Shirk v. Neible

• Decision Date: 23 January 1901
• Citation: 59 N.E. 281,156 Ind. 66
• Parties: SHIRK et al. v. NEIBLE et al.
• Court: Indiana Supreme Court

156 Ind. 66

59 N.E. 281

SHIRK et al.

v.NEIBLE et al.

Supreme Court of Indiana.

Jan. 23, 1901.

Appeal from circuit court, Carroll county; Joseph M. Rabb, Special Judge.

Action by James A. Shirk and others against Daniel W. Neible and others. From a judgment in defendants' favor, plaintiffs appeal. Affirmed.

A. W. Reynolds, L. D. Boyd, and M. A. Ryan, for appellants. M. Winfield and J. L. Sinkes, for appellees.

HADLEY, J.

Foreclosure by appellants, as indorsees, against the maker of a promissory note governed by the law merchant. Answer in three paragraphs: First, a general denial; second, no consideration; and, third, fraud and failure of consideration which went to the entire complaint, except as to the right of plaintiffs to recover and foreclose as to $100. A demurrer to each the second and third paragraphs of answer was overruled. Reply that appellants bought the note before maturity, for value, and without notice of the fraud.

Under repeated decisions of this court, the second paragraph of answer is insufficient for failure to allege appellants' notice of the infirmity of the note. Coffing v. Hardy, 86 Ind. 369;Bank v. Ruhl, 122 Ind. 279, 23 N. E. 766;Galvin v. Bank, 129 Ind. 439, 441, 28 N. E. 847;Shirk v. Mitchell, 137 Ind. 185, 194, 36 N. E. 850;Potter v. Sheets, 5 Ind. App. 506, 32 N. E. 811. For this error the cause must be reversed, unless it shall clearly appear from the record that the judgment rests upon some other paragraph of answer, and the ruling harmless to appellants. Railroad Co. v. Maddux, 134 Ind. 571, 578, 33 N. E. 345, 34 N. E. 511;Miller v. Rapp, 135 Ind. 614, 34 N. E. 981, 35 N. E. 693;Tewksbury v. Howard, 138 Ind. 103, 37 N. E. 355; Ewbank, Manual, § 257.

The facts constituting the fraud are set forth with much particularity in the third paragraph of answer. The facts in the case, as affirmed by the court's special finding, are as follows: November 6, 1896, a firm of learned and skilled attorneys at law resided at Delphi, where for many years they had practiced their profession as partners. At said date Louisa Nipple was shot to death in the cornfield of appellee Daniel W. Neible, at dusk, while engaged in unlawfully taking corn. November 9, 1896, Neible and his two sons, aged 13 and 16, respectively, were arrested upon a warrant issued by a magistrate, charging them with the murder of Mrs. Nipple, and placed in jail to await an examination. The homicide caused great excitement in the community, and there were many circumstances indicating the guilt of the boys. At the time Daniel W. Neible was a well to do farmer, residing on his farm with a wife and four children, two boys and two girls, and neither he, nor either of his boys, had ever before been charged with crime. Neible was unfamiliar with proceedings in court, and with the value of the services of attorneys, and he and his wife were greatly alarmed and excited over the conditions surrounding them and their sons. On the night they were placed in jail Neible employed said attorneys to defend him and his boys. Neible at the time of the employment requested said attorneys to inform him what their charges would be for the service, and they informed him that it was impossible to determine at that time what services they would be called upon to render, but that their charges would be reasonable. The attorneys at once entered upon an investigation of the facts and circumstances attending the death of Mrs. Nipple, and diligently prosecuted such investigation up to the time of the convening of the grand jury, and were in daily communication with Neible and other members of the family regarding the case. Said attorneys also appeared at the preliminary hearing before the magistrate, and examined the witnesses, and otherwise conducted said examination on behalf of Neible and his sons, and upon said preliminary hearing Neible was discharged from custody for want of criminating evidence against him, but his two sons were held, without bail, to await the action of the grand jury. On December 17, 1896, after the preliminary hearing, and a few days before the meeting of the grand jury, Neible and his wife called at the office of their attorneys for the purpose of conferring with them respecting the defense of their sons then confined in jail, and without any previous thought of executing to their attorneys a note and mortgage for their fee. During this conference Neible again requested said attorneys to state what their fee would be, and, upon Neible's insistence, said attorneys stated they would, if required to fix their fee at that time, consider all the work that might have to be done in the case, and would fix it at $3,000, which amount Neible then agreed to pay; whereupon the attorneys then demanded that Neible and wife execute to them the note and mortgage sued on, which they did on said December 17, 1896. The grand jury met on the following first Monday in January, and, having considered the evidence, refused to indict either of the Neibles, and the sons were also thereupon discharged from custody. The services of said attorneys in and about the defense of the Neibles were worth $500, and no more. If all of the Neibles had been indicted for murder, and tried separately therefor, the services of their attorneys would have been worth $3,000. May 5, 1897, said attorneys, for a valuable consideration and in the usual course of business, assigned, before maturity, by indorsement, the note and mortgage to the appellants. That at the time the appellants took said note and mortgage the cashier of appellants' bank, who transacted the business, knew that prior to its execution the maker, Daniel W. Neible, and his two sons had been arrested on the charge of murdering Mrs. Nipple. That they had been examined before a magistrate, and that said attorneys had appeared at said examination as their counsel, and that the two sons had been bound over to await the action of the grand jury on said charge, and that they were in jail at the time the note and mortgage were executed, but neither said cashier nor any officer of appellants' bank had actual knowledge of the consideration for which the note was given.

It is shown by the third paragraph of answer and by the special finding that on the night Neible and his sons were thrown into jail the father employed said attorneys for their defense. At the first meeting, and before the employment, and while the parties stood at arm's length and upon an equal footing, Neible was capacitated to make a contract with respect to fees that the law would require him to keep. Then there was no special confidence between them-no vis major-to give one advantage over the other in making a bargain. At that time, if an agreement could not have been made to his liking, Neible could have turned to other lawyers without injury or impairment of his defense. But at this first meeting, and before their employment, Neible requested said attorneys to state the total amount of their fee for the defense, which they refused to do, assigning for the refusal the same reasons that subsequently yielded to their effort to do so. The employment made was a general employment, under which the attorneys were entitled to a reasonable compensation for the services rendered, and, having accepted such employment and established a relation of confidence that gave them vantage ground, the law thereby stripped them of all power during the continuance of the relation to contract with their client for a fee in excess of fair compensation. Therefore these attorneys having agreed with their client during the progress of the confidential relation as to the amount of their fee, and demanded and taken a negotiable note and mortgage therefor, the law presumes the transaction to be fraudulent, and the fee excessive, and the burden is laid upon the attorneys to show by clear proof that it was fair, and the amount agreed upon but a reasonable compensation for the services which they had performed, or would be called upon to perform, under their employment. French v. Cunningham, 149 Ind. 632, 636, 49 N. E. 797, and authorities cited. See, also, McCormick v. Malin, 5 Blackf. 510, 523;Rochester v. Levering, 104 Ind. 562, 568, 4 N. E. 203;Ross v. Payson, 160 Ill. 349, 43 N. E. 399;Gray v. Emmons, 7 Mich. 533;Brown v. Bulkley, 14 N. J. Eq. 451; Howell v. Ransom, 11 Paige, Ch. 538; Merryman v. Euler, 59 Md. 588, 43 Am. Rep. 564.

The record shows that the note and mortgage were executed after the preliminary examination before the magistrate had been held, and but a few days before the convening of the grand jury. The boys had been denied bail, and remanded to jail to await the action of the grand jury. The community was in a state of excitement, and there were many known circumstances indicating the boys' guilt. Neible and his wife were greatly alarmed and excited over the conditions affecting their sons. They...