*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

reserved to himself all rights to object to their introduction into evidence when offered. This proceeding was had under a statute of this state which provides that:

Action of assumpsit by Willard Saulsbury duce the same, stating, however, that he and others against the American Vulcanized Fibre Company. Judgment for plaintiffs. Argued before WOOLLEY and RICE, JJ. James I. Boyce, of Wilmington, for plaintiffs. William S. Hilles, of Wilmington, for defendant.

Action of assumpsit to recover compensation for professional services rendered the defendant by the plaintiffs in instituting and conducting for the defendant certain litigation in the Court of Chancery of the state of Delaware. The issues of fact as well as of law were tried by the court, pursuant to the statute which permits trial in this manner when agreed to by the parties.

In opening, the plaintiffs stated that their case was to be proved largely by documentary evidence.

"At any time during the pendency of actions at law, the court on motion and due notice thereof, may order a party to produce books or writings, in his possession or control, which contain evidence pertinent to the issue, under circumstances in which production of the same might be compelled by a Court of Chancery.' Rev. Code, c. 107, § 13, as amended by chapter 121, vol. 20, Laws of Delaware.

Upon the plaintiffs' petition and by authority of this statute, the court— "ordered, that the defendant do produce on the 19th day of May, 1914, the books or writings mentioned in schedule appended to the said motion and marked Exhibit A, at the office of the the use and inspection of the plaintiffs during prothonotary of this court at Wilmington for the pendency and at the trial of the said cause."

Selecting one from a great number of We understand that pursuant to that orbooks, documents and papers produced by the der, all the books and writings therein dedefendant upon an order of the court, made scribed, excepting certain of them shown not several days before the trial, Mr. Boyce said: within the control of the defendant, were proI now offer this portion of these minutes induced at the time and place named in the orevidence, asked for by us to be produced by

the defendant.

WOOLLEY, J. The record discloses that on May 14th counsel for the plaintiffs notified counsel for the defendant that on May 15th he would move the court

der and that they have since been transferred to and are now in the presence of the court. We also understand that the only notice for production made by the plaintiffs upon the defendant was the notice preliminary to the motion to produce. This being the state of the record, we will hear argument, if de

sired.

Mr. Boyce: I offer as evidence the minutes of the meeting of the board of directors at which certain officers of the defendant company for the year 1913 were elected. Upon

production by the defendant upon the court's order and after inspection by the plaintiffs, they are evidence under the decisions of this state, citing Netter v. Stoeckle, 4 Pennewill, 345, 56 Atl. 604; Thomas v. Railroad Co., 2 Pennewill, 411, 47 Atl. 380; Kelly v. AssociaFrank's Adm'r, 1 Houst. 245; Deringer v. tion, 1 Marv. 183, 40 Atl. 954; Frank v. Deringer's Adm'r, 5 Houst. 148.

Un

Mr. Hilles: I have never received from the Mr. Hilles: I hold they are not in eviplaintiffs a notice to produce. I have proI have pro-dence. duced these minutes upon the court's order in relation to these papers was that they The order which your honors made for the purpose shown by that order. counsel on the other side prior to the trial of were to be produced for the inspection of this case, and I think during the case. questionably that is not a production of the other side, which notice the counsel on the paper or document upon notice given to the other side has the right to accept or decline to accept, as he sees fit. Consequently if he does voluntarily produce such documents upon notice, the production by him voluntarily makes them evidence without further proof. But certainly your honors' order upon a party does not make the documents evidence, nor does it prove the validity of the documents offered.

"to order the defendant to produce the books or writings mentioned in the schedule hereto appended, which said books or writings are in the possession or control of the defendant and which contain evidence pertinent to the issue, such production to be made for use during the pendency and at the trial of said cause under such terms and at such times as the court may direct."

Upon the date named in the notice, counsel for the plaintiffs made the motion for production, in conformity with the terms of the notice. Counsel for the defendant waived WOOLLEY, J. [1] There are two methods any question of the pertinency of the papers whereby a party may procure from his addemanded, and submitted to an order to pro-versary documents and writings necessary to

the proof of his case. The first is the common-law method by giving the adverse party notice to produce the writing at the trial, and upon its production by the party notified and upon its inspection by the party calling for it, it becomes evidence without further proof. The reason for this rule lies in the theory that the production of a writing on notice, without objection by the party producing it, amounts on his part to an admission of its genuineness and relevancy, and inspection by the party calling for it is in effect an offer of the writing as evidence, thereby dispensing with the necessity of formal proof.

Upon notice to produce a writing the party notified may object to its admission in evidence, and the question of its admissibility will be determined by the court before it is produced and submitted for inspection. But if he fails to produce, when not relieved by an objection sustained by the court, the party calling for the instrument is then free to make proof thereof by secondary evidence. This method was found to have its hazards and limitations, as it carried the risk of inspecting a paper when its contents were unknown, and restricted the use of the papers so produced, to evidence at trial,

hence the enactment of the statute.

[2] Under the statute the court may order a party to produce a writing shown to be pertinent to the cause, either for the inspection of a party before trial, or for use at trial, or, as in this case, for both purposes. Upon such an application, usually made long before trial, the court does not pass upon the admissibility of the paper as evidence. It makes the order upon being shown prima facie that the testimony sought is pertinent

through the court's order. The party producing the paper under the court's order then has his first opportunity to object to its admissibility as evidence, and to except to the ruling of the court. In other words, the production of writings at trial, under an order authorized by the statute, simply makes available to a party something that otherwise is beyond his reach, and if he chooses to obtain it in this way, he must prove it just as though he had been in possession of it himself. We know of no rule, however, that prevents a party resorting both to an order of court to produce at trial and the common-law notice to produce at trial, which was not done in this case. Whether performance under the notice is possible because of compliance with an order of the court to produce would seem to depend upon whether the party notified has such possession and control over writings as to enable him to produce them on notice, when under the court's order he has already produced and surrendered them.

There are many cases in our Reports touching this statute, but in none of them has been decided the question whether a writing produced under the order of the court becomes evidence upon its production and inspection in the sense in which it becomes evidence under the common-law rule of production under notice and inspection. The question was approached, but not decided, in the case of Taylor v. Jackson, 5 Houst. 224, 226, where counsel seeking papers from his adversary, in an abundance of caution supplemented the order of the court to produce by the common-law notice to produce, and then proved the paper by the subscribing witness, thereby indicating that the court did not hold the paper to be in evidence upon the production under its order and the subsequent inspection.

As the minutes in question are not evidence by force of their production under the court's order and their subsequent inspection, they must be proved before they are admitted.

to the cause, and leaves the question of its admissibility to be determined when it is later offered in evidence at the trial. When the order is to produce before trial, the object of the party asking for the production. may be to enable him, by inspection, to prepare his pleading or by making a copy to prepare for secondary evidence in the event of the failure of his adversary to produce on notice. When production is made for inspection before trial the order is obeyed Upon proof by the secretary of the defendwhen the production is made and the op-ant company, who transcribed them, the minportunity for inspection is afforded, after utes were admitted in evidence. which the paper is returned to its owner and can be called for at trial only upon another order or upon notice to produce. If the party seeking the paper wants it at the trial. the court may so order its production. When in obedience to such an order it is produced at trial, it is by the order and the compliance therewith made available to the party calling for it. If he desires it simply for inspection, it is within his control for that purpose; if he desires it for evidence, it is for that purpose in his possession, and he may offer it in evidence upon such proof thereof as is required by the rules of evidence, in exactly the same way as though he gained possession of the instrument otherwise than

The evidence produced and admitted on ' the part of the plaintiffs and defendant that has a bearing upon the decision in this case appears in the statement by the court.

WOOLLEY, J. (announcing the decision of the court). Under authority of the statute and by agreement of the parties, the matters of fact at issue in this cause were tried by the court, judgment to be rendered upon its decision thereon as upon a verdict by a jury. Const. art. 4, § 23; chapter 270, vol. 11, Laws of Delaware; Rev. Code, p. 776. was tried, testimony offered, objections interposed, rulings made and exceptions noted in

all respects similar to like proceedings in a cery litigation, should be excluded from the trial by jury.

demand, as it represents a sum estimated by percentage upon a principal sum never recovered, within the terms of the contract fixing the fee contingent upon the amount recov

In order to preserve to the parties the same right of exception they would have had, if the case had been submitted to a jury upon a charge by the court, we will state our opin- | ered. ion upon the law as applied to our finding of fact.

This is an action in assumpsit, brought by the plaintiffs to recover from the defendant the sum of $20,350 with lawful interest thereon from the 3d day of February, A. D. 1914, as compensation for professional services rendered as solicitors for the defendant in certain litigation instituted, conducted and concluded in the Court of Chancery of the state of Delaware, pursuant to a contract in writing, disclosed by correspondence of the parties and by resolutions of the board of directors of the defendant corporation.

The claim of the plaintiffs is that by

resolution of the board of directors of the

defendant corporation, passed at a meeting held on the 8th day of April, 1913, they were retained as counsel and solicitors to represent the defendant in certain contemplated negotiations and impending litigation concerning the conduct and liability of one of its former officers, and that pursuant to another resolution of the board of directors of the defendant corporation, passed upon the 12th day of June, A. D. 1913, they were paid, as retainer, June, A. D. 1913, they were paid, as retainer, the sum of $3,000.

The questions submitted for determination, therefore, are:

First, whether the $3,000 paid by the defendant to the plaintiffs, pursuant to resolution of its board of directors of June 12, 1913, was paid as a retainer or in part satisfaction for services rendered; and

Second, whether certain accrued and unpaid dividends, amounting to $1,750, payable to but released by one of the parties to the chancery litigation, were a part of the recovery in that litigation, upon which the plaintiffs under the contract here sued upon might estimate and demand, as a part of their con

tingent fee, the sum of $350.

While there was a great volume of testimony introduced in the case, that which was offered in proof of the contract between the parties was really circumscribed in amount and mostly documentary in character.

[3, 4] The first act of the parties appears by a resolution of the defendant corporation, passed by its board of directors, at a meeting held on April 8, 1913. The preamble to this resolution recites a transaction by a deceased officer of the company, which, if proven, established in the company a right of action against his personal representative for a very considerable sum of money. Following the preamble, which has no important relation to the matter now in question, is the resolu

tion:

It is further claimed that in response to a communication from the plaintiffs, asking the defendant corporation to fix the compensation and proposing the terms for which they would render professional services in the matter in which they had been retained, the ridge and the firm of Saulsbury & Morris, of "It is resolved, that the said Arthur J. Selfdefendant corporation, by resolution of its Wilmington, Delaware, be retained by and on board of directors, passed on the 9th day of behalf of this company to represent it in negoJuly, 1913, accepted the terms proposed and tiations with the personal representative of the promised to pay the plaintiffs for their pro-ecution of any claim or claims, action or cause, late president of this company and in the prosfessional services, a sum of money which which may be necessary to obtain for this comwhen calculated with reference to the con- pany proper restitution of any sum or sums tingency upon which the same was to be com- which may be due from the estate of the late puted, amounts to the sum of $20,350, for sion of the contract by which such acquisition president by way of accounting or for a resciswhich sum, and the interest thereon from was made, and the officers of this company are the day upon which it is claimed to have be- directed to do and perform such acts and things come due, they bring their suit. as shall be necessary to carry this resolution into effect."

The defendant does not controvert the correspondence and resolutions proven by the plaintiffs, and while not admitting does not deny its liability to pay the plaintiffs pursuant thereto the sum of $17,000. As to its liability to pay this sum, it made no defense. For defense, however, to the balance of the claim of $3,350, it maintains, first, that the sum of $3,000 paid by it to the plaintiffs, nominally as retainer, was in fact a part payment for services rendered by the plaintiffs under the contract for services, and therefore should be deducted from the gross sum computed and demanded; and, second, that the sum of $350, being a part of the sum claimed by the plaintiffs based upon a percentage of the amount recovered in the chan

A copy of this resolution was transmitted by the vice president of the company to the plaintiffs.

At a meeting of the board of directors of the defendant corporation, held on June 12,. 1913, the following resolution was passed:

"Resolved, that the treasurer of this company be and he hereby is authorized and directed to pay to Arthur J. Selfridge and Saulsbury & Morris, Esqs., as counsel for this company as retainer for services in the cause of this company" against the executor of the late officer and others, "the sum of $3,000."

A copy of this resolution was forwarded the same day to the plaintiffs by the treasurer of the company, together with a voucher for $3,000, as shown by the following letter:

"Wilmington, Del., U. S. A., June 12, 1913. "Messrs. Saulsbury & Morris and Mr. A. J. Selfridge-Gentlemen: We herewith hand you a voucher to the amount of $3,000.00 as retainer in the suit of equity in accordance with a resolution passed by the board of directors this day.

"Very truly yours,

"American Vulcanized Fibre Company,
"D. W. Masters, Treasurer.

I which embodied a copy of the plaintiffs' letter offering the terms, and by the remainder of which, accepted those terms in the precise language of the plaintiffs' offer. The resolution without the preamble is as follows:

"Resolved, that this company does hereby accept said proposition and does hereby agree to pay to said attorneys from time to time all the expenses incurred by them in connection with In acknowledgment of the receipt of the the preparation, prosecution and trial of this cause and compensation for their services at copy of the resolution and the check for the rate of $100 per day for each day spent $3,000, the plaintiffs upon the same day mail- by them in preparation, prosecution and trial ed to the defendant company a letter of thereof, from the inception to the termination thereof and in the event that twenty per centwhich the following is a copy: um of the amount recovered in said matters ex"Received of American Vulcanized Fibre Com-ceeds the amount so paid to them for their pany, at the hands of D. W. Masters, treasur- services, that they shall be paid a further sum er, check for three thousand dollars ($3,000), as equal to the difference between the sums so retainer for services in the cause of American paid from time to time for their services and Vulcanized Fibre Company, ** pursuant twenty per centum of the amount so recovered, to resolution adopted by the board of directors and that the secretary be and is hereby inof American Vulcanized Fibre Company on June structed to deliver to said Saulsbury & Morris 12, A. D. 1913. Arthur J. Selfridge. and Arthur J. Selfridge a certified copy of "Saulsbury & Morris. this resolution showing the acceptance of the terms set forth in their communication."

"June 12, 1913."

*

proved at subsequent meetings.

For the time being this ended the transac- The minutes of the several meetings of the tion whereby the plaintiffs were retained by board of directors at which these several the defendant to represent it in the negotia-resolutions were passed were formally aptions and litigation adverted to. Thus far the transaction was simply one of retainer, whereby the defendant engaged the plaintiffs as counsel and paid them a retainer fee. The contract was a contract of engagement and the consideration which bound the plaintiffs to the defendant was the fee paid by the defendant to the plaintiffs. Up to this point nothing was said or done by either party respecting compensation for the services to be rendered in the matter in which the plain-a contract of services for a a contingent tiffs had been retained.

On July 2, 1913, the plaintiffs addressed to the defendant the first communication that appears, from the evidence, to have been made concerning compensation for services in the matter for which they had been engaged, and is as follows:

"July 2, 1913.

"American Vulcanized Fibre Company, Wilmington, Del.-Gentlemen: On the 8th day of April, 1913, by a resolution adopted by your board, we, with Arthur J. Selfridge, Esq., were retained by and on behalf of your company to represent it in negotiations with the personal representative of the late president of your company, and in the prosecution of any claim or claims, action or cause, which may be necessary to obtain for your company proper restitution of any sum or sums which may be due from the estate of the late president by way of accounting or for a rescission of the contract by which such acquisition was made.

"No compensation was fixed in said resolution for the services so to be rendered.

"We have considered this matter and request that you adopt a resolution fixing our fee for services under said resolution.

"Yours very truly, Saulsbury & Morris." On July 9, 1913, the plaintiffs again wrote the defendant upon the subject of fixing compensation, stating the terms upon which they would render the services for which they had been engaged. Upon the same day, the board of directors of the defendant company passed a resolution, the preamble of

If a copy of this resolution, with nothing further, had been transmitted to the plaintiffs, the defendant's unconditional acceptance of the plaintiffs' offer to serve it upon the terms stated would have made a.complete contract and the contractual transactions between the plaintiffs and the defendant would then have been, first, a contract of retainer for a fixed amount, and, second,

amount. But when the secretary of the company forwarded a copy of this resolution to the plaintiffs, upon the day following its adoption, he sent with it the following letter:

"Wilmington, Del., U. S. A., July 10, 1913.

"Messrs. Saulsbury & Morris, 907 Market St., Wilmington, Del.-Gentlemen: In compliance with the instructions contained in a resolution of the board of directors of this company passed at their meeting of July 9th, I am inclosing herewith certified copy of said resolution. "Very truly yours,

"American Vulcanized Fibre Co., "T. W. Campbell, Sec. "P. S.-It is understood that the $3,000.00 paid to you already by this company is part of the fees contemplated by this resolution."

Though not appearing to be a corporate act in the sense of a resolution of the board of directors, this letter was sent to the plaintiffs and received by them with the copy of the resolution, and was notice to the plaintiffs, at the instant the corporate act was communicated to them, of an understanding on the part of some one that the $3,000 already paid to them was a part of the fees contemplated by the resolution. Whether that understanding was the understanding of the corporation, evidenced by an act contemporaneous with and of legal force equal to that of the resolution, was something of which, at that time, the court was not informed. We therefore admitted the letter