Court Opinion

ID: 3530927
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:43:32.195985+00
Date Added: 2024-06-11T14:06:00.225321
License: Public Domain

These causes are in certiorari to quash the opinion by the Kansas City Court of Appeals in Nelson v. Massman Construction Company et al., 120 S.W.2d 77. They were separately commenced and separately briefed, but were consolidated and argued together. The facts, as they appear in the opinion and by which we are bound, are, in many respects, common to both causes. It appears in the opinion sought to be quashed that Thomas E. Nelson brought suit against the Massman Construction Company and recovered a judgment for $5500. [See Nelson v. Massman Construction Company, 231 Mo. App. 1, 91 S.W.2d 623.] The law firm of Jacobs  Henderson (Floyd E. Jacobs and Mitchel J. Henderson) had a contract with Nelson to prosecute the suit against the Massman Construction Company, by which contract the firm was to receive for services 50 per cent of the net amount recovered. Thomas E. Deacy, an attorney, but not a member of the firm of Jacobs  Henderson, "had arrangements with said law firm whereby he, according to his testimony, was to receive 25 per cent of the fee" in the Nelson case. When the judgment was paid, November 13, 1936, it amounted to $6437.55, and this amount was paid by the Massman Construction Company to the clerk of the circuit court. The payment was made by a trust company treasurer's check made payable to the clerk, who endorsed the check without recourse and delivered it to Nelson. Thereupon Nelson receipted the clerk, satisfied the record of the judgment, and delivered the check to Jacobs, who cashed it, paid some expenses incurred in the Nelson case, retained $3000 as the attorney's fee in the case, and turned the balance over to Nelson. About ten days before these transactions, the clerk, Massman Construction *Page 1008 
Company and its attorney were given written notice by Henderson and Deacy that they claimed to have an interest in and a lien on the Nelson judgment. When the clerk received such notice there was placed, by a deputy clerk, on the margin of the record of the judgment this pencil note: "Do not allow this judgment to be satisfied. Henderson and Deacy file attorney lien on judgment. See files."
Henderson and Deacy, about twenty minutes before the payment of the amount of the judgment to the clerk, etc., received notice from the office of the Massman Construction Company's attorney that the Nelson judgment would be paid to the clerk at 11:30 A.M. that day. Deacy got to the clerk's office before all the transactions pertaining to the payment, etc., were completed, but was not able to do anything about it. Henderson and Deacy then went into the circuit court and filed separate motions in the Nelson case to set aside satisfaction of the judgment, and to secure judgments against the Massman Construction Company for their fees. The motions were on the theory that Henderson and Deacy, separately, had an attorney's lien on the judgment. On a hearing the trial court sustained these motions and set aside satisfaction of the Nelson judgment and entered separate judgments in favor of Henderson and Deacy. The Henderson judgment was: "Now, therefore, it is by the court considered, ordered and adjudged that the release and satisfaction of the judgment heretofore entered in this cause (the Nelson case) on the 10th day of January, 1934, made by the plaintiff (Nelson) on November 13, 1936, be and is hereby set aside and that execution issue upon said judgment in favor of the said Mitchel J. Henderson in the sum of eleven hundred and twenty-five ($1125.00) dollars (one half of the fee, under the contract, based on the judgment of $5500), same being the amount of the attorney's lien held by the said Mitchel J. Henderson against said judgment, and that said Mitchel J. Henderson have and recover of and from the Massman Construction Company, a corporation, defendant herein, the sum of eleven hundred and twenty-five ($1125.00) dollars, together with the costs of this proceeding."
The judgment on the Deacy motion was about the same in form and the amount was $750, being 25 per cent of the amount of the fee retained by Jacobs.
The Massman Construction Company appealed to the Kansas City Court of Appeals, and the Court of Appeals reversed the judgment of the trial court in favor of Henderson, but affirmed as to Deacy. These certiorari proceedings followed.
We shall first consider what we may term the Deacy case. It appears from respondents' opinion that Deacy took an active part in the trial of the Nelson case in the circuit court and argued the case the first time it was up in the Court of Appeals. The Court of Appeals at first handed down an opinion reversing the judgment and remanding *Page 1009 
the cause. Thereupon and thereafter Jacobs, at the direction of Nelson, looked after the case. Motion for a rehearing was filed and sustained; the case was reargued, and the judgment was affirmed. Certiorari was denied by this court, and also by the Supreme Court of the United States. [Massman Construction Company v. Nelson, 299 U.S. 569, 57 Sup. Ct. 32, 81 L. Ed. 419.]
As to what was done on behalf of Henderson and Deacy immediately upon receipt of the notice that the Nelson judgment would be paid to the clerk, Deacy testified: "I immediately called Mr. Burns, the circuit clerk, and I told him that this notice had been served upon us. I asked him what he was going to do in the event the money was paid into his hands. He stated to me that in the event the money was paid into his hands he was going to pay the money over to the plaintiff (Nelson) and that he would pay the money over to the plaintiff and not require any release or any signature on the part of any of the attorneys in the case. I got down to the court house as soon as I could, and as I walked into the circuit clerk's office, Mr. Jacobs and Mr. Nelson were there present and had already received the money from the hands of Mr. Burns, the circuit clerk. Wait a minute. I am slightly incorrect there. The money had been paid into the hands of Mr. Burns, the circuit clerk, and Mr. Burns told me that he was going to immediately pay the money out to Mr. Nelson. I asked him to wait until I could have an opportunity of seeing Your Honor. In the meantime I had prepared, in the few moments which I had, a motion to impound the money, and brought that down here and attempted to contact Your Honor, but Your Honor was out, or busy, or unavailable. And I went on back downstairs, and the money had then been paid out by the circuit clerk to the plaintiff in the case."
Concerning the payment to the clerk, Jacobs testified that the day before such payment, he found out that the Massman Construction Company intended to pay the amount of the judgment to the clerk; that he went to see the clerk and told him "definitely that this money belonged to Nelson and that I was his only attorney with my present associates (the firm of Jacobs 
Henderson was dissolved April 1, 1935); and that the money was due him (Nelson). . . . I told Mr. Burns (the clerk) who the money belonged to, and told him we were going to insist on payment to us." Jacobs also testified that Deacy was to receive 20 per cent, instead of 25 per cent as Deacy claimed, "in the cases (of Jacobs  Henderson) wherein he (Deacy) took an active part." Henderson did not testify.
[1] Much space in relator's brief (in the Deacy case) is given to the merits. What was said in State ex rel. Public Service Commission v. Shain et al., 342 Mo. 867, 119 S.W.2d l.c. 222, is applicable here and we quote: "In proceedings of this kind (certiorari), we are concerned only with the question of conflict, and we look only to the opinion *Page 1010 
of the Court of Appeals for the facts, as has been sufficiently enunciated heretofore. . . . Contentions not decided by the Court of Appeals cannot be made the basis of a ruling quashing its record on certiorari on the grounds that the opinion is in conflict with decisions of this court." Relator cites and quotes from cases by the Courts of Appeals. Conflict with decisions by the Courts of Appeals will not support certiorari. [State ex rel. Brotherhood of Locomotive Firemen and Enginemen v. Shain et al.,343 Mo. 666, 123 S.W.2d 1, l.c. 6, and cases there cited.]
[2] Assignments of conflict are not very clear, but we may say that conflict is assigned (1) on the ruling, as relator construes, that Deacy was entitled to have applied to his case "the most favorable inference of all the credible testimony in the case;" (2) on the ruling that the payment of the $3000 to Jacobs did not discharge relator from liability to Deacy; (3) on the ruling that the payment of the $6437.55 to the clerk of the court did not place the money in custodia legis; and (4) on the ruling to the effect that Deacy, in his motion to set aside, etc., alleged a specific contract and was permitted to recover on an implied contract. In other words, one cause of action was alleged and recovery was had on an entirely different theory.
That part of the opinion pertinent to the first assignment of conflict reads (120 S.W.2d l.c. 90): "In our statement of the case we have based same upon evidence most favorable to the movant (Deacy). There is evidence shown that is contradictory to the facts of evidence we have set forth herein. However, as the judgment in the circuit court was in favor of movant, and as the trial court was in a position to know as to whether or not appellant (Massman Construction Company) so placed the funds incustodia legis, thereby throwing upon the law and the court the responsibility of saying where and to whom it should go, we conclude that movant is entitled to have applied to his case themost favorable inference of all the credible testimony in thecase and that we should defer to finding of fact made by the trial court, therefore, we do not burden our opinion with a discussion of unfavorable evidence." (Italics ours.)
Relator contends that the italicized portion, as a statement of the law, conflicts with the numerous rulings of this court that in an equity case appeal, the facts are considered de novo,
without regard to the most favorable inference rule that obtains in a law case on appeal where the facts are challenged by demurrer. But it is apparent that respondents did no more than to defer to the finding of facts made by the trial court. That is what the opinion says was done. The first assignment of conflict is not tenable.
[3] Respondents ruled to the effect that the payment of the $3000 fee to Jacobs, under the facts, did not discharge the Massman Construction Company for liability to Deacy. Does this ruling conflict with any previous ruling of this court? The course of reason pursued *Page 1011 
by respondents respecting this question follows (120 S.W.2d l.c. 88).
"Under the evidence in this case, we conclude that movant Deacy stands in a position of an independent lawyer called into the case by the law firm of Jacobs  Henderson. The evidence clearly discloses that Mr. Deacy was not a member of the law firm, and not, therefore, a party to and a joint obligee in the contract between Mr. Nelson and Jacobs  Henderson. It follows that Mr. Deacy has no right that he can assert directly upon the Nelson contract with the law firm.
"We conclude that any right to a lien on the judgment involved herein, if any, that Mr. Deacy may have must arise from the fact that he did valuable service with full knowledge and consent of Mr. Nelson. That Mr. Deacy did valuable service in the case is clearly established by the evidence. Further, it is clearly shown that Mr. Deacy has received nothing for his services.
"The attorney fee in this case is purely contingent. Insofar as Mr. Nelson is concerned, it stands admitted that his obligation to the lawyers attached to 50 per cent of the net amount collected as a result of the suit.
"Whatever was the understanding or belief on the part of Mr. Nelson, as to how Mr. Deacy was to be paid for his services in the case, has but little bearing upon the question as to whether Mr. Deacy had a lien for his services. Under the facts as shown in this case, no additional cost was imposed upon Mr. Nelson for the services rendered by Mr. Deacy. Mr. Jacobs and Mr. Henderson had a perfect right to secure the services of Mr. Deacy in this case, and to contract for such services upon a basis of a per cent of the contingent fee agreed upon with Mr. Nelson. Such a contract was made with Mr. Deacy. Mr. Nelson had full knowledge of the services rendered in the case, and accepted same and received the fruits of same."
As supporting the second assignment of conflict, relator cites Lamport et al. v. Aetna Life Ins. Co. (Mo.), 199 S.W. 1020. That case did not involve an attorney's fee, but involved the power of an attorney to waive the misconduct of the trial judge in going into the jury room and talking to the jury about the case. All the attorney had to do with the case was to sit at the counsel table while the case was being tried; assisted in getting out subpoenaes "and seeing that the witness for plaintiffs were in attendance, and had been asked to remain at the court house and inform counsel for the plaintiffs the result of the verdict reached." We find no support for the second assignment of conflict in the Lamport case, or any other case.
[4] The third assignment of conflict is on the ruling that the payment by relator of the amount due on the Nelson judgment to the clerk of the court did not place the money in custodialegis. Relator cites no case from this court supporting the third assignment of conflict and we find no such case. Noell v. Mo. Pac. Ry. Co., *Page 1012 335 Mo. 687, 74 S.W.2d 7, was to recover for an attorney's fee. In that case it was said (74 S.W.2d l.c. 12): "Nevertheless, had defendant paid the money to the clerk of that court, we think upon the authority of Laughlin v. Union Pacific Railroad Co., supra (196 S.W. 398), it would have been liable to plaintiff for disregarding his lien." We find no support for relator's third assignment of conflict.
[5] For convenience we repeat the fourth assignment of conflict as we have stated it. The fourth assignment of conflict is on the ruling to the effect that Deacy, in his motion to set aside, etc., alleged a specific contract and was permitted to recover on an implied contract. In other words, one cause of action was alleged, and recovery was had on an entirely different theory. The separate motion of Deacy is not set out in the opinion, but reference to it is made. Such being so, we may examine this motion as though it were set out in full in respondents' opinion. [State ex rel. Brotherhood of Locomotive Firemen and Enginemen v. Shain et al., 343 Mo. 666,123 S.W.2d 1, l.c. 2, and cases there cited.]
In the motion Deacy alleged: "Comes now your petitioner, Thos. E. Deacy, and respectfully shows the court that he is, and was at all times herein mentioned, a duly licensed and practicing attorney at law in Kansas City, Missouri; that on and prior to the 10th day of February, 1932, your petitioner was associated with the law firm of Jacobs  Henderson, a co-partnership, composed of Floyd E. Jacobs and M.J. Henderson, in the practice of the law in Kansas City, Missouri; that prior to the 10th day of February, 1932, said firm of Jacobs  Henderson and your petitioner were employed by Thomas Nelson . . . to institute, file and prosecute the . . . cause of action against Massman Construction Company, a corporation, with the understanding and agreement that as compensation for legal services rendered and to be rendered unto Thomas Nelson by the said firm of Jacobs 
Henderson and by your petitioner, Thos. E. Deacy, that said law firm of Jacobs  Henderson and your petitioner should receive a sum equal to fifty (50) per cent of any and all sums which might be recovered in said action, either by suit or compromise, and that it was the understanding and agreement between your petitioner and said firm of Jacobs  Henderson and said Thomas Nelson that your petitioner should receive for his services a sum equal to twenty-five (25) per cent of the total fee which might be collected in said action." (Italics ours.)
After so pleading, the motion goes on to allege what Deacy did in the prosecution of the Nelson case and alleges that he "was and is entitled to the sum of $800, same being the amount of his attorney's fees under the understanding and agreement between this petitioner (Deacy) and" Nelson; that "no part of said sum has ever been paid unto your petitioner and that your petitioner had a lien against the (Nelson) judgment . . . in the sum of $800.00." The prayer *Page 1013 
of Deacy's motion follows: "Wherefore, your petitioner respectfully prays this court to make and enter an order setting aside the satisfaction of the judgment heretofore entered in this cause, and that this court order that an execution issue upon said judgment in favor of this petitioner in the sum of $800.00, same being the amount of your petitioner's lien and interest in the same, and that your petitioner have and recover of and from the defendant herein the sum of $800.00, together with the cost of this proceeding."
Respecting the fourth assignment of conflict, it is stated in respondents' brief that Deacy "alleged the contract of the plaintiff (Nelson) with the law firm of Jacobs  Henderson and alleged his (Deacy's) employment by the firm of Jacobs 
Henderson to participate in the case." And it is stated in the brief that Deacy alleged "that he was not a member of the law firm of Jacobs  Henderson and was not a party to the express contract between Jacobs  Handerson and the plaintiff, Nelson, but that he acquired an implied contract with the plaintiff, Nelson, by reason of his employment in the cause by said law firm, with the knowledge and consent of the plaintiff, Nelson." Reference to Deacy's motion, supra, disclosed that no such allegations were made. Instead of alleging that he was not a member of the firm of Jacobs  Henderson, he alleged that he wasassociated with Jacobs  Henderson in the practice of the law;
and instead of alleging that he was not a party to the contract between Jacobs  Henderson and Nelson, he alleged that he, and
Jacobs  Henderson were employed by Nelson. Also, he alleged that he, and Jacobs  Henderson were to receive 50 per cent, etc., for the attorneys' fee. This motion is too plain for dispute as to what it alleges. And it is equally plain, as relator contends, that the respondents based their ruling in favor of Deacy on a contract other than the one pleaded in his motion, and on an entirely different cause and theory than alleged. Nothing to the contrary appearing, it may be assumed that the Deacy motion was tried on the facts or theory alleged. "The term theory when used in connection with the trite rule that recovery cannot be had in an appellate court on a different theory than that upon which the case was tried, evidently does not have reference to what facts the evidence establishes, but the term theory,
when so used, has reference to cause of action, or defense,
or to `a matter essential to the rendition of the judgment.'" [State ex rel. Brotherhood of Locomotive Firemen and Enginemen v. Shain et al., 343 Mo. 666, 123 S.W.2d 1, l.c. 4; State ex rel. Bush v. Sturgis et al., 281 Mo. 598, 221 S.W. 91, 9 A.L.R. 1315.]
Respondents' ruling that Deacy could recover on a contract and theory entirely different than that alleged and upon which the cause was tried is in conflict with many decisions of this court, among which are Henry County v. Citizens Bank, 208 Mo. 209, l.c. 225, 106 S.W. 622; Snyder v. Am. Car  Foundry Co., 322 Mo. 147, 14 S.W.2d *Page 1014 
603, l.c. 606; Hobbs v. Hicks et al., 320 Mo. 954,8 S.W.2d 966, l.c. 969; Benz et al. v. Powell et al., 338 Mo. 1032,93 S.W.2d 877, l.c. 879. See, also, Cole v. Armour et al.,154 Mo. 333, 55 S.W. 476; Mills v. Met. St. Ry. Co., 282 Mo. 118,221 S.W. 1; Jones v. Hill (Mo.), 18 S.W.2d 382.
Respondents' ruling in the Deacy case as stated in the fourth assignment of conflict should be quashed, and it is so ordered.
[6] Realtor, Henderson, makes several assignments of alleged conflict, but the meat of the complaints is that respondents' ruling that payment of the fee to Jacobs bound him is in conflict with prior controlling decisions of this court. It appears that the firm of Jacobs  Henderson was dissolved prior to the payment of the $3000 fee to Jacobs on November 13, 1936, and that the Massman Construction Company, at that time, had notice of such dissolution. And so relator contends that the payment of the $3000 fee to Jacobs, did not discharge Massman Construction Company from liability to him. Many cases are cited to support the alleged conflict. Typical of the cases cited are Knaus et al. v. Givens et al., 110 Mo. 58, 19 S.W. 535; Seufert v. Gille,230 Mo. 452, 131 S.W. 102.
The Knaus case was by the endorsees on six promissory notes. The notes were payable to "W.A. Dudgeon, treasurer," and were executed by "W.A. Dudgeon  Co.," a partnership composed of Dudgeon, Givens, and Talbot. Dudgeon was not made a party defendant. Among other defenses, Givens and Talbot pleaded that Dudgeon, after the dissolution of the firm and after maturity of the notes, transferred them to plaintiffs. The reply so admitted. Thereupon a motion by defendants for a judgment on the pleading was sustained. It was not alleged that the plaintiffs had notice of the dissolution when they purchased the notes, and it was held that, absent such notice, the power of Dudgeon to bind the firm as to third persons remained as it was before dissolution. The rule is that, after dissolution, a member of a dissolved partnership cannot bind the other members as to third parties who have notice of the dissolution. The Knaus case and the Seufert case so hold, and there are none to the contrary.
But the question respondents ruled was not whether the firm of Jacobs  Henderson was bound to a third party by an act of Jacobs, but the question was whether the payment of the fee to Jacobs was payment to the firm.
Not one of the cases cited by relator, Henderson, deals with such facts as here. So far as appears here, the lien of Jacobs 
Henderson attached to the Nelson cause of action upon the commencement of the Nelson case. [Sec. 11716, R.S. 1929, Mo. Stat. Ann., sec. 11716, p. 630.] The petition was signed by Jacobs  Henderson hence the Massman Construction Company had notice of this lien when process was served. But the lien was then held jointly. Respondents' opinion says [120 S.W.2d l.c. 87]: "The appellant *Page 1015 
(Massman Construction Company) herein presents what we consider to be a very pertinent question in the case at bar. The appellant urges that the obligation of Mr. Nelson was to a partnership or to joint obligees.
"The law of this state is clearly to the effect that whereseveral parties are jointly interested in an indebtedness, allare necessary parties to an action for recover. [Peters v. McDonough, 327 Mo. 487, 37 S.W.2d 530.] (Italics ours.)
"The testimony of Mr. Nelson, the plaintiff in the original suit, is clearly to the effect that he hired Mr. Jacobs. However, he knew of the partnership, and the employment contract must be construed as between Mr. Nelson and the law firm of Henderson 
Jacobs, and, as originally made, Mr. Jacobs and Mr. Henderson were joint obligees. . . . The respondent herein (Henderson) contends that the dissolution of the partnership, and the fact that only the services of Mr. Jacobs were thereafter retained, creates a situation wherein the obligation ceased to be a joint obligation.
"As to whether or not there was such a severance as to justify the position taken must be answered by the facts as they appear in the evidence. Most potent to the question is as to how Mr. Jacobs and Mr. Henderson, themselves, acted toward the matter.
"Mr. Henderson, for some reason unknown to us, was not called as a witness. However, in the testimony given by Mr. Jacobs, when being cross-examined by Mr. Deacy, it is clearly shown that the parties themselves treated all unfinished business as partnership business. It is shown that in similar matters, as are involved in the case at bar, the office of Mr. Henderson would collect the fees and remit to Mr. Jacobs his portion of same, and that the office of Mr. Jacobs would collect the fees in other cases and remit same.
"We conclude that the actions of both members of the dissolved law firm clearly justifies the conclusion that both Jacobs and Henderson treated the fees belonging to the firm at the time of dissolution as partnership business. There is no showing whatever to the effect of any agreement that certain fees would go to Henderson and other fees to Jacobs. This impels us to the conclusion that as to the fee herein involved Mr. Jacobs and Mr. Henderson were joint obligees."
Relator contends that the above italicized statement of the law is in conflict with the ruling in Priest v. Oehler et al.,328 Mo. 590, 41 S.W.2d 783. It is contended that the Henderson case was in equity, and that the law as stated by respondents has no application to an equity case. In the Priest case, the court said (41 S.W.2d l.c. 788): "Under this head appellants invoke the rule that one joint obligee, without the concurrence of his co-obligees, cannot maintain an action upon a joint contract. [Clark v. Cable, 21 Mo. 223.] The rule is applicable only in actions at law. In addition to the fact that *Page 1016 
this is a suit in equity, the obligation of the contract running to plaintiff and defendants Cunliff and Smith is as to them several as well as joint; each has a several right to have it enforced. The point made as to nonjoinder of parties plaintiff is without substance."
Relator misconstrues the Priest case. That case was correctly construed in Hamrick v. Lasky et al. (Mo. App.), 107 S.W.2d 201, l.c. 204:
"Plaintiff urges that our opinion is in conflict with Priest v. Oehler, 328 Mo. 590, 41 S.W.2d 783, l.c. 788. Plaintiff construes that case as holding that the rule that payment in full by the obligor to one of two joint obligees discharges the obligation is inapplicable in equity. It is obvious that the case does not so hold. What the case holds is that the rule that one of two joint obligees cannot, without the concurrence of the other, maintain an action on an obligation which has not been discharged by payment to the other, is inapplicable in equity. It merely announces a rule of procedure. It does not hold that, though one of two joint obligees cannot maintain an action at law on an obligation which has been discharged by payment to the other, he can maintain an action thereon in equity, and no case has been brought to our attention so holding."
Relator cites no case, and we find none, to support conflict. We think that the writ in the Henderson case was improvidently issued and should be quashed. It is so order. Hyde and Dalton,CC., concur.