Missouri, K. & T. Ry. Co. of Texas v. Wood

• Decision Date: 07 December 1912
• Court: Texas Court of Appeals
• Parties: MISSOURI, K. & T. RY. CO. OF TEXAS v. WOOD et al.

152 S.W. 487

MISSOURI, K. & T. RY. CO. OF TEXAS v. WOOD et al.

Court of Civil Appeals of Texas. Dallas.

December 7, 1912.

Rehearing Denied January 4, 1913.

Appeal from District Court, Grayson County; B. L. Jones, Judge.

Action by J. H. Wood and another against the Missouri, Kansas & Texas Railway Company of Texas. Judgment for plaintiffs, and defendant appeals. Affirmed.

A. S. Coke and A. H. McKnight, both of Dallas, and Head, Smith, Hare & Head, of Sherman, for appellant. Wolfe, Maxey, Wood & Haven, of Sherman, for appellees.

RASBURY, J.

Ari Wilson sued appellant in the district court of Grayson county for personal injuries due to the alleged negligence of the appellant. At the time of filing the suit there was also filed with the clerk of the court an assignment by Wilson, conveying one-third of his cause of action against appellant to Messrs. J. C. Wall and W. J. Mathis, attorneys. Subsequently, and before the case was tried, appellant compromised the case with Wilson with the knowledge and consent of Messrs. Wall and Mathis, the full amount of the compromise going to Wilson. After the compromise appellees Wood and Haven intervened in the suit, and alleged they owned a half interest in the one-third interest in the cause of action assigned to Wall and Mathis, and that the case was compromised and settled without their knowledge or consent. Upon trial appellees recovered judgment, and the case is here on errors assigned by appellant.

By their plea of intervention appellees, after asserting a cause of action on the part of Wilson against appellant, alleged that Wilson, after receiving his injuries, employed appellees and Wall and Mathis as attorneys to sue appellant to recover damages for his injuries, and that each were to receive as compensation for their services in that behalf an undivided one-twelfth interest in said Wilson's cause of action; that on the ____ day of October, 1910, Wilson conveyed to Wall and Mathis by contract in writing an undivided one-third interest in said cause of action, it being understood and agreed at the time that the contract was for the benefit of appellees, they to have one-half of said one-third, and Wall and Mathis the other one-half; that, while appellees' names were not embodied in the written contract, the appellant had actual notice that appellees were employed and had such interest in Wilson's cause of action; that afterwards, on March 9, 1911, Wilson, for the purpose of carrying out and making more definite his contract with his several attorneys, executed and delivered another written contract, whereby he transferred and assigned to appellees and Wall and Mathis an undivided one-third interest in said cause of action, as well as an undivided one-third interest in any judgment rendered on said claim or any sum of money collected on said cause of action or said judgment, whether by compromise or otherwise, which contract was deposited with and filed by the district clerk on March 13, 1911; that, notwithstanding appellant had actual knowledge of the facts alleged, it compromised and settled said cause of action with said Wilson and said Wall and Mathis. Appellant, besides the general denial and certain special exceptions, admitted the execution of the contract of October, 1910, by Wilson to Wall and Mathis, but denied appellees had any interest therein; admitted it had notice that Wall and Mathis were Wilson's attorneys, and had an interest in his cause of action, but denied notice of the written contract because same, not being acknowledged, was not constructive notice to appellant of its terms or provisions, and denied also either actual or constructive notice of any interest of appellees in said contract; that, if appellees ever had any interest in said cause of action, the same was owned, held, and controlled by appellees and Wall and Mathis jointly, and, appellant having compromised and settled same with the consent and approval of said Wall and Mathis, appellees were bound by such settlement, and appellees' cause of action, if any, is against their associates Wall and Mathis; further, that on March 13, 1911, appellant made a full and complete settlement with Wilson of his said cause of action, including attorney's fees, without notice, actual or constructive, that appellees had any interest therein, but that, on the contrary, appellant believed at the time of making said settlement that Wall and Mathis were the only ones who had any interest in Wilson's cause of action; that negotiations for adjustment had been carried on for several weeks which was well known to appellees, and that they knew as well that said Wall and Mathis were assuming to act in regard to the interest assigned in said cause of action as attorneys' fees, and appellees acquiesced therein, and made no complaint to appellant, nor notified it that they had any interest therein; that if appellees did have any interest in said fees by their acts and conduct they represented that said Wall and Mathis had full power and authority to act in regard to the settlement of the same; and that appellees were estopped to deny they were concluded by the acts of said Wall and Mathis.

The first contract, which is undated, and unacknowledged, but was filed in the office of the county clerk in attempted compliance with article 6833, R. S. 1911, recited, in effect, that Wilson has employed Wall and Mathis to represent him in the matter of his claim for damages, they to bring suit if necessary, and, in order to secure them for services rendered and to be rendered, Wilson assigns, transfers, and conveys to them one-third of his claim and cause of action against the railway company. The contract is signed by Wilson, Mathis, and Wall. The second contract, which is dated March 9, 1911, is signed by Wilson alone, and properly acknowledged. In substance, it declares that Wilson has employed Mathis, Wall, Wood, and Haven as his attorneys to represent him in the matter of the prosecution of his claim against the railway company, and assigns and sets over to them an undivided one-third interest in his cause of action and in and to any judgment rendered in any court on the same and in and to any sums of money collected on said cause of action or judgment. There was also a provision in the contract that neither party should compromise the claim without the consent of the other.

Upon trial it was agreed between appellant and appellees that the court should instruct the jury that, in the event they found for appellees, their damages should be assessed at $2,000, which agreement the trial judge observed. The court, also, upon request of appellees, instructed the jury that appellant had no notice of the second contract, and could not be charged with notice of the same, but that same could be considered upon other issues in the case.

A great amount of testimony was adduced upon the trial of the case, and it is wholly impracticable to set same out in this opinion, but the testimony, in deference to the verdict of the jury, warrants the following conclusions of fact: That Ari Wilson was injured by appellant; that W. J. Mathis and James P. Haven were employed by him to prosecute his claim against the appellant; that Mathis associated John C. Wall with him in the case, and Haven in like manner associated J. H. Wood, Wilson having employed neither Wall nor Wood; that the first contract signed by Wilson conveying an interest in the judgment to Mathis and Wall alone was for the benefit of Haven and Mathis, and so understood by all the parties thereto, and was subsequently agreed to by Mathis and Haven, after the contract excluding Haven and Wood was delivered in a conference in reference to the matter, at which time, notwithstanding the contract referred to, it was agreed that Mathis and Haven should have the case on equal terms; that after the first contract was executed, and after the conference between Mathis and Haven, Mathis signed Haven's name to the petition then on file in the case, and from which the name of Haven had been omitted when Mathis prepared same, and Haven begun active participation in the suit, and contributed his share of labor to its preparation for trial; that the second contract executed by Wilson was in confirmation of what was intended by the first contract and supplementary thereto; that under both contracts an assignment of a third interest in Wilson's cause of action against appellant and any judgment recovered thereon to Mathis and Haven was intended by all parties interested; that appellant had actual knowledge of the first contract, and knew that Haven and Wood claimed an interest in Wilson's cause of action thereunder; that appellant had no notice of the execution of the second contract, and had no knowledge of appellees' claimed interest in Wilson's cause of action by reason of said second contract; that a month or six weeks before appellant adjusted the claim with Wilson and Mathis and Wall the appellee Haven was in the office of Mr. Head, one of the appellant's attorneys, at which time he was asked if he (Haven) and Judge Wood "represented" Wilson in his suit; that Haven told him they did; that Mr. Head then mentioned that some negotiations were pending in the matter, and he wanted to know if Haven and Wood were in the case; that Mr. Head received an amended petition in Wilson's case against the railway company from either Judge Wood or Mr. Haven, which was by him sent to the company's general attorneys, and that in that way he knew that Wood and Haven were attorneys in the case, and that he noticed that the names of all the attorneys were signed to the same; that Mr. Head, appellant's attorney, knew it was an almost universal custom at the Sherman bar that cases like Wilson's were prosecuted on a contingent fee, and that he was attorney for the railroad company; that, after Head's conversation with Haven, Head had a conversation with Wall, and incidentally inquired of him if Wood and...