Opinion ID: 1446228
Heading Depth: 1
Heading Rank: 10

Heading: Attorney-in-Fact Fees

Text: This is another major issue involved which the majority opinion glosses over, and again the facts relating thereto will be set forth. Prior to the execution of the Agreement and under the old underwriters' agreements Attorney was entitled to retain 25 per cent of the premium deposits and 5 per cent of dividends as its fee. In consideration of this fee, Attorney was required to pay for all offices, equipment and personnel used for the business of Exchange. Subsequent to January 1, 1949, when the illegal Agreement became effective, Company admits that it handled this business for its own account. The evidence shows that Company had, at the time of retrial, collected $78,419.13 as fees on dividends and the sum of $246,331.94 as fees on premiums on the business directly traceable to former Exchange subscribers. Just how, or why, Exchange should be charged with the fees provided for by the old underwriters' agreements after the effective date of the illegal Agreement remains a mystery. After the effective date of the illegal Agreement by Company's own admission it was acting on its own account and there was no Attorney in existence. Exchange's recovery should be lessened only by the amount of the actual costs incurred by Company in conducting the business directly traceable to former Exchange subscribers. To hold otherwise permits Company to profit by its own wrongdoing. There can be no question but that the old underwriters' agreements were superseded by the illegal Agreement; there can also be no question but that the old underwriters' agreements were not revitalized by the District Court of Appeal's holding that the Transfer and Assumption Agreement was illegal, void and of no effect. Company by its conduct after the assumption of Exchange business demonstrated that it was not acting under the old underwriters' agreements. (See Pennsylvania Water etc. Co. v. Consolidated Gas etc. Co. [C.A. 4, 1951], 186 F.2d 934, and Virginia Dare Transp. Co. v. Norfolk Southern Bus Corp. [C.A. 4, 1949], 176 F.2d 354, for cases holding that a judicial declaration of the invalidity of a later contract does not revitalize an original valid contract.) The findings of the trial court with respect to the fees paid the Attorney-in-Fact are commented on as follows by the majority: The evidence supporting the foregoing findings is: (a) the Underwriters Agreement; (b) the Transfer and Assumption Agreement; and (c) the agreement whereby Company assumed the obligations of Attorney and Attorney assigned its rights to the management fees. This statement is particularly interesting when it is remembered (1) that the Underwriters' Agreement was superseded by the Transfer and Assumption Agreement which was held to be illegal, void and of no effect, and (3) that the agreement between Attorney and Company was an agreement made by one legal entity with itself. I cannot conceive of a majority of this court sanctioning the use of a void and illegal contract as evidence in a case which arose out of that particular void contract. But by its holding here a majority of this court not only judicially sanctions an obvious wrong, but, in effect, allows the wrongdoer to retain both the fruits of his wrong, a bonus for his wrongdoing, and his expenses incident thereto!