66 N.J. Eq. 11 | New York Court of Chancery | 1904
The demurrer to this bill is supported upon the sole ground of a want of equity. It is not contended that the bill is defective in failing to bring before the court the different persons who it alleges had valid claims upon the defendant company, which were assigned to the complainants and form the basis of their claim. For has there been any contention that the bill is multifarious in that it has sought relief upon three several, distinct and unconnected claims.
The sole contention of the complainants in support of the bill is that by the written retainers and assignments of persons having claims against the defendant company for personal injuries, and by timely notice thereof to the company, complainants became, in equitjr, assignees of the proportionate parts of any sums which such injured persons should thereafter receive from the defendant company, either by a composition between them or by a recovery and judgment in actions at law, and that a trust thereupon arose, binding tire defendant company and making it accountable in equity to the complainants for their proportionate parts thereof.
There is no attempt to support the bill in respect to any part of complainants’ claims on the ground of what has been incorrectly styled the attorney’s 'lien, and it is obvious that such a contention would have been unavailable, because it is
The sole question, therefore, is (and it seems to be one of first impression in this state) whether when an attorney, retained by a person injured by the tort of another, has procured from the injured person an assignment of a proportion of the damages which may be recovered by action or judgment, or received by compromise or settlement, and has given notice of such assignment to tire tort-feasor, there is raised thereby an obligation on the part of the tort-feasor to account to the attorney, as such assignee, for the proportion of a sum which the tort-feasor has paid to the injured person as compensation for the injury and as satisfaction therefor agreed upon between them, and which obligation can be enforced by the decree of a court of equity.
It is observable that the bill does not disclose, any contract on the part of complainants with the persons from whom they procured these assignments, other than such as may be implied from complainants’ acceptance of their respective retainers as attorneys. Such acceptance of retainers would bind the attorneys, no doubt, to perform their duties of .office in bringing and prosecuting actions at law and in incurring liability for the ordinary costs and expenses thereof. But there is no statement that the attorneys bound themselves to incur expenses not ordinary, such as, e. g., are required in seeking evidence, in procuring the attendance of witnesses at the trial, &c., which, commonly, the client incurs and pays for. It does not appear that the attorneys agreed to incur such expenses and to relieve their clients therefrom, and it may be open to question whether there is disclosed a consideration which will support such» assignments or relievo them from being treated as unconscionable. But the question was not raised in the argument and need noi be considered.
The doctrine of equitable assignment was the growth of the administration of equitable principles in the English court of chancery in its effort to mitigate the rigor of the common law, which originally pronounced all assignments of choses in action to be invalid and incapable of enforcement by action in courts of law. The jurisdiction thus assumed extended not only over assignments of debts and demands arising out of contracts, but also over assignments of possibilities, expectancies or contingencies, and the rationale of the doctrine as to the latter seems to have been, as stated by Mr. Pomeroy, that the assignee of an expectancy, possibility or contingency acquired thereby a present equitable right, which became an equitable property right over the proceeds of such expectancj', possibility or contingency as soon as they came into existence as an interest in possession. 3 Pom. Eq. Jur. § 1271; Spenc. Eq. Jur. 852; Bisp. Pr. Eq. 214. It seems to follow that such assignments only become operative and effective when the proceeds of such assigned possibilities, expectancies or contingencies have actually come into existence or possession. The doctrine has been constantly recognized and applied in this court. Bacon v. Bonham, 6 Stew. Eq. 614.
But there was one class of possibilities of the assignments of which the English court of chancery declined to take jurisdiction, and the class included the possibility of recovering damages for a tort. The reason frequently assigned for such refusal of jurisdiction was that such assignments tended to induce or promote litigation, and so violated the policy of their laws against champerty and maintenance. 8 Pom. Eq. Jur. § 1275.
If it be inferred from the statement of the bill that complainants’ clients agreed that their attorneys, if successful in their respective suits for damages, should be entitled to a part of the moneys recovered, such an agreement would, under English law, have been champertous. But it was held in our supreme court, in a learned and exhaustive opinion of the late Chief-Justice Beasley, that the law of maintenance and champerty has
Mr. Pomeroy declares, as the result of his examination of the cases, that the criterion usually adopted in determining whether a chose in action may be assigned, so that the assignee may invoke the jurisdiction of a court of equity, is this. He says:
“All things in action which survive and pass to the personal representatives of a decedent creditor as assets, or continue as liabilities against the representatives of a decedent debtor, are in general thus assignable; all which do not thus survive, but which die with the person of the creditor or of the debtor, are not assignable.”
And he explains that in the second class are included all torts to the person where the injury and damages are confined to the body and the feelings. 3 Pom. Eq. Jur. § 1215.
I do not find it easy to understand why the capacity of a chose in action to survive to and be enforceable by the claimant’s representatives affords a rational test of the justifiable jurisdiction of a court of equity, at least in a ease where the assignor is yet alive. But assuming this test to be correct in its classification of choses assignable or non-assignable in equity, it would seem not to be applicable under our legislation. Since the passage of the supplement to the “Act respecting the abatement of suits,” which supplement was approved March 17th, 1855 (P. L. of 1855 p. 40), the provisions of which supplement were afterward transferred to the “Act concerning executors and the administration of intestates’ estates” (Revision), approved March 27th, 1874 (Gen. Slat. p. 1425), and now appear as sections 4 and 5 of the last-named act, it has been settled that
If the claims for damages for personal injuries on which complainants’ bill is founded bid been prosecuted to judgment, it may be open to question whether, in view of the state of our law in respect to maintenance and champerty, and the survivor-ship of actions, assignments thereof might not become operative upon the judgment and fall within the jurisdiction of this court to enforce in favor of the assignee, as in ordinary cases of equitable assignments. It may be argued that such damages, which at the time of the assignment were unascertained, had by judgment recovered become fixed and determined; that the judgment had become a debt of record and that the amount thereby fixed was a fund which had come into existence out of a previous possibility, and that, in the absence of the obstacles which deterred the English courts from recognizing such assignments, this court might properly enforce upon the judgment, and the judgment debtor, the claim of the assignee.
But such a question is not presented in this case, and the argument suggested is wholly inapplicable to the situation disclosed by this bill. No judgment was recovered upon any of these claims for damages. What occurred between the parties was this: The alleged tort-feasor, the defendant company, admitted its liability for the injuries for which damages were claimed, treated with the injured persons with respect to. the amount of compensation to be paid for a release of the claims, and when that amount was agreed on between them paid the same to the injured persons and simultaneously received from them complete releases therefor.
That a person having a valid claim to recover damages for a personal injury may bargain with his attorney and agree to pay him for his services a share of the amount received or recovered, and that such agreement may be enforced between them, seems to
Nor will such assignment fall within the reason of the doctrine respecting equitable assignments of choses in action under the circumstances disclosed in this bill. Such assignments admittedly operate only where some fund or property comes into existence arising out of a previous possibility. He who holds such a fund may then be liable to account to the assignee thereof. Where a composition is made between the tort-feasor and the person wronged, on the basis of a payment for a release, .the fund does not come into existence until the payments and the release are simultaneously exchanged. Then the fund thus created is in the hands of the releasor, and the assignee may follow it there; but it never existed in the hands of the releasee.
In many of the states the subject of such contracts of attorneys with their clients has been dealt with by statutes. Some of them confer upon the attorney a lien upon the amount recovered, not only for the costs, but for a stipulated share of the damages under any agreement between the attorney and the injured party. Yet it has been held, in a well-considered opinion in Tennessee, where such legislation exists, that notwithstanding the lien thus imposed by statute, and of which the tort-feasor must have had knowledge, he might well deal with the party making claim upon him for damages for personal injuries, and satisfy
For these reasons I conclude that the bill states no facts upon which an equitable duty on the part of the defendant company arises which can be enforced by decree.
The demurrer must be upheld and the bill dismissed, with costs.
