Dubois's Appeal

38 Pa. 231 | Pa. | 1861

The opinion of the court was delivered,

by Strong, J.

— An attorney, in behalf of a firm consisting of three partners, brought suit and recovered a judgment against their debtor. An execution was then issued and levied upon the debtor’s interest in a tract of land belonging to his wife. The husband and wife then joined in executing a mortgage upon her land to the three members of the firm, to secure the payment of the judgment which had been recovered against the husband. Subsequently the land was sold under judicial process, at the suit of another mortgagee of the husband and wife, and the proceeds of the sale were brought into court for distribution. They suffice to satisfy the mortgage given to the members of the firm, and the present controversy is between rival claimants to the fund applicable to its payment. It is insisted, on behalf of the attorney, that he is entitled to take out a reasonable compensation for the professional services rendered by him in obtaining the judgment for the firm, and for issuing execution thereon. In other words, it is claimed that he has a lien on the fund in court, though it was not brought there through his agency, and though it was never in his hands.

In a certain sense, an attorney has been said to have a lien for his fees, upon the money or papers of his client, while they are in his hands. He may deduct from money collected by him, a just compensation for collecting it, and need only pay over the balance. This, however, is a right to defalcate, rather than lien. So he may retain papers intrusted to him, until he has been paid for services rendered in regard to them. But possession is indispensable to his lien as much as it is to the lien of an ordinary factor or bailee. It has never been determined that he can maintain a claim upon a fund in court, against a mortgagee or a judgment-creditor, even though such mortgagee or creditor be his own client. In distributing money in court, the Common Pleas is guided by the liens of record. True, if there be a question respecting the ownership of a record lien, the court may decide it; but lien is not ownership. The attorney has no title to the judgment which he secures, or tó the mortgage which he is instrumental in obtaining. Not being an owner, he cannot claim as a distributee. "We concur, therefore, in opinion with the learned president of the Common Pleas, that the attorney, as such, was not entitled to share in the distribution made in this ease. The next question is, whether the court erred in not decreeing to the appellant, as administrator of an assignee of two of the copartners of the firm of Fetherolf, Montgomery & Co., two-thirds of the sum secured by the mortgage, instead, of awarding the whole to Isaac Barton, a prior assignee under an assignment made by the third partner in the name of the firm, and made to discharge a partnérship debt. The facts are that the firm was largely indebted to Isaac Barton, after the judgment against Hellerman had been recovered, and after the mortgage of Hellerman and wife had been given to secure it. On the 7th of September 1857, Montgomery, one of the partners, by an instrument signed Fetherolf, Montgomery & Co., and sealed, assigned to Barton “ all debts, dues, claims, and demands whatsoever” due to the firm, authorizing the assignee to collect them, and apply the sums collected to the payment of the debt due from the firm to him. The assignment also stipulated that if any surplus remained, after payment of the said debt, it should be paid to the firm. Sixteen months afterwards, on the 6th of January 1859, the other two partners assigned their interest in the mortgage to Daniel Fetherolf, under whom the appellant claims. The contest is between the assignees under, these two assignments. The appellant, who claims under the second, insists that the prior transfer to Isaac Barton was inoperative to pass the mortgage, or, at all events, more than the interest of Montgomery therein, because it was only an assignment of the debts due to the firm, and he contends that the mortgage was the property of the partners as tenants in common, and not the property of the firm. This allegation is founded upon an entire misapprehension of the character of the mortgage, and of the purpose for. which it was made. It was indeed given to the three partners, and not the firm in its distinctive name. But it was given to secure the payment of a judgment belonging to the firm. That judgment was the substance of which the mortgage was only the shadow. Payment of the debt to the firm, would have extinguished the mortgage, of course. An assignment of all debts due to the firm undeniably carried the judgment to the assignee, and with it, by necessary consequence, all securities for its payment. This is none the less true because the securities may have stood in other names than those of the plaintiffs in the judgments. In whatever name the mortgage stood, it was but collateral to the judgment, and dependent upon it for continued existence.

Again, it is insisted that the assignment to Isaac Barton was invalid, because Montgomery appended a seal to the name of the firm. The objection does not call in question the power of one partner to assign partnership credits in payment of debts due from the firm, but it denies that he can do it in the mode here adopted by a sealed instrument. It is doubtless a general principle of the common law, that a partner cannot bind his copartners by seal, but this is to be taken with some qualification. The partnership relation will not authorize one partner to execute an instrument under seal, whereby a new and original obligation is imposed upon the firm. He cannot charge the firm by seal, but he may discharge it, and it seems now to be generally settled that when a seal is not essential to the nature of a contract, and will not change its legal effect, the addition of a seal will not vitiate it. The cases upon this subject are collected in Vol. 1, Am. Lead. Cas. 297-8, and we shall not go over them.The rule protects a partnership rather against executory than executed contracts. The assignment of a chose in action, in payment of a debt, does not charge but discharge. It is not an executory contract, creating an obligation. Its legal effect is not changed by adding a seal to it. Montgomery’s assignment to Barton was not, therefore, vitiated by the form in which it was made. In Everett v. Strong, 6 Hill 163, the precise question here made was ruled, and it was held that an assignment of a chose in action by one partner under seal, was a good assignment. We are of the same opinion.

Finally, it is insisted that the assignment to Barton was void, because it was not recorded within thirty days, in accordance with the ■ requirement of the Act of 24th March 1818. That Act is wholly inapplicable to this case, for two reasons: first, because no trust in favour of creditors was created by the instrument, and secondly, because no creditor of the firm contests it. The strife is between two assignees of the mortgage.

Upon the whole, we discover nothing to invalidate the claim of the appellee to the money in court, and we affirm the decree of the court below. '

The decree of distribution is affirmed.