Marshall v. Cooper

43 Md. 46 | Md. | 1875

Bartol, C. J.,

delivered the opinion of the Court.

The object of the bill of complaint in this case, filed by the appellee, is to restrain by injunction, the enforcement of a judgment at law against him, until the determination of certain proceedings pending in the Court of Appeals of Virginia, and until the mutual claims and demands of the complainant and the judgment creditor shall be adjusted by proper accounts to be taken between them, under the direction of the Court. The appellee asks relief on the ground of an equitable set-off.

The judgment for $6000 was recovered in an action of tort, by Chaides H. Utterback against the appellee, in the Superior Court of Baltimore City, in November, 1871, and was affirmed by the Court of Appeals in January, 1873. (37 Md., 282.) Long before the institution of that suit, viz: in July, 1866, Utterback became indebted to the appellee, in the sum of $11,000, for which, with interest thereon, the appellee held the promissory notes -of Utter-back, secured by a deed of trust from the debtor, to R. W. L. Rasin, conveying certain lands in Fauquier County, Virginia. In February, 1868, the appellee instituted proceedings in the Circuit Court of Fauquier County, Virginia, sitting as a Court of Equity, for the purpose of enforcing his claim against the property conveyed by the deed of trust. In that case, the claim of the appellee was resisted by Utterback, upon the alleged ground that it was fraudulent and usurious, and by other defendants in 'that cause, who claimed to hold liens upon one of the parcels of land described in the deed of trust, prior and superior to the lien of the appellee. It appears from the proceedings in that case, which are exhibited with the bill, and by agreement are made evidence, that issues were framed and sent by the Court to a jury, to try the questions of the alleged fraud and usury on the part of the appellee ; and the jury by their verdict found upon the issues, in favor of the claim of the appellee as legal and valid ; and it further appears that the Court in September, 1811, passed a decree in favor of the appellee, not only against Utterback, but also against the other defendants in that suit, and adjudged that the appellee was entitled to a priority of lien as against the property. From that decree, the parties defendants in the suit, have taken an appeal to the Court of Appeals of Virginia, which appeal is still pending and undecided.

The bill in this case, charges that “even if- the decree of the Circuit Court of Fauquier County shall be affirmed, the amount which your orator will be able, at the best, to realize thereunder from the premises there in controversy, will fall far short of your orator's said debt and interest, and the said Utterback will remain indebted to your orator in a large sum of money, if not to the full amount of the judgment which he has recovered against your orator in this State. If the said decree should be reversed, the said Utterback will be indebted to your orator in the full amount of your orator’s debt of $11,000, and interest,” &c., &c.

The bill further charges, that “Utterback is wholly and hopelessly insolvent, having been so at the time he became' indebted to your orator aforesaid, and continues so down to the present moment.”

And the bill further alleges, as ground for equitable relief, “ That having been precluded by the ordinary rules of law from setting up his claim as aforesaid against said Utterback in the action of tort, in which said judgment was recovered against him, he has no means of defending himself against the gross and manifest injustice, which would result to him from the execution of said writ of fieri facias, except by seeking the interposition of this honorable Court, and lie humbly submits that in view of the circumstances aforegoing, and the insolvency of said Utterback, he is entitled to be protected by injunction, forbidding and restraining the same, until the final determination of the appeal now pending as aforesaid in the Court of Appeals of Virginia, and your orator tenders himself ready and willing when said a])peal shall be determined, or the amount of said Utterback’s liability to him finally ascertained, to pay over as your honor may determine, any part of the judgment aforesaid, which may remain due by Mm, after first deducting what may be otherwise left unsatisfied of his claim against said Utterback.”

It appears by the record, and the agreement of facts signed by the solicitors, that Utterback was indebted to Ms attorneys, Marshall and Fisher, (the appellants,) for professional services rendered by them in the suit against the appellee, to the amount of one-third of the judgment therein recovered, as of the date of the entry to their use, (viz : in November, 1871,) he having contracted at the time of retaining them to prosecute the suits, to pay them one-third of the amount which might be recovered in the same. That he was also indebted to the appellants, Brook and Scott and Sanders, the amounts respectively mentioned in the assignments to their use respectively. That they had issued attachments upon their respective claims, in order to reach the proceeds of the judgment, in the hands of the appellee, who was made garnishee in December, 1871, and pleaded non assumpsit and nulla bona thereto ; that these attachments were pending until February, 1873, when they were dismissed upon the agreement of Utterback, to assign to them the judgment, in the manner shown by the copy of the judgment exhibited with the bill ; that the amounts due to them remain wholly due and unpaid, and the assignment to them was intended to enable them to secure satisfaction thereof out of the proceeds of the judgment.

It further appears that the appellee received from the proceeds of the sale of one of the parcels of land mentioned ■in the deed of trust, $2100.34, May, 1868, and applied the same on account of Utterback’s debt to him — which sum is not involved in the appeal. That the appellee also received from the rental of the farm now in controversy the aggregate sum of $1763.77 — paid to him by the receiver, under the orders of the Circuit Court of Fauquier County. And that the last mentioned farm was sold, under order of the same Court and was bought by the appellee, and that the proceeds of sale, after deducting costs and expenses amounted to $7335.65, which was allowed to and received by the appellee on account of his claim, — and that he has since re-sold the farm.

The questions to be decided are, first, whether the appellee is entitled to the equitable right of set-off claimed by him, and to what extent? and secondly, whether such right can be maintained, as against the parties appellants, to whose use the judgment has been entered?

In deciding the first question, it is material to ascertain to what extent the appellee’s claim lias been paid and satisfied; and this depends upon the effect of the proceedings in Virginia.

The appellants contend that all the money received by him, including the net proceeds of the farm purchased by him; and amounting in the aggregrate to $11,199.76, is to be applied in the reduction of his claim as payment thereon ; and that the balance only can be claimed as a set-off, which the appellants state to be only about $2700 ; and they contend that it is inequitable, even if the right of equitable set-off exists, to make the injunction embrace the whole judgment, and restrain the appellants from collecting any part of it.

We do not concur in this view; with the exception of the sum of $2100.34 before mentioned, which it is conceded was received absolutely and applied in the reduction of the debt; we do not think the moneys which came into the appellee’s hands, under the Court’s orders, from the rental and sale of the land in dispute, can be considered as absolute or final payments upon his claim.

The orders and decree under which they were received, are not final; but still open and subject to be reversed on appeal, and the money is held by the appellee not in his absolute right ; but as a mere stakeholder, subject to the final decision of the cause, to be applied in the satisfaction of his debt, only in the event of an affirmance of the decree of the Circuit Court, and in case the same is reversed, will belong to others, and his debt will remain unsatisfied, except to the extent of the credit first mentioned. Under these circumstances, it cannot be said that the appellee has not a subsisting claim, which a Court of Equity will recognize, to an amount exceeding the amount of the judgment. There is no question as to the insolvency of Utterback, the judgment creditor. This fully appears from the record, and as against him, there can be no doubt of the equitable right of set-off claimed by the appellee. Besides the other equitable grounds stated in the bill, arising from the nature of the appellee’s cross claim, and his inability to assert the same as a set-off at law, in the action of tort against him ; — the insolvency of Utterback furnishes equitable ground for the interference of the Court.

In Waterman on Set-off, sec. 396, the author says, “it is deducible from the general scope of the authorities, that insolvency has long been recognized as a distinct equitable ground of set-off,” and cites many authorities. This was distinctly decided in Lindsay vs. Jackson, 2 Paige, 581— a case which has be.en cited and approved by this Court in 9 Gill, 89, and 17 Md., 91. We refer also in support of this proposition to Gay vs. Gay, 10 Paige, 376; Merrill vs. Souther, 6 Dana, 305; Pond vs. Smith, 4 Conn., 297; Robbins vs. Holley, 1 Monroe, 91; and Tuscumbia R. R. Co. vs. Rhodes, 8 Alabama, 206. In this last case the doctrine governing Courts of Equity on this subject is fully and ably discussed in the opinion of Judge G-oldthwaite. From these authorities, and others might be cited to the same effect, it is clear that the appellee, as against Utter-back, would be entitled to be protected by injunction against the enforcement of the judgment.

The authorities cited by the appellants, to show that the equitable right of set-off does riot exist, where the cross claim is a mere contingent one, depending for its existence upon some contingency to happen in the future, have no application to this case; because as we have before stated, the claim of the appellee is not one of this character ; but a present subsisting debt to the extent wé have before indicated.

It remains for us to consider whether the appellee is entitled to relief as against the appellants, the assignees of the judgment.

As respects Brook and Scott and Sanders, who claim simply as assignees, it is quite clear that they stand in no better position than the judgment creditor, and are subject to the same equitable rights which existed against Utter-back. This is abundantly shown by the cases of Gay vs. Gay and Merrill vs. Souther, before cited, and by Central Bank vs. Copeland, 18 Md., 305; and Timms vs. Shannon, 19 Md., 277. We refer also to Jacoby vs. Guier, 6 Ser. & R., 45; Kerr on Injunctions, 68; and to Waterman on Set-off, sees. 83, 96, and cases there cited.

This principle applies also to the appellants, Marshall and Fisher, so far as they claim as mere assignees. They assert, however, a right toa superior equity, on the ground of a lien to which they claim to be entitled as attorneys for Utterbaek, in the suit in which the judgment was recovered.

By reference to the English, cases, it appears that formerly the rule on this subject was not uniform ; in some of the Courts the solicitor had no lien whatsoever, while in others his lien existed to the extent of the costs allowed by law, which belonged to the solicitor ; afterwards the judges established a uniform practice or rule, under which the lien was recognized to the extent of his legal costs or fees allowed to him by law. There is no English case which we have seen that extends the lien farther than this.

In the United States the decisions are not uniform.

In Vermont, New Hampshire, Pennsylvania, Indiana, Illinois, Missouri, Minnesota, Texas and California, it has been decided by the Courts of last resort, that no such lien exists, except for the attorney’s costs and fees taxed and allowed by law. And for a claim of the attorney for services, such as that of the appellants ; he is left to his remedy against his client upon the contract. While in some of the States as in New York, Alabama, Georgia and Florida, and perhaps some others, the attorney’s lien is held to extend to his compensation for services, where it is fixed by contract, or rests upon the principle of quantum meruit; and as between the attorney and client, the Courts protect the-lien of the attorney. In re, Paschal, 10 Wall., 483, the Supreme Court have also recognized such lien.as existing. That was a case arising between the attorney and his client, and the questions there decided have no application to this case.

In New York, where the lien is recognized to the fullest extent, it has been decided by the Court of Errors, that it cannot be asserted against a party proceeding by a bill in chancery, to obtain a set-off against the judgment of a cross claim existing when °the judgment was rendered. Nicoll vs. Nicoll, 16 Wend., 446. In that case the decision of the Chancellor in Gridley vs. Garrison, 4 Paige, 647, was reversed.

In Maryland, no case involving the question of the attorney’s lien has arisen or been decided by the Appellate Court.

In Strikes’ Case, 1 Bland, 98, a petition was filed by solicitors, claiming to be allowed out of a fund in Court, for professional services rendered in the cause ; the Chancellor dismissed the petition saying, that “he knew of no practice of this Court, or of any analogous proceeding of the English Court, which would authorize the introduction of claims of this sort into a cause depending, or about to be disposed of,” and added, “the Chancellor must in all cases leave the contracts between solicitors and suitors, relative to professional services, to be settled and decided upon, in like manner as all other contracts.” And this we think is in accordance with sound reason, and the uniform practice in this State. In our opinion the appellants, Messrs. Marshall and Fisher, were not entitled to any lien upon, the judgment, growing out of their contract with Utterback, or for professional services rendered by them as attorneys in the suit, which they can assert in this case, as against the equitable set-off claimed by the appellee. Their rights depend upon the entry made to their use, and they stand in tbe position of assignees of the judgment, which as we have before said, is subject to the equitable right of set-off claimed by the appellee.

(Decided 22nd June, 1875.)

There was no error in the ruling of the Circuit Court upon the petition of the appellants, asking that the appellee be required to elect between the proceedings in this cause, and that instituted by him in the Circuit Court of Fauquier County, against the same parties. It is settled that the pendency of a suit at law in a foreign jurisdiction is no bar to a suit for the same cause in this State. Seevers vs. Clement, 28 Md., 434.

In this case it appears that the Maryland defendants, Marshall and Fisher, did not appear in the Virginia suit, refusing to acknowledge the jurisdiction of the Virginia Court. While the other appellees, residents of Virginia, have voluntarily appeared in the present suit. We think there is no equitable ground upon which the appellee could be required to make the election.

Upon the whole case, we are of opinion the appellee was entitled to the injunction as prayed, and the order of the Circuit Court will therefore be affirmed, and the cause remanded, to the end that the injunction may be issued upon the terms prescribed by the order of the Circuit Court.

Affirmed, and remanded.