Opinion
43955.
ARGUED SEPTEMBER 4, 1968.
DECIDED JANUARY 9, 1969. REHEARING DENIED JANUARY 21, 1969.
Action on contract. Muscogee Superior Court. Before Judge Davis.
Mundy, Gammage Cummings, E. Lamar Gammage, Jr., for appellant.
Hatcher, Stubbs, Land Rothschild, A. J. Land, for appellee.
Where a debtor voluntarily pays a part of an amount claimed to be due by his creditor on a contract which the debtor seeks to attack on the ground of duress and fraud in an action against him by the creditor for an overdue instalment there-under he is conclusively deemed to have waived the duress and fraud if at the time of the partial payment he has knowledge of all of the facts upon which he now bases his claim of fraud and duress as a ground for avoiding the validity and enforcement of the contract and at a time when the alleged duress was at an end.
ARGUED SEPTEMBER 4, 1968 — DECIDED JANUARY 9, 1969 — REHEARING DENIED JANUARY 21, 1969 — CERT. APPLIED FOR.
J. Madden Hatcher, Albert W. Stubbs, Aaron J. Land and Alan F. Rothschild, a partnership licensed to practice law, sued Wilson M. Camp in the Superior Court of Muscogee County to recover $8,000 with interest at 7% from January 1, 1968, which principal sum represented the first instalment due on the following contract executed by the defendant:
Civil Actions 956 and 986
Mr. Wilson M. Camp P. O. Box 748 Columbus, Georgia Re: U.S. v. 1279.50 Acres of Land, et al — Dear Wilson:We agree that our fee for services rendered to you in the above stated case will be $90,000, of which $50,000 will be paid when the fund is distributed by the Court (which should be done as soon as possible) and the balance will be payable in five (5) equal annual instalments without interest until maturity of $8,000 each commencing January 1, 1968.
We agree that this fee is based on the award to you of $266,318.08 and that should there be any repayment by you to the Government on account of the reversing of the judgment and a verdict for a lesser amount, we will contribute our proportion of this restitution or payment by giving you credit on the remaining unpaid instalments of the fee and, if the remaining unpaid instalments are not sufficient, we will pay the difference in cash.
If this agreement is satisfactory to you, we request you to sign in the space provided below. 10th Wilson M. Camp."
Yours very truly, Hatcher, Stubbs, Land Rothschild By: J. Madden Hatcher JMH/mmv Accepted, this day of January, 1967. The defendant filed an answer and counterclaim as follows:"Counterclaim:
"Further answering said petition as a whole and by way of counterclaim, the defendant alleges that plaintiffs are indebted to him in the sum of $13,122.53, for the following reasons:
"A. That the law firm of Hatcher, Stubbs, Land Rothschild and its predecessors have represented defendant, personally, and in his business transactions and his business associates, including his father and grandfather, as his and their attorneys at law, for approximately 35 years. The defendant and his associates have paid a monthly retainer fee to the plaintiffs for many years and have been billed for individual transactions in which the plaintiffs acted as defendant's attorneys at law.
"B. Prior to June 1, 1961, the defendant consulted J. Madden Hatcher and Alan F. Rothschild of the plaintiff law firm regarding a purchase of property he was contemplating from J. W. Cooper and on June 1, 1961, the plaintiffs, Hatcher and Rothschild, acting on behalf of said law firm, in connection with said purchase, prepared an agreement between the defendant and J. W. Cooper regarding the purchase of the property, as defendant's attorneys, for which services the plaintiffs were paid a fee of $3,500 by defendant, which agreement provided in part as follows: `3. It is understood and mutually agreed between the parties that any funds received from the United States Government, or any instrumentality thereof, by reason of the taking, purchase or condemnation of land, or an easement on the same, of any of the land this day sold by Cooper to Camp shall be paid by Camp, after deducting the expenses of Camp in connection with the same, which expenses are not to exceed 15% of the total sum received by Camp, and after deducting all Federal and State income taxes on the same, and after deducting all sums due and actually paid to the Federal Land Bank of Columbia, South Carolina, to Cooper to be applied on the last maturing instalment of the $400,000 note this day executed by Camp to Cooper. Cooper agrees to cooperate with Camp in collecting any moneys receivable from the United States as promptly as possible.'
"C. That plaintiffs acting by and through plaintiffs, Hatcher and Rothschild advised the defendant, as his attorneys at law, that his total expense, including attorney's fees, in the condemnation proceedings then pending against the land purchased, would not exceed 15% of the total sum received by the defendant after deducting all Federal and State income taxes on the same and after deducting all sums due and payable to the Federal Land Bank of Columbia and, defendant, because of the confidence which he had in the advice of his said attorneys of long standing, accepted and relied upon said advice to his detriment, in that said agreement required defendant to pay to Cooper the balance of the 85% of such amounts less such deductions, thereby injuring and damaging defendant to the extent of any excess over and above the sum of 15% of said amounts. Without said advice from his counsel, defendant would not have entered into said transaction.
"D. That immediately upon the execution of the agreement by the defendant, the plaintiffs acting by and through plaintiff, Hatcher and/or the plaintiff, Rothschild notified the authorities of the United States Government that they were representing the defendant in the condemnation proceedings against the property involved in the agreement which were then pending.
"E. It was understood between the defendant and the plaintiffs acting by and through plaintiff Hatcher and plaintiff Rothschild that said law firm was employed to represent the defendant in the condemnation proceedings then pending at and for a fee equal to 15% of the amounts received less any out of the pocket expenses in connection therewith and that the total expense to the defendant of the condemnation proceedings would not exceed 15%.
"F. Upon this understanding and without any other agreement or understanding or, in fact, any other discussion regarding a fee for said services, the plaintiffs proceeded to represent the defendant and did represent the defendant in said condemnation proceedings and obtained for defendant judgment in the amount of $266,318.08 principal and the further sum of $55,918.81 interest.
"G. Following the rendition of said judgment in defendant's favor, the United States Government filed its appeal, after the filing of which, the plaintiffs, acting by and through plaintiff Albert W. Stubbs, wrote to the defendant and referred to the 15% provision in the agreement above mentioned as attorney's fees and inquired as to whether any other fee arrangement had been made with the defendant, which letter, the defendant answered as follows: `It was recognized at all times that your firm would represent me in the condemnation, in fact, you forwarded copies of the agreement to the U.S. Government as soon as it was executed by myself and Mr. Cooper. Your firm undertook the trial of my case with full knowledge that the agreement, which you prepared as my attorneys, limited my total expenses including attorney's fees to 15% of the award.'
"H. On December 15, 1966, the plaintiffs acting by and through plaintiff Albert W. Stubbs, wrote the defendant as follows: `I remind you again, as stated in my letter to you of December 10, it is my present feeling that I do not intend to have anything further to do with the case until the dispute as to our fee is settled.'
"I. Defendant alleges that, apparently in pursuance of the terms of the original contract dated June 1, 1961, the plaintiffs acting by and through plaintiff, J. Madden Hatcher, inquired of the defendant the amount of his out of pocket expenses in connection with the litigation which amount defendant furnished to Mr. Hatcher of $11,458.06.
"J. That the plaintiffs acting by and through plaintiff Hatcher represented to the defendant that the appeal filed by the United States Government would necessitate considerable preparation and work by the firm and that the firm would not and could not proceed with said appeal unless the defendant agreed to pay them a total fee of $90,000 and defendant was further told by the said plaintiff Hatcher that they would withdraw from the case and turn the same over to other counsel only in the event that defendant paid their full fee of $90,000.
"K. Numerous other letters were exchanged and conversations held between the plaintiffs and the defendant regarding the amount of the fee, which finally culminated in an ultimatum being issued to the defendant by the plaintiffs, acting by and through plaintiff, J. Madden Hatcher, that he must either agree to pay the sum of $90,000 and sign the agreement or that they would not draw down the amount of the money to which defendant was entitled nor would they permit it to be drawn down by anyone else until said amount was paid.
"L. Defendant shows that shortly after said agreement was signed, to-wit, on May 4, 1967, the United States Government withdrew its appeal rendering any further work on behalf of said law firm unnecessary.
"M. Defendant alleges, upon information and belief, that said law firm was aware of the fact that the Government was going to withdraw its appeal at the time of the making of the ultimatum to the defendant and representing to him that substantial work and expense would be involved in said appeal.
"N. The defendant alleges that he signed said agreement under duress of said ultimatum and that he was coerced into doing so by the false representation of the plaintiff Hatcher and that said agreement is null and void and of no effect.
"O. The defendant further alleges that the plaintiffs have perpetrated a fraud upon him: (1) By representing him in court under an agreement to so represent him for a fee not to exceed 15% and then taking advantage of the fact that they were his counsel of record and had control of the litigation and demanding the substantially higher fee of $90,000; and/or (2) By advising defendant, as his attorneys at law to execute the agreement of June 1, 1961, if they did not intend to represent the defendant in the condemnation litigation at and for the amount of the fee set forth in said contract.
"P. Defendant shows that the plaintiffs were entitled under the contract of June 1, 1961, and the understanding and agreement in pursuance thereof to a fee not to exceed 15% of the judgment and interest less expenses which amounts to a net fee due to the plaintiffs of $36,877.47.
"Q. That defendant alleges that he never actually paid the plaintiffs the sum of $50,000 but on the contrary, the plaintiffs, as attorneys of record for this defendant, received from the United States Government checks totaling the amount of the award payable to the defendant and other parties entitled thereto and deducted from one of the checks payable to this defendant the sum of $50,000.
"R. Defendant alleges that the account of the plaintiffs for attorney's fees has been overpaid in the sum of $13,122.53, as a result of the fraud practiced upon the defendant by the plaintiffs and as a result of the coercion of the defendant by the plaintiffs.
"Wherefore, defendant prays:
"(1) That the demands of the plaintiffs be denied; and
"(2) Defendant demands judgment against the plaintiffs in the sum of $13,122.53."
The plaintiff filed a motion for a summary judgment supported by the pleadings and affidavits with exhibits showing various mail correspondence. The defendant filed a motion for a denial of plaintiff's prayer for a summary judgment supported by affidavits and exhibits of mail correspondence. The court granted plaintiff's motion for a summary judgment from which judgment the defendant appeals.
The plaintiff in this case presents facts seeking to show that it is entitled to an affirmance of its summary judgment on two theories of law: (1) that the facts presented show as a matter of law that the contract sued on was not procured by fraud or duress, and (2) that assuming that there was fraud and duress by which the execution of the contract was procured, both the fraud and duress were waived by the defendant when he paid the sum of $50,000 to the plaintiff as a credit on the contract sued on knowing at the time of such payment all of the facts and circumstances which he alleges constituted the fraud and duress upon which he relies now to seek relief against the enforcement of the contract sued on. We deem it unnecessary to determine whether there are issues of fact for a jury on the question whether there was fraud or duress in the procurement of the contract, since assuming that there were duress and fraud we are required, under the law, to hold that both were waived by the payment of $50,000 to be credited on the amount called for by the contract, with knowledge of all the facts at the time of such payment which facts form the basis of the present claim of fraud and duress. There is no merit in the defendant's contention that he did not pay the $50,000 but that it was simply retained by the plaintiff from funds paid by the U.S. Government on the judgment in the condemnation case. It is undisputed in the record that the defendant received in part payment of his judgment a U.S. Treasury check for $79,835.53, which he endorsed and delivered to plaintiff with the understanding that it remit to him a check for the difference between the amount of this Government check and $50,000 due from him to plaintiff, which was done and a photostatic copy of plaintiff's check for $29,835.53, payable to defendant and marked paid, is in the record as plaintiff's exhibit. The record shows without contradiction that the defendant knew of all the facts upon which he relies to show duress and fraud at the time of the partial payment on the contract which he contends was procured by duress and fraud, and knew that any danger of threat or duress was at an end. The compelling answer to the principal question involved is demanded by the following authorities: Gibson v. Alford, 161 Ga. 672, 685 ( 132 S.E. 442); Hunt v. Hardwick Co., 68 Ga. 100; Monk v. Holden, 186 Ga. 549 ( 198 S.E. 697).
The court did not err in rendering judgment for the appellee.
Judgment affirmed. Eberhardt and Whitman, JJ., concur.