Case ID: ny-st-rep_41/html/0365-01.html
Source: Caselaw Access Project
Author: {"author": "Andrews, J", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Artemas H. Holmes et al., App’lts, v. George S. Evans et al., Resp’ts.
    
    
      (Court of Appeals,
    
    
      Filed December 1, 1891.)
    
    Attorneys—Compensation for services.
    Plaintiffs, a firm of attorneys, were employed by defendants to litigate or make settlement of certain claims, they to receive a specified percentage of “such recovery or settlement in kind” with the right for defendants “within sixty days to substitute a reasonable cash fee,” the balance, after deducting plaintiffs’ portion, to be divided between defendants. A settlement made by them not being satisfactory, plaintiffs gave a consent to substitution, stating that if a settlement was made on substantially the terms rejected, they should be entitled to their commission. IKd/that a performance of the services was in effect a condition, and non-perform-once by plaintiffs would defeat their equitable right, and their abandonment of the case forfeited their rights -under their agreement.
    
      Appeal from judgment of the New York superior courts general term, affirming judgment for defendants, entered* upon report of referee.
    
      William B. Hornblower, for app’lts: John C. Tomlinson, for resp’ts.
    
      
       Affirming 36 St. Rep., 933; see also 37 id., 369.
    
   Andrews, J

There is authority tending to support the claim that by force of the agreement of March 24,1890, there was an equitable assignment by the defendants to the plaintiffs of an interest, to the extent specified in the agreement, of the claim of the defendants against Lippincott. Fairbanks v. Sargent, 104 N. Y., 108; 5 St. Rep., 531; Williams v. Ingersoll, 89 N. Y., 508.

An equitable assignment has been defined to be such an assignment as gives the assignee a title which, although not cognizable at law, equity will recognize and protect. Such an assignment passes an immediate equitable interest in the subject, although it. is not essential to the creation of the interest that it should be immediately enforceable by suit for specific performance to recover the interest assigned. Whether in a given case the transaction amounts to an equitable assignment depends to a great extent upon the intention. Where the transaction is evidenced by a written agreement, it depends upon the intention of the parties as-manifested in the writing, construed in the light of such extrinsic circumstances as under the general rules of law are admissible in aid of the interpretation of written instruments.

It has been said that “ to make an equitable assignment there must be such an appropriation of the subject matter as to confer a complete and present right upon the party intended to be provided for, even where the circumstances do not admit of its immediate exercise.” Swayne J., Christmas v. Russell, 14 Wall., 69.

There must undoubtedly be a purpose to pass a present interest, but that interest may be absolute or qualified, a right to the immediate possession and enjoyment or a right to such enjoyment, postponed until the occurrence of some future event. In other words, the assignment may be made subject to limitations, conditions and qualifications, such as might be inserted in the conveyance or assignment of the legal estate in the same subject. The quality of the equitable estate is that and that only which the parties intended.

The language of the agreement of March 24, 1890, is consistent, with an intention on the part of the defendants to give the plaintiffs an equitable interest in the subject of the litigation, and the circumstances confirm that construction. The case was complicated and, perhaps, doubtful. The defendants had no means to carry on the proposed litigation, and the plaintiffs could not. reasonably have expected to receive compensation for their services and disbursements except through the fund or property which might be recovered in the action. They, therefore, on their part agreed to conduct proceedings and suits, “ and so far as lies in their power to carry said proceedings and suits to a successful and final issue a.nd recovery,” and the defendants agreed that the plaintiffs “ shall receive upon settlement or recovery of said claims ” (against Lippincott) a specified percentage of such recovery or settlement in kind,” the defendants reserving the right “ within sixty days to substitute a reasonable cash fee ” for the services of the plaintiffs in the place of such proportionate part of the claims recovered or settled for as before provided. The final clause of the agreement provides for a division by the plaintiffs between the two defendants of all stock, cash and property settled for or recovered after the plaintiffs shall have set aside their portion under the agreement, and it is stated that the allowance to the plaintiffs shall cover all disbursements. This was not an ■agreement to pay the plaintiffs out of the fund to be recovered. It was an agreement in effect that they should have a share in the claims, and that when realized the fund should be divided between the parties in the proportions indicated. The right reserved to the defendants to substitute a cash compensation for the compensation in kind, does not, we think, characterize the agreement as executory only, or prevent its operating as an equitable assignment If the right should be exercised, it would divest the equitable title of the plaintiffs in any part of the claim and operate as a defeasance. But the concession that the plaintiffs were equitable assignees under the agreement by no means establishes their right to a specific performance.

The consideration of the assignment was their undertaking to render the services mentioned. If they have not performed the agreement on their part, but have failed or neglected to perform it, and performance was not prevented or excused by the act or conduct of the defendants, plainly they have no standing in a court of equity to insist upon a specific performance of the agreement in their favor. The consideration for the agreement of the defendants was wholly executory and was the promise of the plaintiffs to render the services specified. The performance of the services was in effect a condition, and non-performance by them would defeat their equitable right. It is well settled that to entitle a plaintiff to specific performance in equity he must show as a condition precedent “ performance, or at least a willing-mess to perform on his part.” Gray v. Murray, 3 Johns. Ch., 179; Pom. Eq. Jur., 1407; May v. Schuyler, 11 J. & S., 107.

The referee found that the plaintiffs did not perform their contract. This finding is conclusive here unless unsupported by evidence. The proof tends to show that the plaintiffs on the 24th of April, 1890, voluntarily abandoned their relation as attorneys and counsel for the defendants, and that the defendants at their request procured other counsel, -and the plaintiffs thereupon executed a stipulation substituting the new counsel in their place as attorneys in the action. The plaintiffs had no further •connection with the suit or with the negotiations for settlement, but such negotiations were continued by the substituted counsel .and culminated in a settlement between the defendants and Lippincott in July following.

In the letter addressed to the defendants under date of April 24, 1890, written in the name of the plaintiffs by one of the firm, requesting the defendants to substitute other attorneys in their place, stating as a reason that they were of opinion that they could, not succeed in establishing the defendants’ claims as they asserted them, “or to any other or greater extent than is contained in the proposed agreement, which you reject,” occurs the-following: “ Under our agreement with you, we have no charges-against you, although our disbursements have been, say, twenty-three dollars, but under that agreement, in the event that you settle the controversies upon substantially the same terms as those you reject, we shall be entitled to the compensation provided for in the agreement.”

It is claimed that the settlement effected by the substituted, counsel was upon substantially the same terms as those proposed by the plaintiffs and rejected by the defendants, and "that, therefore, they are entitled to the compensation provided for in the agreement, as if they had continued to act and.the settlement had been effected by them. Without considering the soundness of this claim it is a sufficient answer to the contention that the: terms of the settlement were in many important respects quite different from those proposed by the plaintiffs. There can be no pretext that the variations were merely colorable and made for the purpose of defeating the claim of the plaintiffs.

We are of opinion that there is no error in the judgment. It is found and the finding is fully sustained by the evidence that-the plaintiffs acted in good faith and conducted the case of their clients with great intelligence and fidelity up to the time of their withdrawal from the case. Their abandonment of the case may have been a mistake. But we think it involved a forfeiture of any rights under the contract of March 24, 1890.

The exception to the refusal of the referee to permit the amendment of the pleadings so as to introduce a cause of action as on a quantum meruit,.was not well taken. The appeal from the-denial of the court of the plaintiffs’ motion to open the case for the introduction of further evidence presents no question reviewable here.

The judgment should be affirmed.

All concur.