West v. Anchor Casualty Co.

FOURT, J.

This is an appeal from a judgment in favor of respondents after their demurrer to the first amended complaint was sustained without leave to amend.

This court, pursuant to the Rules on Appeal, has ordered the original superior court file to this court for consideration to the end that we have before us the entire record in the case.

In the first amended complaint filed on August 26, 1960, the plaintiffs, who are attorneys at law, alleged among other things, the following: That the Anchor Casualty Company (hereinafter referred to as company or insurance company) is a corporation doing business in California; that R. B. Weiss, John Dowling and others (hereinafter referred to as corn

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pany’s agents), were agents of the insurance company acting within the course of their employment; that on January 16, 1960, plaintiffs and defendants Freddie Leroy Johnson and Erma Geraldine Johnson made an oral contract whereby the attorneys were to prosecute for the Johnsons an action against Doris Jean Pearson for the recovery of damages caused to the Johnsons by Pearson as a result of an automobile accident which occurred on December 25, 1959. The attorneys were to be paid 33% per cent of all sums received for the prosecution of a settlement if such settlement was made before pretrial and 40 per cent of such amounts if the matter was settled thereafter and the attorneys were to have a lien upon all funds received by them from said proceedings or settlement.

It was further alleged that Pearson was insured by the insurance company. The Johnsons agreed to pay all costs, including investigation costs and other costs incurred in the preparation and trial of the case and further agreed that they, the Johnsons, would not settle or dispose of the action or proceedings without the consent of the plaintiffs. The attorneys commenced and performed all of the necessary services, including the compilation of factual material. After the attorneys, had expended their time, money and effort the Johnsons secretly, on April 3, 1960, compromised their claim with the insurance company, acting fraudulently and eollusively with the company and a release was executed by the Johnsons whereby they released Pearson of all claims. It was further alleged that a proper settlement would have been for not less than $10,000, of which one-third thereof should have been paid to plaintiffs as attorneys.