Ryan Bros. v. Ashton

1. Attorney: duty to client: contract. An attorney who is about to enter into a contract with another outside of the ordinary course of business for compensation for legal services to be rendered for the latter, is bound to inform him of all the facts and circumstances attending the subject of the controversy. 2. -: fraud: pleading. If such a contract be made without such information being'given it'is presumptively fraudulent, and the attorney seeking to recover thereon must state facts sufficient to remove the presumption of fraud. 3. -: contract: fraud. ' A. resided in Iowa where his estate was situated; his wife and children in Illinois. After his death R., an attorney residing in the same county as A., went to Illinois and entered into a contract with the heirs at law, in accordance with which he was to receive twenty-live per cent of the value of the estate for its settlement. No litigation was involved therein and the debts of the estate, which amounted to twelve thousand dollars, were small: JHeld, that such a contract was fraudulent and could not be- enforced.

Appeal from Jasper District Court. Action for specific performance. The petition states that James Ashton departed this life intestate, on the 27th day of September, A. D. 1873, leaving as his heirs-at-law the defendant, Hannah Ashton, his widow, and her two children, William Ashton and Margaret Tnlley, and two children by a previous wife, and that on the 30th day of September, A. H. 1873, the following agreement was entered into between the plaintiffs and Hannah and William Ashton: “Mattoon, 111., Sept. 30,'1873. “ We hereby acknowledge having this' day- employed Ryan Bros., of Newton, Jasper county, Iowa, as our attorneys at law to do all things necessary in the settlement, prosecution and collection of the interests of Hannah Ashton, William Ashton and Margaret Tulley, in and to the estate of James Ashton, deceased, late of Jasper county, Iowa, for which services we agree to pay them one-third of- the net proceeds of said estate which may be adjudged to be the shares of said parties aforesaid, when collected, together with the further sum of three hundred dollars, provided that sum is collected for the parties from the estate, and in the event nothing is collected, then said Ryan Bros, are to receive nothing for their services. It is also stated that James Ashton separated from his wife about the year A. D. 1852, in Illinois and came to said Jasper county, and at the time of his decease, was possessed of a large amount of real and personal property of the value of from ten to twelve thousand dollars, besides the dower interest of said Hannah in lands convc_yed by'said James Ashton to the children by his first wife, and also that he owned certain lands in Illinois the value of which is not .stated. That on the .... day of October, A. D. 1873, one of the plaintiffs, D. Ryan, in conjunction with said Hannah, was appointed joint administrator of said estate, the same being done at the request of said Hannah; the sureties on the bond however, being furnished or procured by said plaintiffs, and on the .... day of October said Hannah came to Newton, Iowa, and signed the bond procured by plaintiffs and qualified as administratrix of said estate. That on the' 30th day of said October, said Hannah gave another bond as administratrix, and has thereunder and thereby obtained the possession and control of all the prop-' erty of said estate, except the smn of five hundred and eighty-five and 43-100 dollars, which is in possession of said D. Eyan as co-administrator with said' Hannah Ashton. That said Hannah claims control of the said assets in her possession as sole administratrix. That plaintiffs have repeatedly offered to perform the said agreement on their part, but that said Hannah has refused to recognize them or said agreement. That said James Ashton was not indebted more than three hundred dollars, and that all.there is to do is to make the distribution among the heirs. That said Hannah, William Ashton and Margaret Tulley are non-residents of the State and propose to remove saidassets out of the State. An injunction and accounting is asked, and also for general relief. A demurrer having been sustained to the petition, the plaintiffs appeal. There is no such thing recognized by the courts of this State as champerty or maintenance. ( Wright v. Mesh, 3 G. Greene, 482.) An agreement for a contingent fee is a valid contract between attorney and client. (McDonald v. Q. c& N. W. R. Go., 29 Iowa, 173.) Fraud must be clearly established; the exception to the rule being that where a trust relation exists, as in the case of attorney and client,' the attorney must show that a contract with the latter is free from fraud. (Hill on Trustees, 160; Muller v. Wells, 23 Conn., 21; 1 Story, Eq. Jur., § 310.) Plaintiffs’ authority under the contract, even if it be considered as executory, is coupled with an interest and therefore not revocable. (Ryan v. Martin, 18 Wis., 672; 1 Pars, on Con., p. 69; MeGregor v. Gardner, 14 Iowa, 326.) A person may not discharge his employe at any time and thus release himself from liability under his contract. (Allen, Noyes dé Go. v. Pelan dé Anderson, 5 Iowa, 336.) It is not necessary to the idea of champerty that the alleged champertor is to carry on the suit at his own expense. (Lathrop v. Amherst Bank, 9 Met., 489.) Champertous agreements are against the law and morals. (Ooquillard’s Admr. v. Bearss, 21 Ind., 479.) The law against champerty, though somewhat relaxed, is still a substantial part of the common law. .(Barker v. Barker, 14 Wis., 131; see, also, Marshall v. B. <& O. R. Go., 16 ITow., 325; Rafferty v. July, 22 Ind., 471; Martin v. Veeder, 20 Wis., 466; Byrd v. Adem, 9 Ala., 755; Evans v. Bell, 6 Dana, 479; Thurston v. Reroival, 1 Pick., 415.) Where a contract is made between attorney and client in respect of compensation, that relation and the contract came into existence together. (White v. Whaley, 40 How. Pr., 353.) Contracts which courts would not regard as unfair dealing between other' parties will frequently not be sustained as between attorney and client.. (Harper v. Perry, 28 Iowa, 57.) Specific performance will not be decreed as a matter of right, but only in the exercise of a sound legal discretion. (Quinn v. Roath, 37 Conn., 16; Sherman v. ’ Wright, 49 N. Y., 227.) Defendants at any time had the right to discharge their attorneys, thus ending the contract of employment, although liable therefor if not done for good and sufficient reason. (Wells v. Hatch, 43 N. II., 246.)