Merchants' Nat. Bank v. Eustis

• Decision Date: 31 October 1894
• Citation: 28 S.W. 227
• Parties: MERCHANTS' NAT. BANK v. EUSTIS.
• Court: Texas Court of Appeals

28 S.W. 227

MERCHANTS' NAT. BANK v. EUSTIS.

Court of Civil Appeals of Texas.

October 31, 1894.

Appeal from district court, Tarrant county; W. D. Harris, Judge.

Action by W. G. Eustis against the Merchants' National Bank on a written contract for services as an attorney at law. Judgment for plaintiff, and defendant appeals. Reversed.

Bomar & Bomar, for appellant. Hunter, Stewart & Dunklin, for appellee.

HEAD, J.

This suit was instituted by appellee to recover of appellant compensation for his services as an attorney, rendered under the following contract: "The State of Texas, County of Tarrant. Know all men by these presents, that the Merchants' National Bank of Fort Worth, Tarrant county, Texas, has employed W. G. Eustis, of Henrietta, Clay county, to bring suit for the following described property in Clay county, Texas: (1) One hundred and fifty-three acres out of the southeast quarter of T. & N. O. R. R. Co. section No. 2, certificate No. 30/508, patented to E. F. Ikard, being all of said S. E. qr. except about 7 acres, deeded by E. F. Ikard to the F. W. & D. C. Ry. Co. (2) An undivided fourth interest, or whatever interest said bank is entitled to, in lot 5 in block 14 in the town of Henrietta, being the lot on which the Henrietta National Bank building is situated. The said W. G. Eustis is to bring these suits at his own expense, and hold the said bank harmless against costs of court; and, in consideration of his legal services in the premises, the said W. G. Eustis is to receive a commission of fifty per cent. on the sale of said lands, or a commission of fifty per cent. of any compromise made of said suits, said commission of fifty per cent. to be in payment of his legal services, and in payment of his commission on any sales he may make, or that may be made, of said lands, and to be paid whether the sale is effected by the said W. G. Eustis or by said bank; but the said W. G. Eustis is not to make any sale or compromise unless it is first submitted to and approved by said bank. Witness the signatures of said parties, this 26th day of July, A. D. 1888. E. W. Taylor, Pres. Merchants' National Bank. W. G. Eustis." Judgment was rendered in favor of appellee in the court below for $2,900.

Appellant, in several of its assignments, questions the right of its president to execute the contract sued upon, in the absence of authority from the board of directors. We think he had the power virtute officii. In 1 Morse, Banks (3d Ed.) § 143, among other things, it is said: "It is the duty of the president to preside at meetings of the board of directors. The amount and nature of the duties imposed upon him may vary in different associations, according to the usages or the by-laws of each, but ordinarily the position is one of dignity, and of an indefinite general responsibility rather than of any accurately known power. * * * Usage or directorial votes may confer upon him special functions, and may extend his authority to correspond with the increase of active duties, but the authority inherent in the office itself is very small. Indeed, it is very difficult to say precisely how or wherein it is really much in excess of that which can be exercised by any other single director. * * * Indeed, it is a singular fact that the entire collection of judicial authorities justifies the enunciation of only one act as falling within the properly inherent power of the president. This solitary function is to take charge of the litigation of the bank. There is no question that this matter belongs to him by virtue of his office. He may institute and carry on legal proceedings, and collect demands or claims of the bank. He may appear, answer, and defend in suits against the bank. He may retain and employ counsel on behalf of the bank." We believe this quotation from the text is well sustained by the adjudicated cases. We do not construe the contract above copied as binding the bank to convey to appellee any part of the land referred to therein. In his petition, appellee alleged the institution of the suits contemplated by the contract, and that he had prepared them for trial, but that appellant, without his consent, had compromised and dismissed them. He alleged that he would have gained the suits had he been allowed to prosecute them to judgment, and that his commission upon the value of the land that would have so been recovered would have amounted to the sum for which he asked judgment. To this petition, appellant, among other things, in paragraphs Nos. 10 and 11 of its amended answer, replied that at the time of the execution of the written contract hereinbefore referred to, and for some time previous thereto, there was pending a suit involving its title to something near 16,000 acres of land, of great value; "that prior to the date of said contract, on July 23, 1888, the said W. G. Eustis had entered into negotiations with this defendant, by applying to it to employ him, in pursuance of which the contract sued on was made; that the said E. W. Taylor, president, inquired of the said Eustis whether or not he had anything to do with the attempted foreclosure of said deed of trust and bringing about of the litigation that was involved in the suit of the British-American Mortgage Company v. Henrietta National Bank, and whether or not he represented the defendant in said suit, and the said Eustis represented to him that he had nothing to do with the said suit; that, upon the faith of said representations being true, the said E. W. Taylor executed the instrument of writing sued on by plaintiff; that he would not have executed said contract had it not been for said representations; that said representations were untrue, and made with the intent to deceive this defendant; that, in truth and in fact, the said Eustis represented the Henrietta National Bank, as well as the Exchange Bank; * * * that, as soon as the agents of the defendant learned that said representations were untrue, they immediately discharged the said Eustis, for the reason that they had lost confidence in him," etc. To this part of appellant's answer, appellee interposed exceptions, which were sustained by the court, and this part of its defense entirely excluded. In this we think the court erred.

In Weeks on Attorneys at Law (2d Ed.) § 260, it is said: "An attorney should disclose to his client every adverse retainer, and even every prior retainer which may affect the discretion of the latter. No man can be supposed to be indifferent to the knowledge of facts which work directly on his interests, or bear on the freedom of his choice of counsel." In Arrington v. Sneed, 18 Tex. 140, the following language is used: "The retainer of employment was for the professional services of the plaintiff in a case which was not to be tried until the succeeding term of the court. This suit was brought before that period arrived. It is plain that the action could not be maintained for services thereafter to be rendered. The plaintiff, therefore, sued first for the mere retainer, and proceeded by attachment. He afterwards amended, averring that the defendant had discharged him from his employment, and claiming compensation for the services actually rendered; but the alleged discharge was after the bringing of this suit, and we are of the opinion that the bringing of the suit, under the circumstances, and in the manner in which it was brought, was sufficient, without adverting to other...