise up to $ 25,000, if they make me an offer after giving them four or five days' notice and no fee goes to you.

"8. I have read this contract and fully understand it.

"Witness my hand this 4th April, 1918.

"G. W. Wall, Administrator."

"Accepted: Jo Johnson."

The contract was written on a printed form and one clause was marked out, which will be more particularly referred to in the opinion. The original contract is in the record and the paragraphs are not numbered. We have numbered them for the sake of brevity and convenience in writing the opinion.

The attorney filed a suit for damages for the administrator in the Baxter Circuit Court against the railroad company on June 6, 1918. Subsequently the administrator was removed and an administrator in succession appointed. During the latter part of August, 1918, he discharged Johnson and dismissed the suit against the railroad company. In September, 1918, for the purpose of carrying into effect a compromise with the railroad company, he instituted a friendly suit against it in the Pulaski Circuit Court for $ 10,000, and by consent obtained judgment for that sum. Johnson claimed that he was entitled, under his contract, to a fee of one-half the amount recovered; but his claim was denied by the railroad company. Johnson then filed his petition in the Baxter Circuit Court under an act providing that the compensation of an attorney shall be governed by agreement and also, the manner in which the court may determine and enforce a lien for the attorney's services created by the act. Acts of 1909, p. 892. The matter was submitted to the court under the provisions of the act. Johnson claimed that the language of the contract rendered it ambiguous. He claimed that under its terms he was to get half of the amount recovered after deducting the costs of the litigation. That the whole of paragraph seven related to a compromise on the part of the administrator before a suit against the railroad company was to be filed. That the words, "My part to be not less than ten thousand dollars," in the first part of paragraph seven, referred solely to the right of the administrator to compromise within four or five days after notice given to the railroad company before suit should be brought, and that it had no reference to the amount to be recovered after the management of the suit was turned over to him. The court first permitted Johnson to testify, reserving its decision as to its admissibility. The testimony of Johnson is long and involved; but we think it is legitimately susceptible to the construction placed upon it in his brief. The court below seemed, also, to have been of that opinion and after due consideration refused to receive the testimony on the ground that the contract was not ambiguous and that under its terms, Johnson was not allowed to recover anything as compensation unless the administrator by suit or compromise recovered more than that amount against the railroad company.

The trial court adjudged that Johnson's petition for attorney's fees under the statute should be denied, and Johnson has appealed.

Judgment reversed and cause remanded.

Jo Johnson, for appellants.

1. Under the contract appellants were entitled to recover as a fee one-half of the amount recovered by the administrator after deducting the costs and expenses. 120 Ark. 289. The contract is to be construed most strongly against the party drafting it. 73 Id. 338; 74 Id. 41; 135 S.W. 343; 84 Ark. 431.

As a general rule third parties are not bound by the contract. 208 S.W. 786, but in 237 U.S. 285, 35 S.Ct. 543, it is held that the contract between the attorney and client is to be resorted to as a basis for calculating the compensation of the attorney irrespective of the rights of third parties. Ib. loc. cit, p. 549, 2nd col. See also 35 S.Ct. Rep., p. 549.

2. The interveners were clearly entitled to $ 5,000 under the contract. 128 Ark. 471; 237 U.S. 285; 55 Miss. 626.

3. Under section 1, Act 293, Acts 1909, appellants are entitled to recover. Kirby & Castle's Digest, p. 1916, § 463. They had a lien on the judgment and it cannot be affected by any compromise or settlement of the parties. 47 N.Y.S. (17 Jones) 89; 54 N.Y.S. (22 Jones) 8. See also 12 N.Y.S. 111; 35 S.Ct. 543 (549).

Allyn Smith, for Jo Johnson, makes the same points and cites the same authorities, supra. The judgment should be reversed, with instructions to enter judgment for $ 5,150.50 for attorney's fee and costs and expenses, etc.

Troy Pace, for appellee.

1. The contract was invalid, for the reason that G. W. Wall, who executed the contract, was never the legal administrator of Fulson, deceased. He was a non-resident of Arkansas and his letters and contracts were null and void. Kirby & Castle's Digest, § 14.

2. The right to remove to the Federal Court was not waived, nor its right to object to the competency of the administrator by filing notice, petition and bond for removal. 161 U.S. 271, 41 L.Ed. 431.

Appellee is not estopped to raise this question being a jurisdictional one. Ib.

3. The contract was void for champerty and against public policy. 66 Ark. 190; 206 S.W. 38.

4. The contract provided for no fee unless recovery in excess of $ 10,000 was had. An attorney is bound by his contract with his client. 120 Ark. 394. See also 120 Id. 289; 128 Id. 471; 205 S.W. 118.

HART, J. MCCULLOCH, C. J., dissenting.

OPINION

HART, J., (after stating the facts).

It appears from the record that the administrator of the estate of John Fulson, deceased, brought suit against the railroad company for negligently causing the death of said John H Fulson, while in its employ as a locomotive engineer. Jo Johnson was his attorney under a contract executed by himself and the administrator. The administrator in succession discharged Johnson and dismissed the action brought by him. The administrator then...