In re Magoon

15 Haw. 244, 1903 Haw. LEXIS 7

Opinions

OPINION OF THE COURT BY

FREAR, C.J.

(Galbraith, J., dissenting.)

The introductory facts and circumstances of this case are-set forth so fully in Mr. Justice Galbraith’s opinion in this ca e and in the opinion in Kellett v. Sumner, known as the Ropert case, ante 76, and In re Humphreys, ante 155, and In re Davis, filed this day, that little need be added here.

Two charges are made against the respondent in this disbarment proceeding. It is conceded that one is not sustained and no further notice will be taken of that. The other is in substance that the respondent was guilty of gross professional impropriety and misconduct in inducing Sumner to pay at the conclusion of the Ropert case a fee that was grossly excessive under the circumstances, namely, a fee of $4,000. The allegations as to the fee of $2,500 in the guardianship and injunction cases is made not as a separate charge but merely as introductory to or as having some bearing upon the charge as to the $4,000 fee.

The theory of this case is that the respondent has been guilty of such professional misconduct as to warrant dealing with him quasi-criminally. This is not an action by the attorney for his fees, in which he could recover only what his services were reasonably worth — in the opinion of the court or jury upon the evidence, nor is it a proceeding by the client to set aside the transaction or to recover the excess paid, because of fraud or undue influence, actual or presumed, nor is it a proceeding in which the court is asked to determine what may properly be paid as a reasonable fee by a guardian, administrator or trustee, nor is it even a summary proceeding brought by a client asking the court to exercise its summary jurisdiction over attorneys to compel his attorney to pay to him moneys unjustly withheld. It comes nearest to this last mentioned proceeding — in which the court may act upon the basis of the conduct of the attorney as distinguished from the reasonableness of his claims, and yet it is not such a proceeding. Tt is not brought by or at the instance of the client nor is there any juayer for such relief nor was any evidence introduced on that theory to show how much of the fee was excessive or how much should be returned to the client. And if such a summary proceeding for the enforcement of the client’s alleged rights would be proper in a case of this kind, that is, to compel the return of the excess in the amount of a fee (in this instance, not a fee retained by the attorney out of the proceeds collected but a fee paid voluntarily by the client after payment to him of such proceeds), would not the complaint have to be dismissed and the client left to his action if it appeared that the attorney acted in good faith and not dishonestly ? In Rule on Kennedy, 120 Pa. St. 491, 502, the court said, quoting in part from an earlier Pennsylvania case:

“ ‘If the client is dissatisfied with the sum retained, he may either bring suit against the attorney or take a rule upon him. In the latter case the court will compel immediate justice or inflict summary punishment upon the attorney, if the sum be such as to show a fraudulent intent. But if the answer to the rule convinces the court that it was held back in good faith and believed not to be more than an honest compensation, the rule will be dismissed and the client remitted to a jury trial/ And we may add to this that a man does not lose his right to trial by jury because he is an attorney-at-law. Where an issue of fact is fairly raised between himself and his client he is as much entitled to such trial as any other citizen.”

The Supreme Court of the United States said, per Mr. Justice Bradley, in the case of In re Paschal, 10 Wall. 483, 491:

“If an attorney have collected money for his client, it is prima facie his duty, after deducting his 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 descredit 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 proféssional duty. The application against him in such cases is not equivalent, to an action of debt or assumpsit but is a quasi criminal proceeding, in which the question is not merely whether the attorney has received the money, but whether he has acted improperly and dishonestly in not paying it over. If no dishonesty appears the party will be left to his action. The attorney may have cross demands against his client, or there may be disputes between them on the subject proper for a jury or a court of law or equity to settle. If such appear to be the case, and no professional misconduct be shown to exist, the court will not exercise its summary jurisdiction.”

It is true that attorney and client sustain a confidential relation towards each other and that in consequence when dealings between them are sought to be set aside the burden of proof is shifted to the attorney to show that the transaction is fair and reasonable, but not only is this not such a proceeding but even when such transactions are set aside on the presumption of undue influence, it is not cause for the disbarment or suspension of the attorney so long as he has acted honestly and in good faith. The transaction in such case is treated as-it would be if it were between others in confidential relations,, and the parties are left to their civil remedies.

The question then is whether the respondent acted in such a way as to call for punishment quasi-criminally. Is such conduct shown by what was actually done to induce the payment of the fee, and, if not, was the fee itself so grossly excessive as to show such conduct irrespective of what was done by the respondent to induce its payment ? It would seem . that there could be but one answer to the first of these questions. The evidence (for the prosecution as well as for the respondent) shows that the respondent did not say a word to Sumner about fees until after the conclusion of the Kopert case and after the proceeds of that case were deposited to Sumner’s credit in the bank; that he then said to Sumner that he thought that they ought to make some settlement as to his fee; that Sumner then asked how much he wanted, to which the respondent replied that he preferred to leave it to him (Sumner) ; that Sumner said he thought $2,500; that the respondent, who was, as he says, surprised and had in mind $5,000 as a proper fee, called his (Sumner’s) attention to the amount of work that he had done and particularly to a number of other suits and matters besides the Eopert suit in which he had acted for Sumner and said that he thought that $4,000 would be a very fair and reasonable fee, to which Sumner replied that it was all right and that he was perfectly satisfied; and that the respondent then said that if he (Sumner) were not satisfied, he, the respondent, wished him to say so and be frank with him, but that •Sumner said, no, he was perfectly satisfied, it - was all right. All of this took only a few minutes. Sumner soon afterwards told his nephew, R. W. Davis, with whom he was living and with whom he talked over everything at that time and in whom he seemed to have complete confidence, that he was satisfied. He likewise told the Attorney General the same thing when the latter made inquiry of him preparatory to bringing this proceeding. He reiterated it several times on the witness stand in this proceeding, — that he was satisfied when he paid the fee and was still satisfied, though he also said (but just after he -had been asked why he had paid the respondent $4,000 and his 'associate counsel $2,000, the latter of whom had threatened to suit him) that he was afraid that if he refused they might "bring a suit against him and that he felt within him that the sum of four thousand dollars was too large but that he did not say so. It looks much as if this last idea were an after■thought, but suppose it were not, there was nothing at the time to indicate to the respondent that Sumner had any such thought '“within him.” What should the respondent have done ? Who should name, or at least suggest, the amount of an attorney’s fee if not the 'attorney himself? Where should he do so if not in his office ? When should he do it, if not when the litigation is terminated (or before), even if his client is then in a happy frame of mind over his victory? Sumner seems still to be in that frame. How long should the attorney wait, especially when his client, as in this case, was about to leave the 'Territory for an indefinite period to return to his home in Tahiti? Sumner evidently looked upon the resimndent as the one who had brought that suit to a successful termination, ;and was much pleased with his work in that and other matters and apparently is still pleased. He looked upon the respondent in a very different light from that in wbicb he looked upon the respondent’s associate counsel. He himself proposed to pay the respondent $2,500 but held out long and strenuously against paying the associate more than $1,500 and readily acquiesced in paying the respondent $4,000 when the latter called his attention to all the services that that fee was to cover.

Now as to the amount of the fee. It was for the services of the respondent as leading counsel in the Ropert case — a case involving $48,025 and some real property, valued at from ten to twenty thousand dollars, all of which was secured to Mr. Sumner. It was a most hotly contested case, involving difficult questions of law and fact, and one in which the respondent was subjected to much personal abuse by opposing counsel. The fee was also for services in defending an action of assump-sit for about $2,700 and $700 interest, which required several days of trial before the jury, resulting in a verdict against Sumner for about $1,500. It covers services to be rendered on the appeal in that case in the Supreme Court, and, on a new trial, if one is ordered, and on a second appeal, if one is taken, and so on to the termination of the case. It covers services in successfully defending Sumner in a proceeding to have him placed under guardianship, as an insane person, and all services to be rendered on appeal and further trials or hearings, if any, thereafter. It covers services rendered in procuring for Sumner the $48,025 from Sumner’s trustee, the settlement of the account with the trustee, the cancellation of a will, the drafting of a conveyance from the trustee to Sumner (all this before the Ropert suit was begun), the subsequent drafting of a power of attorney from Sumner to the respondent, the drafting of a trust deed from Sumner to R. W. Davis covering thirty or forty thousand dollars worth of property, the adjustment of a number of claims against Sumner without suit, &c., &c. It is true Mr. G. A. Davis, respondent’s associate, had already received $2,000 as his fee, but that apparently was excessive for his services in the Ropert case alone, and in so far as it was excessive and obtained by undue influence it need not be considered in connection with the respondent’s fee. Mr. Davis also did not come into the case at the-start. The respondent was leading counsel, and, besides himself, two'other attorneys in his office devoted much time to the case. The matters outside of the Ropert case which the respondent’s fee also covered were not covered by Mr. Davis’ fee. While the fee paid to the associate counsel should be taken into-consideration the fee for both leading and associate counsel together should be greater than the fee for one alone should be if there were no associate. Now, in our opinion the respondent’s fee was excessive even for all the services rendered and to be rendered. But is that material in this case? If every attorney is to be liable to disbarment or suspension whenever he charges a fee that is excessive in the opinion of the court or otherwise acts on a view in which the court differs from him in opinion, the profession will be a pretty dangerous one to follow. An attorney should be allowed considerable scope for the exercise of judgment. Much leeway should be allowed for honest difference of opinion — especially in proceedings of a quasi criminal nature. If we may judge from the present run of fees among the members of the bar, which apparently are somewhat higher now than they were ten or even five years ago, and often, in our opinion, altogether too high; if we may judge from the testimony given by leading members of the bar as to proper fees in cases involving that question in the courts from time to time, we may safely affirm that a considerable portion of the bar, including some of those of highest standing in point of both ability and character, would, if called upon, testify that the-fee in question was not unreasonable, considering the various suits and other matters covered by it, the services yet to be rendered and uncertain in extent as well as those already rendered, the amount and difficulty and responsible nature of the work, the large amounts involved and the success attained, not to mention the absence of a re tainer in the first instance and the doubt as to what compensation would be obtained in view of Sumner’s lack of funds outside - of those involved in the suit. The respondent even advanced money for Sumner’s support during the litigation. If we consider awards of fees made by Circuit Judges on various occasions (in our opinion clearly excessive) we should have to say that the fee in question is very moderate by comparison. Even if we compare the fees allowed by this' court in some cases, and we do not mean to imply that they were not too large in any instances, it may be a question whether it is excessive, at least to any greater extent. No doubt the last few years have furnished instances of excessive fees sufficiently to amount almost to a scandal in the eyes of a large portion of the community and of the bar itself, and the Sumner litigation is not the least notorious in this respect. But that is np reason why the respondent should be punished quasi-criminally upon an occasion when, as seems to be the case here, the fee was asked in good faith and is such that there might be a fair difference of" opinion as to its reasonableness? There is no doubt that the-fee in question covered all the matters referred to. Sumner as well as the respondent says that that was the agreement at the time, and the receipt which was given afterwards, but before-this proceeding was thought of, specifically so states. The receipt was not given at the time either because it was thought unnecessary or because the respondent had to hurry into cour.t. When it was given, which was in July, about a week or so-before this proceeding was begun, it was dated July 26 by mistake for June 26, the day on which the fee was paid.

Of course if Mr. Sumner were a man of ordinary strength of mind, it would be preposterous to hold that the respondent should be punished for charging a fee of this amount under the circumstances. The only serióte difficulty in the case would seem to arise from the fact that he is an aged man of weak mind and easily influenced. There' is no doubt of this — as shown by his inability again and again ta escape imposition in the management of his property — although two Circuit Judges have recently held that he was sane, and a large number of the leading physicians, lawyers and business men of this city have certified to his sanity. The respondent contends that Mr. Sumner, while appearing in an unfavorable light, indeed, at his worst, on the witness stand, seems as rational as others in private conversation, and that, while credulous and easily misled by flattering promises, he is strong minded in the sense that he knows what he wants or does not want and that when he makes up his mind as to that, nothing can move him. There seems to be much truth in this contention, — to judge from the evidence in the various Sumner cases that have come before us. But it is unnecessary to attempt a psychological analysis of Mr. Sumner — a problem which has puzzled many and led to diverse opinions. It no doubt makes a great difference how Mr. Sumner is handled. He must be dealt with, if successfully, in peculiar ways, but that does not show that he is not weak minded and easily influenced. It merely shows that his weak points must be discovered and appropriately played upon. That he cannot endure prolonged mental strain is evident. But how does all this affect the question now before us ? If the respondent could have asked a fee of like amount for like services of one in normal mental condition without being subject to quasi-criminal proceedings, could he not of Mr. Sumner ? In ■the one case there might perhaps be a recovery of part in an appropriate proceeding if it should be decided that the fee was excessive, and in the other, not. But can it make any difference in a proceeding of this kind so long as the charge was made honestly and in good faith. Mr. Sumner was not under guardianship. Gould not the respondent 'properly charge the client who employed him what he thought was a reasonable fee ? And it seems clear'that the respondent thought this a reasonable fee. Must he first have seen that Sumner had legal advice as to the amount of the fee? Thére is no rule of law requiring that, and should the attorney, if any, called upon to advise him as to that fee likewise see tbat Sumner had further legal advice as to his, the second attorney’s, fee and so an ad infinitum,? No doubt it would have been appropriate, if nothing more, for the respondent himself to have sought advice in a friendly way of brother 'attorneys or perhaps even of a judge as to what would be a reasonable fee under the circumstances, but there was no obligation on him to do so. That is not infrequently done even in respect of fees charged men of unquestioned mental soundness. Even such men often pay without objection what they consider excessive fees because the attorneys charge them. In the present case Mr. Sumner both at the time and afterwards, when there was no reason whatever for saying so if he did not feel so, said that he was perfectly satisfied. The respondent could not have made it easier for him to object if he had cared to. There was room for an honest difference of opinion as to the reasonableness of the amount. Under such circumstances, how can the court inflict a penalty in a proceeding of this kind — merely because it differs in opinion from the attorney as to the reasonableness of the charge?

Attorney General L. Andrews and W. S. Fleming in support of the complaint. Respondent in person; J. Lightfoot also for the respondent.

The complaint is dismissed.