Court Opinion

ID: 7809994
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:11:45.822529+00
Date Added: 2024-06-11T16:30:26.163242
License: Public Domain

HART, J., (after stating the facts). Tt appears from the record that the administrator of the estate of John Fulson, deceased, brought suit against the railroad company for negligently causing the death of said John H. Fulson, while in its employ as a locomotive engineer. Jo Johnson was his attorney under a contract executed by himself and the administrator. The administrator. in succession discharged Johnson and dismissed the action brought by him. The administrator then instituted a friendly suit against the railroad company for the purpose of effecting a compromise with it and, pursuant to their agreement, a judgment was rendered against the railroad company for $10,000. Johnson claims that, the suit having been settled without his consent, he is, under our statute, entitled to recover his compensation as an attorney from the railroad company as declared in St. L., I. M. & S. R. Co. v. Hays & Ward, 128 Ark. 471. The contract under which he seeks to recover is set out in our statement of facts and need not be repeated here.'  (1) The circuit court was of the opinion that the contract sued on was not ambiguous and should be construed by the court. It was held that the contract on its face showed that the administrator was entitled to recover $10,000 before the attorney was entitled to recover anything; and that, the administrator, having compromised with, the railroad company for $10,000 by recovering an agreed judgment rendered against it for that amount, as he had a right to do, Johnson was not entitled to recover anything against the railroad company. This holding was in the application of the well known rule that parol testimony is not admissible to contradict, vary, add to, or take from the terms of a written contract. This brings us to a consideration of the question of whether or not the language of the contract rendered it ambiguous or uncertain in its terms; for it is well settled that when the written instrument when applied to its subject-matter shows a latent ambiguity parol testimony of the facts and circumstances surrounding its execution may be given to clear away its uncertainty.  (2) This doctrine has been repeatedly announced by this court and several of our earlier decisions on the subject are cited in the late case of Brown & Hackney, Incorporated v. Daubs, 139 Ark. 53. Indeed the rule is well settled in the text books and in the adjudicated cases elsewhere. The only difficulty is in its application to the facts of a given case. It is not contemplated by this rule that a written contract can be added to or subtracted from by evidence of surrounding circumstances. 'But as said in United Iron Works v. Outer Harbor Dock & Wharf Company, 168 Cal. 81, this rule of evidence is- invoked and employed only in cases where upon the face of the contract itself there is doubt and the evidence is used to dispel that doubt, not by showing that the parties meant something other than what they said, but by showing what they mean by what they said.  (3) In the application of this rule to the case at bar, the majority of the court is of the opinion that when the contract, which is the basis of this lawsuit, is read and considered from its four corners, it is uncertain whether the words, “My part to be not less than $10,000” in the first part of paragraph seven refer exclusively to the compromise to be attempted and effected before suit was to be instituted as contended by counsel for Johnson, or whether they mean that no fee was to be received by Johnson unless a recovery in excess of $10,000 was had against the railroad company. It will be observed that under paragraph five of the contract, it is provided that the attorney is to have as his compensation one-half of the amount recovered, in the event of a recovery. When the provisions of this and other paragraphs are read in the light of each other and paragraph seven, it is uncertain whether the words “My part to be not less than $10,000” in the beginning of paragraph seven refer to the compromise provided for in that paragraph, or mean that in no event, regardless of whether a compromise was effected, should the attorney be allowed any compensation unless the amount recovered be more than $10,-000. It is conceded by counsel for both parties that the latter part of paragraph seven was inserted in the contract for the purpose of giving the administrator four or five days within which he might effect a compromise with the railroad company before suit was instituted under the contract. The words, ‘ ‘ My part to be not less than $10,-000,” are in the beginning of this paragraph and they may or may not refer exclusively to the compromise provided for in this section.  (4) It appears from the records that these words are in the handwriting of the attorney and that the succeeding words of the paragraph are in the handwriting of the administrator, while the remainder of the contract is on a printed form. Hence it is insisted that in case of conflict, the written part of the contract should control that part which is in print. This does not solve the doubt. The uncertainty is whether the words in question refer exclusively to the compromise provided for in the paragraph in which they are written, or are to be considered a limitation of the right of the attorney to compensation under paragraph five. Therefore, a majority of the court is of the opinion that the trial court erred in holding that the contract was not ambiguous or uncertain, and in not admitting parol testimony of conversations and negotiations had between the parties at the time of the execution of the writing which served to eonstrue the latent ambiguity in the contract in tbe respects pointed out above. In Davis v. Webber, 66 Ark. 190, tbe court held that a stipulation in a contract for an attorney’s fee for prosecuting a suit that the client shall not settle the suit without the attorney’s consent is void as against public policy ; and that if such stipulation is not severable from the rest of the contract, but is an inducement for entering into it, the entire contract is void. Counsel for the railroad company invoke this rule to defeat the attorney in his right to recover in this case. We do not think that rule has any application to the contract sued on.  (5) The particular parts of the contract relied upon to support counsel’s contention are paragraphs four and six. In the former, the attorney is given the power to conduct, manage and settle the case by suit or otherwise, with the right to employ assistant counsel and expert witnesses. In the latter paragraph, it is reiterated that the client is not in any way to interrupt the attorney’s management of the case. The clauses in question are not fairly susceptible to the construction that they prohibit the administrator from making a settlement without the consent of Johnson. Indeed, it appears from the whole contract that such was not the case. The contract is in the record. It shows on its face that there was a printed clause which had for its object the prohibition of the administrator from making a settlement without the attorney’s consent, and this clause was marked by the parties before the contract was signed.  (6) It is next insisted that the contract is champertous and void because it contains a provision binding the attorney to pay the costs of the litigation. On this point it may be said that under the terms of the contract the attorney was bound to advance the costs of the suit, and in the event of recovery, such costs were to be deducted from the amount recovered, and the attorney was to get one-half of the remainder as his fee; and in the event of a failure to recover in this action, the attorney agreed to lose the money he had advanced for expenses of litigation and to charge no fee. Authorities which adhere rigidly to the common law with respect to the doctrine of champerty and maintenance are cited by counsel in support of their contention. We do not deem it necessary to cite or review these cases; for this court has held that the common law in regard to the offense of champerty has never prevailed in this State. In the early case of Lytle v. State, 17 Ark. 608, hi a syllabus prepared by Judge Scott, who also delivered the opinion, it is said that an attorney at law may purchase his client’s interest in the subject-matter of the suit, in consideration of services rendered and to be rendered in the prosecution of the suit, and become bound for the costs in the prosecution of his own and client’s rights, without the violation of any law of champerty in this State. In the opinion, the learned Justice referred to the fact that under the English law there was a total incapacity in counsel to make any contract whatever with his client for his professional services, while in this State the right of making contracts is a high personal privilege of the citizen, which could be claiméd by lawyers as well as by any other classes of citizens. In the later case of Davis v. Webber, 66 Ark. 190, the court again held that a contract between an attorney and client, allowing the former a contingent interest in the subject-matter of litigation as compensation for his professional services, is not void for champerty, though the courts will scrutinize such a contract closely to see that the attorney has» taken no unjust or unfair advantage of his client. In Davis v. Webber, supra, the court referred to the fact that in Lytle v. State, supra, the court had traced the origin and reviewed the history, of the law of maintenance and champerty as enacted into statutes and declared by the courts of England. Continuing, the court said: “The conclusion reached was that such 1-aws were not applicable to contracts between attorney and client providing remuneration to the attorney for services rendered his client in conducting litigation. The English rule avoiding such contracts upon the ground of maintenance and champerty was repudiated, as repugnant to our Constitution and statutes, and the court showed and anight have added, that such a rule was contrary to the genius of our institutions.” In discussing the question in 11 C. J., pp. 242 and 243, it is said that in the States in which the common law doctrine of champerty and maintenance has not been adopted, it is nothing contrary to law, morals or public policy in a contract by an attorney to recover land or other property for an interest in it, even though he also agrees to pay the costs and expenses; and Lytle v. State, 17 Ark. 608, is the first case cited in support of the text. There was an early statute passed in the State of Michigan directed against champerty and maintenance. The statute was in reality but an affirmance of the common law. Subsequently a statute was passed providing that the compensation of attorneys might be fixed by agreement between them and their clients and further providing that all laws in conflict with it should be repealed. It was held that this statute repealed the earlier one prohibiting champerty and maintenance, and that under it, a contract between an attorney and his client that the attorney should pay all costs incurred on account of bringing an action, in case he failed to recover anything, was valid. Wildey v. Crane, 63 Mich. 720, 30 N. W. 327, and Lehman v. Detroit etc. R. Co. (Mich.), 147 N. W. 628. In Brown v. Bigne (Ore.), 27 Pac. 11, 28 A. S. R. 752, 14 L. R. A. 745, it was held "that the doctrine of champerty is directed against speculation in lawsuits and to repress the gambling propensity by buying up doubtful claims; that it is not and never was intended to prevent persons from charging the subject-matter of the suit in order to obtain the means of prosecuting it. It has been said that such statutes have been passed so that the'doors of justice shall not be shut to the poor, who may be oppressed, or to those who have no other means of prosecuting their suits except the subject-matter of them. Our Legislature lias passed an act providing that the compensation of an attorney is governed by agreement and also providing for an attorney’s lien and its enforcement. Acts 1909, p. 892. Under this statute and applying the principles of law above announced, a majority of the court is of the opinion that contracts like the one under consideration are valid and binding obligations where they are entered into in good faith. In the case at bar, there is nothing in the contract itself and no extrinsic facts in the record tending to impeach the integrity of the contract. From the views expressed, it follows that the court erred in not receiving parol evidence as to the meaning of the contract as indicated in the opinion; and in not submitting this question to the jury. If the jury should find that Johnson is entitled to recover, he will be only entitled to recover one-half of the amount recovered by the administrator, after deducting the expenses and costs as provided in paragraph five of the contract. See St. L., I. M. & S. R. Co. v. Kirtley & Gulley, 120 Ark. 389. For the error indicated, the judgment must be reversed and the cause will be remanded for a new trial.