McFadden v. Swinerton

59 P. 816 | Or. | 1900

Mr. Chief Justice Wolverton,

after stating the facts in the foregoing language, delivered the opinion.

It is contended that an interpleader will not lie under the facts developed in the course of the proceedings, because : (1) The plaintiff is himself interested in the controversy by reason of having retained $124.50 out of the original fund coming into his hands as compensation for his services as attorney in its collection, touching which there is a dispute between him and Dickinson ; and (2) he is but the agent or attorney for Swinerton, and as such required to account to him, regardless of whatever other demands may have been made upon the fund. As a general rule, an agent, attorney, or bailee cannot compel his principal to interplead with a stranger claiming by paramount and adverse title funds which have come into his hands by virtue of his representative capacity : Shaw v. Coster, 3 Paige, 339 (35 Am. Dec. 690, 704, note). It is also a rule of general application that the plaintiff praying an interpleader shall be and continue entirely indifferent between the conflicting claimants, and that the bill will not lie where he asserts an interest in any part of the fund or other thing in dispute : 11 Enc. Pl. & Prac. 455; Wing v. Spaulding, 64 Vt. 83, 86 (23 Atl. 615); Bridesburg Mfg. Co.’s Appeal, 106 Pa. St. 275. The first rule stated is not an invariable one, while, as it pertains to the latter, the assertion of an interest by the plaintiff in the fund goes to the very right of maintaining the bill. It frequently becomes an interesting and controverted question, however, whether the facts prevailing show the plaintiff to have such an interest as is inimical to the maintenance of the interpleader. There is an old case (Cotter v. Bank of England, 3 Moore & S. 180) wherein the bank claimed a lien upon bullion in respect of certain freight charges which had been paid on account of it, and it was said the bank did not seek to charge one party or the other, but had charged the bullion, and it vTas held that the interpleader would lie. This was under a statute, but the principle involved was the same as without it. So, also, an interpleader was maintained in Gibson v. Goldthwaite, 7 Ala. 287 (42 Am. Dec. 592), by an attorney who had collected certain notes and bills placed in his hands for collection by the Tombigbee Railroad Company, the proceeds of which were demanded by parties claiming title by transfer from the company. It.was there alleged that the plaintiff had no interest in the fund beyond his commission which he retained. In the opinion of the court we find this language: “The authorities cited merely show that a private agent cannot question the title of his principal to money or property which he has received from or for him by bill of interpleader, where a third person sets up a claim to it. Here the complainant does not deny the right of the corporation, his principal, but merely states that two of the defendants claim, as its assignees, the money which he holds to his credit. The defendants do not set up a title independent of and paramount to the principal, but merely derivative.' They professedly deduce their title from the same common source, and are in such a predicament that they may with propriety be required to interplead, and adjust their conflicting claims.” In the case at bar the plaintiff and the defendants Dickinson and Swinerton are all agents, according to their allegations, as it respects the fund in controversy; plaintiff and Dickinson in the capacity of attorneys, and Swinerton as a specially constituted agent for the purpose of bringing suit in his name. The plaintiff and Dickinson claim an attorney’s fee of ten per cent, of the amount collected, while Swinerton claims a special property therein by reason of the advancement of certain costs and expenses incurred in the suit. But the plaintiff’s claim is but a charge upon the fund, which brings the case in close analogy to those last cited.

The claims of the other parties interpleaded are derivative from the same source, and the interest, if any, of the attorneys and agents, is derived through contract or agreement with those parties ; and the ulterior question presented is whether the agents are entitled to the fund as against the principals. None of the parties to the proceeding are making any objection to the interpleader, except Dickinson and Swinerton; but a decree of inter-pleader was entered by the court below in such a manner as to suggest their consent to the same, and they ought not now to be heard to impugn its authority. There is no dispute touching the authority of the court to enter the order or decree on account of’ the state of the pleadings, or the cause not being ripe for determination, but the effect, only, of Such order or decree is challenged. It cannot otherwise be construed, however, than as a proceeding requiring the parties to interplead so that the plaintiff may be relieved from further responsibility touching the fund paid into court. It appears from the decree that all of the parties, except Eglin, who subsequently intervened, appeared by their respective attorneys, and the court found the allegations of the complaint to be true, which could not have been done, under the state of the pleadings, without the consent of the parties. It. is, therefore, quite natural to assume that the parties assented to the decree of interpleader, and that decree has put the first stage of the case at rest, whether it may be said to be technically a proper case for an interpleader or not; and this court will so treat it.

Plaintiff’s reply to Dickinson’s answer put in issue the matter touching the attorney’s fee, and, upon this issue’, as well as upon the issues, formulated by the parties inter-pleading, the court heard °evidence, and determined it, with the other issues, at the final hearing. The questions thus involved will now receive our consideration. Swinerton. did not answer, although he appeared when the decree of interpleader was entered; but whatever interest he has in the fund is set up by Dickinson’s answer to the complaint. It is shown beyond dispute that during the years 1892 and 1893 Vaughn was an agent for the receiver of the Oregon Pacific Railroad Company, located at Philomath, Oregon ; that he purchased numerous labor and other claims against the receivership ; that Sullivan and Wyatt — two of the co-defendants — furnished money to Vaughn at the same time to purchase like claims, which he did, taking the assignment thereof to himself. Having thus acquired numerous claims, Vaughn, representing claims amounting, as stated, to $8,000, signed the following memorandum at the solicitation of Dickinson, Swinerton, and the H. S. Crocker Company :

“San Francisco, Dec. 2nd, 1893.

To the Creditors of the Oregon Pacific Railway Company—

Gentlemen : The undersigned, one of the above creditors, begs leave to state as follows : That at a meeting of the creditors, held recently, the question of sending a representative to be present at the sale on December 15th of the company’s road in Oregon wTas discussed, and thought favorable of. Since that meeting, information has come to us, which we think renders it unnecessary to send any one, or to go to that expense ; but, as we have called your attention to the matter, we desire to further state that, if the sale be not made the 15th, as advertised, we shall be in a position to attach property for our claims. If it should be made, I think that we can arrange to get our claims paid in advance, perhaps, of others. Therefore, if you are willing to join your claims with ours in the premises, we will cause it to be looked after the same as ours, and at an expense which shall be satisfactory to you. If you feel inclined to join with us under these circumstances, please sign this letter, and state the amount of your claim, and whether the claim accrued under Mr. Hoag’s administration as receiver or under Mr. Hadley’s administration. Mr. Hadley is the present receiver. Should you sign this, we shall consider it an assignment of your claim, if necessary, for the purposes of bringing suit.”

On December 15, the H. S. Crocker Company made the following assignment upon said paper or memorandum :

“For value received, we hereby sell, assign, and transfer the above accounts to W. A. Swinerton.”

Subsequently the defendant Eglin assigned certain other claims to Vaughn for the purpose of collection, which were assigned to Swinerton on like conditions as those contained in the foregoing assignments. An action was instituted in the name of Swinerton to recover upon these claims, together with divers others, and the steamship Willamette Valley attached in San Francisco. This suit was unsuccessful, and was, accordingly, dismissed. Thereafter these claims, with others, were forwarded from San Francisco by or at the instance of Dickinson, and presented in the name of Swinerton to Hon. A. C. Woodcock, who was appointed referee for the adjustment of claims against the receivers of the Oregon Pacific Railroad Company, and were approved to the amount of $8,264.81, including interest, and a dividend of .09846 per cent, directed to be paid thereon. Subsequent to the presentation of the claims, the plaintiff was requested to represent the claimants in the capacity of attorney before the referee. This he did, and, when allowed, drew the dividend thereon, amounting to $1,245.04, and forwarded $400 thereof to Dickinson. The remainder constitutes the fund which forms the basis of the present controversy.

Mr. Dickinson testified, in effect, that he prepared and presented the claims against the Oregon Pacific Railroad Company as the' attorney for Swinerton ; that Swinerton, being about to depart for Japan, gave him an assignment thereof, to enable him to proceed with the collection; that, prior to this assignment, — about April 8, — witness had procured an order from Swinerton, and sent the same to plaintiff, to enable him to draw the dividend allowed and ordered paid upon the claims; that he was employed, both by Vaughn and Swinerton, the latter part of November, 1893, to prosecute the claims referred to against the Oregon Pacific Railroad Company and take all necessary steps deemed advisable to enforce the collection, and particularly against the steamship Willamette Valley by attachment, the costs to be advanced by Swinerton; that -witness was to receive for his compensation ten per cent, of the recovery after repaying the costs; that the costs mentioned by Swinerton in his deposition were paid through him, and that he is at present the owner of the claims or of the fund arising from the dividend directed to be paid thereon. On cross-examination he testified that he required further'assistance in the prosecution of the claims, and desired to employ plaintiff, and pay him a reasonable fee therefor; that his clients had already expended a large amount of money, and did .not care to go to further unnecessary expense, and that he notified plaintiff that his compensation must depend upon the contingency of recovering something; that the base of his charge was ten per cent, of the amount that should be recovered, and that plaintiff should be willing to take one-half of the amount, which was agreed to by him ; that he took the claims from Vaughn relying entirely upon his statements regarding them; that he supposed Vaughn was at Corvallis all the time, and would assist in looking after the claims ; and that, when he forwarded the same to the referee, he wrote Vaughn touching the matter.

Swinerton testified that in the month of December, 1893, the H. S. Crocker Company had a claim against the Oregon Pacific Railroad Company, and Vaughn was the agent of the latter company in San Francisco; that witness saw him a number of times regarding the collection of claims in controversy, as well as numerous other creditors of the corporation, and had sundry consultations with them; that he consulted also with his co-defendant Dickinson, who was the attorney for the H. S. Crocker Company, and introduced Vaughn to him, and they all three consulted together ; that the result of the consultation was an assignment of sundry claims to him for the purpose of bringing suit upon them, including those held by Vaughn ; that at the time of making said assignment it was understood that the properties of said corporation were advertised for sale, and, if the sale should result in securing enough money to pay the claims, no further proceedings were to be taken, but, if not, the witness agreed with the assignors, and particularly with Vaughn, that he would have the steamship Willamette Valley attached, and force payment by the sale thereof; that he would secure the services of Mr. Dickinson as attorney without charge, unless he should succeed in making the collection, and also that he would advance the necessary costs of the proceeding or proceedings to be taken ; that he caused suit to be brought in the Superior Court of the City and County of San Francisco against the railroad company, and the steamer to be attached ; that the attachment was levied about December 17, 1893, and was released April 10, 1894, the suit being virtually defeated, and there being no chance of maintaining it, or reaping any benefit from the attachment; that Vaughn was kept fully advised of every move, and that, when it became doubtful as to the maintenance of the action, Vaughn, on February 2, 1894, signed and delivered to him the paper annexed to his deposition, which is as follows :

“W. A. Swinerton, Esq., San Francisco, Cal.—

Dear Sir : I am going away to Oregon shortly, and will probably not be here when the suit against the Oregon Pacific P. P. Co. will be decided. From developments since suit was commenced, by reason of vessel being mortgaged so far as at present advised, I am advised by attorney we may probably have to let go our hold on vessel, and look entirely to the railroad and sale of same for payment of our claim. I therefore authorize you to retain from collection of my claims assigned to you my pro rata of the legal expenses, except attorney’s fees, which may have been incurred in this action” ;

That he caused to be sent, under date of October 29, 1895, through his attorney, Dickinson, to the Honorable A. C. Woodcock, at Corvallis, Oregon, corrected statements of the claims assigned to him remaining unpaid, which included those assigned by Vaughn ; that the other claims mentioned in the assignment had previously been collected in full through a libel suit against the steamer, which embraced all the claims that he was advised could be pursued in an action for libel; that the claims against the Oregon Pacific Railroad Company presented to the referee for allowance, and the right to the dividend thereon, were by him assigned to his said attorney, Dickinson ; that the assignment was made by reason of his contemplated departure and absence, and to enable Dickinson to pursue the matter, to the end that the dividend might be collected, and the claims properly attended to ; that, by reason of the relations thus existing between himself, Dickinson, and Vaughn, the attachment action was instituted and prosecuted, and that witness had expended in costs of attachment, etc., $1,417.99, besides court expenses ; also the expenses of another action which he caused to be brought at the instance of Vaughn upon some other claims subsequently assigned; that he has never received anything from Vaughn, or any one, on account of said costs and expenses incurred and paid in connection with said attachment action, except the $400 which plaintiff had forwarded from the dividend allowed.

Mr. Vaughn testified, in effect, that he went to San Francisco in March, 1893, as general agent for the Receiver of the Oregon Pacific Railroad Company; that Dickinson and Swinerton, learning that he was a creditor in a large amount, agreed with him that, if he would furnish a list of San Francisco creditors, and endeavor to induce all to join with them, they would attach the vessel, and force collections thereby; that, acting on the proposition, he furnished them a list of the various creditors ; that Dickinson advised that all the claims be assigned, for the purpose of collection, to one party; that some time afterwards Dickinson showed him an assignment, which he subscribed, placing opposite his name $8,000, which was intended to cover all claims he then held against the company, but not the exact aggregate ; that he was to give them what information he could, and they were to make the collection without expense to him ; that witness took the memorandum at the instance of Dickinson, Swinerton, and the H. S. Crocker Company, and went about the city, and induced numerous creditors to sign the same, many of whom represented marine claims ; that he was directed to and did inform such claimants that, if the collections were not made through the attachment, the claims would be returned without costs to them, and that it was also understood that, if the collections could not be made in San Francisco, they would not affect his claims in Oregon if he desired to make collection there ; that he never gave Swinerton or Dickinson any authority to file the claims in Oregon, or to collect the same in that jurisdiction ; that he supposed it was not necessary for him to present them for an allowance, as they appeared upon the receiver’s books, and had been approved by the court; that he signed the paper addressed to Swinerton and Dickinson for the purpose of inducing others to contribute their proportion towards the expenses in the attachment proceeding, and that it was understood that witness was still not to contribute towards the said expenses ; 'that the parties who assigned their claims to him retained no authority or control over them, and that there is nothing due Swinerton or Dickinson from the dividend.

The defendants Sullivan, Wyatt, and Eglin testified that, in so far as each individual’s claim was concerned, they gave no authority to Vaughn to assign them to either Dickinson or Swinerton for any purpose, and that neither Dickinson nor Swinerton was authorized to present the same, or any part thereof, in Oregon for allowance ; that they supposed no such presentation was necessary, as the books of the receiver showed the present ownership thereof, and that the dividend thereon would have been allowed and paid at any rate in due course of settlement of the receivership matter. There is some testimony tending to show that these parties knew the attachment proceeding against the steamship Willamette Valley was to be, and subsequently was, instituted, and the testimony of Vaughn is somewhat discredited by the correspondence which took place between him, Dickinson and Swinei'ton, which appears in the evidence. The plaintiff wrote Dickinson, April'6, 1896: “I looked after this matter on the contingency of our ever getting anything, and will retain $60, if that is satisfactory to you and our clients.” This proposition was accepted as satisfactory to Dickinson.

From the testimony, of which the foregoing is a cursory review, it is somewhat difficult to determine the exact relative rights of the parties litigant. It is apparent, however, that the memorandum or circular signed by the several claimants preliminary to attaching the steamship Willamette Valley constituted an assignment thereof for the purposes of instituting the action, and it was not intended that the title should pass for any other purpose. Swinerton was not the attorney, and could claim no lien in that capacity for the expenses advanced in the course of the proceedings, and the assignment did not give him a special property in the claims, except for the purpose of.instituting the action. That such was the understanding of Swinerton and Dickinson is made apparent by the fact that they subsequently obtained from Vaughn a special authorization to retain pro rata all expenses chargeable to Vaughn out of the collections made.upon the claims. The authorization referred to is the letter directed to Swinerton of date February 2,1894, and which is witnessed by Dickinson. But, in so far as Sullivan, Wyatt, and Eglin were concerned, Vaughn certainly had no authority to pledge their claims for these costs and expenses, and hence they could not be bound by the authorization above referred to.

There is another feature of the matter that has some weight. Mr. Swinerton testified that he expended a definite amount in the prosecution of the action in which the steamship was attached. It appears that a large portion of the claims assigned to him were afterwards collected in full by libeling the steamship, they being marine claims ; but he makes no attempt to show what reduction was made in his demand for expenses paid by reason of these collections, and, in fact, the testimony is so uncertain in its nature that it is difficult to say whether or not there still exists any valid claim in his behalf on account of said costs and expenses advanced by him. However this may be, the authorization is so specific in its nature as to entitle Swinerton, or his assignee, Dickinson, to such part of the fund or dividend allowed by the court as Vaughn would otherwise be entitled to, and this is all that either he or Dickinson is entitled to recover from the fund, except that Dickinson should have the attorney’s fees retained by the plaintiff, less $60. Sullivan, Wyatt, and Eglin make no contention touching the amount of the attorney’s fees retained out of the fund, nor as it respects the $10 costs incurred in commencing this suit. These amounts should, therefore, be deducted from the aggregate dividend declared before any distribution is made of the fund, which was not done by the court below, and will, therefore, lessen the amount of each share proportionately. The decree will therefore be that plaintiff pay to Dickinson the sum of $64.50, and that of the fund now in the hands of the clerk of the court below, to-wit, $720.54, there be applied $10 to the expenses of instituting the suit, and that the balance be distributed as follows : $196.44 to Sullivan, $127.34 to Wyatt, $113.28 to Eglin, and $273.48 to Swinerton, or Dickinson, his agent and attorney; that in all other respects the decree of the court below be affirmed; and that Dickinson and Swinerton recover of the defendants Vaughn, Sullivan, Wyatt, and Eglin their costs and disbursements on the appeal. Modified.

Mr. H. C. Watson, for Swinerton and Dickinson. Mr. S. A. Jeffrey, for A. L. McFadden. Mr. W. M. Ramsey, for Vaughn and other claimants.

Decided 13 August, 1900.

On Motion to Modify Degree.

[62 Pac. 12.]

Mr. Chief Justice Bean

delivered the opinion.

The motion for modification of the decree is based upon ex parte affidavits showing or tending to show that before the appeal was taken the clerk of the court below paid out the fund in controversy to the several claimants in accordance with the decree of that court. The right of appeal did not suspend the enforcement of the decree, nor justify the custodian of the fund in refusing to disburse it in accordance therewith. The court below might very properly have made an order directing the clerk to retain possession of the fund a sufficient length of time to enable the appellants to perfect an appeal. It did not do so, however ; hence the clerk could, without incurring any personal liability, in good faith pay over the fund to the parties entitled to it under the decree : Hovey v. McDonald, 109 U. S. 150 (3 Sup. Ct. 136, 27 L. Ed. 888); Keck v. Allender, 42 W. Va. 420 (26 S. E. 437). But, if the money was paid out before the appeal, the appellants are entitled to recover from the other parties whatever was wrongfully distributed to them. Where a judgment or decree is modified or reversed on appeal, the appellant is entitled to restitution of all that he has lost under it. The method of procedure to effect this object, however, is not uniform, but varies accox-ding to cix-cumstances. Where the amount lost appears of recox’d, and there is thus a certainty in the matter, a writ of restitution is sometimes issued by order of the appellate coux’t: 18 Enc. Pl. & Prac. 889; Estus v. Baldwin, 9 How. Prac. 80; Bickett v. Garner, 31 Ohio St. 28. But, where the facts do not so appear, some motion or process in the nature of a common-law scire facias is necessary, or a direct action may be bxxmght against the respondent to x’ecover what he wrongfully received under the erx’oneous judgment : Metschan v. Grant County, 36 Or. 117. (58 Pac. 80); Northwestern Fuel Co. v. Brock, 139 U. S. 216 (11 Sup. Ct. 523, 35 L. Ed. 151); Ex parte Morris, 76 U. S. (9 Wall.) 605, 19 L. Ed. 799; Haebler v. Myers, 132 N. Y. 363 (28 Am. St. Rep. 589, 30 N. E. 968); Clark v. Pinney, 6 Cow. 298 ; note to Little v. Bunce, 7 N. H. 485 (28 Am. Dec. 368) . It is seldom the facts upon which the appellate court can safely base a judgment of restitution sufficiently appear of record. The record is not prepared with a view to an adjudication or decision of that question. When the right depends entirely upon mattex*s dehors the record,, the better pi-actice, ás we undei’stand the authorities, is for the appellate court to direct that restitution be made, to the appellant of all property and rights lost under the judgment, and to remand the cause to the court below for the enforcement of such ox’der in a proper proceeding, upon notice to the parties : Flemings v. Riddick’s Ex’r, 5 Grat. 272; Keck v. Allender, 42 W. Va. 420 (26 S. E. 437).

Our statute px'ovides that, when a judgment or decree is reversed or modified by the appellate court, it “may direct complete restitution of all property and rights lost thereby Hill’s Ann. Laws, § 545. But this probably contemplates a final judgment of restitution only in cases where the facts appear of record, and not where it is necessary to make proof aliunde by ex parte affidavits.' Moreover, a similar statute has been construed by the Supreme Court of California to apjAy “only to those cases where the judgment operates upon specific property in such a manner that its title is not changed, as by directing the possession of real estate, or the delivery, of documents, or of particular personal property in the hands of the defendant, and the like Farmer v. Rogers, 10 Cal. 335; Hewitt v. Dean, 91 Cal. 617 (28 Pac. 93, 25 Am. St. Rep. 219).

It is also urged that the former decree of this court is erroneous in so far as it reduces the amounts to be paid to the respondents Sullivan, Wyatt, and Eglin. This matter seems sufficiently clear from the opinion of Mr. Chief Justice Wolverton. The court below, in making the order of distribution, neglected to charge Sullivan, Wyatt, and Eglin with their proportionate share of the attorney’s fee for collecting the original fund, although they made no contention as to the amount thereof. The proportionate share of the attorney’s fee due McFadden and Dickinson, and the $10 costs incurred in commencing this suit, were therefore properly deducted from the amount otherwise due the parties referred to, before distribution was made of the fund. The controversy between McFadden and Dickinson as to the manner in which the attorney’s fee should be divided between them was a matter which did not concern the other parties to the action.

The questions raised by the petition for rehearing of the plaintiff McFadden, are sufficiently covered by the former opinion, and the motion is denied. The decree is adhered to, except an order will be made that appellants be restored to whatever they have lost by reason of the decree of the court below, and the cause will be remanded to that court for such further proceedings as may be proper. Modified : Rehearing Denied.

Case Details

Case Name: McFadden v. Swinerton

Court Name: Oregon Supreme Court

Date Published: Jan 29, 1900

Citation: 59 P. 816

Court Abbreviation: Or.