Wright v. Kansas City, Ft. Scott & Memphis Railway Co.

BROADDUS, P. J. This is a suit to enforce an attorney’s lien for his fee. The action is based on the following contract: “I hereby employ George W. Wright, attorney to prosecute my claim against the Kansas City, Port Scott and Memphis Railroad Company, for injuries sustained by me on or about the 10th day of June, 1901, and I hereby agree to pay said attorney for his services a sum equal to fifty per cent of the amount recovered, either by suit or compromise. I further agree not to settle, compromise or otherwise dispose of said cause of action without the written consent of said attorney; and in case I dismiss, compromise or settle without such consent, any suit brought by him for me, I agree to pay said attorney for his services therein a sum equal to one half of the amount claimed as damages in the petition. [521] It is further agreed that said attorney shall not compromise or settle said cause of action or any suit brought thereon without my consent. “Dated the 3d day of July, 1901. “Harry T. Eudaley.” The plaintiff commenced suit in Jackson county circuit court against said company in favor of the said Eudaley where he claimed 'damages for his injuries in the sum of $20,000. Afterwards there was a merger of said company with the St. Louis and San Francisco Railroad Company and the latter was also made a party to the action. Afterwards a trial was had and plaintiff recovered judgment against said defendants in the sum of $13,000. Afterwards on appeal to the Supreme Court the judgment was reversed and cause remanded for a new trial. On the 1st day of August, 1905, the St. Louis and San Francisco Railroad Company without plaintiff’s consent compromised and adjusted the claim of said Eudaley for his alleged damages for the expressed consideration of $500, and obtained from him a writing whereby he released and discharged the two companies from any and all liabilities on account of his said injuries. It is alleged, however, as a matter of fact that they paid him the sum of $1180 in said compromise. The plaintiff gave to defendants due notice of his contract and of his lien for a fee as provided by the statute. It is admitted in the petition that defendants have paid him the sum of $250. He claims that he is entitled to a sum equal to $1180, the amount paid by defendant on said compromise less said $250 already paid. The St. Louis ánd San Francisco Railroad Company demurred to plaintiff’s petition for the reason that it did not state a cause of action, which the court sustained. The plaintiff stood on his petition whereupon judgment was rendered in favor of said railroad company, from which plaintiff appealed. [522] The demurrer goes to the validity of the contract, because of the provision therein that the plaintiff Eud-aley could not settle or compromise his cause of action without the written consent of his attorney. The question has been determined by both the Supreme Court and the St. Louis Court of Appeals. We quote from a case decided by the former: “A contract by which attorneys are employed to recover land by suit, and stipulating that they are to have one-half of the land recovered, and in which the client agrees not to compromise the suit or claim without their consent and approval, may or may not be unlawful, according to the circumstances of the case. And in this case where the client compromised with her adversaries after suit was brought, and in which, as a result of that compromise, defendant is withholding from plaintiffs, under a. deed from the client one-half of the land to which they would have been entitled had not that compromise been made, it is held that the contract not to compromise without their approval was lawful.” [Lipscomb v. Adams, 193 Mo. 530.] The defendant contends that this case is not in point, but we fail to see any distinction in principle under the facts. The holding of the St. Louis Court of Appeals is that: “Where an attorney has a contract for a percentage of the proceeds of the suit or settlement of the same, a stipulation in such contract that the client would make no compromise unless the attorney consented to it, is not void as against public policy, in the absence of any facts tending to impeach the good faith of the attorney making such contract.” [Beagles v. Robertson, 135 Mo. App. 306.] The petition contains no recitation that tends to show that there was any fraud or misconduct on plaintiff’s part whereby his client was induced to enter into the contract, in the absence of which we must assume there was none. And it is said in Lipscomb v. Adams, supra, that such agreements may or may not be condemned as [523] against public policy according to the circumstances of the case; and that each case must be judged in the light of its OAvn facts. As we understand from the two decisions, such contracts are not absolutely void because they prohibit clients from settling their cases without the consent of their lawyers, but may become so by reason of the attendant circumstances. The courts of other States generally hold that such contracts ,are against public policy. It is further insisted as the St. Louis and San Francisco Railroad Company was not a party to the original suit, it is not liable under the language of the statute. Section 1059, Revised Statutes 1899, in providing for the consolidation of railroad companies, declares that the effect of such consolidation is to impose upon the consolidated company all the obligations and liabilities which belonged to or rested upon either of the companies making the consolidation. This statute was construed in Kinion v. Railroad Co., 39 Mo. App. 574, where it is held that “so far as regards any right of action that existed against either of the corporations prior to their being so united, the effect of a consolidation is not more than a change of name;” and that the consolidated company succeeds to all the rights of the consolidated companies and becomes liable for all their obligations. And this court so held in Springfield Lighting Co. v. Hobart, 98 Mo. App. 227. The provision in the contract that in the event that the client should settle the suit without plaintiff’s consent he should pay plaintiff for his services a sum equal to one-half of the amount claimed as damages in the petition, we do not believe rendered the entire contract void. The contract in that respect is separable, and it is not contended that it is enforceable as against defendants. Its validity could only be called in question in case plaintiff sought to enforce it against his client. It may not be improper to add that plaintiff in [524] this proceeding does not even call in question the right of his client to compromise said suit notwithstanding the agreement that he should not do so, without plaintiff’s consent, and does not seek to enforce the agreement in that respect. He is only asking that his lien for his fee be enforced under the statute notwithstanding the client violated the contract. We cannot see wherein defendants’ rights are affected in any way by reason of such restriction. The petition in our opinion did state a good cause of action, therefore the action of the trial court is reversed and remanded. All concur.