Smith's adm'r v. Lamberts
Smith's adm'r v. Lamberts
Opinion of the Court
The only question brought before the Court for its decision in this case, is. whether the claim of S. & J. Lambert against the representatives of Dishman has been paid; and its solution depends on the extent of power with which an attorney at law is clothed, who, in the ordinary course, is entrusted by a creditor with a bond, note or other evidence of debt, for suit and, collection. Practitioners of the law in this country are generally regarded by the Courts as vested with a larger authority in the control and disposition of demands placed in their hands for collection, than has been usually attributed by the common law to an attorney at law in England. Here the characters of attorney and barrister or counsellor at law, are in most instances blended, and the powers pertaining to this double capacity, are held to be of a wider' scope than those belonging to the office of an attorney merely.
He may accept payment of the debtor, if voluntarily made to him, at any time whilst his • powers continue ; or he may take such steps as he may think best calculated to procure payment. In the honest exercise of a sound discretion, unless otherwise instructed by his client, he may delay bringing suit, he may consent to continuances of it, after it is brought, during its progress to judgment, and after judgment he may postpone issuing execution; he may elect whether to take one against the person or the lands or goods of the. debtor ; and if he issues one against the lands or goods,, he may direct on what property of the debtor it shall be levied; and, after levy he may control the proceedings of the sheriff or other officer having charge of the execution, and may from time to time postpone a sale of, the property levied upon.
It. has been decided by the Supreme court of the United States, in the case of the Union Bank of Georgetown v. Geary, 5 Peters’ R. 99, that an agree-ment made by an attorney, in,whose hands a promissory note was placed for collection, with an endorser, that,if the latter would confess judgment and not dis-.
The subject has been before this Court in several cases. In Hudson v. Johnson, 1 Wash. 10, and Branch v. Burnley, 1 Call 147, it was decided that, in general, payment to an attorney at law of a debt which he is employed to recover, is good on the custom of the country, particularly if he have possession of the evidence of debt. In the case of Smock v. Dade, 5 Rand. 639, it is asserted by the General court as well settled doctrine, that whilst the authority of an attorney does not extend to the commutation of a debt without the client’s assent, his receipt of actual payment is complete protection to the debtor. In that case the attorney received a portion of the debt in money, a draft at ten days sight, and a bond at four months; and the receipt given by the attorney stipulates that the draft and bond when paid should be,together with the sum paid in money, in full of the executions of the creditor against the debtor. The amount of the draft was paid to the attorney, but there was no evidence to shew that he had ever realized any thing on the bond. In this state of things the Court held that the amount produced by the draft constituted to that extent a good payment, but that the creditor ought not to be charged with the bond; that the Court below ought not therefore to quash an execution which the creditor had issued to enforce collection, “ although it would have been entirely proper if
The decision in Smock v. Dade has been approved ^Y this Court in the case of Wilkinson v. Holloway, 7 Leigh 277. In the last mentioned case it was decided that it was not competent for an attorney employed to collect a debt, to discount from it a debt be himself owes the debtor, or to take as an absolute payment or satisfaction the debtor’s assignment of a bond of a third person. But the Court at the same time recognize it as well settled doctrine that an attorney at law who has possession of the evidence of debt, or has obtained a judgment for his client, may receive from the debtor payment of the debt; and that the creditor having confided in him, not only to sue, but also to collect and receive the money, is bound by the payment.
I do not see how we can approve the decision in Smock v. Dade, in regard to so much of the creditor’s demand as was held to be paid by the proceeds of the draft, and yet consistently decide that the debt in this case has not been satisfied by Brooke’s receipt in actual money of the amount of Coakley’s note.
It is true there is a difference in the wording of the written receipts given by the attorneys in the two cases, but I cannot perceive any such marked variance in their phraseology as would justify us in saying that the coming of the proceeds of the collateral debts into the hands of the attorney should in one case constitute a payment ; but that, in the other, payment could not be predicated of the transaction till such proceeds were handed over by the attorney to his client, the original creditor.
The receipts vary from each other in two particulars. In Smock v. Dade the signature of the attorney’s name is followed by the addition of the word “ attorney.” In
And I cannot perceive how any more extensive control over the rights and interests of his client is asserted by an attorney in the undertaking that certain collateral securities placed in his hands for collection shall, when paid, be applied as a credit to his client’s demand, than in undertaking that, when paid, the proceeds shall be in full of the original debt. The relations of the several parties, each to the other and to the subject matter of the contract, and the purposes sought to be accomplished by the attorneys and the debtors by the arrangements made between them, in the two cases, were essentially the same.
Any argument, by way of analogy, to be drawn from the law regulating the property in a fund which has come into the hands of one holding towards it the double relation of executor and legatee, or of executor and guardian, furnishes, I think, no aid to the pretensions of the appellees. In such cases, the party coming into the possession of the fund, is considered as taking possession in the first instance, in the character of executor, because he cannot in the first instance, according to law, take possession in any other character, and he will be presumed to have possessed himself rightfully, and not wrongfully. Being originally so possessed, he will be presumed to continue to hold in the same character until some act is done, indicating decisively a purpose to hold in his other character. Generally, in such cases, there are others having claims upon the fund, whose rights and interests are to be adjusted and settled before the executor can legally elect to hold it in his other character of legatee or guardian. Here by the very terms of the agreement, the fund, when received, was to be applied as a credit to the claim of the Lamberts. There were no rights or interests of other persons to be looked to and adjusted before the attorney might lawfully hold the fund as the money of his ori
It is urged, that if an attorney, entrusted with the collection of a debt, may thus treat with the debtor, and accept from him claims on third persons to be collected, and credited to the debt, he has it in his power to subject the creditor to several settlements with him, instead of one. The fact that a creditor may be thus occasionally subjected to inconvenience, furnishes, it seems to me, no argument against the legal existence of such a power: for the inconvenience is one which may
It is also urged, that the executors had a right at any time previous to the collection of Coakley’s note, to withdraw it from the hands of the attorney; and that even after the collection, they had a right to revoke the directions given as to the application of the proceeds. Even if the first branch of the proposition were law, it would, by no means, follow that the second was also : for according to this hypothesis, so soon as the note was collected, it was converted into something belonging to the debtor, to wit, money, which the attorney had a right to receive in payment of his client’s demand, and which, by the express agreement between him and the executors, it was stipulated should be applied as a credit to said demand. But I do not think that either branch of the proposition is true. It is true, that this Court, in the case of Beers &c. v. Spooner, 9 Leigh 153, decided that a verbal direction given by a person having claims in the hands of an attorney for collection, to pay part of the money when collected, to another in satisfaction of a debt due to the latter from a third person, was revocable by the person giving the directions in his lifetime, or by his administrator after his death. Judge Tucker, however, in assigning .the reasons of the Court, asserted principles, and approved of a decision furnishing ample authority for treating the •transaction now under consideration, as an irrevocable dedication by the debtor of a fund for the payment of his debt. He says, “ If Dudley (who was the person giving the directions) had been bound for the debt, and .had directed Spooner (the attorney) to pay, there would
Upon the authority of the principles declared in the foregoing case, I think we would be well justified in treating the transaction between White, the executor, and Brooke, as an irrevocable appropriation by the former of the fund arising from the collection of Coakley’s note to the payment of the demand due the Lamberts. The fact that Brooke would, in this aspect of the case, be acting as the attorney, agent or trustee of both creditor and debtor, in the prosecution and collection of the collateral security, does in no wise impair or detract from his original right and duty as attorney of the Lamberts, to receive money of the debtor, whenever realized, in payment of the demand, and grant him an acquittance for it. So viewing the case, were it not for the fact that the attorney stipulates in the receipt for deducting his fee and commissions from the fund, and the want of proof that such deduction was in truth ever made, it would seem to me that the collection of the money, its coming into the hands of one authorized to receive it, and the acquittance of the debtor, would be, necessarily, in legal contemplation, simultaneous acts, or rather one and the same act. Does the fact, that the attorney was only to apply the balance of the pro
A decision which would deny to such a transaction the force of a payment, would, it seems to me, be at war with the general practice and understanding of the country, and operate much to the detriment of creditors. An attorney is generally employed in the collection of a debt, not merely because of a belief on the part of the creditor, in his skill, in the use of the ordinary legal means used for the enforcement of claims, and his promptness in paying over his collections, but also, because of his knowledge of the means, situation and relations of the debtor, and his talent in making and availing himself of such treaties and negotiations, as will be likely, without in any measure jeoparding the rights of the client, or resorting to legal coercion, to procure payment of the demand. To say that the receipt of money by the attorney in such a case, shall not constitute a payment by the debtor, is to strip the former of a power, which, to the honour of the profession, is very rarely used except to promote faithfully, the best interests of the client; and to subject an absent creditor who has not given special instructions to his attorney, to a very great disadvantage in a struggle for the effects
I am therefore of opinion, that so much of the decree appealed from, as relates to the demand of the Lamberts, ought to be reversed with costs, and the enforcement of the same against the representatives of Dishman perpetually enjoined.
The other Judges concurred in the opinion of Judge Daniel.
Decree reversed.
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