Union Mutual Life Ins. Co. v. Buchanan

• Decision Date: 20 January 1885
• Docket Number: 10,002
• Parties: The Union Mutual Life Insurance Company v. Buchanan
• Court: Indiana Supreme Court

100 Ind. 63

The Union Mutual Life Insurance Company v. Buchanan

No. 10,002

Supreme Court of Indiana

January 20, 1885

Petition for a Rehearing Overruled March 31, 1885.

fro the Marion Superior Court.

Judgment affirmed.

S Claypool and W. A. Ketcham, for appellant.

S. M. Shepard, C. Martindale, J. Buchanan and G. B. Manlove, for appellee.

OPINION

Elliott, J.

The appellee became the agent and attorney of the appellant in August, 1872, and in the bond executed to secure the faithful discharge of the duties of the agency is the following:

"Whereas the said Jas. Buchanan has been duly appointed by the Union Mutual Life Insurance Company of Me. as their financial and loan agent for the State of Indiana, and is intrusted and charged with the investment of any and all money intrusted to him for investment upon first mortgages upon real estate worth at least twice the amount loaned thereon, said investment only to be made by him after the proposed application and security have been approved by said company, and the proposed borrower's bond duly executed and delivered to him, and the mortgage securing same has been duly executed and deposited for record, then he is to draw his draft upon said company for the amount of the proposed loan, less the cash portion of any premium for life insurance that may be payable out of such loan. The said borrower of any sum is to pay all expenses of loan obtained. The said agent is to collect and remit any and all money due of loans made by him, whether of principal or interest, free of charge to said company, except in case of suit; the said agent as attorney for said company shall be entitled to receive as compensation in such suit any sum that may be collected as attorney's fees as provided in such bond or instrument upon which suit may be brought. The compensation for services of said agent shall be for such sums as may be agreed upon between him and the borrowers, as a commission for negotiating the loans, and the said company shall not be liable to said agent for any compensation for services except as above provided in case of suit for collection."

For a series of years Buchanan acted under this contract, and now claims compensation for legal services rendered the appellant, and for attorney's fees received by it in cases where the money due upon loans was collected by suit.

There are more than twenty-five hundred pages of evidence, and we shall make no general synopsis, but shall refer to that part of the evidence involved in the argument of counsel as we take up the questions in the order in which they are presented.

It is proper to preface our discussion of the instructions by stating the rule, so often repeated in our decisions, that instructions are not to be considered in separate and detached parcels, but must be taken as a whole, and if, when so considered, they express the law without material contradiction, there is no error. Counsel for appellant, by detaching the instructions assailed from the group in which they properly belong, pursue a course which is not borne out by reason or authority, for no writings, literary, law, or any other, can be justly judged by piecemeal.

The court in its third instruction entered upon the work of construing the contract between the parties, and stated that there were three general classes of services provided for in that instrument. The first class, the jury were informed, embraced "all services necessary, or properly incident to the investment of any and all money entrusted to the plaintiff, and would include the preparation and examination of papers and records, the procuring of insurance, and the performance of other like acts." The fourth instruction directed the jury that for such services the plaintiff must look to the borrower alone for compensation. The fifth instruction defines, and correctly, the second class of services provided for by the contract to be services rendered in making collections without suit. The third class of services are defined by the fifth instruction to be services rendered in the collection of claims by suit, and the seventh describes very clearly and correctly states what such services are.

In the sixth instruction the court stated the second question to be "the amount and mode of payment specified in the bond for such services," and it is to this question that the eighth instruction (to be presently noticed) refers. No objection is made to any of the instructions we have mentioned, but a reference to them is necessary in order to justly understand the force of the eighth, ninth, tenth and eleventh, to which objections are urged, for these instructions form a group covering one branch of the case. The instructions here assailed read thus:

"8. I will now endeavor to answer the second inquiry, what is the amount and mode of payment specified in bond for services of making collections by suit? The amount is whatever may be collected as attorney's fees in such suit, which of course can not exceed the amount specified in the judgment, which amount is fixed by the bond or other instrument securing the loan sought to be collected by such suit. There can be little or no difficulty when the full amount of the attorney's fees provided for in the judgment was in fact collected in money by sale or otherwise. That is what the plaintiff was entitled to. If he got that, then he was entitled to no more. If the defendant collected it, and failed to pay it over to him, then the defendant was bound to compensate him therefor.

"9. If a judgment was taken in such suit, but it has never been satisfied by sale, or otherwise, then the plaintiff is not entitled to recover the attorney's fees specified in such judgment, for by the bond he is entitled only to such sum 'as may be collected as attorney's fees.'

"10. Suppose, however, that in a suit for collection upon a loan made by plaintiff, prosecuted by him in behalf of defendant, he recovered a judgment for $ 1,050, including, say $ 50 attorney's fees, suppose that he procured a sale of the land mortgaged to secure such loan, to satisfy such judgment, and that upon such sale only $ 500 was bid, and nothing more was ever realized upon said judgment, what would the plaintiff be entitled to out of the amount realized? I answer that he and the defendant would each be entitled to receive out of the fund realized in proportion to their interest in the judgment itself, that is, in the case supposed, the plaintiff would be entitled to one 1/21 parts, or $ 23.81, and the defendant to twenty 1/21, or $ 476.19.

"11. Suppose, again, that after taking judgment, as in the case last supposed, for $ 1,050, including $ 50 attorney's fees, the plaintiff procured a sale of the mortgaged land, but nobody bid anything, and in order to sell or get anything out of the judgment, it was bid in by defendants at $ 500, this being all that it was worth, and nothing further ever being realized upon such judgment, what would be the compensation to which plaintiff would be entitled in such case? I answer, that it would be just the same as in the former case, that is, he would be entitled to a sum out of the actual value of the land in proportion to his interest in the judgment, which would be, in this case, as in the other, $ 23.81, and this the plaintiff would become liable for to the plaintiff as soon as the land was bid off."

These instructions not only state the law correctly upon the subject they cover, but they present it with such perspicuity and precision as to entitle them to high commendation.

The general rule is that fees earned by an attorney who conducts the suit belong to him, and not to his client. We need not stop to inquire whether it would, or would not, be against public policy for an attorney and client to agree that the latter should take the fees, or part of them, for here the contract between the attorney and client secures the fees to the attorney. If the fees did belong to the attorney, and were in fact received by the client, there can be no doubt that the former might have his action, as for money had and received, if the latter refused to account for the fees collected.

It is said by counsel that "the words 'collected in money by sale or otherwise,' contained in the eighth instruction, might, perhaps, standing alone, be construed to mean an actual collection in money, but there was no evidence tending to make such a case." We are satisfied that even if it were proper--as it certainly is not--to isolate this phrase from its associate words, the jury could not have been misled, and if this be true, as it is, then there was nothing more than a harmless error, and for harmless errors judgments are never reversed.

Where, as here, fees to which the attorney is entitled are received by the client, the attorney may maintain an action for them. It can make no difference whether the client takes pay in money or property, for, if he does receive the full value of the fees, he has neither a legal, moral nor equitable right to deprive the attorney of them. The clause assailed does, therefore, assert an abstract proposition in correct terms, and we are not willing to say that there was no evidence to which it was applicable, for the record by no means excludes such a hypothesis.

The counsel object to a similar clause in the ninth instruction and affirm that it must have controlled the decision of the jury. If it did so far control the jury as to carry them to the conclusion that the appellee was entitled to recover for fees received by the appellant either in money or in property, it produced a just result. We can not say that there was no evidence that the property which the appellant in some instances acquired did not pay both its debt and the attorney's...