4 Edw. Ch. 40 | New York Court of Chancery | 1842
The object of this proceeding on the part of Ann Fay, against her late solicitor, is to compel him to refund or pay over moneys to her which he has received under the decree and orders of the court made in this cause. The suit was for a sale, in partition, of certain real estate in which Mrs. Fay was interested, to the extent of eight eighteenth parts; Susan Ann De Rose, the widow of Anthony L. De Rose and her three infant children, were interested in five eighteenths, and Matilda De Rose, the widow of John P. De Rose and her infant child, were owners of the remaining five eighteenth parts.
On the reference in the partition suit to ascertain liens, these judgments were presented by Mr. S., and the same were reported by the master: the first, as a lien on Mrs. Fay’s and Matilda De Rose’s share of the estate, and the other on Mrs. Fay’s share alone; the amounts, for principal and interest, computed to the date of his report, were decreed to be paid with additional interest to the time of payment; and they were paid exclusively and entirely out of the eight-eighteenths of the proceeds of sale to which Mrs. Fay was entitled or in which she was interested. She now states in her petition that she was not indebted to the said W. S. S. in any such amounts; and never, knowingly or intentionally, executed such bonds and warrants of attorney; and that the same must have been procured from her by fraud and misrepresentation. But she admits that she once borrowed fifty dollars of him, and also that, at the same time, her sister-in-law, Matilda De Rose, borrowed a like sum; and that they gave their joint notes for the two accounts; and, likewise, that she afterwards borrowed money of him, at different times, to the amount of about fifteen dollars. Also that she recollects he once asked her to sign a paper which he informed her was to secure the one hundred dollars and some part of the fifteen dollars; and that these were the only
The subject has undergone an investigation before the master, who has taken and reported the evidence; and the whole case has been argued before me and awaits a decision. The testimony of Mr. Millspaugh shows the consideration of the two bonds and judgments. The consideration of the first was made up of the following items:
1836, June 16. To services getting the corporation
to take the mortgages, $ 50.00
To money lent to Mrs. Fay and Mrs. De Rose, 100.00
To interest thereon, 7.77
To expenses going to Albany on business, per Mr. Magill, 37.50
To charges on Day Book, 25.00
$220.27
It is proved, in support of the item of fifty dollars, that Mr. S. was instrumental in procuring the corporation of the city of New York to take an assignment of two mortgages upon the property from the receivers of the Globe Insurance Company, an insolvent institution, so as to prevent an immediate foreclosure; and that, on objections being raised by the counsel of the corporation to their taking the mortgages and advancing the money, Mr. S. succeeded, by furnishing explanations to the counsel, in removing his objections;
The proportion of the fifty dollars to be borne by Mrs. Fay, according to her eight-eighteenths of the estate, was twenty-two dollars and twenty-two cents, which is all
. Keeping this great principle in view, I shall proceed to the other items which form the consideration of the first mentioned judgment. One hundred dollars of it is for money lent, and some interest thereon. This money was lent in two distinct sums, fifty dollars to Mrs. Fay, and fifty dollars to Mrs. De Rose. Mr. S. has adduced no evidence to show, (independent of the fact of their making a joint note) that these loans were made upon any original understanding that the borrowers were to become sureties for each other’s respective loan. Their joining in the note, in the first instance and afterwards in the bond, may have been a matter of convenience to avoid multiplying the evidences of debt; and it is not such an assumption or obligation as, under the circumstances, gives to the solicitor a right to take payment of the whole out of the individual property of Mrs. Fay, which was then in a suit under his charge. It matters not that she seemed willing to sign the papers when prepared and presented to her without actual fraud or misrepresentation on his part. He was bound to apprise her distinctly of the legal effect of the papers, and of the extent of the liability she was subjecting herself and property to by signing them; and he should be prepared to prove that he did so; or else, he should not have asked her to make herself liable to him for any thing more than his actual advances for her benefit. Standing in the relation of solicitor, I think he had no right to impose upon her, for his own benefit, a voluntary suretyship for another, even with her own consent. Fifty dollars of the money, therefore, which was lent to Mrs. De Rose, with the interest thereon which he has received, must be refunded to Mrs. Fay. The item of thirty-seven dollars and fifty cents, expenses incurred for William Magill, stands upon the samé footing. Mrs. Fay had nothing to do with this. Magill was the son of Mrs. De Rose ; and she alone was responsible for the payment of that money. And so far as Mrs. Fay’s money has been applied to that object, it must be refunded by Mr. S., with interest.
As respects the charges on day-book, amounting to twenty-five dollars, no evidence has been given what they were for.
I now come to the second judgment, obtained by Mr. S. against Mrs. Fay solely on the twenty-fourth day of November, one thousand eight hundred and thirty-eight, and on which was reported to be due by the master, as a lien on her share of the estate, the sum of two hundred and seventy-one dollars and twenty-five cents. This was entered up by confession on a bond and warrant of attorney. It appears that, after the bill was filed by Susan Ann De Rose in the present suit and while the same was pending, Mr. S. filed a bill before the chancellor, in behalf of Mrs. Fay, as a complainant, for the same object. To that bill, a plea of the former suit pending for the same cause was interposed; and which plea was allowed by the chancellor, and the bill was dismissed with costs. For the defendant’s costs therein, an execution issued; and Mrs. Fay’s right and interest in the property in question was sold by the sheriff and purchased by Mr. Lansing, but was afterwards, by consent of the purchaser, redeemed out of the proceeds of the sale under the decree in this cause. For Mr. S.’s costs and counsel fees in such suit a bond and warrant were given to him by his client; and on which the last mentioned judgment was entered up. The items constituting the two hundred and fifty-seven dollars, for which the bond and warrant of attorney were given, have not been laid before me. They were contained in a statement produced before the master, and marked exhibit No. 4, but which exhibit has either been mislaid or was withdrawn from the master’s office; and has not been produced on the hearing. It is understood, however, to have contained a charge of one hundred dollars for a counsel fee* in addition to taxable costs of the suit, (but it does not appear that the costs have ever been taxed) and a charge of fifteen dollars for services out of the suit in looking after some rents
Again: even if Matthews v. Matthews could be considered as going against her entire right to file a bill under such circumstances, it would form no justification or excuse for filing another bill for the same object, so long as the first remained undisposed of. The plea of the other suit pending would be equally fatal to the second, although the first might be untenable and would be dismissed at the hearing. In support of such a plea, the court has only to ascertain the fact of the pendency of the suit pleaded, and not whether it is properly brought or will probably be defeated or dismissed.
For this reason alone the chancellor might well allow the plea to be a good bar, without disturbing the decision in Matthews v. Matthews. If the solicitor really supposed the bill of Susan Ann De Rose would be dismissed, as being prematurely or irregularly or improperly filed, he should have waited until he could bring about such a result; but, to file another bill in behalf of his client for the same object, with a full knowledge of the pendency of the first and without any reason to suppose that its prosecution was intended to be dropped or abandoned, betrays either gross ignorance of principles of law and the practice of the courts, or an inordinate desire to involve the estate or the client in unnecessary litigation and expense, by which the solicitor might profit. In every such case, it is the duty of the court to interpose and protect the client from the consequences of such misconduct. In Wood v. Wood, 4 Russ. 558, a petition imputed various acts of misconduct to a solicitor who had had the conduct of the suit; one charge against him was, that he abandoned a suit which was depending, and unnecessarily instituted a second suit, though every useful purpose might have been accomplished by means of the first suit, or, at least, much expense might have been saved by adopting the proceedings in it. The Lord Chancellor said:
I come now to another and more important branch of this case. The decree made in the cause had provided that, after paying the costs of the suit and discharging the incumbrances upon the whole estate, and satisfying some general and specific liens upon the undivided eight eighteenths in which Mrs. Fay was interested, the residue of that share of the proceeds of sale should be brought into court to abide its further order. It having been determined, by the decree, that Mrs. Fay’s eight eighteenths of the estate, although purporting to be a fee, was liable to be defeated by the limitation over in the will, under which the title was held in the event of her dying without issue living at the time of her death, and which was good by way of executory devise to pass the eight eighteenths to her brothers, Anthony L. and John P. De Rose, and their heirs; and as Mrs. Fay was a widow without children, and the event was likely to happen by which the fee was to vest in others, her interest was put on the footing of a life estate, with remainder to the infant children of the two deceased brothers. After making the payments and division of the proceeds, as directed by the decree, the balance of that share to be brought in, as stated by the" master, was two thousand four hundred and nineteen dollars and forty-eight cents. But, it was found that there was a deficiency of nineteen hundred and eight dollars and thirty-three cents on the mortgage-debt of four thousand two hundred and seventy-five dollars and two cents, by virtue of the second mortgage held by the corporation of the
The effect of that petition and order was directly to benefit Mr. S. He was, thereby, enabled to receive all that remained of the John P. De Rose share on account of his mortgage. He and Mrs. Fay stood in the character of co-sureties for Anthony L. De Rose; and those two shares of the estate were liable to contribute equally to make good the deficiency due to the corporation. One half was nine hundred and fifty-four dollars and sixteen cents, but,, by taking the whole amount (one thousand nine hundred and eight dollars and thirty-three cents) out of Mrs. Fay’s share, it left so much more for Mr. S. to receive. Upon no principle of equality or equity was Mr. S. entitled to this—so far as that balance due to the corporation was concerned, it was a case of joint suretyship between Mrs. Fay and John P. De Rose in which the rule of equal contribution would apply.
The lien of the corporation had priority and preference to the S.’s mortgage; and the most that he could ask was that Mrs. Fay’s share should bear one-half of it. And yet, Mr. S. was instrumental in getting up the petition for Mrs. Fay and procuring the order for the payment of the whole out of the fund in which she Was interested. He was, still,
Whatever may have been her seeming willingness, again to petition the court for the purpose and to accept the small amount that was paid to her, it is impossible, as between her and her solicitor, to regard her as any thing more than a passive instrument in his hands, which he had no right, thus, to use for his own benefit. As I have, before, had occasion to remark, he had no right, in my opinion, to propose or allow her to do an act so detrimental to her own interest, but was bound to advise and protect her against such an act of folly and weakness. The Lord Chancellor of Ireland observed, in the case of Segrave v. Kirwan, 1 Beatty’s R. 157, that wherever a professional man is called on to give his services to a client, whether to prepare a deed or will, the law imputes to him a knowledge of all the legal consequences to result, and requires that he should distinctly and clearly point out to his client all those consequences from whence a benefit may arise to himself from the instrument so prepared, and if he fail to do so, a court of equity will deprive him of it.
If this be true of a deed or will, why may it not be true of a petition to be presented to the court by which a client is made to relinquish an important interest for the benefit of the solicitor, and where it is very much a matter of course for the court to make an order pursuant to its prayer 1 There is, to be sure, some testimony which shows that Mr. S. informed Mrs. Pay that her interest and his were now likely to come in collision and that he suggested to her that she had better employ another solicitor. But I think he should have gone further and absolutely refused to draw up and present such a petition for her as he did, or, if he acted any further for her in the matter, it should have been only to petition that one-half and not the whole of the deficiency should be taken out of her fund. And, in this point of view, it matters not that she had friends at hand or other lawyers with whom to consult and advise. So long as Mr. S. chose to act as her solicitor, he was bound to give her just such advice as he would,' acting as a sensible and good lawyer,
Another objection exists, that the rights of the infants in and to this money, though somewhat contingent, have been entirely overlooked or disregarded in the order that was made authorizing the whole amount that was required to be taken out of that share of the estate. Counsel have now appeared in behalf of these infants and insist that it is not too late to rectify the error, by requiring the solicitor to refund, in order that the money may he placed in court for their ultimate benefit, subject, of course, to any claim which Mr. S. may have upon that portion which may vest in John P. De Rose’s heirs after Mrs. Fay’s death by virtue of his mortgage from John P. De Rose: if it shall appear that the mortgage covers that contingent undivided interest.
I see no escape from this conclusion. Mr. S. must be required to pay into court, within twenty days, out of the money which he has received of the John P. De Rose share of the estate, on account of his mortgage, the sum of nine hundred and fifty-four dollars and sixteen cents, with interest thereon from the twenty-third day of June, one thousand eight hundred and forty, being the time when he received or might have received it. He must, also, refund and pay into court all the money which he received for principal and interest, which was two hundred and seventy-one dollars and sixty-nine cents on his first judgment, excepting the twenty-two dollars and twenty-two cents, fifty dollars and fifteen dollars, amounting to eighty-seven dollars and twenty-two cents, as forming a part of the judgment with the interest thereon, which part and interest he has aright to keep; and he must pay interest on the residue of the two hundred and seventy-one dollars and sixty-nine cents from the time he received it in May, one thousand eight hundred and forty. He must, likewise, refund and pay into court all the money he received on his second judgment, being two hundred and ninety-four dollars and forty-five cents for principal and interest, except fifteen dollars included in and forming a part of that judgment, which he is entitled to hold with interest thereon; and he will have to pay interest on the residue received by him from the time he received it in May, one thousand eight
See Lewis v. Morgan, 3 Y. & J. 230.