Rogers v. O'Mary

| Tenn. | Nov 2, 1895

Wilices, J.

This is a bill to collect attorneys’ fees from the several defendants, on the idea of a joint and several liability for the same. The Chancellor gave decree for $324.50, and defendants, Perkins, O’Mary, Prinnes, and Grlickman, called the Campbell County defendants, have prayed and perfected an appeal. Defendants, Miller and King, also appealed, but did not perfect such appeal.

The cause has been heard by the Court of Chancery Appeals, which reversed the decree of the Chancellor, and dismissed complainants’ bill, and they have appealed to this Court, and assigned several grounds of error. We need not dispose of them seriati/ni, but will consider them together.

The facts, as found by the Court of Chancery Appeals, so far as necessary to be stated, are that the complainants, as attorneys, filed a general creditors’ bill in the Chancery Court at Jacksboro against the Citizens’ Bank of Jellico to fix the rights of all creditors, and provide for their payment, and to set aside a conveyance of its property to the bank. Soon after' the bill was filed, the bank made an adjustment with its creditors, by which they agreed to receive the amounts due them in certain time installments. In consequence of this adjustment, the assets of the bank were returned to it, and the receiver appointed under the creditors’ bill was discharged. The agreement entered into between the bank and its creditors appears to have been made without the co-operation of complainants, and over their objection, so far, at least, as it pertained to their fees, which the bank agreed to pay in such sum as the Court might fix and adjudge. The creditors having agreed with the bank, the Court fixed complainants’ foes at $150, and awarded execution against the bank therefor, complainants, however, not being present at the time. They declined ' to accept this sum thus fixed, and brought their bill against King and Miller, residents of Claiborne County, and the appellants, residents of Campbell County, to hold them jointly liable for reasonable fees, which they claim should be $500.

The suit was based on the ground that the defendants were depositors in the bank, and had agreed to the compromise, and consented that the funds of the bank be withdrawn from the Court, where they had been impounded under the general creditors’ bill. The appellants (called the Campbell County defendants) pleaded in abatement that they were residents of Campbell County, and served in that county, and could not be sued in Claiborne County, as there was no privity between them and the Claiborne County defendants in the employment of complainants.

On argument this plea was held sufficient as to form and substance, and issue was thereupon taken on it, and the Chancellor held that there was such privity and joint obligation as made the suit maintainable. The decree overruled the plea, and time was granted for thirty days to file an answer, and it was agreed that if answer was made it should not affect the hearing of the plea in the Supreme Court, and should not operate as a waiver of the plea. Answer was filed, and on the hearing the Chancellor gave decree, as before stated, for $324.50 — that is, a fee of $300 and interest on same $24.50.

The Court of Chancery Appeals was of opinion that the Chancellor should have sustained the plea in abatement and dismissed the bill. They also report that the fee found by the Chancellor was reasonable, but that fixed by the Court in the bank case was not sufficient.

■ The Court of Chancery Appeals further found that there was no joint or express contract of employment and no privity between defendants, except that a preliminary investigation should be made at a cost of $25.00, but if a general creditors’ bill should be determined upon and filed (which was clone), that attorneys’ fees would be paid, out of the funds impounded in the ' suit, in such amount as the Court might fix, and there should be no individual liability for the same outside of such fund, and that the appellants had made provision for the payment of complainants’ fees in their adjustment with the bank; that Miller had no privity with the Campbell County defendants in the employment of complainants, and that King had no connection with the other parties, or with the matter, except to accept the provisions of the adjustment; that the Claiborne County defendants were immaterial parties so far as the suit against the Campbell County defendants was concerned, and hence the bill should have been dismissed on the plea.

It is insisted that defendants are jointly liable, because they procured or accepted the benefits of the adjustment and released the fund impounded, and the complainants rely upon the following cases as sustaining this contention: Rains v. Rainey, 11 Hum., 261; Moses v. The Rank, 1 Lea, 401; Humes v. The Bank, 13 Lea, 496; Whitsell v. The Association, 3 Tenn. Ch., 526. These are cases where counsel had brought a general fund into Court and the application was to have counsel fees paid out of the fund thus impounded, and did not involve the question of individual liability outside of and beyond the fund, and are not in point in this case.

It is next said that the Campbell County defendants waived their plea in abatement, by obtaining time to answer, and it is now too late to rely upon their plea. It .is true the proper .practice, on finding the plea against defendants, would have been to render a decree in complainant’s favor for their debt, from which they could, as a matter of right, have taken an appeal. Code (M. & V.), § 5136; Wilson v. Scruggs, 7 Lea, 638; Strauss v. Weill, 5 Cold., 126.

The Court, however, refused to grant the appeal, and complainants consented that the answer might be filed, and that it should not be treated as a waiver of the plea. This agreement certainly estops and precludes the complainants from now insisting on the irregularities in the proceedings taken in overruling the plea.

Complainants insist that, inasmuch as defendants settled with the bank, their agreement that fees should be paid out of the funds impounded, was abrogated, as that agreement clearly contemplated the prosecution of the cause to final hearing. It is clear that defendants, in the adjustment, made provision for the payment of fees by the bank in substantial accord with the agreement previously entered into with complainants, and they were placed in such position as, by proper application to the Court, the amount of their fee could be fixed and decree made for its payment, and this could have been done by a simple reference, wnich the attorneys stood in position to have obtained, and, if the finding of that Court, as to the amount, should prove unsatisfactory, complainants had their remedy by appeal. It was not necessary that complainants should have been parties on record. As attorneys, they had a right to the reference both under the general provisions of the law and the agreement made between the bank and its creditors.

We see no error in the finding and decision of the Court of Chancery Appeals, and it is affirmed, the Chancellor’s decree reversed, and bill dismissed. The costs will be paid as directed by the Court of Chancery Appeals.