Adair v. First Nat. Bank Of Clinton

• Citation: 137 S.E. 192
• Decision Date: 07 March 1927
• Docket Number: (No. 12168.)
• Parties: ADAIR. v. FIRST NAT. BANK OF CLINTON.
• Court: United States State Supreme Court of South Carolina

137 S.E. 192

ADAIR.

v.FIRST NAT. BANK OF CLINTON.

(No. 12168.)

Supreme Court of South Carolina.

March 7, 1927.

Cothran, J., concurring in part and dissenting in part.

Appeal from Common Pleas Circuit Court of Laurens County; C. M. Drummond, Judge.

Action by Joe R. Adair against the First National Bank of Clinton. From an order refusing to set off a judgment for plaintiff against a judgment previously entered for defendant, defendant appeals. Order affirmed.

The following is the order of Judge Drummond appealed from:

"This matter came on for hearing on petition and motion of the defendant, First National Bank of Clinton, S. C, to set off against the judgment of the petitioner against the plaintiff, the judgment obtained by the plaintiff against the petitioner in the above stated action.

"The plaintiff made return that he had prior to the commencement of the action assigned to his attorneys, Messrs. Simpson, Cooper & Babb, any judgment he might obtain in said action against the petitioner to secure the fee agreed by him to be paid such, attorneys in instituting and prosecuting said action, to the amount of $100 and one-half of the judgment obtained.

"The petitioner obtained a judgment against the plaintiff. Subsequently the plaintiff as a result of the efforts of his attorneys obtained judgment against the petitioner. The plaintiff was insolvent or practically so at the time of the commencement of the action and had no way to secure the services of attorneys except by securing them by assignment of the judgment. In good faith, this was done. Bad faith is not charged. It would be inequitable to set off the portion of the judgment so assigned to the attorneys against the judgment of the petitioner against the plaintiff. The judgment of the plaintiff created a fund by the efforts of the attorneys, and they are entitled to a lien on the fund for their reasonable fees in the absence of contract, but in this case there is a contract made and performed in good faith, and this court in equity and good conscience will enforce same. Ex parte Hires, G7 S. C. 117, 45 S. E. 146, 100 Am. St. Rep. 71.3; Ex parte Wells, 43 S. C. 477, 21 S. E. 334; Simmons v. Reid, 31 S. C. 389, 9 S. E. 105S, 17 Am. St. Rep. 36.

"It is therefore ordered that the judgment obtained by the plaintiff, Joe R. Adair, against the defendant, First National Bank of Clinton, S. C, to the extent of one half thereof less $100, be set off against the judgment obtained by said bank against the said Adair in said action; that the remaining half of said judgment of the said Joe R. Adair against the said bank and the further sum of $100 thereof be paid to Simpson, Cooper & Babb, attorneys for the said Joe R. Adair, for services rendered in said action, with interest from date of the judgment.

"It further appears that the said Joe R. Adair is the head of a family residing in this state, and as such is entitled to a homestead in real estate and personal property, and he asks that same be assigned to him in this action in the funds arising from the sale of his real estate in so far as his homestead in realty is concerned. The bank claims that the said Adair has, or has had, other real estate from which homestead can be assigned. It is therefore ordered that the question as to the property from which such homestead shall be assigned be and the same is referred to commissioners, one to be by the plaintiff, one by the said bank, and one by the sheriff of the county, said commissioners to be disinterested freeholders of the county; that the surplus funds arising from the sale of the real estate of the plaintiff after payment of the mortgage indebtedness be regarded as real estate."

A. C. Todd and O. L. Long, both of Laurens, for appellant.

Simpson, Cooper & Babb and Blackwell, Sullivan & Wilson, all of Laurens, for respondent.

RAMAGE, A. A. J. 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 by 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:

"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.

"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 in a position where the principles laid down in the case of Simmons v. Reid, supra, apply with full force; and in our judgment theseprinciples 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...