McCracken v. Harned

44 A. 959, 59 N.J. Eq. 190, 14 Dickinson 190, 1899 N.J. Ch. LEXIS 20

• Court: New Jersey Court of Chancery
• Decided: December 14, 1899
• Status: Published

Opinion

Grey, V. C.

The admissions of the answer and the proofs show that the defendant received all of the accounting by the Philadelphia attorneys and also the payment of the moneys collected, and the delivery of the uncollected notes, for the complainant, and that he turned over to the latter a portion of the cash received for him, thus acknowledging his liability to account to the complainant for moneys derived from the collection of the notes. There is neither allegation nor proof that the defendant has in fact fully accounted to the complainant for these moneys and notes so by him received. The setting'up of the claim of a right to retain these moneys, is of itself a showing that the defendant asserts a right in the fund in his hands. There is sufficient evidence to show that the complainant demanded an account. He lias received none, except so far as the copy of the letter written by the Philadelphia attorneys to the defendant might be deemed an account. But it will be noticed, that although the letters were addressed to the complainant, the moneys collected and the notes were not turned over to him by the Philadelphia attorneys but to the defendant, by whom part of these moneys were paid over to the complainant. The defendant still .has the notes and also a portion of these collections, amounting to something over $200, which he claims the .right to retain for services, &c.

The claim set up by the defendant for counsel fees is not a sum certain, nor is it averred or proved under any express contract, nor by any other mode which fixes the amount due to the defendant as a liquidated sum. What the defendant claims is, by way of set-off or counter-claim, a payment in the nature of compensation for services rendered. Neither the services nor the claimed compensation are of a definite character. No judgment at law has established a right to this compensation or fixed the amount thereof, so that by this defence the defendant sets up in response to a clear liability to account for moneys and property in his hands, a claim that unliquidated damages shall be allowed to him by way of set-off.

Whether the defendant is in fact entitled to have allowed to him such unliquidated damages as he sets up in his answer, is a matter which the court of appeals has declared must be determined at law. Trotter v. Heckscher, 13 Stew. Eq. 612; Alpaugh v. Wood, 18 Stew. Eq. 153. In the latter case the court of appeals declared that “ a purely legal demand for unliquidated damages is not cognizable in a court of equity.”

It should be noted that this is a denial that this court has judicial power to consider a legal demand for unliquidated damages by way of set-off, and that the declaration was made in a cause wherein equitable jurisdiction on other grounds had concededly attached. A decree was made for an accounting and discovery, but it appearing that the defendant’s counter-claim could have been recouped if there had been a suit at law, the court of appeals declared that the proper course would be to suspend the enforcement of the decree in equity for the accounting until an opportunity should be afforded to the other party to test, by an action at law, the validity of the counter-claim which they had set up.

The defendant contends that he has an attorney’s lien upon the money and the notes in his'hands, but even if he has such lien, he is not thereby freed from liability to account for the property of the complainant which he has received, as he admits, as complainant’s counsel.

The complainant in this case is entitled to an accounting. A decree will be advised accordingly, but with a clause suspending its enforcement until an opportunity shall have been afforded to the defendant to establish at law his right to compensation touching the matters set up in his answer by way of set-off.