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"This agreement made and entered into this 3rd day of Dec., 1904 by and between Eaton & Estes, Attys. of Sidney, Ia., and David Donaldson of Farragut, Iowa, Witnesseth:
“That whereas David Donaldson desires a divorce from his wife, Henrietta Donaldson, and an adjustment of the matter of her alimony, at the earliest possible date, now.
“The said David Donaldson, hereby agrees to pay to the said Eaton & Estes, the sum of Four Thousand Dollars and to convey to them or to whomsoever they order, his town property in Farragut, Freemont county, Iowa, consisting of one-half acre of land in Lot 51, Coy's Addition to said town 653 of Farragut, Ia., and the house and all other appurtenances thereunto belonging. The payment of said $4,000 and conveyance of said property are in consideration of Eaton & Estes securing for said David Donaldson a divorce from the bonds of matrimony, or of any services of said Eaton & Estes whereby a severing of the bonds of matrimony is secured as between the parties aforesaid, and settlement of all alimony and all claims of said Henrietta against the estate and property of said David Donaldson. It is expressly understood that said $4,000 and said property shall include and pay all costs of suit, attorney's fees and all other expenses whatever connected with said divorce proceeding and shall be paid and performed as soon as or upon the procurement of said divorce and settlement of alimony. Witness our hands on the day and date above written, at Farragut, Iowa."
Plaintiff testified that this contract was drawn up and signed in the evening after the conference between his attorney and the wife and her attorney at which the final terms of settlement were agreed upon. But we regard this conflict in the evidence as wholly immaterial. It appears from plaintiff's evidence, which is not contradicted, that after the negotiations of the afternoon his attorney desired that the contract or arrangement, whatever it may have been at that time, with reference to defendants' fees, be modified so as to provide for payment of $6,000 instead of $5,000 as contemplated in the written contract above set out, on account of the fact that the wife's attorney was asking so much. Three days later notice of a proceeding for annulment of marriage was served upon this plaintiff, in which it was stated that the wife asked $2,500 and the homestead by way of alimony. Plaintiff seems to have been surprised that the claim for alimony was so small, and demanded from defendants the written stipulation which had been entered into for by him, which demand was refused, but a copy of the stipulation was given to him, whereupon he notified defendants by letter that they were dismissed from the case, and consulted another 654 attorney. The day before the convening of the term of court in January following, when the case according to the notice was to come on for disposition, plaintiff called upon defendants at their office with reference to the letter dismissing them from the case; arrangements were made by which defendants were to carry out their contract and have the marriage annulled as provided for in their stipulation, defendants consenting that the new attorney be recognized if compensated by the plaintiff; and on the second day of the term a decree was entered in accordance with the stipulation, save that plaintiff agreed to pay his wife $500 in lieu of conveying to her the homestead, so that the decree provided for alimony in the sum of $2,000 and the payment of all costs by the defendant. Before the entry of this decree defendants insisted on a settlement with plaintiff under the written contract, and plaintiff gave them two checks for $2,000 each and one for $800, all to be held in escrow until the decree should be rendered, and thereafter they applied the proceeds of these checks in payment to the wife of $2,000 alimony, to her attorney of $300, in settlement of costs and expenses $29, and retained in balance $2,471 as their net compensation under the contract.
The contract between defendants and plaintiff with reference to the procurement of annulment of marriage by plaintiff's wife against him and the settlement of her alimony, involving a lump sum agreed by plaintiff to be paid to defendants in consideration of an annulment being granted and the alimony settled, as agreed, was illegal and void for two reasons: First, it was a champertous contract; second, it was a contract against public policy for facilitating and bringing about a divorce. As to the champerty there can be no question. It was not a contract for a contingent fee, but one in which the defendants speculated as to the settlement which could be sescured from the wife. This is on the theory that the written contract was entered 655 into, as testified by the member of defendant firm who made it, prior to the final stipulation for settlement entered into on the afternoon of December 3d. It is hardly necessary to cite authorities in support of the proposition that an attorney cannot lawfully make such a contract: Boardman v. Thompson, 25 Iowa, 487; Adye v. Hanna, 47 Iowa, 264, 29 Am. Rep. 484; Hyatt v. Burlington etc. R. Co., 68 Iowa, 662, 27 N. W. 815; Jewel v. Neidy, 61 Iowa, 299, 16 N. W. 141.
That a contract with reference to procuring a divorce or to facilitate its procurement is void as against public policy is also well settled: Barngrover v. Pettigrew, 128 Iowa, 533, 111 Am. St. Rep. 206, 104 N. W. 904, 2 L. R. A., N. S., 260. If a contract to promote a marriage, not between the parties to the prospective marriage, but between one of them and a stranger who undertakes to assist in bringing it about, is contrary to public policy, as was held in Estate of Grobe, 127 Iowa, 121, 102 N. W. 804, then certainly a contract with reference to procurement of a divorce is equally invalid, and an attorney who engages in the business of divorce brokerage for his own profit and as a means of speculation goes wholly beyond the limits of the legitimate business of an attorney at law: Barngrover v. Pettigrew, 128 Iowa, 533, 111 Am. St. Rep. 206, 104 N. W.904, 2 L. R. A., N. S., 260; Newman v. Freitas, 129 Cal. 283, 61 Pac. 907, 50 L. R. A. 548; Jordan v. Westerman, 62 Mich. 170, 4 Am. St. Rep. 836, 28 N. W. 826.
If, in fact, the contract between the defendants and plaintiff was entered into after the member of defendant firm had concluded the negotiations for settlement, then it was void also on the ground that the terms of settlement had not been disclosed to plaintiff and defendants were not dealing fairly with him. That a contract between client and attorney will be disregarded by the courts if made without a fair and full disclosure of the facts on which it is predicated is too well settled to justify anything more than the mere citation of a few pertinent cases: Shropshire v. Ryan, 111 Iowa, 677, 82 N. W. 1035; Ryan v. Ashton, 42 Iowa, 365; 656 Cassem v. Heustis, 201 Ill. 208, 94 Am. St. Rep. 160, 66 N. E. 283; Henry v. Raiman, 25 Pa. 354, 64 Am. Dec. 703.
Counsel for the defendants do not, however, seriously question the invalidity of the contract made between them and the plaintiff with reference to the procurement of an annulment of marriage by the wife. Their contention is that plaintiff made a voluntary settlement with them under such contract, and that a payment voluntarily made cannot be recovered back. The soundness of this general proposition as applied to parties dealing with each other at arm's-length may be fully conceded, and it is not necessary to refer to the many authorities cited by counsel in its support. It is equally well settled, as between attorney and client or other persons between whom such confidential relations exist, that the one is entitled to rely on the good faith of the other; a settlement, though voluntarily made, will be inquired into by the courts, and money or property procured by the attorney or person owing the duty to the other party to protect his interests will be restored to him if he has been imposed upon and injured by reason of the fiduciary relation: Kisling v. Shaw, 33 Cal. 425, 91 Am. Dec. 644; Cunningham v. Jones, 37 Kan. 477, 1 Am. St. Rep. 257, 15 Pac. 572; Polson v. Young, 37 Iowa, 196.
The burden is on the attorney to show that in any contract or settlement with his client or dealing with his client's property he has acted in fairness and good faith with a disclosure of all the facts : Prouty v. Bullard, 77 Iowa, 42, 41 N. W. 559; Miles v. Ervin, 1 McCord Ch. 524, 16 Am. Dec. 623.
An attorney who acts in bad faith and seeks to secure his personal advantage to the prejudice of his client may properly be denied any compensation for his services: Davis v. Swedish-American Nat. Bank, 78 Minn. 408, 79 Am. St. Rep. 400, 80 N. W. 953, 81 N. W. 210.
A settlement is not voluntary where the parties are not 657 dealing on an equal footing: City of Marshall v. Snediker, 25 Tex. 460, 78 Am. Dec. 534. As this court has said in Polson v. Young, 37 Iowa, 196: “Transactions between attorney and client, as in all other cases where fiduciary relations exist between parties, one of whom possesses superior knowledge and ability and the other is subject to his influence, are regarded with a scrutinizing and jealous eye by the courts of equity, and will be set aside and the clients protected whenever advantage has been taken of them through influence or knowledge of the attorneys possessed by reason of their peculiar relations.” If the attorney is not to be allowed to procure his client's property in an unfair transaction which is prejudicial to his client's interest, then certainly he may be required to return to his client any money exacted in settlement under an illegal contract, the settlement being exacted by the attorney while the relation of confidence continues to exist between them and while the very matter is pending in court as to which the relation has arisen, so long as it is within the power of attorney to say "that which you require shall not be done except upon conditions which I choose to impose," the attorney and the client are not standing on an equal footing: City of Marshall v. Snediker, 25 Tex. 460, 78 Am. Dec. 534. It is to be borne in mind that the settlement between plaintiff and defendants under which defendants exacted from plaintiff $2,471 in excess of all disbursements under their contract for simply negotiating the procurement of annulment of marriage by plaintiff's wife from him and the determination of the amount of her alimony cannot be regarded as otherwise than grossly excessive. Nothing but a formal trial was contemplated, for the ground of annulment was mutually understood to be sufficient. There had never been any contest, save as to alimony, and this contest had been fully adjusted before the settlement between plaintiff and defendants. The contract for compensation was illegal, and the only right which defendants had was to be 858 paid the reasonable value of their services. When the settlement was made the decree had not yet been entered, and the defendants were in possession of the instrument controlling the allowance of alimony, so far as such allowance could be controlled by mutual agreement of the parties. Certainly such a settlement was not made between persons dealing at arm's-length, but was, on the other hand, between attorney and client in the very business with reference to which the employment had arisen, which business had not yet been completed. The view suggested by one of defendants in his testimony, that defendants' services were “worth just what (plaintiff] thought it was worth to get a separation from his wife," cannot be approved. The client, no matter how ignorant or unduly exercised he may be, may properly look to his attorney to furnish him the judgment and discretion which he lacks.
That plaintiff had by letter dismissed the defendants from the case and employed another attorney is of no significance, for the reason that the relation of client and attorney between plaintiff and defendants had been resumed by mutual consent before the case came on for disposal, and the other attorney was by consent of the defendants simply brought in to assist in protecting plaintiff's interests as against his wife. There is no evidence that the other attorney was representing plaintiff in any controversy with the defendants in relation to the payment of their fees.
The trial court should have sustained plaintiff's motion, and required the return by defendants to plaintiff of the amount asked, as having been paid in excess of a reasonable compensation.
The judgment of the trial court is therefore reversed.
The Validity of Contracts Between Attorney and Clients is discussed in the note to Shirk v. Neible, 83 Am. St. Rep. 159; and champerty and maintenance are discussed in the note to Thallhimer v. Brinckerhoff, 15 Am. Dec. 317. That an attorney contracting for a contingent fee has the burden to prove that the contract is fair to his client, see Lynde v. Lynde, 64 N. J. Eq. 736, 97 Am. St. Rep. 692. It has been held that any agreement conditioned on the obtainment of a