Larned v. City of Dubuque

86 Iowa 166 | Iowa | 1892

Kinne, J.

1. Judgment: assignment: fraud: evidence. I. It is claimed by the plaintiff that the assignment of the judgment obtained by Sara Lee Porter against the defendant city was procured by fraud. We think the plaintiff has wholly failed to establish this claim. The substance of the testimony relating to this question is that, when the compromise of the judgment of Sara Lee Porter against the city was effected, which also included the dismissal of her suit against the mayor and aldermen, the interyen or was not consulted; that Mrs. Porter’s presence in Dubuque was purposely kept from his knowledge; and that the fact that twelve thousand dollars had bee.n taken from the city treasury and deposited in a bank for the protection of the mayor and aldermen, who refused to levy the tax, was not disclosed to Sarah Lee Porter. The evidence does not disclose what, if any, representations were made by the officials of the city to Mrs. Porter. These officials were under no obligations to notify the intervenor of Mrs. Porter’s presence in the city, or of the contemplated compromise, and especially was this so when, as it appears, she was represented at the settlement by one Roberts, an attorney, who represented Wiltse, the attorney whom she originally employed in the case. Sara Lee Porter had the right, regardless of the intervenor,'to compromise her judgment, as well as the litigation growing out of its attempted enforcement. Her liability, if any, under her contract with Wiltse and Poor, for attorneys’ fees, in no way prevented a compromise of her claims, so far as the defendant city was ■concerned. At one time before this, when both Sara Lee Porter and the intervenor were present, an attempt was made to compromise, but the intervenor advised his client against it. Counsel who represented her at the time the compromise was effected also drew the assignment, which she executed.

Much stress is laid upon the fact that the officers •of the defendant city kept from Mrs. Porter’s knowledge the fact that the city had set apart twelve thous- and dollars to indemnify the mayor and aldermen for refusing to levy a tax to pay her judgment. In the exercise of good faith they were not bound to disclose this fact to her. This money was not set apart to pay her judgment. She had no right whatever to it. It may be' that the council acted illegally in thus taking the money from the city treasury for the purpose of indemnifying its officers and members for refusing to perform a legal duty, if such it' was, but this question we do not determine. For aught that appears, Mrs. Porter knew the facts relating to this twelve thousand dollars, but, in our view, it is immaterial whether she •did or not. She was no nearer securing the money on her judgment by legal means, by reason of the fact that the city council had set this money apart for a purpose •other than to pay her judgment.

2. -: -: compromise: validity. II. It is contended that the settlement or compromise was not based upon any consideration. It appears that in March, 1866, Sara Lee Porter recovered a judgment for eight thousand three hundred and eighty-nine dollars and twenty-five cents and costs against the city. In the same action she sought to establish a vendor’s lien on certain real estate of the city, hut failed. She appealed from the decision of the lower court, and was again defeated as to her lien. Porter v. City of Dubuque, 20 Iowa, 444. In June, 1866, she caused execution to issue on her judgment, and it was returned unsatisfied. In July, 1866, she petitioned the city council to levy a special tax to pay her judgment, hut it failed and refused so to do.._ She then sued the mayor and aldermen, claiming that they were personally liable for refusing to levy thé tax. Upon the trial a verdict was found in her favor, which the court set aside. From this ruling she appealed to this court, and the action of the lower court was again sustained. Porter v. Thomson, 22 Iowa, 391. While the case was pending in the district court for retrial, the council took the action setting apart the twelve thousand dollars for the purpose above referred to. Mrs. Porter then came to Dubuque. The city was then indebted to an amount exceeding eight hundred thousand dollars. It was virtually bankrupt. Its bonds were being sold at from fifteen.to forty cents on the dollar. It may well be presumed, in the absence of testimony, that she was cognizant of the financial condition of the city, and the value of its securities. Under these circumstances it must be conceded that the inducement to Mrs. Porter to effect what, at least, appeared to be an advantageous compromise of her judgment, and the litigation connected therewith, was very great. It is said that no accord and satisfaction is pleaded by the city, or, if sufficiently pleaded, that it is not established. In our view, it is not a question, strictly speaking, of accord and satisfaction, but the settlement of pending litigation, as well as the compromise of her judgment.

But it is contended that the law is that an agreement, even if executed, to accept a less amount than that actually due, in satisfaction of a judgment, is without consideration and void. No doubt the great weight of authority sustains this contention, though there are cases wherein the correctness of this rule is at least doubted. Harper v. Graham, 20 Ohio, 118; Reid v. Hibbard, 6 Wis. 192; Freeman on Judgments [3 Ed.], sec. 463. And it is quite certain that the tendency of courts is towards holding that such an agreement, fully' executed, is valid as a discharge of the entire judgment.

The general rule, that a payment of part of a claim would not operate as a satisfaction of the whole, has been held not to apply in many cases, among which are the following: Where, in addition to. part payment, there is an additional consideration, as an article of value. Neal v. Handley, 116 Ill. 418. Where the doing or procuring of an act is a burden or inconvenience to the defendant, and a possible benefit to the plaintiff. Booth v. Campbell, 15 Md. 569. Or if a part be paid before all is due. Pinnel's case, 5 Coke, 117; Brooks v. White, 2 Metc. (Mass.) 283; Boyd v. Moats, 75 Iowa, 151. Or if payment of part be made in a way more beneficial to the creditor than that prescribed in the contract. Sibree v. Tripp, 15 Mees. & W. 23. Or payment of part at a more convenient place than that provided in the contract. Smith v. Brown, 3 Hawks, 580. Or if the debtor render certain services by consent of the creditor in full payment of a debt. Blinn v. Chester, 5 Day, 359. Or assign certain property. Eaton v. Lincoln, 13 Mass. 424. Or if he pay costs and expenses of an action brought to recover a liquidated debt, in addition to a part of the debt. Mitchell v. Wheaton, 46 Conn. 315.

“This rule, which may obviously be urged in violation of good faith, is not to be extended beyond its precise import; and, whenever the technical reason for its application does not exist, the rule itself is not to be applied. Hence judges have been disposed to take out of its application all those cases where there was any new consideration or any collateral benefit received by the payee which might raise a technical legal consideration, although it was quite apparent that such consideration was far less than the amount of the sum due.” Brooks v. White, 2 Metc. (Mass.) 285. Again, this rule “is technical, and not very well supported by reason; courts, therefore, have departed from it on slight distinctions.” Kellogg v. Richards, 14 Wend. 116. It has been held in numerous eases that a “compromise and part payment of a judgment on a verdict, on a verbal agreement that the same shall discharge it in full, will operate, especially -under equitable circumstances, as a discharge of the judgment.” 2 Black on Judgments, sec. 989; Clay v. Hoysradt, 8 Kan. 74; Walrath v. Walrath, 27 Kan. 395; Harper v. Graham, 20 Ohio, 105; Reid v. Hibbard, 6 Wis. 175; Jackson v. Olmstead, 87 Ind. 92; Hendrick v. Thomas, 106 Pa. St. 327. See Ruddleedin v. Smith, 36 Iowa, 669.

It is the settled doctrine that the rule we have been discussing does not apply to a case of creditors of an insolvent debtor who accept, in satisfaction of their claims, a composition or sum less than the full amount of their demands. Murray v. Snow, 37 Iowa, 410; 2 Parsons on Contracts [7 Ed.], p. 619, and note; Milliken v. Brown, 1 Rawle, 391; Paddleford v. Thacher, 48 Vt. 574. The city of Dubuque may, in one sense at least, be said to have been an insolvent debtor. It was bankrupt. It could not pay its debts. A consideration, in a legal sense, is said to “consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” 3 Am. and Eng. Encyclopedia of Law, 831; Black’s Law Dictionary, title “Consideration.” The facts clearly show that the consideration for -the assignment of the judgment and compromise of the litigation was the payment of certain costs, in addition to the five thousand dollars paid on the judgment. The plaintiff contends that the costs to he paid were those in the case of Porter v. City of Dubuque, but we think it clearly appears that the costs which were to be and were paid were those in Porter v. Thomson. These costs were paid by the city in pursuance of the agreement of settlement. Mrs. Porter, having been defeated in her appeal in this case in the supreme court, was liable for a portion, at least, of the costs. We then have a case which comes squarely within some of the exceptions to this rule, heretofore noted, when, in addition to paying part of the judgment, .the city was to pay, and did pay, costs for which Mrs. Porter was liable. See Mitchell v. Wheaton, 46 Conn. 315. The city was under no legal liability to pay these costs, and their payment was a direct benefit to Mrs. Porter. We have no doubt that the facts of this case take it out from the operation of the rule contended for by the plaintiff. We think the pleading is sufficient as a plea of settlement and compromise. It might be more full, but it is averred, in substance,'that Mrs., Porter assigned and transferred the judgment in writing, and for a valuable consideration, and in -full payment and satisfaction of the judgment, 'all her interest therein to the city and its representatives. The law favors settlements and compromises of litigation, and upholds them whenever it can be done without violating legal rules and principles. The compromise ended the litigation touching the personal liability of the city officers. The result of that litigation was a matter of doubt and dispute. The compromise, as made and carried into effect, was supported by a good consideration. 3 Am. and Eng. Encyclopedia of Law, 837,and notes; Honeyman v. Jarvis, 79 Ill. 318; Husband v. Epling, 81 Ill. 172.

III. In addition to the plea heretofore mentioned, there was a plea of payment in full. In view of what we have said above, we need give it no consideration. We may say that the plea was not sustained, as the evidence did not show that the full amount of the judgment was paid.

3. *¡ _._. effect. IV. The plaintiff insists that inasmuch as Mrs. Porter did not cancel the judgment, but assigned it to Randall, trustee, the intention was to keep jt alive for Mrs. Porter’s benefit. The facts clearly show that it was Mrs. Porter’.s intention when she made the assignment to part with all her interest in and to the judgment, and it was not canceled, at the instance of the defendant city, to better ■enable it to compromise with other bondholders. Randall did not hold the judgment as the representative of Mrs. Porter, but of the city only. No one can, it seems to us, doubt,- under the evidence in this case, that Randall could, after the compromise was affected, at any time, at the instance of the city, and while he was acting as trustee, have canceled, this judgment. His cancellation of it after he had resigned his trusteeship in no wise affects the rights of any party to this litigation. Mrs. Porter having parted with all her Interest in the judgment prior to her death, it is a matter of no moment to the plaintiff whether Randall’s satisfaction of the judgment was legal or not. It was almost eighteen years after this judgment was assigned before this suit was instituted. There are no persuasive equities in the plaintiff’s favor, and the court below properly dismissed her petition.

Y. It follows from the conclusion we have reached that the district court did not err in dismissing the «cross bill of S. P. Adams, administrator of Sara Lee Porter. Mrs. Porter having during her lifetime parted with all her interest in the judgment, she had no property therein which could be sold, or which her heirs could take by descent.

4. --: settlement: attorney's lien. VI. The defendant city pleads the settlement with Sara Lee Porter as a satisfaction in full of intervenor’s claims. As the intervenor had, long' Pnor to this settlement, perfected his right to a lien, the settlement to which he was not a party, and in no wise consenting between his client and the defendant city, could not impair or in any way affect his rights; and one making settlement and payment under such circumstances, without seeing that the attorney is paid and his lien discharged, does so at the peril of being thereafter compelled to pay the attorney whatever sum may be due him. Patrick v. Leach, 3 McCrary, 555; Rooney v. Second Avenue Railway Co., 18 N. Y. 368; Marshall v. Meech, 51 N. Y. 140; Casar v. Sargeant, 7 Iowa, 318; Hurst v. Sheets, 21 Iowa, 507; Brainard v. Elwood, 53 Iowa, 30; Winslow v. Central Iowa Railway Co., 71 Iowa, 200.

5. Attorney fees: agreement: construction. VII. The city claims that, under a proper construction of the contract between Mrs. Porter and Wiltse, aud in which the intervenor has a half interest, the three hundred and twelve dollars and fifty cents paid to intervenor is the full amount due him; that the contract provided for' the payment to the attorneys of twenty-five per cent, of the “amount made;” and it is insisted that the “amount made” meant the difference between the actual value of the bonds and the amount received by Mrs. Porter in settlement, which was twenty-five hundred dollars, one-fourth of which is six hundred and twenty-five dollars, and one-half of that was the sum in fact paid intervenor. We cannot so read the contract. There is, to our minds, nothing in it which indicates that it should be so construed. We think the meaning of the contract was that the attorneys should have one-fourth of the amount they collected on the bonds, by suit or otherwise.

■6. • — •: —:—. Again, it is said that, as the contract provided that Wiltse was to have this sum in case he collected the full amount of the bonds, principal and interest, and was to make no charge if he failed to collect the full amount, the intervenor cannot recover. We do not think this claim merits serious consideration, in view of the facts in evidence. The full performance of the contract on the part of the intervenor was prevented by Mrs. Porter, and she cannot thus rob the intervenor of the benefits of the contract which would have accrued to him in case he had been permitted to fully perform on his part. Her act in settling with the defendant city was a waiver of her right to insist on the collection of the full amount of the bonds and interest, as a prerequisite to his receiving the compensation provided in the contract. Attix v. Pelan, 5 Iowa, 336; Williams v. The Bank of the United States, 2 Pet. 96; Shulte v. Hennessy, 40 Iowa, 352; Fleming v. Gilbert, 3 Johns. 528.

VIII. As to the defense of collusion pleaded by the •city, the evidence fails to establish it.

7. Attorney's lien: ue£?Ken!oreeofumitations. IX. The defendant city pleaded the statute of limitations to the intervenor’s claim as against it. Our statute provides that the following actions may be brought within the times herein limited, respectively, after their causes accrue, and not afterwards: Subdivision five of Code, section 2529, reads: "Those founded on written contracts, on judgments of any courts except those courts provided for in the next section [subdivision], and those brought for the recovery of real property, within ten years.” Subdivision six reads: "Those founded on a judgment of a court of record, whether of this or of any other of the United States or of the federal courts of the United States, within twenty years.” These provisions, so far as they apply to this case, are, in substance, like the Revision of 1860. It must be conceded, if this attempted enforcement of the attorney’s lien is to be deemed an action so far as the statute of limitations is concerned, it is barred, unless, as is claimed by the intervenor, he has such an interest in the judgment as. in effect, subrogates him to the rights of the judgment-plaintiff, to the extent of his lien; that to that extent he becomes the owner of the judgment, as against both parties thereto, with the same rights as to time and manner of enforcement as the judgment plaintiff had. It seems to us this “action,” if it may properly be called such, is not “founded” on a judgment, but grows out of, and is based upon, the written contract-of the parties. That contract has never ripened into a judgment; no action has yet been brought upon it.

It may be said that, technically speaking, this proceeding to enforce the attorney’s lien is not an action. Conceding this to be so, it must follow that the right to-the lien is based primarily upon the contract; but, to perfect that right, certain other steps must be taken as provided by statute. Now, it seems, if the right to maintain an action on the contract is barred, the right to enfcnce the lien must also fail; and it is said that while proceedings by an attorney to enforce his claim do not constitute an action, within the literal operation of the statute of limitations, yet it will, in general, be governed by the analogy of the statute. Jones on Liens, section 237; and see, also, McNagney v. Frazer, 27 N. E. Rep. (Ind.) 431. We are clear that when the statute has barred the right of the attorney to sue upon the contract and establish his right to his fees, and that question is properly raised in his proceeding to-enforce his lien upon a judgment, his lien must fail. The intervenor’s cause of action for his attorney’s fees arose when the settlement was effected. Adams v. Bank, 36 N. Y. 255; Marshall v. Meech, 51 N. Y. 142; Mygatt v. Wilcox, 45 N. Y. 306. He might then have brought his action" against his client, and, under ordinary circumstances ten years from that time the action would be barred, it being founded upon a 'written contract. This settlement was had in November, 1867, and no action has ever been commenced by the intervenor for his fees, and the present proceeding was not commenced within ten years from the date of the settlement.

But it is contended that the lien holder is so subrogated to the right of the judgment plaintiff as that, to the extent of his lien, he may enforce it in the same time and manner as the judgment plaintiff could do; and counsel seem to claim that this doctrine has been established by this court. -A brief review of the cases will, we think, show that this court has never so held. In Hurst v. Sheets, 21 Iowa, 506, it is said: “The lien of the attorney is upon what? The statute answers: It is ‘upon money due his client in the hands of the adverse party.’ ” In Cowen v. Boone, 48 Iowa, 353, it was held that “the statute does not give the attorney a lien upon the judgment, as a judgment, * * * but he has a lien on money due his client, in the hands of the adverse party, from the time of giving the required notice.” In that case the court expressly says it does not determine whether the lien holder had the right to enforce the lien in the same manner and to the same extent that the plaintiff in the judgment could. In Winslow v. Central Iowa Railway Co., 71 Iowa, 197, it was held by the court that - the Code did not provide for a lien on the judgment, but upon the claim against the adverse party, or the money in his hands.

In Brainard v. Elwood, 53 Iowa, 30, it was held that, when the notice of the lien is given as provided by law, “it appears to us that the attorney acquires an interest in the judgment, and by a proper proceeding may have a decree against the judgment debtor and judgment creditor for the enforcement of so much of the judgment as shall enable him to collect what is due him. * * * But, where a lien is given upon money due by a judgment, it appears to us that there is a resoluting right to enforce the lien through the judgment.” Seevers, J., in a dissenting opinion in the same case, says: “It is clear the lien is on the money in the hands of the adverse party, and not on the judgment.” In Wishard v. Biddle, 64 Iowa, 529, the court in speaking of the lien says: “His lien undoubtedly, gave him interests in the judgments, and perhaps he might enforce it against the property on which the .judgments were liens.” It will be seen that the extent to which this court has gone is to hold that the attorney, having a lien, had such an interest in the judgment as he could by proper proceedings enforce to the extent of his claim. The lien is by statute upon money due his client in the hands of the adverse party, and after judgment it is now provided that the lien may be made effective by entering the statutory notice in 'the judgment docket opposite the entry of the judgment. Code, section 215.

The fact that the law has provided for an attorney’s lien upon the judgment, as an additional means of securing to him his compensation, is no reason why he should not be held to avail himself of his right to enforce said liens within the period of limitations applicable to his action on his contract. In other words, the attorney’s right to enforce his lien is measured, so far as time is concerned, by his right to maintain an action against his client for his fees. Counsel -for the intervenor says: “It may be conceded, if it were at all material or necessary, even that the statute would begin to run against the intervenor as soon as he might have commenced his action to recover h,is fee. But it appears in the evidence in this case that, by the cooperation of the defendant, both in purpose and effort, Mrs. Porter was secretly conveyed out of the state, to avoid the serving of process' by the intervenor for the recovery of his fee, and that she has continuously remained out of the state ever since.” The record shows that Mrs. Porter never resided in Iowa. It also shows that she died in Aiken, South Carolina, in 1870, about fifteen years before this suit was commenced. So that,if the disability of nonresidence had existed, it was removed by her death. Savage v. Scott, 45 Iowa, 134.

No steps were taken to make intervenor’s claim from Mrs. Porter’s estate, presumably for the reason that on December 6, 1867, when Roberts paid the Intervenor part of his fee, he, in a receipt then given, expressly waived any claim to collect further fees of Sara Lee Porter, and agreed to look only to the city of Dubuque for 'the balance of his fees. But we need not determine as to whether he was bound by this agreement whereby he released Mrs. Porter. In any event his cause of action against her was barred, more than ten years having elapsed since her death, and prior to the commencement of this action. Such' being the case, his cause of action, as against the city to enforce his lien, was also barred.

The evidence shows that the intervenor was employed as one of the attorneys for Sara Lee Porter against the defendant city; that he rendered valuable services in the line of his employment; that he gave notice of his lien as required by statute then in force; that he has received only part of the compensation due him; but we hold that he cannot recover, for the reasons above stated. We are not unmindful of the fact that in 1867, the time this lien notice was served, there was no statute in force providing for making the lien effective after judgment, such as now exists, but we have treated the case as if it arose under the Code of 1873. The provisions of the Code in 1873 are certainly as favorable for the enforcement of the attorney’s lien as was the earlier statute referred to. Revision of 1860, section 2708; Code of 1873, section 215.

The'result we have reached being in any event decisive of the case, we need not discuss the many other questions raised. We have- examined the case with care, and are satisfied with the result reached by the district court. Affirmed.