Swanson v. Webb Tractor & Equipment Co.

• Decision Date: 15 March 1946
• Docket Number: 29783.
• Citation: 24 Wn.2d 631,167 P.2d 146
• Court: Washington Supreme Court
• Parties: SWANSON v. WEBB TRACTOR & EQUIPMENT CO.

167 P.2d 146

24 Wn.2d 631

SWANSON v. WEBB TRACTOR & EQUIPMENT CO.

No. 29783.

Supreme Court of Washington

March 15, 1946

Department 1

Action by Walter V. Swanson against Webb Tractor & Equipment Company to recover an attorney's fee for legal services, together with an amount advanced by him for expenses in certain prior litigation, and to have a lien for such fee established and foreclosed against the proceeds of two judgments procured for the defendant in the prior litigation. From a judgment for plaintiff but refusing to establish any lien upon proceeds of the former judgments, the defendant appeals.

Appeal from Superior Court, Yakima County; Robert J. Willis, judge.

C. W Halverson, of Yakima, for appellant.

Walter V. Swanson and D. H. Bonsted, both of Yakima, for respondent.

STEINERT Justice.

This action was brought by plaintiff, Walter V. Swanson, to recover an attorney's fee for legal services, together with an amount advanced by him for expenses, in certain prior litigation, and to have a lien for such fee established and foreclosed against the proceeds of two judgments procured for the defendant, Webb Tractor & Equipment Co., in the prior litigation.

The complaint alleged that between May 15, 1941, and April 7 1944, plaintiff, at the special instance and request of the defendant, performed certain legal services for the defendant, involving the preparation of various instruments in writing, counselling with and advising the defendant, and, particularly, the prosecution to judgment of two actions in the state of Idaho, in each of which this defendant was plaintiff; that the judgments in those actions amounted to approximately $50,000; that thereafter defendant settled and satisfied the judgments for the sum of approximately $40,000, and has ever since retained the cash proceeds thereof in a bank in Yakima; that plaintiff's services are reasonably worth $12,500, in addition to which he necessarily incurred expenses amounting to $168. Plaintiff prayed for judgment in the sum of $12,668; that a lien in the amount of his attorney's fee be established against the proceeds of the Idaho judgments held by the defendant; and that such lien be foreclosed.

In its answer, defendant admitted that plaintiff had performed legal services in connection with the litigation referred to above and admitted the amount of the former judgments and the subsequent settlement thereof, but denied the remaining allegations of the complaint. The answer further set forth three affirmative defenses.

In the first of these, defendant alleged that a firm of attorneys in Idaho was associated with the plaintiff as attorneys of record for the conduct of the two actions in that state; that after the judgments had been obtained therein, the defendants in those actions offered to pay in settlement of them the sum of $40,000; that defendant herein through its president, A. R. Webb, thereupon requested plaintiff and his associate counsel to submit a statement of charges for all legal services rendered by all of them in connection with that litigation; that Webb was then and there advised by plaintiff and the associate counsel that the total charge for such services would be $8,000; that, relying upon that advice, defendant accepted the offer of compromise, received the sum of $40,000 in full settlement, and satisfied the judgments in those actions; that because of a dispute which concurrently had arisen between the plaintiff and his associate counsel concerning the division of the fee, defendant paid the sum of $8,000 into the registry of the Idaho court; that thereafter a summary proceeding was instituted in that court, pursuant to the statutes and law of that state, wherein it was determined that one-third of the total fee should be paid to this plaintiff, and the other two-thirds to his associate counsel; that prior to the final determination of that proceeding process was duly served upon plaintiff but he declined to appear; that thereafter, the clerk of that court duly tendered to the plaintiff the sum of $2,666.67, being one-third of the total fee, but that plaintiff refused to accept the tender; that such sum has at all times been available to the plaintiff; and that the order made by the Idaho court in that proceeding is a final and binding order and judgment, from which no appeal has been taken, and is therefore entitled to full faith and credit.

As a second affirmative defense, defendant alleged that prior to the commencement of this action plaintiff and his associate counsel agreed with this defendant that the total fee to be charged for all of their services in connection with the former litigation should be $8,000; that such fee was to be divided among them on the basis of one -third to plaintiff and two-thirds to associate counsel; and that such proposed division was in accordance with the usual and established custom between forwarding and receiving attorneys.

For a third affirmative defense, defendant alleged that the reasonable value of all of plaintiff's services performed for the defendant did not exceed the sum of $2,666.67, which amount was tendered to, and refused by, the plaintiff, and has ever since been maintained for him.

In his reply, plaintiff admitted that a purported summary proceeding as set forth in defendant's answer was instituted in the Idaho state court, resulting in an alleged distribution of the $8,000 which had been paid into that court, but denied that such proceeding had any validity whatever, and further denied all of the ramaining material allegations of the answer and the three affirmative defenses.

After issues were joined, the present cause was tried to a jury, which returned a verdict in favor of the plaintiff in the sum of $4,168. The court thereupon entered judgment on the verdict, but did not establish any lien upon the proceeds of the former judgments obtained by this defendant, as plaintiff in the Idaho actions. From the judgment herein, defendant appealed.

The issues involved in this appeal can be more satisfactorily presented and considered if the facts upon which they rest are clearly understood, and we will therefore refer to the evidence in some detail.

Respondent, Walter V. Swanson, is an attorney at law residing in the city of Yakima and has had seventeen years' experience in the active practice of law. Appellant, Webb Tractor & Equipment Co., is a corporation engaged in the business of handling and distributing tractors and other heavy machinery and equipment, and in the conduct of its business acts as agent for various manufacturers and distributors of such supplies. Its main office is in Yakima but it also has branch offices in various other cities and transacts business throughout central Washington and neighboring states. Respondent has been the attorney for the appellant since 1934 or 1935.

In the latter part of 1940 appellant leased to L. Romano Engineering Co. three Model C Tournapulls, which are heavy tractors used in moving earth. The rental reserved in the leases was forty dollars a day for each machine, with the option in the lessee to purchase the machines at a price of $10,675 each. The Romano company used these tournapulls in the construction of a dike near St. Maries in the state of Idaho, under a contract with the Federal government involving approximately $290,000. In the latter part of May, 1941, appellant also leased to the Romano company four Super C Tournapulls to be used for the same purpose. The total rental reserved in that lease was $49,960, with the option in the lessee to purchase these four machines at any time at that same total amount.

At the time this latter lease was being considered, and prior to its execution, appellant had been having some difficulty with the Romano company under the preceding leases, particularly because of Romano's failure to pay the rental installments promptly, and for that reason Mr. Webb on or about May 15, 1941, consulted respondent in that regard and also with respect to the form of the latter lease and the advisability of entering into it.

Shortly after the execution of that lease on May 27, 1941, Mr. Webb became much concerned about his recent transactions with the Romano company. Not only was that company delinquent in the rental payments, but also it had come to the knowledge of Webb, through one of his men who looked after the repair of the machinery while on the job, that the tournapulls were being misused and abused by the employees of the Romano company, to the extent, as he estimated it, of one hundred dollars a day. Webb thereupon consulted respondent and, after some conferences, it was decided that he and the respondent should go to St. Maries, investigate the conditions, and consult with the Romanos. A trip from Yakima to St. Maries and return, including the transaction of any business thereon, ordinarily consumes three days.

On or about June 15, 1941, Webb and respondent went to St. Maries and after they had spent the better part of a day watching the operations of the tournapulls and consulting with Romano, their worst fears as to the misuse and abuse of the machinery were confirmed. Romano had also taken a very belligerent attitude, threatening not only to keep the machinery without paying for it, but also to get back from appellant the down payment of $10,000 recently made on the four Model C Super Tournapulls.

On their return from St. Maries to Yakima, both Webb and respondent felt convinced that legal action of some sort would have to be taken as soon as possible, in order to protect appellant's property and its rights under the lease agreements. This posed a serious question however owing to the many complexities involved. Respondent spent the greater part of the next two weeks in his...