Royal Crown Bottling Co. v. Chandler, 16913

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: STUKES; TAYLOR, OXNER and LEGGE, JJ., and J. FRANK EATMON
• Citation: 226 S.C. 94,83 S.E.2d 745
• Parties: ROYAL CROWN BOTTLING COMPANY, Inc., et al., Respondents, v. William E. CHANDLER, Jr., et al., Appellants.
• Docket Number: No. 16913,16913
• Decision Date: 27 September 1954

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83 S.E.2d 745 226 S.C. 94 ROYAL CROWN BOTTLING COMPANY, Inc., et al., Respondents,
v.
William E. CHANDLER, Jr., et al., Appellants. No. 16913. Supreme Court of South Carolina. Sept. 27, 1954.

[226 S.C. 95] E. P. Riley, Greenville, Henry Hammer, Columbia, for appellants.

Price & Poag, Leatherwood, Walker, Todd & Mann, Greenville, for respondents.

[226 S.C. 96] STUKES, Justice.

This appeal relates to six actions, five of which were commenced in the Court of Common Pleas of Greenville County and one in Richland County. They were consolidated and tried in Greenville. The actions are for an accounting of attorneys to clients and are, therefore, in equity. The factual findings and legal conclusions of the special referee, the Honorable Calhoun A. Mays, of Greenwood, were affirmed by the court which heard the case on exceptions to the referee's report. Therefore the concurrent findings of fact are not subject to reversal by this court

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on appeal unless they are without evidence to support them or are against the clear preponderance of the evidence. 3 S.C. Dig. 557 et seq., Appeal and Error, key 1022.

The General Assembly of 1951, by provision of Section 95(b) of the General Appropriation Act, 47 Stat. 546, 656, amended the State soft drinks tax by excepting therefrom 'fruit juices plain and/or fortified.' This came to the attention of the Executive Secretary and General Counsel of the State association of bottlers, William E. Chandler, Jr., one of the appellants. He conferred with W. B. Morrow, of Sumter, who was then president of the association of which he called a meeting in Columbia on June 15, 1951, where the effect of the amendment was discussed. Immediately prior thereto Chandler, who was already paid a substantial monthly salary, expense account and travel allowance by the association, interviewed some of the bottlers with a view to obtaining the employment of his law firm to procure, by litigation if necessary, refunds of the taxes on certain bottled drinks, which the Tax Commission was insisting upon collecting despite the above statute, in accord with a proposed contract prepared by him which provided for a contingent fee of twenty per cent. However, Chandler now [226 S.C. 97] makes no claim to additional compensation for legal services to the bottlers in connection with the subsequent refunds, except as he may participate in the fee which may be recovered by Edens, who is the principal appellant; and this action is not concerned with the division. Both of these gentlemen are prominent members of the bar of this court.

There is sharp conflict in the evidene upon the contention of appellants that the result of the Columbia meeting was to authorize Morrow as the agent of the affected bottlers to engage counsel to prosecute their claims. The finding of the lower court was against the contention of appellants and, upon careful review of the evidence, we cannot say that the conclusion is contrary to the clear preponderance of it. However, the court came to the following conclusion, from which there is no appeal: 'The bottlers by making no protest against having suits brought in their names; by accepting the fruits of the victory in the County Court of Richland County; and by bringing their present suits for funds represented by the compromise settlement, have clearly ratified those acts.' An added finding, coupled with the foregoing, which is the main target of the appeal, is the following: 'I find no evidence, however, to support a finding that they ratified Mr. Morrow's unauthorized agreement to pay a fifty (50%) per cent attorneys' fee.'

After the June 15 meeting Morrow and Chandler conferred and concluded that a more experienced attorney than Chandler should be engaged to bring suits for the recovery of the taxes which the bottlers were instructed at the meeting to pay monthly under protest. They agree upon the choice of Mr. Edens, if he were available, and Mr. Chandler interviewed him, after which Morrow confirmed the employment in a telephone conversation. The testimony of both Morrow and Edens is clear that no fee was fixed, only that it must be contingent upon recovery and that the plaintiffs would not advance costs and disbursements. The testimony of both thereabout is significant and is quoted in [226 S.C. 98] part as follows: By Mr. Edens on direct examination: 'He (Morrow) asked me what my idea of a contingent fee would be and I advised him that with so many uncertain elements and factors at that time it would be completely impossible for me to suggest a contingent percentage but as we moved along and the litigation crystallized I would be in better position to agree on that.' This supported Mr. Edens' pleadings in the actions; in the complaint in that which he instituted against the bottlers the fourth paragraph is:

'4. That when plaintiff was engaged to perform the legal services as aforesaid, no agreement as to fees was entered into for the reason that the factors upon which the fee for such services was to be based, as for

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example, the amount of money involved, the amount of work to be performed, the novelty of the question, the issues involved, the probable costs and disbursements, etc., were not readily ascertainable and therefore the agreement as to the amount of fee to be paid for such services was deferred until such date as these factors could be determined.'

Pertinent testimony of Mr. Morrow follows:

'Q. When you discussed that with Mr. Edens, was there any conversation with reference to the terms under which he was employed? A. Well, he (Edens) asked something about that. I simply told him I was not in position to make any commitments as to set fees, any arrangements as to fee would have to be on a contingent basis.

* * *

* * *

'You had no authority about a flat fee. What do you mean by that? A. By any set definite amount either percentage-wise or otherwise.

'Q. No agreement at that time as to fee? A. No, sir. * * *

'Q. Did Mr. Edens make any statement to you with reference to the fee? A. He said he would go ahead, glad to represent the bottlers and do the best he could. That was something that would have to be settled and we just left it.'

[226 S.C. 99] Time was short as it was then nearing the end of July within which a separate suit must be brought for each bottler who had paid under protest, and there were about 40 of them who are respondents here. Similar suits were brought each month for six months, which made a total of approximately 240 actions in all, which were brought in the Richland County Court in behalf of the present respondents.

A few days before the employment of Mr. Edens by Mr. Morrow the latter circularized the affected bottlers, asking for information necessary for the suits which the bottlers were instructed to send in an enclosed, stamped envelope addressed to Mr. Chandler. Blanks were included in the communication whereby the bottlers would agree, by filling and signing, to the payment of attorneys' fees and court costs in the amount of twenty per cent of the recovery. Few responded; certainly there was no general agreement to the suggested twenty per cent contingent fee and Mr. Edens had to proceed without direct authority from most of the respondents--only that extended in their behalf by Morrow--and had to obtain the factual information for the suits from the records of the Tax Commission.

A test case was tried, or test cases were tried, in the Richland County Court on January 22nd, of which notice was given to the bottlers and their attendance invited by Mr. Chandler by circular letter dated January 17, 1952. On January 29 a telegram was sent to the litigant bottlers signed by Mr. Chandler, Mr. Edens 'and associates,' which advised of favorable decision of the suit or suits which were tried.

On January 31 another circular letter, signed as that above and addressed to 'Bottlers represented in tax cases', advised of an amendment to the appropriation bill which was then before the General Assembly...