Hughes v. Dougherty

Mr. Justice Shepard delivered the opinion op the Court. This is a controversy in equity as to the proper disposition of a fund of $3,166.66, authorized by order of the Probate Court, to be expended out of the estate of a minor, one Martin Dougherty, junior, by the appellee, Martin Dougherty, senior, guardian of said minor, in discharge of legal services rendered in the matter of said minor’s said estate. Said order did not specify to whom said fund should be paid, nor who was entitled to all or any part of it. The whole of the estate of said minor consisted of a sum of $9,500, realized after a long litigation, by settlement of a claim for personal injuries suffered by the said minor, and paid to said guardian. The order of the Probate' Court was, that the “ guardian have leave to expend a sum not to exceed one-third of the amount recovered in right of action for personal injuries to said minor, and settled under order of court, as attorney’s fees, said sum to include all legal services of whatever nature in said estate.” The whole of said sum of $3,166.66 was paid by the guardian to the People’s Casualty Claim and Adjustment Company, on the day the order of the Probate Court was entered. The appellants were the attorneys who began the suit which resulted in the settlement out of which the money arose, and prosecuted it through its various stages, although under a different employment at different stages of the suit. The bill was filed by the appellants for an accounting, and to obtain their equitable share of said money paid to the Casualty company. The minor, by his guardian ad litem, filed his cross-bill, praying that the Casualty company be decreed to pay to his guardian the said sum of $3,166.66, and for general relief. The abstract of the master’s report states the main facts and his conclusions succinctly, as follows: “ The master finds that the complainants are attorneys at law, and that the Adjustment company is a corporation organized to collect claims of every kind and nature and description, "and that C. W. Beck is its president and manager. That Martin Dougherty, Jr., is a minor, and that July, 1892, he was a poor person with no estate except a claim against the Chicago, M. & St. P. R. R. Co.; had no guardian, and was unable, being a minor, to make a contract; that the minor was grievously injured through the negligenceof the said railway company, and that it became necessary to institute a suit for said minor against said railway company; that said Adjustment company saw an account of said injury in a newspaper, and obtained from Martin Dougherty, Sr., and Nellie Dougherty, parents of said minor, a power of attorney to settle and collect the claim which said parents had against said railway company by reason of the minor’s injuries; that said Adjustment company employed W. E. Hughes and C. J. Wood to prosecute a number of personal injury causes, and that it had in its employ S. W. Hurdle. That the said suit was started in Kane county, for said minor, by said Hurdle as next friend, in said Wood’s name as attorney. That said Hughes and Wood caused a declaration to be filed in said cause, and obtained a verdict for the minor in the sum of $10,000 ; that up to this time complainants were not employed by the minor or his next friend, but by said Adjustment company, which paid said Hughes $240, and which had an arrangement with said Wood on a basis of ten per cent of the amount received by the said company in cases in which said Wood acted as attorney; that an appeal was taken to the Appellate Court, and that prior to the hearing of said appeal, said Hughes and Wood dissolved their relations with the said Adjustment company and that said Hurdle, the minor’s next friend, thereupon employed and retained Hughes and Wood to prosecute said appeal, they also having the written consent of the minor’s parents. That said Hughes and Wood prepared abstracts and briefs, and did all work necessary in the Appellate Court, said Wood expending minor sums for expenses. ■ That the Appellate Court affirmed the judgment of the trial court, and the railway company appealed to the Supreme Court, who appointed Adolph Moses guardian ad litem, and the guardian ad litem employed Hughes to act as the attorney in the Supreme Court. That Martin Dougherty, Sr., was appointed guardian of said minor, and compromised with the railway company for $9,500. That November, 1894, the Probate Court entered an order allowing said guardian leave to expend a sum not exceeding one-third of the amount recovered by the minor, in payment of attorneys’ fees in said estate. That said Martin Dougherty, Sr., made such payment to the Adjustment company, in violation of the order of the Probate Court. That the said Adjustment company is not an attorney, and has no right to receive fees, or collect money for legal services. That said Adjustment company acted under power of attorney with the parents of said minor to prosecute any suit the said parents had against the railway company, and not any claim of the said minor, and that the said Adjustment company had no authority whatever from the minor, or from his parents, to prosecute the minor’s claim, and said Adjustment company could not perform legal services, or appear in court as attorney. The master further finds that the said $3,166.66 ought to be returned by the Adjustment company to Martin Dougherty, Sr.; that complainants, Hughes and Wood, are entitled to no pay for services in Kane County Circuit Court; that for services said Hughes and Wood rendered in the Appellate Court they are entitled to the sum of $1,000, which sum, with expenses, should be paid said attorneys by said guardian. That the minor’s allegations in the cross-bill have been proved, except that the complainants, Hughes and Wood, were authorized by the next friend to prosecute said suit of the minor in the Appellate and Supreme Courts. That the said Adjustment company should be ordered and directed to pay Martin Dougherty, Sr., as guardian, $3,166.66.” Hpon the coming in of the master’s report the Superior Court sustained exceptions thereto, and dismissed the bill for want of jurisdiction, and this appeal is from such decree. Under the authority of Shepard v. Speer, 140 Ill. 238, it is difficult to understand why the Probate Court, having jurisdiction of the minor’s estate and the guardian, and being clothed with jurisdiction, both equitable and legal in all matters concerning the same, did not adjudge upon the matter in controversy, and settle the rights and equities of all persons to the fund in question, which was a part of the minor’s estate. We are somewhat uncertain whether such a case of extraordinary character is made to appear as will justify a court of equity in assuming the jurisdiction which in ordinary cases of this kind would seem to be vested in the Probate Court; but that a court of general equity jurisdiction does possess jurisdiction, instead of a court of law, in such a case as is here presented, does not seem to admit of much doubt. The minor’s estate was a trust fund in the hands of the guardian, and the theory upon which the bill proceeded was that there had been an illegal diversion of a part thereof, in which the appellants had an interest, and that therefore a restoration of such unlawfully diverted portion should be decreed, and, in doing so, that appellants’ rights and interest therein might properly be determined and decreed. In Townsend v. Radcliffe, 44 Ill. 446, it was held that a bill in equity was properly brought to determine who were the parties entitled to receive a fund which the County Court had ordered the administrator to pay to those persons legally entitled to receive it. The mere fact that the guardian here, had previously determined for himself who was entitled to the fund in question, and had paid it over before the bill was filed, does not affect the question of jurisdiction. Equity will follow the fund into whosesoever hands it may be found, and especially where, as here, all parties who dealt with the fund were chargeable with actual notice. The equity, which the Probate Court recognized, is strong that the persons through whose legal services the minor’s entire estate was created, should be paid from the estate. See in this connection, McKee v. Lamon, 159 U. S. 317. The proof unmistakably shows that appellants Hughes and Wood’s services contributed very largly to the securing of the estate, and that they were entitled to quite as much as was found by the master to be their due, over and above what had been paid to them by the Casualty company for services in the Circuit Court, and with which they express themselves as content. As between the minor and his guardian, or the minor and the Casualty company, we find no reason to make any directions; but as to the appellants, William E. Hughes and Cyrus J. Wood, we think the Casualty company and the guardian should be decreed to pay to them the sum of $1,000, as found by the master. The decree of the Superior Court will therefore be reversed and the cause remanded, with directions to that court to enter a decree in favor of the appellants, against the appellees, the People's Casualty Claim and Adjustment Company, and the guardian, Martin Dougherty, Sr., for the sum of $1,000. Reversed and remanded with directions. Waterman, J. I think that the Casualty company should be permitted to retain only a reasonable compensation for what it has done, disbursed and risked, resulting in benefit to the minor.