For the prosecution of a claim for taking and use of private
property in the Civil War, claimant agreed to pay an attorney's fee
of 50% of the amount to be collected, to be a lien on any warrant
to be issued in payment of the claim; the bill was referred by the
Senate under § 14 of the Act of March 3, 1887, c. 359, 24 Stat.
505, now Jud.Code § 151, to the Court of Claims, where, after
evidence and trial, favorable findings were secured, upon which
Congress appropriated an amount in payment, but with the
restriction that no part thereof in excess of 20% should be paid to
or received by any attorney on account of services rendered in
connection with the claim, the act further declaring it a
misdemeanor for any attorney to exact or receive for such services
any sum exceeding that percentage of the amount appropriated, any
contract to the contrary notwithstanding.
Page 250 U. S. 209
Assuming the provision for a lien not violative of Rev.Stats. §
3477, and the contract valid when made, held
the attorney's right to collect his fee from other assets of the
client was not affected, the restriction as to the fund
appropriated was within the power of Congress, and did not deprive
him of property or of liberty of contract without due process,
although subsequent to the making of the contract and rendition of
the services. P. 250 U. S.
177 Ky. 518 reversed.
The case is stated in the opinion.
Page 250 U. S. 212
MR. JUSTICE McKENNA delivered the opinion of the Court.
Proceeding in equity under the law of Kentucky for an accounting
from the Capital Trust Company as administrator de bonis
of the estate of Thomas N. Arnold, deceased, and that the
estate be settled and distributed.
Defendant in error Calhoun and Calhoun & Sizer, a firm
composed of C.C. Calhoun and Adrian Sizer, attorneys at law,
appeared in the proceeding and by cross-petition prayed judgment
against the trust company as such administrator for the sum of
$1,504.50, with interest from July 10, 1915.
Page 250 U. S. 213
An outline of the facts is as follows:
Thomas N. Arnold, prior to his death, believing that he had a
just claim against the United States, entered into a contract with
the firm of Calhoun & Sizer and employed it to undertake the
prosecution of the claim, and on August 1, 1905, entered into a
written contract with it by which, in consideration of the services
rendered and to be rendered by it in the prosecution of the claim,
he agreed to pay it a fee equal in amount to 50% of whatever sum of
money should be awarded or collected on the claim, the payment of
which was made a lien upon the claim or upon any draft or evidence
of payment that might be issued in liquidation thereof.
The firm undertook the prosecution of the claim, and bills were
introduced in Congress for its payment, and on May 22, 1908, it was
referred to the Court of Claims by a resolution of the United
States Senate for findings of fact under § 14 of the Act of March
3, 1887, c. 359, 24 Stat. 507, now § 151 of the Judicial Code.
About that time, the firm of Calhoun & Sizer was dissolved, and
subsequently Arnold died and the beneficiaries of the estate
entered into a written contract with defendant in error, C.C.
Calhoun, to continue the prosecution of the claim, and agreed to
pay him 50% of the amount which might be collected, the fee to be a
lien "on any warrant" which might "be issued in payment of the
January 15, 1912, the Court of Claims made findings of fact in
the matter of the claim and stated the amount thereof as $5,051.
The court's findings were certified to Congress, and that body, by
an act approved March 4, 1915, 38 Stat. 968, c. 140, made an
appropriation for the payment of the claim and the Secretary of the
Treasury was directed to pay it.
The act, however, contained the following provisions:
"That no part of the amount of any item appropriated in this
bill in excess of twenty percentum thereof shall be
Page 250 U. S. 214
paid or delivered to or received by any agent or agents,
attorney or attorneys on account of services rendered or advances
made in connection with said claim. It shall be unlawful for any
agent or agents, attorney or attorneys to exact, collect, withhold,
or receive any sum which in the aggregate exceeds twenty percentum
of the amount of any item appropriated in this bill on account of
services rendered or advances made in connection with said claim,
any contract to the contrary notwithstanding. Any person violating
the provisions of this act shall be deemed guilty of a misdemeanor
and upon conviction thereof shall be fined in any sum not exceeding
June 7, 1915, Calhoun requested the Secretary of the Treasury to
issue a warrant to him for the sum of $1,003, which he recited was
to be payable to him on account of services as attorney in the
claim of the Capital Trust Company against the United States, as
appropriated for by the act of Congress, the receipt of said
warrant to be taken and accepted as a full and final release and
discharge of any claim he had against the United States on account
of services in said claim.
Afterward, on July 1, 1915, notice was given to Calhoun, as
attorney for the claimant, that, in settlement of the claim, a
check was mailed to him for $1,003, being 20% of the claim, and to
the trust company as administrator de bonis non
check for $4,012. A part of this money is still in the hands of
such administrator, and there is no other property belonging to the
The cross-petition additionally asserts the following: no part
of the fee except the sum of $1,003 has been paid, and there is a
balance due of $1,504.50, with interest from July, 1915, the date
the money was received by the trust company.
July 10, 1915, Calhoun presented his claim to the administrator
duly proved and demanded payment, but payment was refused. The
whole of the $1,504.50, therefore,
Page 250 U. S. 215
remains unpaid, and he, Calhoun, has a lien upon the fund for
the payment, he having accepted the check for $1,003 under protest
and only on account. The contract preceded the act of Congress, and
when the act was passed, such contracts were lawful and Congress
was without authority to take from him his property without due
process of law or just compensation therefor or to deprive him of
his liberty of contract.
This is repeated and emphasized in various ways, and the Fifth
Amendment is especially invoked as sustaining it, and for which
reasons it is alleged that the "attempted limitation of attorney's
fees by said act" was "null and void."
A demurrer to the cross-petition was overruled, and the trust
company answered. A detail of its averments is not necessary. It
practically admits those of the cross-petition, and pleads in
defense the provisions of the act of Congress, and also § 3477,
A demurrer was sustained to the answer and judgment rendered for
Calhoun for the sum of $1,504.50, with interest from July 1, 1915.
The judgment was affirmed by the court of appeals. The court
"This case runs on all fours with Black v. O'Hara's
175 Ky. 623, where it was held that the act of Congress
approved March 14, 1915, appropriating money for the payment of
similar claims and containing a similar provision limiting an
attorney's fee to twenty percent of the amount recovered, was,
insofar as it attempted to limit the amount of the fee heretofore
earned, unconstitutional and invalid."
"We have been urged to recede from the rule announced in
Black v. O'Hara's Adm'r, supra,
as being unsound in
principle; but after a careful reconsideration of the reasoning by
which the decision in that case is supported, we are satisfied of
its soundness, and reaffirm it."
We encounter at the outset a question upon the form
Page 250 U. S. 216
of the judgment. The cross-petition was presented in a
proceeding to require an accounting of the administrator of Arnold,
and the petition asserted a claim and lien upon the money in the
administrator's hands received from the United States government.
The judgment, however, does not refer to that money or the lien
upon it; it provides only that Calhoun recover of the administrator
"the sum of fifteen hundred four and 50/100 dollars, with interest
from July 1, 1915, and his costs herein and may have execution,"
If the judgment only establishes a claim against the
administrator to be satisfied not out of the moneys received from
the United States, but from other assets of the estate, a situation
is presented which it was said in Nutt v. Knut,
200 U. S. 13
200 U.S. 21
, would not
encounter legal objection. In other words, the limitation in the
act appropriating the money to 20% as the amount to be paid to an
agent or attorney would have no application or be involved.
But the judgment is construed by the parties as having more
specific operation, construed as subjecting the money received from
the government to the payment of the balance of Calhoun's fee,
doubtless because the estate has no other property. On that
account, it is attacked by the trust company and defendant by
Calhoun. The controversy thus presented is discussed by counsel in
two propositions: (1) the validity of the contract independently of
the limitation imposed by Congress upon the appropriated money; (2)
the power of Congress to impose the limitation as to that money.
The latter we regard as the main and determining proposition; the
other may be conceded, certainly so far as fixing the amount of
compensation for Calhoun's services (we say Calhoun's services, as
the appearance of the firm of Calhoun & Sizer was withdrawn),
and even so far as the contract provided for a lien, if the
distinction made by counsel be tenable -- that
Page 250 U. S. 217
is, a distinction between a lien on the claim and a lien "upon
any draft or evidence of payment," to quote from the first
agreement, or "on any warrant which may be issued in payment," to
quote from the second agreement.
So far as the contract fixed the amount of fee, it is within the
rule of Nutt v. Knut, supra,
and, for the sake of the
argument, the lien may be conceded to be valid against § 3477,
Rev.Stats., to the contrary, if it be regarded as having been given
not upon the claim, but upon its evidence, as counsel contend. It
may therefore not only escape the defect that was held fatal to the
lien asserted in Nutt v. Knut,
but may claim the support
of McGowan v. Parish, 237 U. S. 285
We, however, need not dwell upon the distinctions (their
soundness may be disputed) nor upon the contentions based upon
them, because, as we have said, we consider the other proposition
-- that is, the power of Congress over the appropriated money and
the limitation of payment out of it to an agent or attorney to 20%
of the claim -- to be the decisive one.
In its discussion, counsel for Calhoun have gone far afield and
have invoked many propositions of broad generality -- have even
adduced as impliedly against the power, if we understand counsel,
the constitution of the Court of Claims and its jurisdiction as
weight in the same direction.
We can only instance some of the points of the argument. The Act
of February 26, 1853, c. 80, 10 Stat. 161, now § 823, Rev.Stats.,
is cited as recognizing the right of attorneys to compensation for
their services in claims against the United States, and it is said
that contracts for such compensation have been universally
sanctioned as legal. And, further, official statement are adduced
to the effect that the Court of Claims is so constituted "that the
successful prosecution of a claim" in it "is something more than a
merely perfunctory performance on the part of
Page 250 U. S. 218
counsel;" it is a matter of great business hazard and risk to
counsel when done upon purely contingent fees. And in many cases,
it is further urged, no other than contingent fees are possible,
and to deny them is practically to deny the right to counsel. Mr.
Justice Miller is quoted from, in Taylor v. Bemiss,
110 U. S. 42
illustration of such result and its injury.
The right to counsel being thus recognized, and recognized
antecedently to the contract now involved, it became, counsel
contend, a "preexisting valid right," and to take it away is to
divest the right -- to take it away is to deprive of property of
value assured of protection by the Constitution of the United
States. To sustain the contentions a number of state cases are
cited. Among them is Black v. O'Hara, Adm'r,
175 Ky. 623,
the case which the Court of Appeals regarded as authority for its
ruling in the present case.
In a general sense, there is force and much appeal in the
contentions, but we think they carry us into considerations beyond
our cognizance. Liberty in any of its exertions and its protection
by the Constitution are of concern. The right to bind by contract
and require performance of the contract are examples of that
liberty and that protection, and they might have resistless force
against any interfering or impairing legislation if the contest in
the case was simply one between Calhoun and the Arnold estate. But
there are other elements to be considered -- there is the element
of the condition Congress imposed on the subject matter of the
controversy regarded as a condition of its grant. Relief could only
be had through legislation. This was petitioned, and the Senate of
the United States was prompted to refer the claim to the Court of
Claims. A defect of remedy remained even after the court had been
thus invoked and had reported the amount and facts of the claim.
Further legislation was necessary, but it could not have been
Page 250 U. S. 219
was optional, not compulsory, and it would seem to require no
argument to convince that the terms of its enactment must be taken
as expressed and the relief it granted accepted with the condition
imposed upon it. Indeed, the proposition is confused by its
discussion. And it is certainly difficult to deal with the
distinction that counsel makes between preexisting and prospective
transactions. The right is absolute and universal, and necessarily
must be to have any strength at all. It is only arbitrary in the
sense that many of the faculties of government are. And we have
seen there was exertion of one of its powers in the present case --
not, however, to interfere with or lessen the asserted obligation
of the contract between Arnold and Calhoun, but to limit only the
application of the money gratuitously appropriated in the payment
of attorney's fees. The contention is that this cannot be done, or,
to put it another way, that the appropriation, though it could not
be compelled, was yet subservient to the contract of Calhoun (and,
we may interject, if for 50%, for any percent, or terms) and that
he was entitled to all the contract provided, denuded of the
condition imposed upon the appropriation.
The contention has no legal basis, and it may be said it has no
equitable one. Neither the justice nor the policy of what
sovereignty may do or omit to do can be judged from partial views
or particular instances. It is easy to conceive what difficulties
beset and what circumstances had to be considered in legislating
upon such claims. Definite dispositions were matters of reflection
and, it may be, experience -- imposition was to be protected
against as well as just claims provided for, and, considering
claimants and their attorneys in the circumstances, it may have
seemed to Congress that the limitation imposed was fully justified,
that 20% of the amounts appropriated would be a proper adjustment
between them. We are not concerned, however, to accuse or defend.
Whatever might have been
Page 250 U. S. 220
the moving considerations, the power exercised must be
sustained. Frisbie v. United States, 157 U.
; Ball v. Halsell, 161 U. S.
The first case dealt with conditions upon pension legislation;
the second concerned a claim against the United States on account
of Indian depredations. It is therefore contended that they are
unlike Calhoun's contract with Arnold, and that their principle is
not applicable. We think otherwise. The legislation passed on was
sustained as within the power of government.
We conclude, therefore, that Calhoun's claim for a balance due
as fees cannot be paid out of the moneys appropriated by Congress
and now in the hands of the administrator de bonis non,
recognized as having any validity as against that fund. Beyond this
we need not go.
Judgment reversed and cause remanded for further proceedings
not inconsistent with this opinion.
MR. JUSTICE HOLMES concurs in the result.
MR. JUSTICE McREYNOLDS took no part in the decision.