United States Savings Bank v. Pittman

Wills, Circuit Judge

(after stating the faets.)

It appears from the record in this case that at the time the order was made by the Circuit Judge, overruling the demurrer and allowing a decree pro oonfesso and reference to a master that the object sought by the complainant had been accomplished. A conveyance of the mortgaged premises had been made to it, the deed delivered to complainant’s counsel and possession of the mortgaged premises delivered to complainant. The action of Attorney Bull in bringing up the demurrer for settlement was not done in the interests of the complainant, but done by him solely for his interest and for no benefit of his client. He had been advised that his demand for a fee Avas refused, and it is clear that all steps taken by him on and after February 1st, 1918, were taken by him for his interest and not that of his client.

The relation of attorney and client is a relation of the highest confidential character, and if at any time in the course of litigation, the interests of the attornéy in a suit become adverse or hostile to his client, he should cease to represent his client and give due notice of his withdrawal in order that his client may secure other counsel.

It is apparent that the entry of the final decree was solely for the purpose of attempting to collect a fee for the benefit of Solicitor Bull, The record shows that there was a dispute between the complainant and its then solicitor as to the amount and reasonableness of the fee to be paid Bull for the services he had rendered.

An attorney is entitled to compensation for services rendered, and in proper proceedings may enforce the collection of such compensation. An attorney employed at a fixed fee to perform certain services cannot be deprived of his compensation by his client preventing the performance of such services by settlement. Where an attorney performs services for which there is no agreement as to his fee, he will be entitled to recover qumitum meruit. 2 R. C. L. 1046.

Ordinarily, in foreclosure proceedings in this State, attorneys where the mortgage provides for attorneys’ fees, accept the sum allowed by the court as their fee, but such fees are allowed the mortgagee and not the attorney. Such fee is intended as an indemnity to the mortgagee for expenditures necessarily made to protect his interest. Jones Mortgages, Sec. 359.

The facts in. the instant case show clearly to our mind that at the time the final decree of foreclosure was rendered, the mortgage had been settled by the acceptance of a deed conveying the mortgaged premises to the complainant and possession taken thereof by the attorney for his client, and his co-defendant, the mortgagor was or had been attempting to rent the..premises. It is true that it is contended that the deed was only taken and held in the nature of an escrow, and this is attempted to be substantiated; by the affidavit of Pittman, until the cancellaion of the mortgage had been delivered and which was subsequently delivered to Bull by the complainant.

If the facts establish this contention, which we do not think they do, then certainly the decree should be set aside for the reason that there was an agreement to accept the deed and that there should be no deficiency decree against the defendant, Pittman, and the foreclosure decree sets out that there shall be no deficiency decree entered thereon and certainly no court of equity will permit a party to receive benefits for which he has given nothing.

The facts disclosed in this record show that at the time the order was entered on the demurrer, there had been a settlement of the case by the giving of the deed to the property in litigation by which the mortgaged premises were conveyed by Pittman and wife to the complainant, and the only condition to be fulfilled was the delivery of the satisfaction of the mortgage. Mr. Bull’s contention to the contrary was incorrect. He had been the attorney and agent of complainant and had transacted all the business relative to the litigation. The attorney for the defendant, Pittman, was also aware of these facts, and, in our opinion, the attorney should have made known to the Circuit Judge the facts relative to this deed, and had this been done, the court would not have entered the decree. It was the duty of Bull, when he was advised by his client that it would not pay the fee he demanded, to have notified his client of his further intentions in the case, so that his client could be heard. In other words, the action of Bull in procuring a ruling on the demurrer and the agreement to have a foreclosure decree without a deficiency decree and fixing the amount of his fee, was, so far as his client was concerned, against the wishes of his client and adverse to the interests of his client. He should have notified his client of his adverse views before proceeding further and given his client an opportunity to secure counsel and be represented in the further progress of the case, especially as to the question of fees to be alloAved himself. He should not have placed himself in the position of representing his client, while, in reality, he was representing only his own demand and not that of his client.

While we do not agree with the views of the complainant as to the amount of the fee to be allowed: Bull, and we believe that on this feature of the case the complainant has an entirely wrong view of the case, we think that the conduct of Bull in procuring the reference to the Special Master and the entry of the foreclosure decree, was under the circumstances an improper proceeding, and that when this was called to the attention of the Circuit Court, the same should have been vacated and set aside.

We are of the opinion that as the complainant had applied to the court for leave to substitute another attorney and to strike Bull from the case as its attorney, this should have been granted. To this motion the attorney, Mr. Bull, filed a demurrer. Upon examination of the motion and Bull’s demurrer thereto, we hold that this should have been granted, upon terms. At the time the motion Was made to strike Bull from: the record as attorney for the complainant it was apparent that there were differenees between the client and attorney to the extent that it was no longer proper that the relationship should continue with justice to either party and the orderly procedure necessary in courts of justice.

The authorities universally recognize the right of a client to terminate the relationship between himself and liis attorney at his election, with or without cause, the existence or non-existence of valid cause for the discharge of the attorney, bearing only on his right to compensation. The right of a client to change his attorney at will is based on necessity in view of both of the delicate and confidential relation between them and of the evil engendered by friction and distrust. 2 R. C. L. 927.

In our opinion, the Circuit Court should have granted this motion, and by proper order reserved the right to make an inquiry as to the proper amount to be allowed Bull on a quanUmv mermt for the services he had rendered in the case for the complainant up to the time of receiving the deed to the mortgaged premises and the possession thereof. There was no necessity or reason for the entry of the decree of foreclosure, and it appears to us that the evidence upon which the fee was fixed does not disclose the true facts of the case or of the professional services and skill rendered by Bull in the case.

For the reasons stated, the case should be reversed with directions to the Circuit Court to set aside and vacate the decree pro confesses and final decree of foreclosure and for further appropriate proceedings.

Per Curiam. — The record in this cause having been considered by this court, and the foregoing opinion prepared under Chapter 7837, Acts of 1919, adopted by the court as its opinion, it is considered, ordered and adjudged by the court that the decree appealed from be, and is hereby, reversed, and the cause is remanded with directions to set aside and vacate the decree pro confesso and final decree of foreclosure and by proper proceedings to ascertain the amount of a reasonable fee to be allowed John W. Bull for the services legitimately, actually and necessarily rendered up to the time of receiving the deed to the mortgaged premises, and also at the same time to ascertain a reasonable fee to the appellant complainant’s present attorneys for their services in procuring the vacation of the decree pro confesso and final decree of foreclosure wrongfully obtained by John W. Bull, including the representation of the case in this court, as. well as all court costs of this proceeding for the vacation of said decree pro confesso and final decree of foreclosure, including the costs of this appeal and that the amount of such last mentioned attorneys’ fees and said court costs in this proceeding be adjudged against said John W. Bull, and shall be deducted from the amount of the fee found to be due to said Bull for his legitimate services in the original foreclosure case, and upon the payment to said Bull of the balance, if any, that the deed to the premises in question made by the mortgagor to the complainant be delivered by Bull to the complainant, and that he also deliver to the mortgagor the satisfaction of said mortgage, and that the bill of complaint for foreclosure of such mortgage be dismissed. If there is no balance left due to said Bull after making the deductions hereinbefore directed, then he shall at once deliver said deed and satisfaction of mortgage as above directed.

Browne, C. J., and Taylor, Whitfield, Ellis and West, J. J., concur.