#### Wooldridge v. Bradbury, et al.

(Decided October 10, 1919.)

Appeal from Bullitt Circuit Court.

1. Attorney and Client — Contract for an Agreed Per Cent. — The fee to which attorneys, under a contract for an agreed per cent, of the amount recovered, are entitled, is to be estimated upon the amount which their client is entitled to receive and appropriate under the judgment, and not. upon the amount' which may be *588found by the court to -be due the client from, the adverse party and which is subject to reduction by a valid set-off.

2. Attorney and Client — Contract for Compensation — Meaning of Word “Recover.” — The meaning of the word “recover” as used in such contracts must be given its common acceptation, unless a different meaning is manifest from the context, and the common acceptation implies the actual obtaining of the thing sought with the right in the client to appropriate that specific thing.

J. F. COMBS and T. C. CARROLL for appellant.

C. B. SEYMOUR, S. L. TRUSTY and C. P. BRADBURY for appellees.

Opinion of the Court by

Judge Thomas

Reversing.

On July 27,1910, appellant, Mary E. Wooldridge, and her husband, Webster C. Wooldridge, who was her agent, entered into a written contract with the appellees, O. P. Bradbury and the firm of Popham, Trusty and Webster1, who were practicing attorneys, whereby she employed them to prosecute certain claims and causes of action which she insisted were due her from one Gr. S. Patterson, and to obtain a settlement of the Shepherdsville Merchandise Company, a business firm owned by Mrs. Wooldridge and Patterson, with a small interest owned by the latter’s wife. That part of the contract material to the present controversy says:

> “That whereas the parties of the first part have employed the parties of the second part as their attorneys in law to prosecute all their claims against Gr. S. Patterson of said Shepherdsville, and the Shepherdsville Merchandise Company and to obtain a full settlement of the affairs of the said Shepherdsville Merchandise Company.

> “Now, therefore, the parties of the first part agree to pay the parties of the second part a sum equal to one-third of all moneys or property recovered for the parties of the first part, or either of them, in the prosecution of said claims of the settlement of the affairs of said company; and if any action brought in connection with said claims or settlement is appealed to the Court of Appeals of Kentucky, or is brought in any other court than the Bullitt circuit court, then the parties of the first-part agree to pay to the parties of the second part a sum equal to two-fifths of all money or property recovered in the prosecution of said claims and in said settlement.”

Thereafter suit was filed against Patterson in the name of Mrs. Wooldridge and in the name of her hus*589band as her agent, seeking a judgment against him for mismanagement of the Mercantile Company and for wrongful appropriation by him of the funds of that company, and other derelictions, in the sum of $20,500.00.

Various defenses were made by Patterson in that suit, and before its submission and determination he pleaded as a set-off the balance of a judgment which he had obtained against Mrs. Wooldridge, amounting to the sum of $2,875.95. This item arose out of a transaction between Mrs. Wooldridge and Patterson, whereby he sold to her certain property in Shepherdsville for the consideration of $7,000.00, $2,000.00 of which was paid by conveying to Patterson a farm containing over two hundred acres owned by Mrs. Wooldridge. The balance of the consideration for the farm was a one-half interest in the mercantile business at Shepherdsville. The remaining $5,000.00 for the real estate in Shepherdsville was evidenced by the note of appellant, and the set-off represents the balance of that note after enforcing the lien on the property. Upon final submission the court in the case of Wooldridge v. Patterson, adjudged: “That the plaintiff, Mary E. Wooldridge, recover of the defendant, G. S. Patterson, four thousand and six hundred dollars, subject to a credit of twenty-nine hundred and eighty-three dollars and ninety-nine cents, the balance of the judgment after deducting one hundred dollars rent set out in the amended answer herein, and interest thereon from February 12,1912. ’ ’

An appeal was prosecuted to this court by Patterson and a cross-appeal taken and the judgment on both the original and cross-appeal was affirmed in an opinion reported in 170 Ky. 748. After the mandate was filed in the trial court, Wooldridge paid into court the amount adjudged against him, after deducting the set-off, which, with interest, was $2,044.75, when appellant’s attorneys, claiming their right to do so under the above contract, entered motion for an allowance to them of forty per cent, of $4,600.00, to which appellant objected, but consented that her attorneys might be allowed under the contract forty per cent, of the $2,044.75. An agreed order was entered to that effect, and her attorneys, the appellees here, were allowed and paid $817.90, and the motion was continued as to the contested issue between the parties, which was finally determined by the court allowing to appellees an additional sum of $1,022.10, which, with the $817.90 previously allowed, was forty per cent. *590on the $4,600.00 found for appellant in her suit against' Patterson, and to reverse this judgment allowing to appellees the additional $1,022.10, this appeal is prosecuted.

It will at once be seen that the sole question for deter- • mination is on what sum are appellees entitled to forty per cent, in payment of their fees, *i. e.,*on the $4,600.00 determined to be due from Patterson to appellant or' on the net sum after deducting the set-off, and for which sum only Mrs. Wooldridge recovered judgment? As will appear from the contract, one of the duties (and as we shall hereafter see, practically the whole duty) of the attorneys was to “prosecute all (their) claims against G. S. Patterson,” and their fees were to be equal to the agreed per cent. *‘1*of all moneys or property recovered. ’ ’ If the suit was appealed to the Court of Appeals, the fee. was to be equal to two-fifths of “all money or property recovered.” The question then is, what was meant by the term “recovered” as used in the contract? There is nothing in its terms to indicate that the word was used in any other sense than its ordinary meaning as rised both generally and legally.

The latest edition of Webster’s International Dictionary defines the word thus: “ To get or obtain again; to get renewed possession of; to win back; ... to obtain title to by. final decree or judgment in a court of law. ’ ’ A strict analysis of this • definition would- confine the meaning of the word only to that which the one ob-. taining the judgment would get the possession of, or" the right to the possession, and which right was capable of enforcement. This definition was adopted and applied by this court in the case of Leslie v. York, 112 Ky. 712. In that case the attorneys had a contract for a fee equal to one-half “they may recover.” A judgment was obtained in favor of plaintiff, but it seems that because of insolvency of defendant only a portion of it was collected. Plaintiff contended that the attorneys were entitled to their per cent, only upon the amount collected, while they insisted that they were entitled to collect from plaintiff their per cent, of the entire judgment. . This court adopted the contention of the plaintiff in that suit and denied the right of the attorneys to any sum more .than their per cent, of the amount actually collected. In the-course of the opinion the court referred to the definition given by Mr. Webster, as well as those given by the authors of various law dictionaries, and then said:

> *591“So we see that tbe primary meaning of the word in common speech, and even when used as a word of art, implies the actual obtaining of the thing sought, and that the meaning which implies the mere obtaining of a judgment which gives a right to the actual possession óf the thing sought is secondary.” The court then concluded its reasoning by saying: “We are of-the opinion that the fair construction of the language is that Leslie was to pay an amount equal to one-half of what he *actually obtained*by the judgment, and not one-half of tbe *amount*of the judgment, which might or might not be worthless. ’ ’

In the case of Robertson *&*Cleary v. Shutt, 9 Bush, 659, this court had under consideration the right of plaintiff’s attorney to a lien upon the judgment as against the right of the defendant to off-set it by another judgment which he held against plaintiff, as is provided by section 377 of the Civil Code. It was held that the attorneys were entitled to their lien in preference to the right of defendant to thus offset the judgment. The court was' influenced to so hold because of the language of the section of the Code, *supra,*wherein it provides that the right to set off one judgment with another is to be had “with due regard to-the legal and equitable rights of all persons interested therein,” and since the right of the attorney for plaintiff attached when the claim was put into his hands, that right could not be defeated by an independent and collateral judgment. The opinion says, however: “We do not doubt that in an action which is subject to be defeated by the plea of set-off, and which is so barred, the attorney’s claim for services must, like the plaintiff’s demand, yield to the set-off as it would to any other available defense to the action.”

In the case of Bradford v. Ware’s Exr., 12 Ky. Law Rep. 986, Judge Barbour, of our former Superior Court, held that “an attorney has a hen only upon the amount to which his client is entitled upon the termination of . the litigation. And, if upon a settlement-of the different liabilities incurred by the parties, the. one to the other, during the litigation, the client is; entitled to nothing, .the attorney has. no lien which he can enforce against the adverse party.

In 6 Corpus. Juris, '745, the author of the text, discussing the rights.of the attorney under a contract like '. the one here involved, in stating the sum upon which he ..is.entitled,to his percentage-,-says: “The percentage com*592ing to the attorney is usually reckoned on the amount actually recovered, and not on the amount of the judgment rendered, unless the language of the contract is such as to justify such an interpretation.”

There is nothing in the language of the contract now before us justifying any other interpretation. We find nothing in the cases of Elk Valley Coal & Mining Co. v. Willis & Meredith, 149 Ky. 449, and Green County v. Lewis, 157 Ky. 490, or any other's relied on by appellees, in conflict with what has been said. In the Elk Valley, etc., case the question was whether the attorneys under a contract for a conditional fee were entitled to the value of a permanent contract of employment by defendant which had been agreed to by plaintiff in settlement of his case, and the court held that since the plaintiff had in a legal sense recovered the value of the contract, it being a valuable asset to him, his attorneys were entitled to their per cent, of its value, which rather substantiates than conflicts with what we have said.

In the Green county case, the attorneys were employed in suits instituted against the county upon some of a series of bonds which it claimed were invalid. The validity of all of the bonds issued by the county, whether sued upon or not, was involved, and the county agreed to pay the attorneys a fee certain, and in addition a sum equal to five per cent, “of any amount of said bonds or any bonds issued by said Green county in aid of said railroad, which they may *save*said Green county.” Certain coupons had gotten into circulation and they were affected by the judgment which the attorneys • obtained for the county, though not directly involved, and they claimed their percentage on the amount of the coupons thus *saved*to the county, which the court allowed, and which is by no means in conflict with our present holding.

However, were we to consider the question as one of first impression, we would have no trouble in arriving at the same conclusion. Section 95 of the Civil Code provides what an answer to a suit may contain. Subsection three of that section says that the answer may contain “a statement of facts which constitute a set-off or counterclaim.” Such statements of facts furnish as complete an answer as does a traverse, a plea of ¡payment, a plea of *non est factum,*a plea of estoppel, or any other plea known to the law. Each of them is allowed the same effect by the law — that of defeating, in whole *593or in part, the claim sued on — and when an attorney accepts employment to bring a suit, he does so with at least the implied knowledge, that the contemplated suit is liable to be defeated by any of the defenses allowed by law, including a plea of set-off. Indeed the plea of payment is largely analogous to the one of set-off. They each impliedly acknowledge the claim sued on, but say in substance that the plaintiff is indebted to the defendant, in the case of payment, for the money so paid, and in the case of set-off, for a claim the payment of which can be enforced. We attach no importance to the fact that the set-off pleaded in the case of Patterson v. Wooldridge, *supra,*had been reduced to judgment before it was relied on as such. It could have been so pleaded without being reduced to judgment, and the difference is only one of practice, for it was said in that case:

> “This suit, according to the pleadings, is nothing more than an individual suit by appellees against the appellant, and while as originally brought it sounds in tort, yet it is shown to be such because the alleged violations of duty imposed upon appellant an implied contract; for when he undertook to discharge the duties of president and manager he impliedly agreed to exercise good faith and fairness toward the corporation and stockholders in doing so. Under this view there could be no valid objection urged to the pleading of the set-off or the allowance of it if found to be correct.”

Illustrations might be given showing what we believe to be the fallacy of appellees’ contention under the facts of this case, but we do not deem it necessary, since we are fully convinced that, the court erroneously allowed them the additional sum of $1,022.10, it being the contract per cent, upon a sum which Mrs. Wooldridg'e never in law recovered.

Wherefore, the judgment is reversed, with directions to dismiss appellees’ claim for any further amount than what they have already received, to pay the balance of the $2,044.00 to Mrs. Wooldridge, and for proceedings consistent with this opinion