Truitt v. Darnell

| New York Court of Chancery | Jul 29, 1903

Grey, V. C.

The defendant is the surviving member of the firm of Sims & Darnell, attorneys-at-law, residing in Atlantic City. The complainants are four women living in Philadelphia. Sims & Darnell had acted as their attorneys in various suits and matters at law.

The complainants assert that Sims & Darnell were their employed attorneys at the very time they began the attachment suit, and continued to be while they were, unknown to the complainants, pressing it to judgment. The defendant Darnell declares that when the writ was issued there were no unsettled matters between them, other than the unpaid bill.

• As the amount of the alleged debt was never agreed upon between the parties, and was not, in the nature of the case, ascertainable by mere computation, it is not quite ’clear that the plaintiffs in attachment might lawfully, by their own ex parte oath, fix the amount of their compensation with that certainty which air attachment proceeding requires. This case does not, in this court, raise this question.

The affidavit of Mr. Darnell filed before the auditor (above recited in full) declares that there is due the firm of Sims & Darnell from the complainants in this suit, “for services rendered in the general management of defendants’ property in Atlantic City from May 13th, 1.901, to October 15th, 1902,”- &c.' The attachment was issued on August 26th,'1902.

Counsel for the defendant strenuously insists that this date— October 15th, 1902 — ought to have been October loth, 1901; that, in fact, the services of Mr. Darnell to the complainants ended in October of 1901, and not in 1902. The defendant has been served with a copy of his affidavit containing the statement that his services ended October 15th, 1902. If he denies the accuracy of the complainants’ copy, he should have produced the original or a sworn copy of it. He cannot be permitted to contradict the proof that it presents, by a mere parol statement contradicting it.

Hpon examining all the proofs I am satisfied, not only that' the copy of Mr. Darnell’s affidavit annexed to the bill of complaint is correct, but that he did, in fact, continue to be in the service of the complainants, as their attorney, at the very time he issued the attachment against them, and afterwards, probably up to and beyond October loth, 1902.

The affidavits submitted by the complainants so declare. The copies of the powers of attorney, letters, &c., annexed to the defendant’s affidavits in this cause, indicate the same thing. The employment of the defendant consisted, as appears by the defendant’s own statement, not only of the conduct and defence of suits, but also of various matters relating to the property of the complainants. Mr. Darnell’s affidavit and accompanying papers show, that he claims to have negotiated loans, rented the hotel, spent money in repairing it for the tenant, as services to the complainants.

To enable Sims & Darnell to conduct this business, they took from the complainants a power of attorney, authorizing that firm

“for the space of one year from the date hereof, for us and in our names, place and stead, to rent and receive rents and execute lease or leases, to keep in repair and pay the necessary expenses thereon out of the revenues derived therefrom, and also from said revenue to pay all interest on mortgages, taxes, insurance, water rents, sewerage rents and other charges of every description.”

This paper is dated April 23d, 1902. It is produced by the defendant himself, and shows that Sims & Darnell accepted an appointment as attorneys for the complainants for the period of one year from April 23d, 1902. There is no pretence of proof-that this power of attorney was ever revoked or surrendered. The attachment was issued oar August 26th, 1902, during the continuance of the employment of Siaars & Darnell under this power of attorney.

Other copies aaanexed to Mr. Darnell’s affidavit oar file show that he was in active correspondence with the complainants, accepting authority from them to act for them as their attorney, in various anatters, by letters, the last of which is dated June 21st, 1902.

When it is considered that the nature of the business carried on by Sims & Darnell for the complainaarts — renting the property, receiving the rents, paying them out to keep the hotel and preanises in repair, paying interest on mortgages, taxes, &c.— was continuous in its character; that it was formally uaadertaken on April 23d, 1902, for one year, and never revoked or surrendered, it is, I think, established that, when the attachanent was issued against the complainants by Sians & Darnell, the latter were yet the employed attorneys of the complaiiaants.

The facts stated ioa the defendant’s affidavit, filed with the auditor, seem to indicate that the defendant, who issued the attachment on August 26th, 1902, went on renderiaag services in the general management of the complainants’ property in Atlantic City until October 15th, 1902, and that he recovered judgment not only for services rendered up to the tiane of the attachment, brat for those reaaderecl afterwards, up to October 15th, 1902, for the sum sworn to before the auditor, is in excess of the original affidavit in attachanent.

The Practice act (Gen. Stat. p. 2535 § 12) provides that no attorney shall commence or anaioatain any suit agaiaast his client for the recovery of any fees, charges or disbursements until after he shall have delivered to his client a copy of the taxed bill of such fees, costs or disbursements. In Strong & Sons v. Mundy, 7 Dick. Ch. Rep. 835, the court of appeals said this requirement cannot be limited to the charges taxed in the bill usually known as costs of the suit, meaitioned in the previous sectioaas; and (on p. 836) intimates that, before suit brought by a lawyer agaiaast his client for charges for general services, such as are the subject-matter of this attachment suit, the bill of charges, &c., must, under section 12, be settled by taxation before service. What mode of procedure shall be observed in taxing such a bill, is not indicated by the court’s opinion.

In this ease there was no taxation of the bill, no service of any copy, and a suit in attachment was begun by the attorneys before all the services for which the fees were claimed, had even been rendered to their clients. The complainants have been deprived of their right to defend the attachment suit by the action of their attornejrs in suppressing the fact, which they were bound to disclose, that they had a claim for these fees and were suing for them.

Irrespective of the obligations imposed by the statute upon a lawyer who claims fees from his client, to serve copy of bill before suit, I think, upon general principles, in cases where compensation to be paid for services has not been fixed by agreement between the parties, the client has an equity to be informed of the amount claimed by the attorney before suit is brought. The client may be willing to pay the amount claimed by the attorney without suit. The nature of the relation of attorney and client is such that the attorney is bound to disclose to his client the amount of his charge, so that the latter may not be subjected to costs of suit if he be willing to pay the sum demanded. No certainly efficient tender of payment can be made until there is either an agreement as to the amount of the sum due, or an acceptance by the client, as correct, of the sum claimed by the attorney.

While the relation of attorney and client continues, and no circumstance has occurred which has put the parties in hostility to each other, so that the client no longer has a right to expect his attorney to care for his interests, the attorney is bound to inform his client of every matter known to the attorney which may threaten his clients’ interests, even if the endangering incident is the attorney’s own claim for fees, which certainly is dangerous if enforced by attachment against non-resident clients.

In the present case no such information was given. The attorney prosecuted a suit against his clients which he knew carried no personal notice to them. The basis of the suit was a claim for an amount of fees which the attorney knew his clients had not been informed, was demanded of them. The attorney prosecuted this suit to judgment without giving his clients any information that it was pending, and thus deprived them of all opportunity to defend it. When they apply to the law court for relief they are informed that it has no power to aid them. Under this judgment for fees which the clients insist are not due, and which both parties admit the attorney never asked his clients to pay until after judgment had been entered against them, the attorney is about to sell the very hotel property which his clients had committed to his charge.

The defendants’ counsel insists that the complainants have their remedy at law under the Attachment act (P. L. of 1901 p. 169 § 07), by suit on the refunding bond to be taken by the auditor. This assumes that the complainants shall submit to the forced sale of their hotel under the attachment, which would plainly inflict irreparable loss upon them, and rely upon a lawsuit for their remedy. It is the function of this court to prevent such loss where an equitable right is exhibited which justifies its interference.

The defendant further contends that under the rulings'in Tomkins v. Tomkins, 3 Stock. 515, and Herbert v. Herbert, 4 Dick. Ch. Rep. 70; S. C. on appeal, 4 Dick. Ch. Rep. 566, where the proceedings in an attachment suit are regular in all formal respects, the court of chancery cannot intervene merely on ,the ground that the claim which has passed to judgment is not in point of fact justly due, or is of a contestable character. He insists that in the Herbert Case the court of appeals expressly declared that “the only ground upon which a defendant in attachment can have any relief in this court is that the plaintiff fraudulently used and managed the attachment suit for the enforcement of a claim which he knew had no legal efficacy.” The defendant insists that under these rulings,' if any sum be due to a plaintiff in attachment, no matter how small it may bo, this court can afford no relief, although the plaintiff may have obtained judgment for much more than is in fact owing to him.

The fraudulent conduct of any suit by a plaintiff in such manner that the defendant is prevented from making .his defence at law, raises an equity which justifies the interference of this court to secure to the defendant the opportunity to be heard, of which he has been deprived by the fraud of the plaintiff. Every man is entitled to present his defence to a suit brought against him. Whether this defence be good or bad is for the court in which the suit is brought, to determine after hearing it. The right to be heard in the regular order of procedure is not dependent upon the meritorious character of the defence. Nor is it limited to those cases in which the defendant owes nothing to the plaintiff. A defendant has the same right to defend himself against an exorbitant increase of a bill as against a totally false claim. He has the right'to the same equitable remedies in both cases.

A party has his remedy in equity against a fraud which has cheated him of his right to defend a lawsuit, as he has against a fraud which has actually cheated him of his property. This fraud may consist just as effectually of a suppression of the truth which the plaintiff was bound to disclose, as of a suggestion of á falsehood with a purpose to mislead.

I do not understand the court of appeals’ judgment to deny these positions. Eegarding its declaration in the Herbert Case, it may, I think, be fairly said that every plaintiff in an ex parte attachment who passes his claim to judgment for an amount which is not in point of fact justly due, in the sense that it is not owed to him by the defendant in attachment, has ‘‘fraudulently used and managed his attachment for the enforcement of a claim which he knew had no legal efficacy.”

No refined distinctions are needed, however, in the present case. The plaintiffs in the attachment were, at the time they brought their suit, the attorneys of the defendants in that attachment suit. No such relation appeared in the Herbert Case. The attorneys were, both by the statute and upon general princi- „ pies of law, bound to notify their clients of the specific sum clemanded for their fees before they began suit against them. The attorneys were bound to have notified their clients of the beginning and pendency of the attachment suit which was levied upon the very hotel property of their clients which was in the attorneys’ charge, the rents of which they were then, by power of attorney, authorized to collect.

The omission of the defendant in this suit to perform this duty to the clients (the complainants in this suit), which prevented a defence in the attachment suit, entitles the complainants to the aid of this court under any proper construction of the case of Herbert v. Herbert.

I will advise an order that upon the complainants’ filing a bond securing the defendant, the benefit of his judgment in attachment, if this suit shall fail, and securing also the payment of any final judgment in that attachment, a preliminary injunction shall issue restraining the defendant from selling the Hotel De Ville and its equipment and from collecting any rents or profits thereof, and from proceeding on the attachment judgment unless the defendant shall consent that the judgment be opened, and the complainants be let in to defend said attachment suit on the merits of the case.