Quakertown & Eastern Railroad Co. v. Guarantors' Liability Indemnity Co. of Philadelphia
| Decision Date | 25 May 1903 |
| Docket Number | 281 |
| Citation | 206 Pa. 350,55 A. 1033 |
| Parties | Quakertown & Eastern Railroad Company, Appellant, v. Guarantors' Liability Indemnity Company of Philadelphia |
| Court | Pennsylvania Supreme Court |
Argued January 28, 1903
Appeal, No. 281, Jan. T., 1902, by plaintiff, from decree of C.P. No. 1, Phila. Co., March T., 1898, No. 580, dismissing exceptions to auditor's report in case of Quakertown & Eastern Railroad Company v. Guarantors' Liability Indemnity Company of Pennsylvania et al. Reversed.
Bill in equity for an account of bonds and for a discovery. Before BIDDLE, P.J.
The facts are stated in the opinion of the Supreme Court.
Errors assigned were in dismissing exceptions to auditor's report.
The assignments of error which question the jurisdiction of the court are sustained, and the decree of the court below is reversed.
John G Johnson, with him Alfred N. Keim and Carroll R. Williams, for appellant. -- An attorney has a lien (or rather, right of defalcation) on money or papers of his client while they are in his hands, but in a common-law action he has no such right of lien upon a fund brought into court for distribution: Dubois's Appeal, 38 Pa. 231; Patrick v. Bingaman, 2 Pa. Superior Ct. 113.
In equity, however, a fund actually brought into court for distribution is made liable for an attorney's fees according to McKelvy's Appeal, 108 Pa. 615.
In the present case our contention is, that although the action was begun by the filing of a bill in equity, yet no fund was ever actually brought into court within the meaning of McKelvy's Appeal, supra, and that therefore it cannot be properly charged that appellant company was endeavoring to take the fund out of court by the aid of other counsel. The question here, it is submitted, is really whether Mr. Terry had a lien on the bonds in the hands of the guarantors' company, defendant. The fact that the guarantors' company chose to evade any question of liability to Mr. Terry for the amount of his fee (and it is submitted there was no liability) by putting 18 of the 101 bonds held by them in the physical custody of the court does not alter the situation. There was no receiver here, as in McKelvy's Appeal, and in no sense of the word was there a fund brought into court through the professional services of Mr. Terry.
Again, there is, it is submitted, no good reason why Mr. Terry should not establish the amount of his claim in the constitutional manner before a jury as other litigants whose claims are disputed are required to do. The appellant railroad company has sufficient assets to satisfy a verdict for a sum of money representing the value of professional services. There is no testimony that appellant company is insolvent, or is likely to prove insolvent.
George S. Graham, for appellee.
Before MITCHELL, DEAN, BROWN, MESTREZAT and POTTER, JJ.
On or about September 1, 1897, the officers of the Quakertown & Eastern Railroad Company deposited with the Guarantors' Liability Indemnity Company 214 of its first mortgage coupon bonds, of the par value of $500 each, for the purpose of securing a proposed loan of $80,000, which sum was to be used in the construction and equipment of its railroad.
The loan was never consummated, and twenty of the bonds were returned to the appellant company, leaving 194 in the supposed custody of the Guarantors' Liability Indemnity Company or its assignees, or others of the parties' defendant, to whose use it was alleged that some of the bonds had been wrongfully appropriated. During the latter part of November, 1897, the Guarantors' Liability Indemnity Company transferred all of its business to, and was succeeded by the Guarantors' Finance Company, and on March 24, 1898, this latter concern made an assignment for the benefit of creditors.
Some time in April, 1898, Henry C. Terry, Esq., of the Philadelphia Bar, was retained as attorney for the Quakertown & Eastern Railroad Company by John Jamison, its president, for the purpose of recovering the 194 bonds from the Guarantors' Liability Indemnity Company, its assigns, or other parties to whose use some of the bonds had been converted.
Accordingly on April 9, 1898, Mr. Terry filed a bill in equity in the court below against the Guarantors' Liability Indemnity Company, its assigns and others, praying that the defendants be ordered to surrender the said bonds to the plaintiff. Subsequently two short amendments to the bill were filed by Mr. Terry.
Appearances were entered for all of the defendants, and answers filed by all excepting the receivers of the People's Bank. The case, however, was never heard in court, as it was settled by agreement and the bonds were recovered without the necessity for a trial.
Mr Terry, and the president of the company, Mr. Jamison, and the contractor, Mr. Baker, and his attorney, Carroll R. Williams, Esq., were all active in the negotiations having in view the return of the 194 bonds. While these negotiations were pending, Mr. Terry requested his clients to arrange for the payment of his fees. This was not done to his satisfaction and in consequence, after arrangements had...
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