Wiley v. Absent

• Decision Date: 28 April 1877
• Citation: 10 W.Va. 206
• Parties: Wiley v. Mahood et at. (Absent, Moore, Judge).
• Court: West Virginia Supreme Court

10 W.Va. 206

Wiley

v.Mahood et at.

Supreme Court of Appeals of West Virginia.

Decided April 28, 1877.

1. An attorney at law, employed to collect a debt, may receive

payment thereof in money, but has no right to accept anything else in satisfaction, without express authority from his client, and if he does it will be no payment unless ratified or assented to by his client.

2. He cannot give the debtor an acquittance of the claim by re-

ceiving payment thereof in a debt he, the attorney, owes the debtor.

3. He has no right to accept notes, bonds, &c, of the debtor, as

collateral security for the debt, without express authority from his client; and if he does so, his client will not be bound unless he assents to or ratifies the same.

4. A recitation in a petition in chancery, filed in a subsequent suit

against the debtor, by the owner of the claim, that his attorney had taken bonds, notes, &c, as collateral security, may not, under certain circumstances, amount to a ratification of the act of his attorney in so doing.

5. Where the plaintiff in a bill, petition or other pleading, has

stated circumstances incorrectly, with which he may well be presumed to have been unacquainted, and the defendant does not rely upon them in his answer, the plaintiff will not be held bound by the statement.

ft. If an attorney, without the authority of his client, accept bonds, &c, of the debtor, with the understanding that he is to collect them and apply them as payment on the claim when collected, in that transaction he is the attorney of the debtor, and not the attorney of his original client.

7. As soon, however, as he receives any monev on the claims thus

put in his hands for collection by the debtor, it is a payment to that extent, less his fees for collecting, upon the claim of his original client.

8. Where assets are to be marshaled, and one creditor has two

funds to which he may resort for the payment of his claim, and another has but one, the first must previously resort to the fund for payment, to which the other cannot.

9. It is error to decree a sale of real estate until the liens thereon

and their priorities are ascertained.

10. It is error to decree a sale of real estate without giving the defendant a day to redeem the property, by paying the amount charged upon it.

This was an appeal from a final decree of the circuit court of the county of Mercer, rendered on the 21st day of October, 1874, in the consolidated causes of William A. Wiley against Alexander Mahood and others, Benjamin White against Alexander Mahood and others, and Joseph H. Alvis and others against Alexander Mahood and others. Hopkins, Hull & Co. filed their petition in the said cause of White against Mahood and others.

The appeal was granted upon the petition of William A. Wiley.

The Hon. Evermont Ward, Judge of the ninth judicial circuit, rendered the decree complained of.

A full statement of the cause is given by Johnson, Judge, who delivered the opinion of the Court.

John E. Kenna and David E. Johnston, for appellant, referred to Smith's adm'r v. Lamberts, 7 Gratt., 138; Fant v. Miller and Mayhew, 17 Gratt., 187; 2 Tuck., 109.

S. 8. Green, for the petitioners, Hopkins, Hull & Co.:

An attorney employed to collect a debt is a special agent, and as such must pursue his powers strictly; he cannot do any act that will destroy the creditor's right of action, or discharge the debt, short of receiving pay- ment in full in money. He has no power to commute the debt or to receive in payment or discharge thereof the bonds or other evidences of debt on third persons. Smock v. Dade, 5 Rand., 639; Wilkinson & Go. v. Holloway, 7 Leigh, 277; Smith's adm'r v. Lamberts, 7 Gratt., 138; Harper, adm'r. v. Harvey et aL, 4 W. Va., 539; Ward, v. Smith, 7 Wall., 447; and Freeman on Judgments, §473, and cases there cited.

The answer of a defendant in equity is always competent evidence against him, when pertinent, whether between the same parties or not. Hunter v. Jones, 6 Rand., 541. And it is also evidence against a co-defendant where the rights of the plaintiff against the co-defendant are prevented from being complete by some question between the plaintiff and the defendant, whose answer is given in evidence. 1 Hanl. Chy. Pr., 842.

The attorney collecting the debt cannot receive from the debtor claims upon third persons, to collect and apply the proceeds to the payment of the debt, as collaterals, in such manner as to charge the creditor for the noncollection of them. As to such claims the attorney is the agent of the debtor and not of the creditor; and any loss from his failure to collect the claim on the third persons must be borne by the debtor, and not the creditor. Smock v. Dade and Wilkinson & Co. v. Holloway, above referred to.

A plaintiff will not be held bound by his admissions where it is well presumable that he is ignorant of the facts, and the defendant does not rely upon the admissions in his answer. 3 Green. Ev., §275.

When a creditor receives collaterals from his debtor for a pre-existing debt, he is only held to ordinary diligence in collecting them; and should he neglect to collect them, he becomes liable to the debtor, not for their face value, but only for the actual damages sustained by him. These damages being uncertain and unliquidated, cannot be pleaded as a payment or set-off in a suit by the creditor upon his original claim, but must be the subject of an independent action. Harrison v. Wortham & McGruder, 8 Leigh, 296.

J. W. Davis, for Hopkins, Hull & Co., referred to the following authorities:

Preston v. Preston et al., 4 Gratt., 88; Livesay v. Jarrett, 3 W. Va. 283; Halbertv. Montgomery, 5 Dana, 13; Scott v, Wicklife, 1 B. Mon., 353; Given v. Briscoe, 3 J. J. Mar., 532; Harrow v. Frame, 7 B. Mon. 127; Smock v, Dade, 5 Rand., 645; Wilkinson & Co. v. Holloway, 7 Leigh, 286; Card v. Walbridge, 18 Ohio, 411; Wilson v. Jennings, 3 Ohio St., 528; U. S. Dig., 1st series, vol. 2, p. 344, §329, 331; Towner v. Lucas' ex'or, 13 Gratt., 705; Langdon v. Patton, 13 Mass., 319; Stark on Ev., 820.

statement of the case by the judge.

At June rules, 1867, William A. Wiley filed his bill in the circuit court of Mercer county, alleging that Alex. Mahood had bought a tract of land of William Smith, and that he owed $600 of the purchase money, with interest thereon, subject to certain credits; that said claim had been assigned by said Smith to Parkinson Shumate; that said Shumate had recovered judgment on said claim, and that said Shumate had assigned said judgment to complainant, and prayed that the said land might be sold to pay said judgment, and that the heirs of said Smith, he having died, be made defendants, and required to make a deed for said tract of land. To this bill Mahood filed his answer, but did not claim that the judgment had been paid, or that he had any defense thereto. Wiley filed an amended bill, in which he alleged Mahood had other land, and that the land on which the lien for purchase money existed had been sold, and had not brought enough to pay his claim. It had been sold, and said Wiley became the purchaser, and on the 13th day of September, 1871, the sale was confirmed and he was given credit for what the land sold for, and a deed was directed to be made to him. Mahood answered the " amended bill, admitting he had some of the lands described, but insisting that a part he had sold and been paid for, but not conveyed, and the other had been returned delinquent. On the 15th of June, 1872, said Mahood filed a petition praying, for inadequacy of price in the sale of the land bought by Wiley, and because Wiley had been credited on the sale for moneys paid out by him in purchasing said land at a tax sale, and for other reasons, that the decree confirming the sale be set aside, and the land resold. The record discloses nothing further in reference to the petition.

Benjamin White also filed his bill against Mahood and others, alleging a claim against George W. Pearis, Sr., and Alexander Mahood, late merchants and partners, trading under the firm and style of Pearis & Mahood. In said bill, which is filed by said White against Pearis & Mahood and others, he alleges "that the property, both real and personal, of said George W. Pearis, has long since been sold and applied to older liens, and that he, the said Pearis, is now wholly insolvent." The record shows that a summons issued, but it does not show who were before the court; the return of the officer who served it, if served at all, not appearing.

To this bill Mahood filed an answer, denying that he was responsible for said debt, In this suit Hopkins, Hull & Co. filed their petition, in which they allege that on the.13th day of August, 1858, they obtained a judgment against George W. Pearis and Alexander Mahood, merchants trading under the firm and style of Pearis & Mahood, for the sum of $1,355.94, with interest and costs. And they further allege that a ft. fa. issued on their judgment; that it went into the hands of the sheriff " and that upon said fi. fa. nothing was realized; and that subsequently said Alexander Mahood placed in the hands of petitioner's counsel as collateral security, to be collected and applied as a credit on said judgment, a large amount of bonds, &c, &c, which, if they had been realized according to the amount thereof, would have nearly paid off said judgment, but such was not the fact. A copy of the receipt of said claims will hereafter be filed as a part of this petition, marked (). A large amount of said claims has not been made or realized, and cannot be made; and that after applying all that has been made or realized, or can be made, will eave a balance due your petitioners on said judgment of $1,200 or more. Your petitioners conic into this Court for the purpose of asking that in the suit of Joseph II. Alms el at. v. Reuben F. Watts et at., and also in any other proceeding pending in this Court, to subject the lands of Alexander Mahood to the payment of judgments...