Chance v. Commercial Credit Co.

118 S.E. 465, 30 Ga. App. 543, 1923 Ga. App. LEXIS 525

• Court: Court of Appeals of Georgia
• Decided: June 27, 1923
• Docket: 14058
• Status: Published

Opinions

Per Curiam.

The plaintiff, Chance, alleged that in a certain cause he, the defendant Myers, and the firm of C. H. & R. S. Cohen, all being attorneys representing at the outset different clients, agreed to combine forces and to represent jointly their several clients, whose interests were the same, upon a stipulation that the fees were to be equally divided among the plaintiff and Myers and the firm mentioned. It appears that their clients were creditors and claimants to a fund much less than the amount of the claims. It is alleged that the plaintiff has “faithfully performed his duties as an associate,” and “ diligently and faithfully performed all his duties in behalf of all clients,” in pursuance of the agreement, the things done being set forth with some detail; and that after all claims of their clients were allowed by the court, Myers, by a letter of a certain date, addressed to the plaintiff, did seek and attempt, and is still seeking and attempting, to avoid his contract for the division of fees, of which, under the agreement, he is indebted to the plaintiff in a stated sum, as shown by a given calculation, the plaintiff and the firm of C. H. & R. S. Cohen being ready and willing to carry out the pooling agreement. The Commercial Credit Company, one of the clients of Myers, is also made a party defendant, in whose behalf - it is averred that Myers had full authority to associate counsel, and that he did so with its knowledge and consent. It is stated, as a conclusion, that this ■company is bound to the plaintiff with Myers, under the agreement made with the plaintiff by the latter. As a basis for the recovery of attorney’s fees in the present action, it is alleged that as a result of their “ arbitrary, unfounded, and unjust action here-? in, . . in their effort to avoid the just payment of fees pursuant to the terms of their written contract, petitioner has been forced to incur great expense to himself and to employ counsel in his behalf; that said parties have acted in bad faith and have been stubbornly litigious, and, under section 4392 of the Code, petitioner is entitled to recover from defendant all expense incident to this litigation.”

In response to demurrers, the letters establishing the agreement .and also the letter of repudiation by Myers were attached to the petition by amendment. The letter last mentioned recites that the writer, at the time of the agreement, did not have in contemplation “ agreeing to the extortionate fees which I understand you [Chance] propose to'have the court grant, in the distribution of the assets of the company, to the auditor and the auditor’s attorney, as the allowance of such extortionate fees would be to my ■own clients’ great detriment, as they have 80 per cent, of the proven claims against the estate, and especially as I am reliably informed that these very excessive fees you are asking for the auditor- .and his attorney are to be divided equally between these gentlemen .and you, and for that reason they are asking for twice what they .normally would ask and would have been glad to accept.” The letter disavows any desire for a participation in the fees to be .awarded to the auditor and his attorney, and in effect withdraws from the original agreement to pool.

The defendants demurred severally, upon grounds both general and special. In view of the amendment, the only special demurrer of the defendant Myers with any merit is that which disputes the ■claim for attorney’s fees as being unauthorized by the pleadings.

If the plaintiff was guilty of the conduct charged in the quoted letter of the defendant, he would not be entitled to recover for the services which he claims to have performed under the pooling agreement. He owed an individual allegiance not only to his original clients, but to those of the attorneys with whom he became associated. The fund to be distributed was not enough to satisfy their several claims. Any unfair reduction of it for the payment of the fees of the auditor and the auditor’s attorney would have been detrimental to the interests of his clients, and a participation by him in an effort to that end would have been inconsistent with his duty to them. If, therefore, the plaintiff engaged in the conduct ascribed, Myers was justified in withdrawing from the original agreement. See, in this connection, Larey v. Baker, 86 Ga. 468 (1 a) (12 S. E. 684); Stubinger v. Frey, 116 Ga. 396 (42 S. E. 713); Cox v. Sullivan, 7 Ga. 144 (2); Baker v. Humphrey, 101 U. S. 494 (3) (25 L. ed. 10651.

We are not unmindful of the rule that a declaration, complaint, or equivalent pleading alleging material and relevant facts which are a defense to the action is bad, unless it also alleges facts avoiding such defense. 6 Stand. Enc. Procedure, 681. See also 31 Cyc. 109, § 15; 21 B. C. L. 491, § 55. This principle was recognized in Cedartown Cotton A Export Co. v. Miles, 2 Ga. App. 79 (1), 83 (58 S. E. 289), where.it was said that, “if the facts as alleged also reasonably tend to establish some defense which would defeat the action, enough additional facts must be set out to negative this defense.” We do not think this principle is applicable here, for the reason that the petition, in quoting the defendant’s letter setting up the breach of the contract, does not allege any fact amounting to a defense, but only states Myers’ contention as to his justification. Moreover, even if the principle could be taken as applicable, the petition, as against a general demurrer, contains a sufficient denial of its truth. It is alleged that the plaintiff diligently and faithfully performed all of his duties to his clients. This averment and the charges of the letter could not both be true. It is also alleged that the action of Myers was “ arbitrary, unfounded, and unjust.” Thus, even if the petition could be construed as anticipating the defense, the allegations are also sufficient to negative it. What we have said above has reference only to the petition when considered on the demurrer of the defendant Myers.

“Where a demurrer to a petition contains grounds both of general and of special demurrer, and the trial judge, without specifying the grounds or the basis of his decision, passes a general order sustaining the demurrer and dismissing the petition, the judgment will be treated as sustaining the entire demurrer upon all its grounds, and the special as well as the general grounds must be considered on review, if the petition is not subject to the latter.” Willingham v. Glover, 28 Ga. App. 394 (1) (111 S. E. 206). It is objected by special demurrer that the petition stated merely the pleader’s conclusions as to the liability of the Commercial Credit Company; but even giving effect to the conclusions, there is a failure to show any liability whatever as to this defendant. The petition alleges nothing that would show an agreement by the Credit Company to pay to the plaintiff anything for his services, but only that it consented for Myers to associate the petitioner on terms of an equal division of the fees which the counsel would respectively receive from their original clients, which as to Myers are alleged to have been contingent. No cause of action was set forth as against the Credit Company. See, in this connection, Mathews v. Giles, 108 Ga. 364 (33 S. E. 1006); Carr v. Witt, 137 Ga. 373 (2 b) (73 S. E. 668). In this view, it is unnecessary to pass upon the special demurrers of the Credit Company.

One of the special demurrers of Myers objects that the averments of liability for attorney’s fees as a part of the expense of the instant litigation are but conclusions. We think that this demurrer was well taken. “ Expenses of litigation are not recoverable by the plaintiff in an action for damages for the mere breach of a contract, when it does not appear that such contract was entered into by the defendant in bad faith, or procured by him by fraud or deceit.” McKenzie v. Mitchell, 123 Ga. 72 (1) (51 S. E. 34); Town of Climax v. Burnside, 150 Ga. 556 (2) (104 S. E. 435). The defendant could not have been stubbornly litigious in a mere refusal to pay.

The judgment on the general demurrer of the Commercial Credit Company is affirmed. As to the defendant Myers, the petition not being subject to general demurrer, the order dismissing it is reversed; but the ground of special demurrer,.going not to the -whole petition but .only attacking the claim for attorney’s fees, was properly sustained.

Judgment reversed.

Jenhins, P. J., and Stephens, J., concur. Bell, J., dissents.