Case Name: SCHULDER v. DICKSON et al.
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1926-01-18
Citations: 66 Utah 418
Docket Number: No. 4168
Parties: SCHULDER v. DICKSON et al.
Judges: THURMAN, J. I concur.
Reporter: Utah Reports
Volume: 66
Pages: 418–452

Head Matter:
SCHULDER v. DICKSON et al.
No. 4168.
Decided January 18, 1926.
(243 P. 377.)
Bey, Hoppaugh & Mark, of Salt Lake City, for appellants.
M. E. Wilson, of Salt Lake City, for respondent.

Opinion:
GIDEON, C. J.
This case was first argued in this court at the 1924 October term. An opinion was thereafter rendered. A petition -for rehearing was filed. The members of the court concurring in the opinion, after further consideration of the case and of the arguments in the petition for rehearing, concluded that the law applicable to the facts appearing in the record did not support or justify tbe conclusions reached in tbe original opinion; nor does the record support in its entirety the statement of facts made in that opinion. A rehearing was therefore granted, and t|ie cause was again orally argued at the February term, 1925. Since the date of the reargument and resubmission, we have again gone over the record and carefully considered the same. "We are now firmly convinced that the court's former opinion should not stand as the judgment in the case. It will for that reason not be published, and this opinion instead will be filed and published officially.
This is an action for an accounting instituted by respondent, plaintiff below. An accounting is sought of the affairs of the partnership theretofore existing between. respondent and appellants, William H. Dickson and Adrian C. Ellis, Jr., defendants below. Subsequent to the taking of testimony and prior to the entry of judgment, Dickson died. The executor of his estate was thereafter substituted as defendant. The trial court rendered judgment in favor of respondent. Motion for new trial was denied. The case is here on appeal taken jointly by Ellis personally and by Ellis as executor of Dickson's estate.
The proceeding is one in equity. The assignments assail practically each and all of the trial court's findings. We are asked, and it is our duty, to review the record and determine whether the court's findings are supported by the weight of evidence and, if supported, whether the conclusions of law are supported by the findings.
The following facts appear in the record: In the year 1895, William H. Dickson, Adrian C. Ellis, Sr., and Adrian C. Ellis, Jr., formed a partnership for the general practice of law in Salt Lake City, Utah, under the firm name of Dickson, Ellis & Ellis. Judge Dickson and Ellis, Sr., were then lawyers of many years experience-. In 1903 respondent spondent married Judge Dickson's daughter. Upon the request of Judge Dickson, respondent was admitted as a member of the partnership. The firm was thereafter known and styled Dickson, Ellis, Ellis & Sehulder. That partnership continued until 1912. In that year Ellis, Sr., passed away. The surviving members thereupon organized a new firm under tbe name of Dickson, Ellis & Schulder. In their new firm the division of fees was three-eighths to Dickson, three-eighths to Ellis, Jr., and two-eighths to Schulder. This action is to recover respondent's pro rata share under this partnership agreement of certain fees claimed to have been received by appellants. The fees in controversy were for services rendered in litigation claimed by respondent to have been pending business at the date of the dissolution of the partnership.
The firm of Dickson, Ellis & Schulder continued until July 1, 1916. Upon that date Judge Dickson retired, and at the date of his retirement announced to the other members of the firm that he expected to receive his pro rata share of the retainers of the firm until January 1, 1917, and also that he would expect to receive his pro rata share of all amounts received from business or litigation then pending in which the firm was interested whenever such business or litigation was finally terminated. Neither respondent nor Ellis desired Judge Dickson to withdraw from the firm, but, at the latter's request, acquiesced in such arrangement. It was evidently contemplated at that time that Schulder and Ellis would continue in the practice of law at the same offices then occupied by the firm and would devote such efforts and time as were required to wind up the business of the old firm. In November, 1916, a partnership agreement was made between Ellis and Schulder, by the terms of which they engaged in the practice of law under the firm name of Ellis & Schulder. That partnership arrangement continued till June 9, 1917. A.t that time Ellis advised Schulder that he would not continue the relationship and advised him that he (Ellis) would move away from' the offices occupied by the firm and let Schulder retain them, or that he would retain the offices and Schulder could remove therefrom. Schulder demurred to the termination of the partnership, but was advised by Ellis that the partnership relation would cease. Ellis also advised Schulder at that time that he (Schulder) would receive his pro rata share of the retainers until July 1st; that Schulder was at liberty to take as muck of tbe business of tbe firm as be could take, including retainers, and tbat be (Ellis) would do likewise; tbat there would be no division of fees after July 1st. Tbe retired member of tbe old firm, Judge Dickson, was not a party to tbis new agreement between Ellis and Scbulder, and be stated in bis testimony tbat be did not know of tbe arrangement for some years afterwards.
At tbe beginning of the trial in tbe district court, there was introduced in evidence a statement of tbe cases pending at tbe time of tbe withdrawal of Judge Dickson from tbe firm. Tbis statement is known as "Plaintiff's Exhibit 1." It contains 12 items and gives amounts and dates of payments as well as tbe division made of such payments. All of' tbe amount in controversy were fees received by appellants subsequent to tbe date of the termination of tbe partnership of Ellis & Scbulder. Tbe services for which these fees were received, with possibly one or two exceptions, were rendered after Ellis and Scbulder bad ceased to .be partners. The district court took tbe view tbat respondent was entitled to such share of those fees as be would have been entitled to bad tbe partnership continued. In other words, tbat be should receive bis one-fomrth notwithstanding tbe dates when collections were made and notwithstanding respondent rendered no services in the.litigation after July 1, 1917, out of which those fees were received. It should be stated tbat respondent Scbulder, after the termination of tbe partnership of Ellis & Schulder, stated to Mr. Ellis that be would be glad to devote any time and render any services necessary in concluding tbe old partnership business. He was not, however, requested to, nor did be, render any services in tbe cases pending except in one or two. In these cases be was requested so to do by tbe clients. Respondent bad received prior to the institution of this action bis pro rata share under tbe partnership agreement of approximately $27,500 fees received by appellants for business pending in tbe office at tbe time of tbe withdrawal of the senior member, Dickson.
Tbe trial court, among other things, found tbe fact of tbe organization of the partnership in 1912' between respondent and appellants for the practice of law in Salt Lake City, and also found the agreed division of fees by each party; that the partnership continued from the date of its organization till July 1, 1916; and that during all of that time the said partnership carried on and conducted a general practice of law as a firm with offices at Salt Lake City and divided the net returns of the business according to the agreement of partnership. In its fourth finding the court found that on July 1, 1916, Judge Dickson, one of the firm, requested the dissolution of the firm and that the firm was thereupon dissolved "upon an agreement then made between said Sehulder, the said Ellis and the said Dickson; that said agreement was in substance to the effect that all pending and unfinished business belonging to the firm should be wound up and completed by said three parties, and that the fees and moneys received as such for services rendered by said parties in the finishing and completion of said business should be divided in accordance with the then existing partnership agreement, namely, three-eighths to said Dickson, three-eighths to said Ellis, and two-eighths to the plaintiff, herein, and that all of the then members of the firm agreed and recognized that the then pending business should be divided upon such basis. ' ' That finding of the court, in our judgment, is supported by practically the uncontradieted evidence in the case, not so much from what was said at the time of the dissolution as from the conduct and acts of the parties following the dissolution. It appears without dispute that for a year after the dissolution the members of the partnership occupied the same offices occupied by them prior to the dissolution; that they devoted their time and attention to the winding up of all of the pending business and divided all fees received in conformity with the partnership agreement. Furthermore, after the dissolution of the firm of Ellis & Sehulder in July, 1917, the fees collected for services rendered in connection with the pending unfinished business were so divided.
The court's finding (and, as indicated, that finding is supported by the record) is that the agreement related to the then "pending business." It is therefore necessary to in quire and determine just what was intended by "pending business." Pending business was of necessity limited to tbe partnership employment then actually in force. In other words, the termination of the employment of the partnership then existing respecting any business or litigation did necessarily end the partnership's relation to such business. The partnership had ceased to exist except in so far as it related to the pending business. If the services for which the partnership was employed terminated, then, of necessity, it would seem, the business was no longer "pending" so far as the partnership was concerned.
As has been pointed out, at the beginning of the trial an agreed statement was introduced in evidence known as Plaintiff's Exhibit 1, which contained all of the items in dispute, 12 in number, and for which respondent seeks to recover part of the fees received. The court found that each of those items was pending business at the date of the dissolution in July, 1916, and that any work or service rendered in each or all of those actions subsequent to the dissolution was for and in the interest of the partnership and upon pending or unfinished, business, and determined as a matter of law that respondent was entitled to his pro rata share of the fees received for such services. The findings of the court on 11 of the 12 items included in the statement are sufficiently supported by the record to preclude us from disturbing such findings. The remaining item or amount in controversy, known as item No. 5 and designated "Silver King-Conkling" Case, presents a more serious question.
There is no testimony in the record tending to show what arrangements or agreements were made between the partnership and its clients respecting any of the litigation involved in the items shown on Plaintiff's Exhibit 1. It only appears that the partnership was acting as attorneys for those several litigants under an employment the terms of which are not shown in the record. The history of the "Silver King-Conk-ling" Case, in which the partnership represented the Silver King Coalition Mining Company, is that the litigation in that case extended over a period of years and it was by the court so found. Tbe ease bad been pending in tbe courts since the year 1909. Tbe action was for an accounting for tbe value of ore alleged to have been taken by tbe Silver King Coalition Mining Company from grounds belonging to tbe complainant in that action. Tbe case was tried in tbe federal District Court of Utah in tbe year 1912 and resulted in a judgment in favor of tbe mining company. An appeal from that judgment was taken to tbe Circuit Court of Appeals (230 F. 553), and there the judgment was reversed and tbe cause remanded, with directions to take an accounting between the parties. Some effort was made to obtain a review by tbe Supreme Court of tbe United States of this decision of tbe Circuit Court. That effort failed. Tbe cause was remanded to tbe federal District Court of Utah, and an accounting was had in or about tbe month of June, 1917, and a judgment for a large sum was rendered against tbe mining company. The cause was again taken to tbe Circuit Court of Appeals, where tbe ' judgment of tbe federal District Court of Utah was affirmed and an additional amount added to tbe judgment of tbe District Court. This second judgment of tbe Circuit Court of Appeals was rendered in tbe year 1919. 255 F. 740, 167 C. C. A. 86. All tbe services connected with tbe accounting, tbe appeal to the Circuit Court, and tbe bearing in that court were performed and rendered by appellant Dickson or appellant Ellis, or by both jointly. At that stage of the litigation tbe officers of tbe Silver King Coalition Mining Company were desirous of compromising tbe judgment, settling tbe controversy, and stopping further expense in litigation. For that purpose they requested Messrs. Dickson and Ellis, as well as other and additional counsel employed by them in tbe ease, to render statements for all services rendered to date. These statements were rendered and the amount thereof was paid in full. Respondent received bis pro rata share of tbe fee paid to appellants at that time. The effort to compromise tbe judgment affirmed by tbe Circuit Court failed, and tbe appellants, -with the other attorneys in tbe case, were instructed by the officers of tbe Silver King Coalition Mining Company to make an effort to have the case reviewed by the Supreme Court of the United States. That effort was made and it was successful, and ultimately, in the year 1921, resulted in the reversal of the judgment of the Circuit Court and the affirmance of the judgment of the federal District Court of Utah rendered in 1912. 41 S. Ct. 310, 426, 255 U. S. 151, 65 L. Ed. 561. The item in controversy here is the amount claimed to have been received by appellants for services rendered in obtaining the review of the judgment of the Circuit Court of Appeals and final reversal of the same.
It is earnestly contended on behalf of appellants that the employment existing at the time of the dissolution of the partnership in this litigation terminated at the time of the affirmance of the judgment on the second appeal by the Circuit Court of Appeals; that the subsequent services rendered by appellants were under a new employment, and consequently that part of their work was upon business not pending at the date of the dissolution of the partnership. As indicated, the record is silent as to the agreement of employment at the time the firm undertook the defense of the action. The testimony of respondent is to the effect that this business came into the office about the year 1909. The most that can be said is that the employment was to defend the action brought against the firm's client without limitation as to- duration or suggestion as to when the employment might cease. In its eleventh finding, respecting the work and services rendered in the Supreme Court of the United States in procuring the writ of certiorari, the court found that—
"This work in the United States Supreme Court, and the work incident thereto, was a continuation of the work of the firm of Dickson, Ellis & Schulder; that the work done in the United States Supreme Court was not done pursuant to any new employment hut was done in carrying out and performing the obligations of the original employment; that the result of all the work theretofore done was marshaled and used in performing the .services rendered in the United States Supreme Court."
Does the evidence support the above finding, namely, that the work done, etc., was pursuant to and a part of the original employment?
It quite conclusively appears from tbe testimony of Mr. W. W. Armstrong and that of Mr. W. Mont Ferry, president and vice president, respectively, of the mining company, at the date of the affirmance of the judgment by the Circuit Court, that Schulder was not employed by that company to represent it in this litigation. Mr. Armstrong testified, quoting from the abstract:
"Mr. Schulder was not employed in any way by the Silver King company while I was director, on the executive committee, or president, to my knowledge."
The same witness further testified, again quoting from the abstract:
"To the best of my knowledge, no steps were taken to apply for the writ of certiorari until after the proposed settlement fell through. There were certain arrangements made with Mr. Ellis as chief counsel, if I am not mistaken, in the matter of arranging to apply for a writ of certiorari, to employ associate counsel, and Mr. Marioneaux and a man whose name 1 cannot recall, I think it was Judge Lindley, but I know we wished Mr. Ellis to be chief counsel and I can distinctly recall Mr. Marioneaux. We wished Mr. Ellis for chief counsel in all company matters."
This witness, however, testified on cross-examination (further quoting from the abstract) as follows:
"At the present time I have no official connection with the company. During all the time that I was a director I think Mr. Ellis was acting as attorney for the company. I was a director until after the decease of Thomas Kearns. From the time I was elected president I made arrangements with Mr. McCormick that we should cut down our legal expenses and confine it as far as possible to one firm. I understood that firm had been attorneys for the company for a great many years. I didn't understand that we were getting any new attorneys in confining our attention to this one firm. X would say we just continued relationship with that firm and cut off some other legal expenses. I have been intimately connected with and known the Silver King Coalition Mines Company ever since I went to Park City in 1889. I know that the firm of Dickson, Ellis, Ellis & Schulder were attorneys for that company from the time it was organized and to the best of my knowledge and belief continue such to this day. I had nothing to do with the payment of the final fee in the Silver King-Conkling case. X had nothing to do with the settlement made by the company, after the final decision of the Supreme Court, with Mr. Ellis or Mr. Dickson. I know nothing about that."
Mr. Ferry testified, again quoting from tbe abstract:
"The committee of which I was'a member did attempt to negotiate with the representatives of the Conkling Mining Company for a settlement which failed. I had nothing to do with the first negotiations for a settlement. I refer to the second. There had been prior negotiations during the incumbency of Mr. Armstrong as president. I had nothing to do with those. As a member of the executive committee and as a director some action was taken at the instance of the president of the company looking to the employment of attorneys for application to the United States Supreme Court for a writ of certiorari, the second. Those attorneys were Dickson, Ellis & Lucas and subsequently Mr. Marioneaux. No others were employed at that time. X think therd is a minute on the records which shows that happened the latter part of 1918. Mr. Schulder was not employed by the company."
There is no claim that respondent ever rendered any assistance in the services performed by appellants in the application for review to the Supreme Court of the United States or in the argument of the case before that court. If therefore the respondent is entitled to share in the fee received for such services, it must be, and can only be, by reason of his former relationship with the appellants as a member of the firm of Dickson, Ellis & Schulder. Resort must therefore be had to the rules of law governing the employment of attorneys and the extent of that employment'under the facts found by the court and as enumerated herein in order to determine whether the service rendered for the fee in controversy was for business pending at the date of the dissolution of the firm;
In Berthold v. Fox, 21 Minn. at page 53, the court says:
"At common law, tbe authority of an attorney to represent bis client in an action ceased upon tbe entry of judgment; but for a year and a day thereafter be bad authority to act for bis client in enforcing tbe judgment by execution, etc. But neither tbe common law nor any statute continues after judgment tbe authority of tbe attorney for tbe defeated party, tbe judgment debtor, or tbe defendant in tbe judgment, as be is aptly styled. • But after judgment, unless tbe defendant, by appeal or otherwise, seeks a reversal or modification thereof, or a stay of proceedings thereon, no reason is apparent why be should be represented by attorney, or why tbe authority of bis attorney in tbe action should be presumed to continue. All that remains to be done in the action is the enforcing of the judgment. But assuming that the retainer of the plaintiff's attorney continues indefinitely until the fruits of the judgment are realized by his client, there is no reason for presuming that the defeated party continues the employment of an attorney, for whose services he can expect to have no use, there being nothing left to he done on his part but to satisfy the judgment, or show upon a supplementary examination his inability to do so. Of course, where the defendant's former attorney, or any other, takes any proceeding in his behalf, the attorney's authority is presumed, as well after judgment as before. And the defendant may employ a new attorney to prosecute a writ of error, without a formal substitution or notice."
In Hooker v. Village of Brandon, 75 Wis. 17, 43 N. W. at page 744, tbe court says:
"We think, upon authority and principle, an employment to defend an action pending in a trial court does not, under ordinary circumstances, authorize such attorney to take an appeal to a higher court from the judgment rendered against his client. Public policy and the rights of litigants require that their attorneys in such case, especially where they have easy access to their clients, should first consult their wishes upon the question of taking an appeal from the judgment rendered against them in the trial court before incurring further expenses in such litigation. Any other rule would authorize an over-confident attorney to inflict unnecessary costs upon his client in a case when the client was entirely satisfied to abide the judgment of the trial court." Citing cases.
Tbe first beadnote to Tobler v. Nevitt, 45 Colo. 231, 100 P. 416, 23 L. R. A. (N. S.) 702, 132 Am. St. Rep. 142, 16 Ann. Cas. 925, is:
"At common law the general rule is that the authority of an attorney to represent his client in an action ceases upon its final determination and the entry of judgment, especially as to the attorney of the defeated party; the attorney of the successful party being empowered under his employment to enforce collection of the judgment by suing out a writ of execution."
Tbe second beadnote to Delaney v. Husband, 64 N. J. Law, 275, 45 A 265, is:
"A retainer to prosecute a suit does not of itself constitute a retainer to bring a writ of error to reverse a judgment rendered in that suit."
Tbe holding of this court is in harmony with tbe foregoing authorities. In Sandall v. Sandall, 57 Utah, 150, 193 P. 1093, 15 A. L. R. 620, this court quotes as a correct statement of the law the following from 6 C. J. p. 672, § 184:
"It is always a presumption that an attorney is employed to conduct the litigation to judgment, and no further; the relation of attorney and client and the general powers of the attorney cease upon the rendition and entry of the judgment. There is a distinction in this connection, however, between cases in which the attorney is retained to represent plaintiff, and those in which he represents defendant; in the latter case, the entry of final judgment always terminates the relation and the attorney's authority. "
The employment of the partnership by the Silver King Coalition Mining Company was a general employment for the defense of the action, and the extent of such employment was not fixed by the terms of the contract, and by reason thereof such employment is, and must be, controlled, in so far as its termination is concerned, by the rules of law applicable to such state of facts. Considering the fact that at the termination of the action in the Circuit Court of Appeals, and the affirmance of the judgment against the partnership client, the attorneys were called upon by their client to render a bill in full for their services to date, and that such bill was tendered and paid; and in further consideration of the testimony of the president and the vice president of the mining company that the respondent was not employed by that company for services in the Supreme Court of the United States — we can see no escape from the conclusion that the finding of the trial court, that such services rendered were a continuation of the former employment, is not supported by the weight of the evidence. On the contrary, the evidence supports the contention or claim of appellants that the services rendered in the Supreme Court of the United States were under a new employment and were not a part of the original employment of the partnership. In our judgment it is quite conclusive under the authorities that if the appellants, acting individually or as members of the firm of Dickson, Ellis & Schulder, had refused to go forward with the efforts to have the judgment of the Circuit Court of Appeals reviewed, neither the appellants personally nor appellants and respondent as members of that firm would have been answerable for breach of contract. It is likewise conclusive, in our judgment, that if the mining company had been so minded as to employ other counsel and not re-employ appellants, or appellants and respondent, it could have done so without even consulting appellants individually or as members of the firm of Dickson, Ellis & Sehulder, and that the mining company would not have been guilty of breach of contract in so doing. The contention, based upon the cross-examination of Mr. Armstrong, that the old firm of Dickson, Ellis, Ellis & Sehulder had been from the organization of the mining company and still were its attorneys, in the light of admitted facts, cannot aid the respondent. The firm of Dickson, Ellis, Ellis & Sehulder terminated in 1912 by the death of Ellis, Sr. The firm of Dickson, Ellis & Sehulder terminated by agreement in 1916. The record discloses that the name of the respondent, or of the firm of Dickson, Ellis & Sehulder, does not appear on the record of the proceedings in the United States Supreme Court. It does not appear that at any time during that litigation the officers of the mining company consulted respondent in relation to this litigation. The respondent must therefore, as elsewhere pointed out, rely solely for support of his claim or contention that the efforts made by the appellants to have the judgment of the Circuit Court reviewed were rendered as part of the employment of the firm at the date of the termination of the partnership. The proven facts do not warrant that claim or contention.
A statement made by Judge Dickson in a letter written to respondent March 14, 1919, is relied upon as showing a recognition on his part that respondent is entitled to share in the fee received for services rendered in the Supreme Court of the United States. In this letter, following reference to certain other litigation and the fee received therefor and of which respondent had had his portion, it is stated:
"The only other business that I know of in which I may have aught to do, which was pending in the office at the time of my retirement from the firm, is the case of the Conkling Mining Company v. Silver King. The attorneys for the Silver King Company may apply to the Supreme Court for a writ of certiorari. If the writ is granted and I argue the case in that court, you will receive one-fourth and the fees therein."
This statement seems to have bad some weight with the trial court in making its findings. the reasons that induced Judge Dickson to make the statement are fully explained in bis testimony. No good purpose could or would be accomplished by stating those reasons here. It is sufficient to say that the reasons that impelled the statement did not exist at the time of the institution of this action or at the time of the trial. the promise, if it be a promise, contained in that letter, was without any present consideration, and unless the appellants were under a legal obligation to pay respondent part of the fees mentioned the letter would not and could not be binding on appellants. If statements in letters are to weigh in determining the rights of the parties, then the respondent should not make any claim for any part of the fee§, enumerated in item No. 5 on Plaintiff's Exhibit 1, received by Judge Dickson. In a letter dated July 10, 1919, written by respondent in reply to the one of March 14th, respondent says:
"Both you and Mr. Ellis, however, stated to me that I would receive my part of the fees received from pending business, and Mr. Ellis did state that he would not give me any part- or portion of the retainers received after I left, but so far as you personally are concerned, you need not send me any part or portion of any fees you may receive hereafter for services rendered by you individually in connection with such old business."
We regard tbe statements made in each of these letters as not being founded upon any consideration and wholly without probative value in determining tbe rights of tbe parties.
It may be contended that if the rule of law as to the termination of employment operated to end the employment upon the affirmance of the judgment by the Circuit Court of Appeals, by parity of reasoning the original employment of the partnership ceased at the date of the entry of judgment in the federal District Court upon the accounting. It is sufficient to say in that regard that no such claim or contention is made by appellants. the fees received for services rendered in the accounting and for services rendered on the second appeal in the Circuit Court of Appeals were treated by appellants as part of the original employment, and they accounted to respondent for his share under the old partnership agreement. By such acts the appellants have affirmatively recognized that the services rendered up to and including the affirmance by the Circuit Court of Appeals were a part of the firm's original employment and that respondent is legally entitled to receive his pro rata share of any fees received for such services.
The court made this additional finding:
"The court further finds that in fixing the fees for the United States Court work in said cause Dickson and Ellis took into consideration the amount of the fees theretofore received by them when they were unsuccessful and that the $40,000 fee charged was to cover not only services rendered in the United States Supreme Court but other services theretofore performed for which an adequate fee had not been paid when the firm representing said company was unsuccessful in the lower courts."
That finding, in our judgment, has support in the evidence. It is reasonably deducible from the history of the litigation. Whatever part or portion of that fee was for services rendered by appellants prior to the affirmance of the judgment by the Circuit Court of Appeals the respondent is entitled to his pro rata share. The court made no finding as to the value of the services rendered by appellants subsequent to the affirmance of the judgment by the Circuit Court of Appeals, and there is not sufficient data in the record from which the court could make such a finding. In order, therefore, that complete justice be done between these parties, it will be necessary for the trial court to take additional testimony and determine the value of the services rendered by appellants subsequent to the affirmance of the judgment by the Circuit Court of Appeals and to credit appellants with such amount, if the court finds the value of such services to be less than the fee actually rendered, to enter judgment in favor of respondent for his pro rata share of the difference under the old partnership agreement.
The judgment of the trial court respecting all of the items on Plaintiff's Exhibit 1 save only item No. 5 thereof is af firmed. Tbe judgment as to said item No. 5 is reversed, and the cause remanded to the district court of Salt Lake county, with directions to proceed in conformity with the views herein expressed. Costs on appeal will be equally divided between the parties.
FRICK, J.
The item of $40,000 for special fees earned under what in the record is termed the "Silver King-Conk-ling" Case, hereinafter referred to as the Conkling Case, to my mind presents the principal difficulty on this appeal. I voted for a rehearing of the case for the reason that after a more careful examination of the record I seriously doubted the correctness of the result reached in the original opinion. After the rehearing was granted and the case was reargued,. I again went over the record and also made a somewhat careful research of the authorities. After doing so I have become convinced that the original opinion should not stand. The question, however, still remains: How shall the case be decided?
There is no doubt under the authorities that, ordinarily, where a law partnership is dissolved which is engaged in the general practice of the law, in the absence of a special arrangement or agreement between the partners, each partner is entitled to his pro rata share of the fees earned in the process of winding up the pending business of the partnership, and in case of the death of any one of the partners pending the winding up' of the partnership business his heirs or personal representatives succeed to his share. There may, however, be special conditions or circumstances when in an equitable accounting a different rule should apply as between the partners. That such may be the case is recognized by the United States Supreme Court in the case of Denver v. Roane, 99 U. S. 355, 25 L. Ed. 476. While the general rule is applied in that case, the court nevertheless, in the course of the opinion, said:
"There may possibly be some reason for applying a different rule to cases of winding up partnerships between lawyers and other professional men, where the profits of the firm are the result solely of professional skill and labor."
The same thought is expressed in Justice v. Lairy, 19 Ind. App. 272, 49 N. E. 459, 65 Am. St. Rep. 405, and is recognized in Roth v. Boies, 139 Iowa, 253, 115 N. W. 930. I refer to the foregoing only for the reason that the record in the case at bar leaves no room for dispute that the firm of Dickson, Ellis & Schulder was employed in the matters in controversy here for the sole purpose of obtaining Mr. Dickson's experience and skill in particular cases, and that is especially true with respect to the employment in which the $40,000 fee was earned. The record is conclusive upon the question that Mr. Schulder's services were not considered in that employment, and that he rendered no assistance to Mr. Dickson or to Mr. Ellis in that matter. Indeed, Mr. Schulder very frankly testified that it was Mr. Dickson's skill and experience that was sought in mining cases like the one in question.
Mr. Schulder, however, bases his claim upon the sole ground that the fee of $40,000 was earned in a case which was pending when the partnership of Dickson, Ellis & Schulder was dissolved .and that he is entitled to his pro rata share by reason of that fact. That is, that he is entitled to his pro rata share of that fee pursuant to the partnership agreement respecting the division of fees earned by the partnership. If it be true, therefore, that the $40,000 fee was earned in an action that was pending when the firm of Dickson, Ellis & Schulder was dissolved and that it is a fee which was earned in winding up the pending partnership business of the firm, then Mr. Schulder should prevail in his contention. The question, therefore, that arises is: Does the record sustain Mr. Schulder's contention?
It is unnecessary for me, nor shall I attempt, to go into detail with respect to what the record discloses regarding that matter. While it is true (and upon that there is no dispute in the record) that the Conkling Case was pending when the firm of Dickson, Ellis & Schulder was dissolved, yet it is equally true that before the particular proceedings in which the $40,000 was earned there had been a full and complete settlement and payment of all the fees that had been earned in that ease by the firm of Dickson, Ellis & Schulder, and tbat tbe settlement and payment was made for tbe express purpose and with tbe intent of paying off tbe judgment obtained in tbe Gonkling Case wbieb bad been ob-firmed in tbe United States Circuit Court of Appeals. After tbe fees bad been paid, negotiations for tbe purpose just stated were opened by tbe respective parties to tbe litigation but failed of consummation. Tbe reasons wby tbey failed are not now material. It was while negotiations were pending, however, tbat it was suggested tbat a new application for a writ of certiorari should be made to- tbe Supreme Court of the United States and tbat such a writ,, if granted, might prove successful. It was upon tbat suggestion, and not otherwise, tbat Mr. Dickson, Mr. Ellis, and Judge Marioneaux applied for and obtained tbe writ from tbe United States Supreme Court and finally succeeded in obtaining a reversal of tbe judgment which bad become final in tbe United States Circuit Court of Appeals. Under all of tbe circumstances, a part of which I have very briefly outlined, I have no doubt tbat tbe matter of obtaining tbe writ of certiorari from tbe United States Supreme Court was manifestly in tbe nature of a new employment of Judge Dickson and Mr. Ellis who acted in conjunction with Judge Marioneaux in tbat matter. Tbe conclusion tbat it was so considered at tbe time by all concerned, tbe record, I think, fully justifies. Further, tbat what was done in tbe regard was done in good faith, and not for tbe purpose of in any way preventing Mr. Schulder from obtaining what was justly due him in winding up tbe business which was pending when tbe partnership was dissolved. If tjie new employment bad been merely colorable or for tbe purpose of depriving Mr. Schulder of bis pro rata share of tbe fees, a different question would be presented. Tbe facts and circumstances which caused tbe application for the writ of certiorari to be made leave little, if any, doubt in my mind, however, tbat tbe employment of Judge Dickson, Mr. Ellis, and Judge Marioneaux was by all considered a new employment and for a special purpose. Tbat it was so considered is somewhat strengthened by tbe fact tbat when Judge Marioneaux was first employed, tbe amount of bis fee, it appears, bad been agreed upon, but after tbe writ of certiorari bad been obtained, and wben final settlement was made, tbe judge demanded and was paid an additional amount for tbe services rendered in tbe certiorari proceedings by bim in conjunction with Judge Dickson and Mr. Ellis. In view of all tbe facts, therefore, there is no doubt in my mind that if under the circumstances Mr. Schulder bad died either just before or just after Judge Dickson and Mr. Ellis were employed in connection with Judge Marioneaux to obtain the writ of certiorari in tbe United States Supreme Court, bis heirs or personal representatives would not have been entitled to any part of tbe $40,000 fee which was paid to Judge Dickson and Mr. Ellis for the services rendered in the certiorari proceedings. Had there been an existing agreement at the time the firm of Dickson, Ellis & Schulder was dissolved, that the firm should prosecute the case upon a writ of certiorari in the Supreme Court in case they failed of success in the Circuit Court of Appeals a different rule would apply. There is, however, not the slightest evidence of any such an agreement. Nor is it contended that such an agreement existed. Indeed, the officers of the mining company by whom Judge Dickson and Mr. Ellis were employed did not so consider the matter. Nor, so far as the record discloses, did any one else so consider it.
Mr. Schulder's contention, as I have already pointed out, is entirely based upon the hypothesis that the proceedings happened to be in a case which was pending when the' partnership of which he was a member was dissolved. While that has its proper, bearing in the case, yet, standing alone, it is not conclusive. That such is the law is clearly pointed out by the Supreme Court of California in the case of Little v. Caldwell, 101 Cal. 553, 36 P. 107, 40 Am. St. Rep. 89. In that case a law partnership was dissolved by the death of one of the partners. Before the dissolution the partnership had entered into a contract to conduct certain litigation for a contingent fee. Some time after the dissolution of the firm by the death of one of the partners and after the case was decided adversely to the contention of the partnership's clients, as is tbe ease at bar, tbe surviving partner entered into a new agreement with tbe partnership's clients whereby it was agreed that tbe ease should be appealed to tbe Supreme Court and that tbe contingent fee should be greatly increased in case be was successful in that court. Tbe surviving partner accordingly appealed tbe ease and reversed tbe judgment of tbe lower court and was thus entitled to receive tbe increased fee. Tbe heirs of tbe deceased partner then brought an action for an accounting and insisted that they were entitled to a division of tbe entire fees upon tbe ground that tbe case was pending at tbe time of tbe death of their ancestor and hence was unfinished partnership business. Tbe court, however, held that tbe heirs were entitled to their share only of the original fees agreed upon, and that tbe surviving partner was entitled to all of tbe increased fee. In that case tbe court recognizes and approves the general rule that the fees derived from all pending partnership business must be distributed in accordance with tbe partnership agreement, and that each partner is entitled to bis pro rata share,' although one of the partners in winding up tbe partnership business may have rendered more services than tbe other. Tbe court, however, held that tbe facts of tbe case carried it outside of tbe general rule and that equity and justice required that a different rule should be applied. Upon reason and principle I can discover no essential difference between tbe California case and tbe case at bar. If there is any difference, tbe case at bar, in view of all tbe circumstances, is stronger in favor of tbe contention of Judge Dickson and Mr. Ellis than is tbe California case. The California case was appealed after an adverse decision in tbe court below. In tbe Conkling Case, a writ of certiorari, which was intended as a writ of review to review tbe decision of the United States Circuit Court of Appeals, was obtained. In tbe California case tbe decision of tbe lower court was reversed and such was tbe effect of tbe decision of tbe Conkling Case in question here. In tbe California ease tbe partnership's clients obtained a large advantage by tbe appeal and such was tbe case here. In the Conkling Case there was, however, a full settle ment and payment of tbe fees earned up to tbe time tbe judgment became final in tbe Circuit Court of Appeals. In tbe California case there was no sucb settlement but there was merely an agreement that tbe case should be appealed to tbe Supreme Court and tbe contingent fee agreed upon by tbe partnership should be increased. In tbe Conkling Case, as pointed out by Mr. Chief Justice GIDEON, Mr. Schulder could not have been held liable for any act of negligence, carelessness, or omission on tbe part of Judge Dickson or Mr. Ellis. It is elementary that in case of legal partnerships each partner becomes liable for tbe acts of bis co-partner if within tbe scope of tbe employment. Upon what principle of law, therefore, could Mr. Schulder have been held for any act of negligence or malpractice on tbe part of Judge Dickson and Mr. Ellis in prosecuting tbe certiorari proceedings? In view of all tbe circumstances, therefore, bow can it be successfully contended that Mr. Schulder can share in tbe earnings of Judge Dickson in prosecuting tbe certiorari proceeding when-it must be conceded in advance that be assumed neither a legal nor a moral responsibility in that matter?
It is argued, however, that according to Judge Dickson's own statements which were made in a letter or letters written by him to Mr. Schulder, tbe former acknowledged that Mr. Schulder was entitled to bis pro rata share of tbe fees which would be earned in case Judge Dickson should argue tbe certiorari proceedings in tbe United States Supreme Court. That letter, as pointed out by tbe Chief Justice, can, however, not be relied on as constituting, a contract. Under certain circumstances it might be construed as an admission that there was a contract under which Mr. Schulder might prefer a claim. The language of the letter, however, in and of itself, refutes such a contention. What Judge Dickson wrote in the letter is:
"If the writ (certiorari) is granted and I argue the case in that court (the United States Supreme Court), you will receive one-fourth of the fees therein."
That is very far from admitting that the old firm of Dickson, Ellis & Schulder was under contract or legal obligation to pay Mr. Scbulder any of the fees earned in the certiorari proceeding. At most, it .was merely a statement by Judge Dickson that if he argued the case Mr. Schulder "will receive" the amount stated. Judge Dickson did not, and could not, bind the partnership or Mr. Ellis by what he then wrote. As pointed out before, the employment was in a special proceeding and was undertaken after full settlement and payment of the fees earned up to the time that the judgment had become final in the Circuit Court of Appeals and after negotiations for a settlement of the judgment had either partially or wholly failed of consummation. Under such circumstances, Judge Dickson could not bind Mr. Ellis by anything the former may have said or written without Ellis' consent, express or implied. Judge Dickson, however, fully explained why he wrote the letter and why he made the statements therein contained, and no one contradicts or even questions his statements in that regard. Moreover, this is a proceeding in equity for an accounting. The burden is upon Mr. Schulder to prove that he was entitled to his proportion of the fees earned in the certiorari proceeding. In order to succeed, Mr. Schulder must show that Judge Dickson and Mr. Ellis were legally obligated to perform services in the certiorari proceeding as a necessary part of winding up the partnership business. Can any one doubt that if any one had demanded that they or either of them should commence and prosecute such a proceeding and they had refused, they would not have been clearly within their legal rights? Unless there was a legal duty imposed upon them to perform the services in such proceeding as a necessary part of winding up the partnership business, Mr. Schulder cannot recover any part of the fees earned by them in that proceeding.
In my judgment the evidence does not only not sustain the conclusion that Judge Dickson and Mr. Ellis were obligated to prosecute the proceeding as a part of winding up the partnership business, but that it is directly to the contrary. No doubt, the easy way out of the difficulty in this case would be to assume that under the partnership agreement the certio-rari proceedings were merely a necessary part of winding up tbe pending partnership business. The conclusion, to my mind, is, however, neither fair, just, nor equitable. To my mind the conclusion that is justified by the facts and circumstances is that the certiorari proceeding constituted' a new and independent employment which was related to the partnership only because the original case had been commenced before the partnership "was dissolved. It certainly is still the law that when a law partnership is dissolved by the retirement of the leading member of the firm clients may settle for past services and may terminate the employment of the partnership altogether. True it is that if the client permits the partnership to complete the business, he is bound to pay for the services rendered by it. The client, after the ca^e has gone to final judgment which is adverse to him, however, may also pay the partnership all fees earned up to that time and release or discharge it from further duties. After that he may employ any other lawyer or firm or may employ any member or members of the law firm either alone or in conjunction with another. After that he is liable only to those he has so employed. In this case while it is true that Mr. Schulder is bound by any settlement that was in good faith entered into between Judge Dickson and Mr. Ellis and the mining company respecting fees yet, if it were assumed that both Judge Dickson and Mr. Ellis had been insolvent and financially irresponsible and Mr. Schulder had notified the mining company that he was entitled to a certain proportion of the fees in the certiorari proceeding and that it should not pay them to Judge Dickson or Mr. Ellis or to either of them for the services rendered and the mining company had nevertheless paid the fees to Dickson and Ellis or to either of them, could Mr. Schulder legally hold the mining company for his share of the fees ? The answer is obviously no, for the reason that in so far as the certiorari proceeding is concerned Mr. Schulder had no legal relationship' with the mining company and it was under no legal obligation to him. So far as the $40,000 item is concerned, therefore, Mr. Schulder cannot prevail.
As to the other items in dispute it is sufficient to say that they stand upon a different footing. The district court was no doubt justified in finding that those items constituted a part of the' fees earned in winding up the partnership business of the firm. I can see no good reason for disturbing the court 's findings and conclusions of law regarding those items. Upon the other hand, I can discover no good reason for upholding the findings of fact and judgment respecting the $40,000 item.
I feel constrained to add that by anything I have said or omitted I do not wish to be understood as holding or intimating that Mir. Sehulder did not in good faith believe that he was entitled to his pro rata share of the $40,000 item. I am convinced from the record that he was just as firmly convinced that he had a legal right to his pro rata share of the fees earned in the certiorari proceeding as I am convinced that he is not legally entitled to any part of those fees. Neither do I wish to be understood by what I have said respecting Judge Dickson's employment that Mr. Sehulder was incompetent or that he was not a good lawyer. What I mean is that at the time the firm was employed by the mining company Mr. Sehulder was a young lawyer of very limited' experience, while Judge Dickson was easily the leading mining lawyer of the western country and so recognized by both bench and bar. It is for that reason that Judge Dickson's services were desired by the mining company rather than the services of Mr. Sehulder. I have merely attempted to outline the facts and circumstances as they really exist; no more; no less.
I am of the opinion, therefore, that the findings of fact, conclusions of law, and judgment awarding to the plaintiff his pro rata share of the $40,000 item should be reversed. In other respects I concur in the views and judgment of the CHIEF JUSTICE.