Meacham v. Pinson

| Miss. | Oct 15, 1882

Chalmers, J.,

delivered the opinion of the court.

Crump & Co. executed to Mrs. Pinson their note for $6,000 of borrowed money, embracing in it a stipulation to pay all attorneys’ fees and costs expended in collecting it, and depositing, as collateral security, certificates of stock in the Holly Springs Savings Bank of the face value of $8,000. The debtors having died without making payment, Mrs. Pinson demanded of the bank a transfer to herself on its books of the stock, which was by the bank refused, on the ground that Crump & Co. were indebted to it in the sum of $6,000, and that, by its by-laws, the bank had a lien on the stock superior to that of Mrs. Pinson as assignee of the certificates.

In a suit brought by Mrs. Pinson against the bank for aeon-version through this refusal of the stock pledged to her, she recovered judgment for its full value, though it amounted to largely more than the sum due for the loaned money and interest, and she had adduced no proof of the amount of her lawyers’ fees and costs. On appeal here we affirmed the principles of law in her favor, but held that she was entitled under the proof only to the amount of the loaned money and interest, no proof as to the lawyers’ fees having been made. To escape a reversal she entered a remittitur of all beyond the amount of the note and interest. The case is reported in 58 Miss. 421" court="Miss." date_filed="1880-10-15" href="https://app.midpage.ai/document/bank-of-holly-springs-v-pinson-7985521?utm_source=webapp" opinion_id="7985521">58 Miss. 421. During the pendency of this suit the estate of Crump & Co. had been placed in the hands of a receiver and was being administered as an insolvent estate in the Chancery Court of Marshall County, and Mrs. Pinson had there probated her claim against it for the sum of $6,000. ' A dividend of twenty per cent had been decreed upon all the probated claims, and under this Mrs. Pinson was entitled to the sum of twelve hundred dollars, but the receiver declined to pay it over until the termination of the litigation between herself and the bank. That litigation having now ended, she has applied to and obtained from the Chancery Court an order upon the receiver to pay to her so much of the dividend heretofore decreed as is necessary to liquidate the attorneys’ fees paid by her in the prosecution of her suit against the bank, which Crump & Co., by the stipulation of their note, had obligated themselves to pay.

She proved that those fees amounted to $1,050, and the court ordered the receiver to pay over that sum to her. From thi$ order the present appeal is prosecuted by the other ci’edi-tors of Crump & Co. The decretal order of the Chancery Court was erroneous. Mrs. Pinson was a creditor of Crump & Co. for thé amount of the lawyers’ fees in addition to the money borrowed by them, and these fees were originally as much protected by the collaterals deposited as was the loaned money ; but when she voluntarily remitted in this court, in her suit against the bank, all beyond the amount due for money loaned, she made herself an ordinary unsecured creditor as to all else. When, therefore, she comes now to demand the balance due, to-wit: the lawyers’ fees and costs expended in the former litigation, she must come as other unsecured creditors and accept with them a pro rata upon her debt.

Her rights in this respect are not enlarged by the former decree awarding to her a dividend of $1,200. Such orders are interlocutory in their character, and are subject to the control of the court until the final winding up of the estate. Neither would her rights be different if the dividend in her favor had been paid to her, as it ought to have been, at the time it was decreed. In that event the amount, $1,200, would have been indorsed upon her probated claim of $6,000. If suing upon it, thus credited, and failing to adduce any proof as to her lawyers’ fees, she had nevertheless recovered a judgment for the full value of her collaterals, she could only have obtained an affirmance here, by entering a remittitur, sufficiently large to operate both as a credit for the $1,200 and an abandonment of all claims against the bank, and hence all claims upon the collaterals for the fees ; and when, thereafter, she went against the estate of her debtors for the amount still due by them for the fees, she would have occupied exactly the same attitude that she now does, that is to say, she would have been already paid off in full as to all save the fees, as to which, by her own action, she had made herself an unsecured creditor. As to these, therefore, treating that as done which ought to have been done, she is entitled only to the same pro rata received by other creditors.

The validity of the stipulation for the payment of lawyers’ fees is assailed by counsel for appellants. The question has been much mooted elsewhere, and the authorities are not harmonious. We see nothing immoi’al or contrary to public policy or usurious in such contracts, and concur with those courts which hold them valid.

An appeal from the decretal order here considered was taken to a former term of this court by the receiver of the estate of Crump & Co. and was by us dismissed, upon the ground that he had no interest in the matter, and being the mere organ or hand of the Chancery Court for executing its will, could not refuse to obey its orders or appeal from its decrees. It is insisted that the dismissal of that appeal is a bar to the prosecution of this. This position is wholly untenable.

The former appeal, having been prosecuted by one who had no right to maintain it, was a nullity, which in no manner affected the rights of the real parties iu interest.

Eeversed and remanded for further proceedings in accordance with this opinion.