Danielson v. Stokes

KINGSLEY, J.

George E. Danielson, Walter M. Campbell, and Thomas T. Johnson (appellants) were awarded a summary judgment on their claim for attorneys’ fees aris

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ing out of their representation of Jack G. Fisher. Appellants object on appeal to the decision made by the trial court as to the source of payment of their claim. Respondents are various other claimants of proceeds of the policy of life insurance which is the subject of the main action.

In October 1958 Jack G. Fisher contracted to sell his interest in a construction business to Houston Fred Stokes. Stokes agreed to pay $100,000 for the business and to assume all liability and obligations under contracts then existing and to perform such contracts and to hold Fisher harmless from any liabilities then existing or thereafter incurred by Stokes in relation to the contracts. A supplemental agreement was executed by Fisher and Stokes in September 1959 for the purchase and sale of the business and in settlement of a civil action whereby Stokes agreed to pay $120,000 instead of the original $100,000.

Appellants participated in the negotiations for the settlement of Fisher’s claim against Stokes. Originally, appellants contracted with Fisher for a contemplated fee of 20 per cent of the recovery on the claim against Stokes. Upon settlement of the claim, Stokes gave Fisher a promissory note for $115,700, secured by an insurance policy on Stokes’ life, having a $100,000 face value, payable to Fisher to the extent of the balance of the purchase price which remained unpaid at the time and in the event of Stokes’ death. Pursuant to the settlement agreement the policy which was obtained provided for double indemnity in the event death resulted from accidental means and the beneficiaries were named and provided for as “Jack G. Fisher, creditor, as his interest may appear; balance, if any, to Shirley Lee Stokes, wife of the insured if living.”

At the time the note was executed appellants and Fisher mutually agreed to reduce the fee to $17,000 plus interest at 6 per cent,

payable out of monies paid by Stokes on the note

(our italics). It was further agreed that appellants would receive 20 per cent of the note proceeds until the $17,000 plus interest was paid. Fisher assigned 20 per cent interest in the note to appellants to secure this agreement.