Wilson v. Seeber

• Decision Date: 15 May 1907
• Citation: 72 N.J.E. 523,66 A. 909
• Parties: WILSON v. SEEBER et al.
• Court: New Jersey Court of Chancery

66 A. 909

72 N.J.E. 523

WILSON

v. SEEBER et al.

Court of Chancery of New Jersey.

May 15, 1907.

Bill by William R. Wilson against George Seeber and others. Heard on return of an order to show cause. Preliminary restraint continued until final hearing.

Alan H. Strong, for complainant. Edward M. Colie, for defendants.

PITNEY, Advisory Master. This is a contest over a part of a sum of money which, at the time of the filing of the bill, December, 1906, was in the shape of a promissory note or notes given by the defendant Seeber to the defendant Schauble, and which notes were, I believe, in the hands of the defendant David. At the filing of the bill, an order to show cause, with interim restraint, was made thereon returnable in January, 1907. Later, on the 15th of January, by consent of all parties, the notes in question were paid under order of the court, and enough of the proceeds to cover complainant's claim were committed to the custody of the defendant David, to be held by him as trustee in an account in bank in his name as such trustee and subject to the order of the court. That fund, now in immediate control and custody of the court, was the proceeds of a compromise of a suit brought by bill in this court on September 1, 1906, by Schauble against the defendant Seeber, in which the complainant herein, Mr. Wilson, a solicitor of this court, was solicitor. This suit, he contends, was brought by him in pursuance of a preliminary contract made between himself and the defendant Schauble, by which Wilson was to have one-third of the proceeds of the suit, and the fund in court aforesaid is admitted to be a part of the proceeds of a settlement of that suit.

Two questions are involved, both of which must be resolved in the complainant's favor in order to give him the relief now sought: First, was the contract made as alleged? Second, did it give him (Wilson) such an interest in the proceeds of the suit as to enable him to maintain this equitable action?

The first question is one of fact, and its solution depends upon the consideration of a variety of circumstances and a careful examination of several rather bulky affidavits. For present purposes, it will be sufficient if I shall find that it is probable that on the final hearing of the cause and an opportunity on each side for cross-examination the complainant will succeed in establishing the contract.

The complainant's contention is, in brief, as follows: In October, 1904, Schauble was the owner of 179 shares of the capital stock of the Rising Sun Brewing Company, and in that year transferred the same for the sum of $130,000 to one Nugent, who really bought in the interest of the defendant Seeber, to whom the stock was subsequently transferred, and in whose name it has since stood. Schauble subsequently thought that he had been unfairly dealt with in the transaction. At and subsequent to that time Judge Gilhooly, of Elizabeth, was his standing counsel in important matters; but Mr. A. J. David, a young lawyer in Elizabeth, was employed by him in unimportant matters. On divers occasions, and particularly in the early part of 1906, Schauble consulted with Judge Gilhooly as to his right to undo the transaction and recover the shares of stock, and wished to employ him to bring a suit for that purpose. Judge Gilhooly expressed doubts as to the prospect of a recovery, and finally declined to be retained for that purpose, stating that he had been somewhat Involved in transactions connected with or growing out of the transfer of the stock, and suggested to Schauble that be employ the complainant, Wilson, for that purpose. Shortly after, and in the summer of 1906, Schauble called upon Wilson, and expressed a wish to employ him, but stated that he had no money to invest in the suit, and desired that Wilson undertake it on shares. He gave Mr. Wilson the particulars of the case. That gentleman, learning from Mr. Gilhooly that he had no objections to his (Wilson's) undertaking the suit, did undertake it, upon the agreement, as he swears, that he was to have one-third of the proceeds, and to run all the risks of expenses and costs, provided that after an examination of the circumstances he thought it could be successfully carried through. He did make this examination, and commenced the preparation of his bill and affidavits, which I have seen, and they show a great deal of labor. At the same time, before filing the bill, he asked Judge Gilhooly to draw a written agreement between him and Schauble as to compensation, which Gilhooly did, and which Wilson handed to Schauble, and which he said Mr. Schauble agreed to and promised to execute. Before the agreement, however, was actually executed, it came to the knowledge of Wilson that there was a scheme on foot by which the ownership of these shares of stock by Seeber might within a very short time be transferred to some other person, and he thereupon hurried matters, finished the preparation of Schauble's affidavit, and came before me on September 1, 1906, at Morristown, with Schauble, and upon presentation of the bill I advised an order to show cause, with interim restraint against the transfer of the stock by Seeber. Naturally, and at once upon obtaining this order, the question arose where the money was to come from in case Seeber should immediately tender a retransfer of the stock and demand a return of the purchase price, and Schauble at once asked the assistance of Wilson in procuring money for him. Nothing was said in the written unsigned contract which made it the duty of Wilson to raise any money. Mr. Wilson applied to Mr. Gilhooly, and learned from him that Mr. Isham, an Elizabeth capitalist, would advance the money provided he could have the stock for the sum of $155,000. Mr. Schauble, upon learning this from Wilson, agreed to it generally, or in part. Either Wilson or Gilhooly had prepared a contract to that effect to be signed by Schauble. That contract, however, was nominally with Judge Gilhooly; Isham's name not being mentioned in it. Objection was made to this contract by Schauble, because it did not provide for protecting him against a suit which had been brought by the brewing company to enforce a large claim against him, which was then pending, and he wished that the sum to be paid him by Judge Gilhooly for the 179 shares of stock should be over and above any amount that he (Schauble) should be obliged to pay as a result of the suit of the brewing company against him.

In this state of affairs, Mr. Wilson and Mr. Schauble met by appointment early in the morning at Judge Gilhooly's office; Schauble having both contracts in his possession—first, the one Judge Gilhooly had drawn between Wilson and Schauble, and, second, the one between Schauble and Gilhooly for the sale by Schauble to Judge Gilhooly, acting for Mr. Isham, of the shares of stock, if recovered. Mr. Schauble then informed Judge Gilhooly that he was entirely satisfied with the contract with Mr. Wilson for his compensation, but he wished the contract for the advancement of the money and the sale of the stock to Gilhooly to be amended in the respect previously mentioned. Mr. Gilhooly thereupon drafted a new contract between himself and Schauble, which was supposed to, and did in fact, cover the objection. Upon this new draft being shown to Schauble, he expressed no dissatisfaction with it, but said that, before executing it, he wished to submit it to Mr. David. This remark seems to have irritated Judge Gilhooly, and he declared that he would have neither of the papers executed in his office, and hastened the departure of Mr. Schauble. The result was that neither the contract with Mr. Wilson or that with Judge Gilhooly were ever executed. On the return of the order to show cause, Mr. Wilson employed Mr. Marsh, of Plainfield, as assistant counsel, and the hearing went over by consent. In the meantime, Schauble seems to have become either suspicious of complainant's sincerity in his devotions to Mr. Schauble's interest in the suit, or his ability to properly conduct it, and, besides employing Mr. David, sought to employ Mr. Colie, of the Essex bar, and asked Mr. Wilson to go with him to Mr. Colie's office as soon as the latter should return from Europe. A meeting took place at Mr. Colie's office about September 13th, in which the subject of Mr. Wilson's compensation was taken into consideration, Mr. Wilson insisting upon his contract in writing as already agreed upon, and that it should be signed. Mr. Colie, after hearing all the parties, acting as counsel for Schauble, prepared another agreement, which distinctly recognized and provided that complainant should have one-third of the recovery and one-third of any compromise; but in a subsequent clause provided that Schauble might discharge Wilson at a certain stage of the cause by paying him a comparatively small sum of money. This contract Wilson declined to sign.

I have stated Mr. Wilson's contention. It is thoroughly supported by his own affidavits, and,' as to the consent of Schauble to the terms of the contract, it is sustained by the affidavit of Judge Gilhooly. It is also sustained by the account of what occurred on the 13th day of September in the office of Mr. Colie. It is quite impossible to account for the provision for one-third compensation found in the contract prepared by Mr. Colie, except upon the assumption that such proportion had been previously agreed upon. The defendant Schauble, in opposition to the deposition of Judge Gilhooly and complainant, denies some of the allegations of the circumstances leading up to his employment of Mr. Wilson, and he denies that he ever agreed to give one-third, and he denies a part of what occurred in Judge Gilhooly's office on the occasion when the judge swears that the second draft of the contract was prepared by him between himself and Mr. Schauble. But I think that denial, when carefully examined, and, compared with the other affidavits, is not...