A. T. Bruce & Co. v. Baxter

• Decision Date: 30 September 1881
• Citation: 75 Tenn. 477
• Court: Tennessee Supreme Court
• Parties: A. T. BRUCE & CO. v. JOHN BAXTER.

75 Tenn. 477

A. T. BRUCE & CO.

v.JOHN BAXTER.

Supreme Court of Tennessee.

September Term, 1881.

FROM KNOX.

Appeal from the Chancery Court at Knoxville. W. B. STALEY, Chancellor.CORNICK & CORNICK for complainants.

W. M. BAXTER for defendant.

FREEMAN, J., delivered the opinion of the court.

This bill is filed for an account as to various claims placed in the hands of defendant, for collection as attorney. It seeks to charge defendant on two grounds: First, negligence in not collecting certain claims specified; and second, that certain moneys have been collected, and money not accounted for.

We think it not improper to say, that the case seems, in one aspect of it, to present a prima facie case favorable to the defendant--at least one of more than ordinary success in collection of debts placed in his hands, in the disturbed and distracting state of the country at the time, that is, from 1863 and the years following. Upwards of sixty thousand dollars on various parties in East Tennessee and some in North Carolina, were thus entrusted to him, and we believe upwards of $54,000 collected and accounted for. But as negligence in regard to specific claims is alleged, we are compelled to look at the details of the transaction, and dispose of each case on its merits, from the proof in the record.

A preliminary question, however, is presented, based on a plea of the statute of limitations of three years, interposed by respondent, so far as the complainants' case rests on the charge of negligence.

This was not the appropriate statute, and interposed no bar to complainants' recovery. Sec. 2773 of the Code gives three years as the period to form the bar, in actions for injuries to real or personal property, and the next section, in favor of sureties of collecting officers for failing to pay over money collected, etc. Neither of these sections cover the case. No damages for injury to property, real or personal, is sought to be recovered, nor is the defendant surety for any collecting officer.

The section applicable is 2775, last clause: “Actions on contracts not otherwise provided for, within six years after the cause of action accrued.” The recovery is claimed on the ground of breach of contract to collect, which involved an obligation to use reasonable diligence in doing what was undertaken, under all the circumstances of the case; and a failure to use such diligence, resulting in a loss to complainant, would make the attorney liable to the extent of such loss, no further: Wait's Act. and Def., vol. 1, 445; secs. 1 and 2, 459-60. Since the liability grows out of breach of contract, it is within the terms of the above section--not being provided for by any other.

In so far as any recovery is sought on the idea of a failure to deliver up any claims in his hands to the attorney who succeeded him, as seems to be one theory of a part of the bill, it may be this bar would apply, as it would go on the assumption of a conversion of a chose in action. We do not understand this, however, to be insisted on.

We need scarcely cite authorities to refute the argument of the respondent, so earnestly pressed on us, that he can have the benefit of the statute of limitations of six years, without having claimed it in his defense, by answer or plea. The law has been too long settled the other way in our State to be shaken, and we think correctly. It is a defense that is at the option of defendants, which they can waive or not, if they choose. If intended to be insisted on, it should be claimed, and the other party thereby notified, as he may be able to show a new promise, reviving the liability: 1 Heis., 701.

The chancellor did not err in refusing to permit the plea of statute of six years to be filed on the hearing. It was possibly within his discretion to have done so, but not to do it was certainly not error.

We now proceed to the particular claims specified. The claim based on the failure to collect interest on the Kennedy note, we think, was properly decreed against defendant. He had sued on the note, recovered judgment, but left the calculation as to the amount due to the clerk, who failed to include the interest, or at any rate failed to enter up judgment for it. We think this was negligent oversight, and as the claim is now barred by the judgment, the respondent was properly held liable for it.

As to all the other claims alleged to have been neglected, we think the principle of the chancellor's decree on its face is erroneous. It is that the respondent is liable for the whole amount of these claims, unless he shall show, that within a reasonable time after his receipt of them, either by himself or his agent, he sued or caused suit to be brought, or used proper and reasonable diligence to collect the same, or the same was not lost by reason of his neglect. The chancellor, it seems, does not assume that culpable neglect has been proven on the whole case, but that the respondent is prima facie liable, until the contrary is shown. In this he erred. The true principle is thus stated as the result of authorities cited, in Wait on Act. and Def., vol. 1, 445: “When a person adopts the profession of the law, and assumes to exercise its duties in behalf of another for hire and reward, he must be held to employ in his undertaking a reasonable degree of care and skill; and if any injury result to the client from want of such reasonable care and skill, the attorney must respond to the extent of the injury sustained.”

This being the rule, the complainant asserts a liability by reason of want of proper diligence and care in the attorney. As this is the ground of the liability, he must make it out by proof, and the extent of the damages so resuiting to him. It is the want of proper care, or rather, the affirmation is, that there was negligence, and this negligence must be fairly made out, or else no recovery can be had at all. When the negligence is shown, then as a result, damage, and the extent of it must be shown--the latter being the measure of the recovery. The case of the Kennedy claim, above referred to, illustrates the principle. There was neglect in not having a judgment for interest. It is conceded he was good--the principal collected--the damage is clear, the amount ascertained. If his Honor had adjudged that the claims might have been made except for neglect, and then had given the attorney a chance to show the contrary, this would have been an irregular practice, as adjudging only part of the case, or on a prima facie case, and then on the account allowing respondent to rebut the case thus found. But the defendant could not have complained of having a second chance to clear himself from liability. But such is not the assumption of this decree, as we understand it.

On the principle we have stated, we will now dispose of the other matters, as far as we can do so without retaking the account, and give the principle of rule by which any subsequent matter is to be investigated and result ascertained, on taking such account as may be necessary.

First, the claim against Conant Hamilton. The loss is alleged to have been in consequence of failure to file said claim in time against Hamilton's estate, so that the statute of limitations barred it. The estate is proven to have been administered as insolvent; whether anything, or how much, would have been realized on it, if filed in time, is not shown. There was certainly negligence in not filing the claim: but loss as well as negligence must be shown in order to recovery--no such loss is shown.

The Tibbs claim is not shown to have been neglected. Large sums were collected out of these parties by respondent, through other attorneys. The proof shows that nothing more could have been made out of him; at any rate, it is not shown affirmatively that any more could--and this is required.

The claims received of Shields are made the basis of a contest. It is first claimed in the bill, that respondent had no right to make a compromise of the debt in his hands and receive notes on other parties. This is clear as a matter of law; but the action of the attorney is definitely shown to have been ratified and approved in fact, and in addition the transaction is ratified by the bill on its face. It seeks an account of these claims received, and this necessarily affirms the action of the attorney in receiving them.

As to all these claims, we see no proof of any affirmative neglect--only one admits of any discussion, that on James Park. The fact that Judge Shields considered them good when he paid them over to Champion, of the firm of Baxter & Champion, does not prove that they were guilty of negligence in not collecting all of them, as some may have become insolvent after this, even with active diligence, especially in those disturbed and uncertain times. The compromise is shown to have been a most favorable one--much better than many other northern creditors realized on their claims.

The claim on James Park is not clearly explained. Judge Shields says it was upwards of $200; respondent collected only $91 and remitted it. Park swears this is all that was due, and files the note with credits, showing he was certainly correct. We must assume that Judge Shields had forgotten the exact amount. Respondent, in this view, is shown to have received all that was due, and owes nothing on this score.

There can be no liability predicated of failure to hand over claims to Messrs. Cornick & Cornick, as the only proof is that of Judge Baxter himself, who says, when it was mentioned on the street to him, he promptly agreed to do so whenever the attorney would ??all at his office, but that he never did so;...