United Railways Co. v. O'Connor

132 S.W. 262, 153 Mo. App. 128, 1910 Mo. App. LEXIS 1002

• Court: Missouri Court of Appeals
• Decided: November 29, 1910
• Status: Published

Opinion

NORTONI, J.

(after stating the facts). — The essential purpose of a bill of interpleader is to protect an indifferent holder of a fund or bailee of an article from the annoyance and expense of separate actions to recover what he is willing to pay. Under the equitable principles which obtain, such a bill will lie when the same debt, fund or thing is claimed by hostile parties throug’h adverse titles derived from a common source. But the interpleader must he a mere stakeholder with no interest in the subject-matter and it must appear he' has incurred no liability to either of the claimants personally. In such circumstances the remedy is available to one who stands exposed to the risk of being vexed by two or more suits for the fund or other subject-matter in dispute. It is not necessary, however, that the stakeholder shall be liable to two judgments, for he cannot be so liable unless he has assumed inconsistent obligations and, in that event, a bill of interpleader will not .lie. [4 Pomeroy’s Eq. Jur. (3 Ed.)., secs. 1319, 1320, 1321, 1322, 1323,1324, 1325,1326, 1327; Supreme Council of Legion of Honor v. Palmer, 107 Mo. App. 157, 194, 80 S. W. 699.] In view of these principles, it is argued for plaintiff that the court erred in sustaining defendant O’Connor’s demurrer for the reason the bill discloses plaintiff to be a disinterested holder of the fund, $250, which it is anxious and willing to pay over to the rightful claimant and that it has placed itself under no liability to respond independently to either one of the defendants. It is said, too, that it recognizes its liability to some one and the only question about which a controversy is to be had pertains to the rights of-O’Con-nor, on the one part, and Bishop & Cobbs and Hausmann on the other, with respect to which question plaintiff is entirely neutral and unconcerned. The argument suggested entirely overlooks the fact that plaintiff may have assumed an obligation to one of the defendants by conduct, though no express promise was made, and that the right of such defendant as a result of this obligation may appear to the exclusion of the other beyond doubt. In other words, the argument overlooks the. fact that it may appear one defendant has a valid right to the fund and affirmatively appear as well that the other is without any right touching the matter whatever. In such circumstances, no grounds for the bill exist as the matter of right presents no question of doubt sufficient to invoke the aid of a court of equity. [Woodmen of the World v. Wood, 100 Mo. App. 655, 75 S. W. 377; 4 Pomeroy’s Eq. Jur. (3 Ed.), sec. 1328; Shaw v. Coster, 8 Paige (N. Y.) 339-347, 348; Story’s Eq. Jur., sec. 821; Beach’s Mod. Eq., sec. 148; Parker v. Barker, 42 N. H. 78, 93; 23 Cyc. 25, 26; 11 Ency. Pl. and Pr. 461, 468; Bassett v. Leslie, 123 N. Y. 396; Crass v. Memphis, etc., R. R. Co., 96 Ala. 447, 11 So. 480; Starling v. Brown, 7 Bush. (Ky.) 164.]

To a complete understanding of the whole matter, it will be necessary to refer to our statutes giving attorneys a lien on the claim or cause of action of their client for compensation, as plaintiff’s petition for an interpleading must be interpreted under the influence of those statutes and the adjudications which they have entailed. The statutes referred to are as follows:

“The compensation of an attorney or counsellor for his sendees is governed by agreement, express or implied, which is not restrained by law. Prom the commencement of an action or the services of an answer containing a counterclaim, the attorney who appears for a party has a lien «upon his client’s cause of action or counterclaim, which attaches to a verdict, report, decision or judgment in his client’s favor, and the proceeds thereof in whosesoever hands they may come; and cannot be affected by any settlement between the parties before or after judgment.” Sec. 964, E. S. 1909.

“In all suits in equity and in all actions or proposed actions at law, whether arising ex contractu or ex delicto, it shall be lawful for an attorney at law either before suit or action is brought, or after suit or actiop is brought, to contract with his client for legal services rendered or to be rendered him for a certain portion or percentage of the proceeds of any settlement of his client’s claim or cause of action, either before the institution of suit or action, or at any stage after the institution of suit or action, and upon notice in writing by the attorney who has made such agreement with his client, served upon the defendant or defondants, or proposed defendant or defendants, that he has such an agreement with his client, stating therein the interest he has'in such claim or cause of action, then said agreement shall operate from the date of the service óf said notice as a lien upon the claim or cause of action, and upon the proceeds of any settlement thereof for such attorney’s portion or percentage thereof, which the client may have against the defendant or defendants, or proposed defendant or defendants, and cannot he affected by any settlement between the parties either before suit or action is brought, or before or after judgment therein, and any defendant or defendants, or proposed defendant or defendants, who shall, after notice served as herein provided, in any manner, settle any claim, suit, cause of action, or action at law with such attorney’s client, before or after litigation instituted thereon, without first procuring the written consent of such attorney, shall be liable to such attorney for such attorney’s lien as aforesaid upon the proceeds of such settlement, as per the contract existing as hereinabove provided between such attorney and his client.” [Sec. 965, R. 'S. 1909.]

Plaintiff owns and operates a street railway system in the city of St. Louis and it appears from the allegations of the bill of interpleader that Mrs. Harrigan received an injury through its alleged negligeuce.' Because of this injury, a claim or cause of action accrued in her favor and she employed defendant John J. O’Con-nor as her counsel to prosecute the same against the railways company. In employing the counsel, Mrs. Harrigan contracted in writing to pay him fifty per cent of whatever amount might be obtained on her claim or cause of action by either suit or compromise and of this contract defendant O’Connor notified plaintiff, to the end of affixing his right for compensation from it though the claim or cause of action might eventually be settled with Mrs. Harrigan without his written consent. It appears, too, from the- bill that defendant John J. O’Connor, in compliance with his contract to that effect, instituted a suit against plaintiff on the claim or cause of action referred to and that this suit was subsequently settled by plaintiff with Mrs. Harrigan by paying to her five hundred dollars without first having obtained the consent of defendant O’Connor. But it is averred in the bill Mrs. Harrigan agreed to pay the fees of her counsel. The statute substantially provides that if a settlement be made with the attorney’s client, after notice of his contract and lien, as in the circumstances of this case, the right of the attorney to enforce his lien for the amount agreed upon shall not be affected thereby. It is the rule of decision under the second section of the statute quoted (sec. 965) that by effecting a settlement with the client, after notice of the lien, without the written consent of the attorney, a party operates a cause of action to arise in favor of the attorney which may be enforced against him by a suit at law for the precentage of the settlement stipulated for in the contract of employment. [Yonge v. St. Louis Transit Co., 109 Mo. App. 235, 84 S. W. 184; O’Connor v. St. Louis Transit Co., 198 Mo.622, 97 S. W. 150; Taylor v. St. Louis Transit Co., 198 Mo. 715, 97 S. W. 155.]

The allegations of the bill of interpleader reckoned, in a measure, with the statutes above quoted, for they proceed to aver and concede a liability to some one in the amount of $250, which is fifty per cent of $500, the amount for which the claim or cause of action of Mrs. Harrigan is said to have been settled. Notwithstanding the attorney’s lien statutes, plaintiff was free to settle her case against the street railroad company; for in the interest of the peace and repose of society the law encourages the compromise and adjustment of litigation. But though she was free to settle the controversy with the present plaintiff without the written consent of her counsel, the rights of O’Connor,- the attorney, were not disturbed by the settlement. Accepting the averments of the bill as importing verity, as Ave must on demurrer, it appears Mrs. Harrigan agreed in the settlement to pay her counsel out of the five hundred dollars she received. This being true, the settlement liquidated the entire cause of action and fixed O’Connor’s right of recovery against the present plaintiff at the amount of $250 or fifty per cent of that paid by Mrs. Harrigan for her and her counsel as well. [Curtis v. Metropolitan Street Ry. Co., 118 Mo. App. 341, 354, 94 S. W. 762; s. c., 125 Mo. App. 369, 102 S. W. 62.]

From the averments in the bill, when considered under the influence of the statutes and decisions referred to, it is obvious that it discloses on its face a valid and enforcible obligation in favor of defendant O’Con-nor against plaintiff to the amount of $250, unless other averments therein show his right to have' been divested or otherwise destroyed. In other words, it appearing that O’Connor actually instituted the suit for his client under contract for fifty per cent, served notice- on plaintiff to that effect, and that it afterwards settled the cause of action with Mrs. Harrigan without his written consent, its conduct raised an obligation under the law on its part to pay O’Connor fifty per cent of the amount, or $250. On the face of the bill, this obligation is to be declared as a liability of plaintiff to defendant O’Con-nor, unless other averments show' him to have had no right in the premises at the time the settlement was made. It is averred in the bill that Mrs. Harrigan attempted to discharge her attorney, O’Connor, before the settlement was made, however, and it is averred, too, that even -after this O’Connor notified plaintiff his fees were unpaid and that he still claimed his lien for compensation. But there is no averment that Mrs. Harrigan did discharge O’Connor as her counsel so as to divest his lien or right of recovery against plaintiff. We entertain no doubt that, notwithstanding the attorney’s lien statutes, a client may, for sufficient cause, discharge counsel, and it.may he under proper circumstances the lien of a recreant so discharged may be forfeited. But there is no averment in the bill before ns that Mrs. Harrigan discharged O’Connor or that she had any cause to so do. There is no suggestion that he was recreant to his trust. The bill avers only that she attempted his discharge and in the absence of averments to the effect that he was actually discharged and setting forth good cause therefor, it appears from the bill that O’Connor continued as counsel for Mrs. Harrigan at the time the settlement was made with her.

The allegations in the bill pertaining to the other attorneys do not import any right whatever in them to the •fund referred to as against defendant O’Connor, for those allegations omit to suggest that those attorneys were employed by Mrs. Harrigan with respect to the claim or cause of action on which O’Connor had instituted the suit. It is averred, substantially, upon information and belief, that Mary Harrigan also entered into an agreement with defendants Albert E. Hausmann, John E. Bishop & Thomas A Cobbs, whereby Mrs. Harrigan agreed to pay Bishop & Cobbs and Hausmann fifty per cent of the amount recovered by her and that said attorneys claim a lien on the fund arising from the settlement of the alleged cause of action of Mrs. Harrigan. Not a word in this allegation suggests that Mrs. Harrigan employed these attorneys for the purpose of performing any service for her with respect to the cause of action on which O’Connor had instituted a suit. So far as the allegations of the bill touching this matter are concerned, it may be Mrs. Harrigan employed the several attorneys last referred to for the purpose of performing legal services as to an entirely different matter and agreed to give them a lien on the indentical fifty per cent of her cause of action against plaintiff on which O’Connor had instituted the suit, for it is not averred these attorneys claim their lien under the statutes quoted. The bill avers, too, that Bishop & Cobbs and Hausmann rendered certain legal services to said Mary Harrigan but plaintiff avers that it is not familiar with the exact nature of such services. Not a word in this averment suggests that the attorneys mentioned rendered any service touching the cause of action on which O’Connor had instituted the suit and so it is throughout the bill— no averment appears to the effect that Bishop & Cobbs and Hausmann were employed or ever performed any service touching the cause of action on which O’Con-nor’s lien had attached. It is true there is an averment to the effect the claims of Bishop & Cobbs and Hausmann and O’Connor are indentical and for the same sum and are not independent, but inferences are not indulged in aid of the bill on demurrer as they are after judgment, when no demurrer. has been interposed. No one can doubt that, in order to show a color of right in Bishop & Cobbs and Hausmann with respect to this fund as against defendant O’Connor, the • bill should contain some pointed averment to the effect that these attorneys performed services for Mis. Harrigan under an agreement with her as to compensation touching the .indentical claim or cause of action on which O’Connor had instituted the suit, for unless such be shown, then no right of lien is suggested under the statutes in their favor against the indentical fund. The question as to whether or not Bishop & Cobbs and Hausmann were entitled to a lien on the indentical fund as that of O’Connor, if it appeared they had been employed in the indentical suit, is not made and will not be decided. It may be that it is not essential to show a color of right in the adverse claimants as a usual thing, but it is entirely clear, in the absence of averment in the bill showing defendants Bishop & Cobbs and Hausmann to have been employed or to have rendered services in the case of Mrs. Harrigan against plaintiff, that they had no enforcible right whatever as against defendant O’Connor with respect to the fund involved, for by operation of law Mary Harrigan had assigned that fund to O’Connor by her contract executed at the time of the institution of the suit, and she certainly could confer no rights on others touching the same, unless it would be in a case where her original counsel was discharged for good cause, his rights forefeited and a new employment of other attorneys was made about the same subject-matter.

Among other things, a bill of interpleader should show not only the willingness of the stakeholder to render the debt or duty to the rightful claimant, but it should show as well that he is ignorant or in doubt which is the rightful one and is in real danger or hazard by means of such doubt from their conflicting demands. It is not required that the bill should show an apparent title in either of the defendants but if it does sIloav on its face that one of the defendants is certainly entitled, on the facts alleged, to the debt, duty or fund as against the other defendant therein, then it is insufficient on demurrer, for the reason that it reveals no question of doubt about which the aid of the court should be invoked. [4 Pomeroy’s Eq. Jur. (3 Ed.), sec. 1328.] We believe it is universally true that where the averments of the bill show one of the defendants is entitled to the fund to the exclusion of the other, a demurrer should be sustained. [Bassett v. Leslie, 123 N. Y. 396; Woodmen of the World v. Wood, 100 Mo. App. 655, 75 S. W. 377; Crass v. Memphis, etc., R. Co., 96 Ala. 447; 11 Ency. Pl. and Pr. 461, 468; Funk v. Avery, 84 Mo. App. 490; Sullivan v. Knights of Father Mathew, 73 Mo. App. 43; 23 Cyc. 25, 26; 4 Pomeroy’s Eq. Jur. (3 Ed.), sec. 1328; Starling v. Brown, 7 Bush 164; Story’s Eq. Jur. sec. 821.] The rule that a demurrer will lie in such circumstances and the grounds upon which it proceeds are thus stated by numerous authorities: “If the plaintiff states a case in his bill which shows that one of the defendants is entitled to the debt or duty, both defendants may demur; the one upon the ground that plaintiff has a perfect defense at law against his claim, and the other on the ground that plaintiff has neither a legal nor an equitable defense to his claim, and has therefore no right to call upon him to interplead with a third person who claims without right.” [Shaw v. Coster, 8 Paige (N. Y.) 348; Parker v. Barker, 42 N. H. 78, 93; Briant v. Reed, 14 N. J. Eq. 271; Starling v. Brown, 7 Bush. (Ky.) 164; Sprague v. West, 127 Mass 471; Crass v. Memphis, etc., R. Co., 96 Ala. 447.]

It appearing from the bill that plaintiff is liable to respond to defendant O’Connor to the amount of the fund and that defendants Bishop & Cobbs and Hausmann are without right as against him, or clearly without any enforcible right to the exclusion of O’Connor, as the facts are averred, the court very properly sustained the demurrer and'the judgment should be affirmed. It is so ordered.

Reynolds, P. J., and Caulfield, J., concur.