Meacham v. Pinson

Mississippi Supreme Court
Meacham v. Pinson, 60 Miss. 217 (Miss. 1882)
Chalmers

Meacham v. Pinson

Opinion of the Court

Chalmers, J.,

delivered the opinion of the court.

Crump & Co. executed to Mrs. Pinson their note for $6,000 of borrowed money, embracing in it a stipulation to pay all attorneys’ fees and costs expended in collecting it, and depositing, as collateral security, certificates of stock in the Holly Springs Savings Bank of the face value of $8,000. The debtors having died without making payment, Mrs. Pinson demanded of the bank a transfer to herself on its books of the stock, which was by the bank refused, on the ground that Crump & Co. were indebted to it in the sum of $6,000, and that, by its by-laws, the bank had a lien on the stock superior to that of Mrs. Pinson as assignee of the certificates.

In a suit brought by Mrs. Pinson against the bank for aeon-version through this refusal of the stock pledged to her, she recovered judgment for its full value, though it amounted to largely more than the sum due for the loaned money and interest, and she had adduced no proof of the amount of her lawyers’ fees and costs. On appeal here we affirmed the principles of law in her favor, but held that she was entitled under the proof only to the amount of the loaned money and interest, no proof as to the lawyers’ fees having been made. To escape a reversal she entered a remittitur of all beyond the amount of the note and interest. The case is reported in 58 Miss. 421. *225During the pendency of this suit the estate of Crump & Co. had been placed in the hands of a receiver and was being administered as an insolvent estate in the Chancery Court of Marshall County, and Mrs. Pinson had there probated her claim against it for the sum of $6,000. ' A dividend of twenty per cent had been decreed upon all the probated claims, and under this Mrs. Pinson was entitled to the sum of twelve hundred dollars, but the receiver declined to pay it over until the termination of the litigation between herself and the bank. That litigation having now ended, she has applied to and obtained from the Chancery Court an order upon the receiver to pay to her so much of the dividend heretofore decreed as is necessary to liquidate the attorneys’ fees paid by her in the prosecution of her suit against the bank, which Crump & Co., by the stipulation of their note, had obligated themselves to pay.

She proved that those fees amounted to $1,050, and the court ordered the receiver to pay over that sum to her. From thi$ order the present appeal is prosecuted by the other ci’edi-tors of Crump & Co. The decretal order of the Chancery Court was erroneous. Mrs. Pinson was a creditor of Crump & Co. for thé amount of the lawyers’ fees in addition to the money borrowed by them, and these fees were originally as much protected by the collaterals deposited as was the loaned money ; but when she voluntarily remitted in this court, in her suit against the bank, all beyond the amount due for money loaned, she made herself an ordinary unsecured creditor as to all else. When, therefore, she comes now to demand the balance due, to-wit: the lawyers’ fees and costs expended in the former litigation, she must come as other unsecured creditors and accept with them a pro rata upon her debt.

Her rights in this respect are not enlarged by the former decree awarding to her a dividend of $1,200. Such orders are interlocutory in their character, and are subject to the control of the court until the final winding up of the estate. Neither would her rights be different if the dividend in her favor had *226been paid to her, as it ought to have been, at the time it was decreed. In that event the amount, $1,200, would have been indorsed upon her probated claim of $6,000. If suing upon it, thus credited, and failing to adduce any proof as to her lawyers’ fees, she had nevertheless recovered a judgment for the full value of her collaterals, she could only have obtained an affirmance here, by entering a remittitur, sufficiently large to operate both as a credit for the $1,200 and an abandonment of all claims against the bank, and hence all claims upon the collaterals for the fees ; and when, thereafter, she went against the estate of her debtors for the amount still due by them for the fees, she would have occupied exactly the same attitude that she now does, that is to say, she would have been already paid off in full as to all save the fees, as to which, by her own action, she had made herself an unsecured creditor. As to these, therefore, treating that as done which ought to have been done, she is entitled only to the same pro rata received by other creditors.

The validity of the stipulation for the payment of lawyers’ fees is assailed by counsel for appellants. The question has been much mooted elsewhere, and the authorities are not harmonious. We see nothing immoi’al or contrary to public policy or usurious in such contracts, and concur with those courts which hold them valid.

An appeal from the decretal order here considered was taken to a former term of this court by the receiver of the estate of Crump & Co. and was by us dismissed, upon the ground that he had no interest in the matter, and being the mere organ or hand of the Chancery Court for executing its will, could not refuse to obey its orders or appeal from its decrees. It is insisted that the dismissal of that appeal is a bar to the prosecution of this. This position is wholly untenable.

The former appeal, having been prosecuted by one who had no right to maintain it, was a nullity, which in no manner affected the rights of the real parties iu interest.

*227Eeversed and remanded for further proceedings in accordance with this opinion.

Reference

Full Case Name
M. L. Meacham & Co. v. Lina D. Pinson
Cited By
6 cases
Status
Published
Syllabus
1. Insolvent Estate. Dividend. Pro rata. Interlocutory order. Case in judgment. C. borrowed of Mrs. P. $6,000, and gave his promissory note to her for that amount, embracing in it the stipulation to pay all attorneys’ fees expended in collecting it, and depositing with her as collateral security $8,000 in certificates of stock in a certain bank. C. made default in the payment of his note, and died; and P. recovered judgment in the Circuit Court against the bank on the certificates of stock in an amount exceeding the sum due on the note. Upon appeal to this court it was held that she was only entitled to recover the amount due for loaned money, there being' no proof as to the attorneys’ fee. P. entered a remittitur of all above the amount due for the loan, and judgment was rendered accordingly. During the pendency of that suit O.’s estate was placed in the hands of a receiver, and was being administered in the Chancery Court as an insolvent estate; and P. probated against it her claim for $6,000. A dividend of twenty per cent was decreed upon all probated claims, thereby awarding a pro rata of $1,200 to P.; but the receiver refused to pay anything to P. until the termination of litigation between her and the bank. After that litigation terminated, she obtained from the Chancery Court an order directing the receiver to pay her so much of the dividend theretofore decreed to her as was necessary,to liquidate her attorneys’ fees in her suit against the bank', which she proved tobe $1,050. Prom that order the other creditors of C. appealed. Held, that the order appealed from was erroneous. P. was entitled to a pro rata on the amount of her attorneys’ fees, that being the extent of her claim against C.’s estate after her remittitur, and to no more; and her rights in this respect were not enlarged by the existence of the former decree awarding her a dividend of $1,200, such decrees being interlocutory and subject to the control of the court till the winding up of the estate. 2. Same. Appeal. When a dismissal not a bar. In the case above stated the receiver appealed from the order directing him to pay to P. the amount of her attorneys’ fees; and the appeal was dismissed by this court on the ground that the receiver had no interest in the matter, and being the mere organ of the court, could not refuse to obey, nor appeal from, its decrees. Upon this appeal, taken by creditors of C.’s estate, it is insisted that the dismissal of the receiver’s appeal is a bar to the prosecution of the present appeal. Held, that such dismissal constitutes no bar to this appeal. 3. Promissory bioTK. Stipulation for payment of attorneys’fees. A stipulation in a promissory note for money that the maker will pay (in addition to the principal and interest agreed to be paid) the amount of all attorneys’ fees which the payee may have to expend in the collection of the note is not contrary to public policy, nor usurious.