High Point Casket Co. v. Wheeler

• Citation: 109 S.E. 378,182 N.C. 459
• Decision Date: 16 November 1921
• Docket Number: 397.
• Parties: HIGH POINT CASKET CO. v. WHEELER (STRUDWICK & BARRINGER, INTERVENERS).
• Court: United States State Supreme Court of North Carolina

109 S.E. 378

182 N.C. 459

HIGH POINT CASKET CO. v. WHEELER (STRUDWICK & BARRINGER, INTERVENERS).

No. 397.

Supreme Court of North Carolina

November 16, 1921

Appeal from Superior Court, Guilford County; Finley, Judge.

Action by the High Point Casket Company against R. A. Wheeler, in which Strudwick & Barringer intervened. From an adverse judgment, defendant appeals. Affirmed.

Intervention is the proper method for an attorney to protect his right under an equitable assignment pro tanto of any judgment obtained by him, and to obtain judgment against the defendant therefor.

This action was originally brought by the plaintiff against R. A Wheeler individually. He was never sued as secretary and treasurer of plaintiff corporation. The complaint alleged that R. A. Wheeler was indebted to the plaintiff in a large sum of money, both on account of unpaid subscription to capital stock and money of the company, which he had as former secretary and treasurer received and not properly accounted for. It is alleged that prior to the beginning of the action, to wit, on September 2, 1915, Wheeler had been suspended as secretary and treasurer by action of the stockholders and the board of directors, who had elected B H. Bradener to that office, in place of the defendant. The cause was referred to S. Clay Williams, Esq., who tried the same as referee, and reported that the defendant was indebted to the plaintiff in the sum of $1,687.06, and the further sum of $550, making $2,237.06, which the plaintiff was entitled to recover of the defendant.

Messrs R. C. Strudwick and John A. Barringer who appeared as attorneys for the plaintiff in the action, and until the judgment was rendered on the referee's report, intervened in this action to establish their right to compensation as attorneys. They were duly retained as such by the Casket Company and were paid a retainer of $50; the company further agreeing that they should have as compensation for their services "one-third of any recovery that might be effected in the action against the defendant." The said terms of employment were accepted by the attorneys, and they represented the plaintiff, and prosecuted the action throughout the litigation for their client, and recovered judgment in the sum above indicated in the referee's report. The controversy was long continued and hotly contested, and there seems to be no reason to dispute the reasonableness of the compensation promised to the attorneys. The latter intervened in the principal action for the purpose of enforcing the allotment to them of one-third of the judgment recovered by the plaintiff with their professional assistance according to the contract, contending that they were entitled to the relief and to the lien on the defendant's land, which, under our statute, goes with the judgment. The petition of intervention was duly served, with a copy thereof, on the plaintiff, but not answered.

The defendant filed one exception to the report, and pending the confirmation of the same took action, as described in the petition, with a view of depriving interveners of their compensation by acquiring control of the plaintiff corporation. The defendant, in open court, withdrew his exception to the report of the referee, which was confirmed. The interveners then filed their petition of intervention, and the court rendered judgment as follows:

"It is further ordered, adjudged, and decreed by the court that the plaintiff do have and recover of the defendant in accordance with said report the sum of $1,687.06, and the further sum of $550, with interest on $550 from January 8, 1917, until paid. It further appears to the court that John A. Barringer and R. C. Strudwick, attorneys at law, by leave of the court have filed in this cause a verified intervening petition whereby they claim to be equitable assignees of one-third of said judgment, and that they are entitled to be paid one-third thereof, that the said petition has been duly served upon the defendant and upon C. C.

Prince, now president of the High Point Casket Company, and that no answer thereto has been filed. The court doth find that all allegations of said petition are true. The court doth find, and thereupon, order and decree, that by virtue of the agreement made by the plaintiff said John A. Barringer and R. C. Strudwick, attorneys, are entitled to receive one-third of the amount recovered against the defendant, and that by virtue of the terms of their employment as aforesaid they are the equitable assignees of one-third of said judgment against the defendant.

It is further ordered and adjudged by the court that John A. Barringer and R. C. Strudwick, attorneys, be paid one-third of the amount of said judgment, and judgment is hereby rendered as to the one-third of the amount thereof in favor of said John A. Barringer and R. C. Strudwick against the defendant, R. A. Wheeler.

It is further ordered and adjudged by the court that the defendant pay the costs of this action to be taxed by the clerk, including an allowance of $250 to S. Clay Williams, Esq., referee."

Defendant appealed.

R. R. King, of Greensboro, for appellant.

John A. Barringer and R. G. Strudwick, both of Greensboro, pro se.

WALKER, J. (after stating the facts as above).

What real interest the defendant has in this controversy we are unable to see. He has to pay the judgment, in any event, and whether to the plaintiff, or one-third of it to the interveners, Messrs. Barringer & Strudwick, the attorneys of the plaintiff, can make no difference to him. A case directly in point is Newsom v. Russell, 77 N.C. 277, where the plaintiff was the assignee of the note on which the action was brought, and defendant alleged that it was assigned in fraud of the assignor's creditors. The court held this to be no defense, as the assignor was bound by his assignment, though made in fraud of his creditors, and then the court inquired:

"It is not the duty of the maker of the note to see to the application of the money, and it is even less his duty to fight the battles of the creditors of the bankrupt. What interest is it to him [defendant] if he is absolved from further liability by payment of his debt upon a judgment regularly obtained against him?"

Here the parties are all before the court and will be concluded by its judgment. The petition of intervention was filed in the case, and copies of it duly served on the plaintiff and the defendant, who failed to answer it or otherwise plead to it, and the court gave judgment by default against them. This fully protects defendant in any payment he makes under the judgment of the court. And Brown v. Harding, 170 N.C. 253, 262, 86 S.E. 1010, Ann. Cas. 1917C, 548, and 171 N.C. 689, 89 S.E. 222, is to the same effect as Newsom v. Russell, supra. But see, also, Wiggin v. Swett, 6 Metc. (Mass.) 194, 39 Am. Dec. Extra Anno. 716; Black v. Mirgan, 28 Am. Dec. Extra Anno., 394; 6 Cyc. 631. The party of record who can complain of a judgment of a court, and appeal therefrom, is one who is aggrieved thereby, in the sense that his pecuniary interest is affected by it; one whose right of property or interest, may be established or divested by the decree, as was said substantially by Chief Justice Shaw in Wiggin v. Swett, supra, citing Smith v. Bradstreet, 16 Pick. (Mass.) 264; Bryant v. Allen, 6 N. H. 116. But, however this may be, we are of the opinion that the judgment of the court was right in itself.

There can be no question as to the definite terms of this contract for compensation of the attorneys nor as to how it should be ascertained and secured, nor can it be reasonably doubted that the parties intended that they should receive a certain or fixed portion of the judgment recovered. The contract, therefore, constituted at least an equitable assignment of the judgment pro tanto. It was held in Costigan v. Stewart, 76 Kan. 353, 91 P. 83, 11 L. R. A. (N. S.) 630, that an attorney who is retained to conduct or to assist in conducting the prosecution of a proceeding under a contract by which he is to receive compensation out of the fund recovered is entitled to a lien upon such fund for his fees. And so in Svea Assurance Co. v. Packham, 92 Md. 464, at pages 477 and 478, 48 A. 359, 52 L. R. A. 95, the court said that there was no evidence to show that the amount defendant agreed to allow the attorneys was unreasonable or excessive. Cases of that character are generally defended by all the means the law affords. They often result in several trials, and usually the receipt of the compensation is greatly delayed, when taken on a contingency. If the case is settled before it has taken its usual course, the attorney is undoubtedly benefited thereby, but the client is saved the necessity, and oftentimes hardship, of paying out cash and has no personal liability for fees in the event of failure. Under such circumstances he must expect to, and usually does, give larger compensation, if successful, than he would if he agreed to pay a fixed fee, whether successful or not. When Mr. Packham made the arrangement for fees, the insurers had not paid the insurance money, and when they did they knew what he had agreed to allow. Yet they stood by without objecting to it and permitted the attorneys thus employed by Mr. Packham to proceed, knowing the terms of their employment. The case of Davis et al. v. Gennell et al., 73 Md. 530, 21 A. 712, is a conclusive answer to such objection by them now. There the attorneys were employed upon a contingent fee by Mr. Brydon, who had sued in his own name and recovered a judgment which was determined to belong to the North Branch Coal Company. some of the stockholders objected to the allowance of the fee, but this court said:

They "stood by and saw the work done; they...