Diggs v. Thurston

39 App. D.C. 267, 1912 U.S. App. LEXIS 2221

• Court: Court of Appeals for the D.C. Circuit
• Decided: November 7, 1912
• Docket: No. 2415
• Status: Published

Opinion

Mr. Justice Robb

delivered the opinion of the Court:

The view we take of the case renders it unnecessary to review •the evidence in much detail. Both Mr. Woodard and Mr. Diggs testified in behalf of the defendant. Mr. Woodard in his testimony stated that when Mrs. Thurston, accompanied by Mr. Diggs, called at his (Mr. Woodard’s) office on the morning of December 31, 1910, “Mrs. Thurston objected to the payment of a fee to me in connection with the Clark case.” He admitted the agreement of December 19th for the division of fees which resulted in his being paid, upon that date, one half of the 20 per cent which Diggs deducted as his fee under the written contract previously mentioned. He admitted that much discussion preceded the final assent of Mrs. Thurston that he be paid the 10 per cent fee. He admitted that nothing was said to her about the agreement between himself and Diggs for the division of fees. Mr. Woodard was asked by the trial justice whether, when the arrangement for the division of fees was entered into, Mr.. Diggs agreed that 10 per cent in addition to the 20 per cent' deducted should be charged, and replied: “Oh, yes, sir; it was. understood that his division with me was not to affect my right-to claim my 10 per cent which we had agreed should be the limit, as between us.” The Court: “Did you and he agree that you should charge 10 per cent in addition to the 20 per cent he had charged?” The Witness: “Yes, sir. As I testified, he was to-divide his 20 per cent with me, and I was to divide my fee-with him.” Mr. Diggs testified that when Mrs. Thurston appeared at his office on the morning of December 31, 1910, she-referred to the Woodard letter of the 19th, whereupon he, Diggs,, informed her of his familiarity with its contents; that the Lambert claim was discussed, and that he, Diggs, advised Mrs. Thurston to compromise the matter if she could. The witness, continued: “I told her that Mr. Woodard had been the counsel in the case from the beginning, that I was brought in the case-through him, explained the work he had done in the matter, and told her I considered he was entitled to a fee, and in addition Mr. Woodard told me when he had fixed on that 10 per cent on his fee that if it was not paid that he intended to issue an attachment on the fund. I told Mrs. Thurston that it might be well for her and me to go to his office and discuss the matter. She did not want to go. I said: ‘You are in Washington now, and this issue has to be met sometime, and as long as you-are here in Washington you might as well step around there,, it is only two blocks,’ and she finally accompanied me to Mr.. Woodard’s office. Mr. Woodard expressed his sympathy in regard to her recent loss. I said to Mr. Woodard: ‘Mrs. Thurstondoes not understand about your fee;’ ” that finally Mrs. Thurs-ton “agreed that this fee of 10 per cent charged by Mr. Woodard-should be paid.” When asked by the court whether, when she agreed to this payment to Mr. Woodard, she knew that he,. Diggs, was to have part of it,' the witness replied that she did not. The witness was further asked, in cross-examination, the following question: “Did you at any time, directly or indirectly, advise Mrs. Thurston that you were in effect sitting as a judge in your own case, and, by advising her to pay Mr. Woodard, practically advising her to pay you ?” Mr. Diggs answered: “As I said, I made no statement to Mrs. Thurston about any arrangement I had with Mr. Woodard, absolutely none, for the reason, as I stated, I simply considered the simple question was. whether or not Mr. Woodard was entitled to a fee.”

It is now insisted that the court was without jurisdiction to determine, under this interlocutory petition, the rights of the parties, there being, according to the contention of the defendant,, no evidence of bad faith on his part.

Sec. 219 of the Code [31 Stat. at L. 1224, chap. 854], providing for summary proceeding against an attorney unlawfully refusing to pay over money he has collected for a client, is at least as broad as the rule of the common law.

* Union Bldg. & Sav. Asso. v. Soderquist; 115 Iowa, 695, 87 N. W. 433. An attorney is an officer of the court and, as such, is bound to so conduct himself that the administration of justice shall not be brought into contempt and disrepute. When guilty of bad faith in his relations with his client, his conduct tends to prevent, rather than promote, justice, and the court whose officer he is has jurisdiction at common law and is charged with the duty of protecting the client from the bad faith of its officer:, “The ground of the jurisdiction thus exercised is the alleged’ misconduct of the officer. If an attorney have collected money for his client, it is prima facie his duty, after deducting Ms.own costs and disbursements, to pay it over to such client; and his refusal to do this, without some good excuse, is gross misconduct and dishonesty on his part, calculated to bring discredit on the court and on the administration of justice. It is this misconduct on which the court seizes as a ground of jurisdiction to compel him to pay the money in conformity with his professional duty.” Re Paschal (Texas v. White) 10 Wall. 483, 491, 19 L. ed. 991, 994. See also: Re Schell, 128 N. Y. 67, 27 N. E. 957; Mundy v. Schantz, 52 N. J. Eq. 744, 30 Atl. 322; 4 Cyc. 975. And the fact that the client may have .a legal remedy does not affect the summary jurisdiction of the court over an attorney who has not acted in good faith toward his client. Re Grey [1892] 2 Q. B. 440, 61 L. J. Q. B. N. S. 795, 41 Week. Rep. 3.

Mr. Diggs admits the receipt of the letter of December 3, 1910, from his then client Mr. Thurston, directing the preparation of an assignment of the claim to Mrs. Thurston. He admits that when Mrs. Thurston appeared at his office on the morning of the 31st of December, following, she informed him that the assignment had been made and was then of record in the case. Mr. Thurston was then dead, as Mr. Diggs well knew. All his interest in this claim had vested in Mrs. Thurston. This Mr. Diggs also well knew. Mr. Diggs admits that Mrs. Thurs-ton insisted that she did not owe Mr. Woodard anything; that before going to Woodard’s office he, Diggs, advised Mrs. Thurs-ton with reference to the Lambert claim and discussed with her the Woodard claim; that, at his suggestion, Mrs. Thurston accompanied him to Woodard’s office, for the obvious purpose of discussing Woodard’s claim. It is admitted by both Diggs and Woodard that at no time during the interview, or at any time prior to the deduction of the extra 10 per cent, was it disclosed to Mrs. Thurston that these two attorneys were to divide fees in the case; in other words, when Mrs. Thurston accompanied Diggs to Woodard’s office she supposed, and had the right to suppose, that Diggs was accompanying her as her attorney; that, having received the 20 per cent, fee provided for in his contract, his sole interest in the question whether Woodard should receive an additional 10 per cent was that of a disinterested attorney seeking, in good faith, to represent his client. In fact, however, Mr. Diggs was to receive one half of the fee which ie testifies Mrs. Thurston, after a lengthy interview, agreed that he, Diggs, might pay to Woodard out of funds in his (Diggs’) hands belonging to Mrs. Thurston. The contention on behalf of Mr. Diggs, that he was not the attorney of Mrs. Thurston upon this occasion, is clearly untenable. If he was not her attorney, what relation did he sustain to her upon that occasion ? Both Diggs and Woodard admit that upon that very occasion they advised Mrs. Thurston with reference to her duties as administratrix of her husband’s estate, and also with reference to the taking care of her own interests; that they also,, upon this same occasion, advised her with reference to the Lambert claim. Mr. Diggs also admits that subsequently, when he collected the costs from the surety on McLellan’s bond, he signed a praecipe as attorney for Mrs. Thurston. Indeed, the evidence is very convincing to the effect that when the assignment to Mrs. Thurston was made and brought to the knowledge of Mr. Diggs, he considered his relations to her as being the relations he had previously sustained to her husband, namely, the relations of attorney and client. When, therefore, he undertook to advise her with reference to the so-called Woodard claim, it was incumbent upon him to practice the utmost good faith, and to inform her of every fact known to him calculated to influence her judgment in the premises. The question before the trial court was not whether Mr. Thurston had employed Mr. Woodard, but whether, when Mrs. Thurston is alleged to have consented to the payment by Mr. Diggs, out of the funds in his hands, of this additional fee of 10 per cent, bad faith was; practised upon her. Had she known that one half of this amount was to be paid to her attorney, Mr. Diggs, she might and probably would have had less confidence in his advice. She might and probably would have declined to permit him to deduct the additional 10 per cent from the funds in his hands. The bad faith practised with reference to this additional 10 per cent extends to and embraces the costs which were retained;. in other words, it permeated and tainted the entire transaction.

The contention in appellant’s brief that the letter of December 19th conveyed to Mrs. Thurston knowledge of the division of fees by Diggs and Woodard is manifestly without merit. Neither in the answer of Mr. Diggs, nor in his testimony, nor in the testimony of Mr. Woodard, is such a contention made or even suggested. On the contrary, this additional 10 per cent is everywhere referred to as the fee claimed hy Mr. Woodard, and, as we have seen, it was expressly admitted in the testimony that Mrs. Thurston had not been informed of the arrangement for the division of fees.

In view of the terms of the written contract between Diggs and Thurston, and of the circumstances under which that contract was entered into, it well might have been contended on the part of Mrs. Thurston that the services performed by Mr. Woodard were in the interest of Mr. Diggs, and that his compensation should come out of the fees provided for in the Diggs’ contract. We do not suggest that the evidence would warrant such a conclusion. We merely intimate that such a contention might have been made had Mrs. Thurston been put in possession of the facts developed by the answer and testimony.

Whether said sec. 219 of the Code be no broader than the rule of the common law, a question not necessary to be here determined, thé judgment must be affirmed, for in our view there was ample evidence before the trial court upon which to base it.

Affirmed, with costs.

Sec. 219, Code, D. C., is as follows: “Any attorney receiving or collecting the money of his client and refusing unlawfully to pay the same when demanded may be proceeded against in a summary way on notice by-said court [the Supreme Court of the District of Columbia], which may-suspend him from practice or dismiss him from its bar.”—Repoeteb.