Davies v. Patterson

WOOD, J., (after stating the facts). The orders of the court eliminating the insurance company from the case and requiring the appellants to he made parties and the interplea filed hy appellants narrowed the issues to, and the cause progressed as if it were, a suit hy appellants against the appellee for fees for services as attorneys. Appellants contend that under their contract with appellee they were authorized to institute suit against the insurance companies, which they did, and that inasmuch as the appellee effected a settlement of these suits for a less amount than the sum sued for without the consent and over the protest of appellants, that they were entitled to the same fee that they would have recovered had the suits progressed to a successful termination in favor of the appellee for the full amount of his demand as made hy those suits. A correct decision of this issue involves a construction of the contract. The contract contemplated that appellants should attend to the matter of making the settlement of the controversy between the appellee and the insurance companies, and for these services the appellants were to he paid the sum of $100 at all events, whether the settlements were had with or without suit. But in the event of a suit appellants were to receive a contingent fee, the amount thereof being dependent upon a recovery in favor of the appellee in a greater sum than that the insurance companies had offered to pay. If appellee did not recover by the suits more than the insurance companies had offered to pay then the appellants were to receive the sum of only $100 for their services in bringing suits and the appellee was to pay the costs. • Now, giving appellants’ evidence the strongest probative value in favor of the appellants, it tends to prove that they were authorized by the appellee to institute the suits against the insurance companies for- $7,000, which they did. That after these suits were instituted appellee without appellants’ consent settled the same.for the sum of $5,000. Assuming these facts to be true, the question of law, therefore, is: “Were appellants entitled to recover a greater sum than $100 as attorney’s fee and the costs, which they paid, in connecetion with the suits ? ’ ’ In Davis v. Webber, 66 Ark. 190, we 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.” See, in addition to the authorities there cited, 2nd Page on Contracts, see. 775, and the cases in the note. (1) Under our statutes an attorney has a lien for his fee which can not be defeated by any settlement of the parties litigant, before or after final judgment or final order. But an attorney has no right to compel his client to. continue litigation and the- client may dismiss or settle the causé of action without consulting his attorney. St. L., I. M. & S. Ry. Co. v. Blaylock, 117 Ark. 507; St. L., I. M. & S. Ry. Co. v. Kirtley & Gulley, 120 Ark. 389. The contract between appellants and the appellee must be read in the light of the law and construed as though it contained a provision permitting the appellee to settle the suits at any time without consulting his attorneys, the appellants. The appellants, therefore, must be held to have contemplated, when they entered into the contract, that after the suits were instituted the appellee might settle the same and for a less sum than sued for and for a sum no greater than that which the insurance companies had offered to pay. Appellants must be held to have known that if the appellee did thus settle the amount which he received in the settlement would represent the amount recovered by virtue of the suits the same as if they had been prosecuted to a final judgment in that sum. (2) It follows that, since appellee recovered from the insurance companies less than the amount demanded by his suits, and less than the amount that the insurance companies offered to pay, the companies would not have been liable for attorneys’ fees had the suits been prosecuted a final judgment. Pacific Mutual Life Ins. Co. v. Carter, 92 Ark. 378. Therefore, under the express terms of the contract, appellants could not recover of the appellee more than the sum of $100 and the costs they had paid for him. The appellants were entitled to a judgment against the appellee for that sum and to have a lien declared on the funds in their hands for its payment. Railway v. Blaylock, supra; Railway v. Kirtley & Gulley, supra. Appellants contend that the issues raised by the pleadings and the proof in this case have already been determined in their favor by the opinion of this court in the case of Davies & Davies v. Patterson, 132 Ark. 484. Appellants misapprehend the effect of the decision in that case. While the parties were the same and the same subject matter was brought under review, yet the issue in that case was entirely different from the case at bar. In that case Patterson filed a motion for a summary judgment against Davies & Davies asking that they be required to pay over $678, the funds in their hands, which he alleged they had collected. It appears that the above sum was collected on a policy of insurance under the-same contract of employment as is in this suit. In that case Davies & Davies in their response to the motion for summary judgment set up the contract and alleged substantially the .same facts in response to the motion as they have alleged here in support of their contention, that they are entitled to a judgment for the full amount of the fees claimed by them. That case was disposed of as if on demurrer to the response. In that case the opinion was concluded in the following language: ‘ ‘ The answer herein stated facts which, if true, were sufficient to constitute a defense to the motion for a summary judgment. In all such cases the court should deny the motion and treat the proceedings as an ordinary action at law and transfer the same to the proper docket and allow it to take its regular course in such proceedings.” We further said in the course of the opinion: “If the facts set forth in the answer of the defendants are true, they had a just and meritorious defense.” Treating the.facts set up in response to the motion as true, we held that the court had no jurisdiction to render judgment against the attorneys on summary proceedings. But an action by clients under a special statute on summary motion to have attorneys pay over moneys collected by them is an entirely different proceeding and presents a wholly different issue from that of an action instituted by clients against their attorneys for money had and received by the attorneys in the regular course of the common law to recover fees for services rendered by them. Although the summary motion and the action at law may be between the same parties and concerning the same subject matter, it does not follow that facts which would constitute a good defense to summary motion to have attorneys pay over the moneys collected by them and which would defeat the jurisdiction of the court to render judgment on such motion, would also constitute a cause of action' in favor of the attorneys for fees for services rendered. It appears from the undisputed evidence in this cause that the appellants have collected and now have in their hands the sum of $678, funds belonging to the appellee. As this sum exceeds the amount of.the fee and costs for which appellants were entitled to judgment, as above indicated, there was no prejudicial error in directing a verdict and rendering judgment herein in appellee’s favor. Judgment affirmed. HART and HUMPHREYS, JJ., dissenting.