Adair v. First National Bank

The opinion of the Court was delivered by Mr. Acting Associate Justice C. J. Ram age. This is an action for damages, and was commenced in 1922; a verdict was rendered for the plaintiff in the sum of $1,793, and judgment was duly entered on the said verdict. Some time before the rendition of the verdict, on motion of appellant, a judgment was entered in favor of appellant against the respondent in the sum of $14,272.07. Prior to the commencement of the action, the plaintiff agreed to pay his attorneys $100 and one-half of the amount recovered for their services to be rendered in the suit, and to secure the payment of the same agreed to assign to said attorneys any judgment that might be obtained. Not being able to pay the fees, he did assign the judgment to his attorneys in accordance with the said agreement. Appellant filed its petition in the cause, asking that the judgment against it be set off against its judgment against the plaintiff. To this plaintiff made return that he had assigned one-half of the judgment, plus $100, to his attorneys, in pursuance of his agreement with them. He also claimed a homestead against defendant’s judgment. Judge Drummond decided the return to be sufficient, and refused to set off the proceeds of the judgment of plaintiff assigned to plaintiff’s attorneys, and sustained the assignment. He also ordered the homestead to be assigned and set off b)r commissioners — the proceeds of the sale of lands to be- regarded as realty. Defendant appeals from this order, which will be set out. There is no difference among the members of the Court as to the matter of homestead; the only difference being as to the matter of setting off the part of the judgment assigned to plaintiff’s attorneys. The majority of the Court favor the affirmance of the decree of Judge Drummond, for the following reasons: *5 “A contingent fee is one which is made to depend upon the success or failure in the effort to enforce a supposed right, whether doubtful or not. Contracts between attorney and client by which the latter agrees to pay to the former fees contingent upon the result of litigation pending, or to be instituted, are valid and binding upon the parties, and will be enforced at law according to their terms.’’ 6 Corpus Juris, 740. “The Court of Common Pleas may by motion on rule to show cause require parties to set off their judgments pro tanto against each other; but this jurisdiction is equitable in its nature, and the application is addressed to the sound, judicial discretion of the Court. The Circuit Judge properly refused to permit defendant to set off his judgment against a judgment obtained by plaintiff in claim and delivery after plaintiff, in pursuance of a prior parol agreement, had assigned his judgment to his attorney in payment for services rendered in obtaining it, who in turn, for "value, assigned it to a stranger, neither of the assignees having notice of defendant’s judgment.” Simmons v. Reid, 31 S. C., 389; 9 S. E., 1058; 17 Am. St. Rep., 36. Mr. Justice Mclver, in the course of his opinion, has this to say: “ * * * Yet it is undoubtedly true that an attorney has an equitable claim to be paid for his services out of the judgment which he has recovered for his client; and the Court, in a proper case, especially in a matter addressed to its discretion, will always recognize such a claim. As is said in the case of Puett v. Beard, 86 Ind., 172 (S. C.); 44 Am. Rep., 280: ‘The right to set off one judgment against another is purely equitable and only allowed where good conscience requires it, and good conscience is far from requiring that an attorney’s claim for' services in securing the judgment should yield to the claim of those holding rights adverse to their clients.’ ” 31 S. C., 392; 9 S. E., 1059; 17 Am. St. Rep., 36.' *6 “An agreement between an attorney and client that the attorney shall have a lien on the judgment, is decisive as to the existence of the lien and its amount, and constitutes a valid equitable assignment of the judgment pro tanto which attaches to the judgment as soon as it is entered.’’ 6 Corpus Juris, 768; Id., 742. There seems to be no serious question about the general principles as above set forth, but their application to this case is brought into question. It is well to bear in mind that Judge Drummond was faced with a situation that existed at the time he heard the case, and not as to how the pleadings stood when they were filed by the respective parties. If appellant desired to use its claim against respondent as a counterclaim, it ought to have desisted from entering up judgment as it did by the order of Judge Featherstone, and waited and had the whole matter submitted to the jury on the trial before Judge Johnson. That was the time to have settled the whole matter in a single judgment — that is a judgment for the plaintiff upon his claim, reduced by what may be awarded the defendant upon his counterclaim, or a judgment for the defendant upon his counterclaim, reduced by what may be awarded the plaintiff upon his claim (to quote the strong and expressive language of Mr. Justice Cothran). It was in the power of the appellant to have had Judge Johnson bring the whole case to a “focus” and have a single verdict in the case. But appellant did not choose to do this; it had Judge Featherstone give an order for judgment and entered the judgment up. Appellant 'in the petition refers to its judgment and to the judgment of the respondent as “judgments,” and not as “claim” and “counterclaim." Hence, it is clear that appellant by its own conduct in taking the judgment, in going to trial without having its debt against respondent submitted to the jury as “a counterclaim," and in calling both the $1,793 and the $14,272.07 recoveries judgments placed itself in a position where the *7 principles laid down in the case of Simmons v. Reid, supra, apply with full force; and in our judgment these principles do apply, for as a matter of law, both the above amounts are judgments, and there can be no getting away from this position. To use an expression current among our grandfathers, appellant has made its bed and will have to lie in it. As a matter of common justice and as a matter of public policy, Courts must protect attorneys when their conduct has been as fair and' as profitable to their clients, as was the case in the matter now in question. But for the efforts' of the attorneys for respondent in this case, there would have been nothing to offset on the judgment of appellant. Appellant conceded nothing until forced to' do so by the verdict of 12 men by the assistance of respondent’s attorneys. And the only interest respondent had in the judgment was what was left after his attorneys had been paid; that is what is just and right in this case, and that is what we hold. We see no error in Judge Drummond’s order. It is the judgment of this Court that the order and judgment of the Court below be affirmed. Mr. Chief Justice Watts and Messrs. Justices BlEasE and Stabler concur.