Case Name: E. Irving Smith vs. Edgar Weeks & others
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1925-04-25
Citations: 252 Mass. 244
Docket Number: 
Parties: E. Irving Smith vs. Edgar Weeks & others.
Judges: 
Reporter: Massachusetts Reports
Volume: 252
Pages: 244–252

Head Matter:
E. Irving Smith vs. Edgar Weeks & others.
Suffolk.
November 21, 1924.
April 25, 1925.
Present: Rugg, C.J., Braley, Pierce, Carroll, & Wait, JJ.
W. R. Buckminster, (J. M. Maloney with him,) for the defendant trustees and special administrator.
A. E. Seagrave, (H. F. Reed with him,) for the plaintiff.
C. F. Eldredge, for the defendant Kimball.

Opinion:
Braley, J.
The bill was originally brought against the defendants Weeks and Wellington, as they are trustees under the will of Thomas Dana, and Julian Dana de Cordova, who gave to the plaintiff a partial assignment of the trust funds to which under the provisions of the will he had become entitled. But, de Cordova having died, Wellington was appointed special administrator of his estate, and having been duly authorized by the court of probate, he appeared to defend, and also filed a cross bill. The trustees demurred. The demurrer was overruled and they appealed. The presiding judge, after making certain findings of fact and rulings of law on evidence, which is fully reported, entered a final decree dismissing the cross bill and granting the plaintiff relief, from which the defendants severally appealed.
The plaintiff, an attorney at law, received November 17, 1922, from de Cordova, his client, the following instrument: "I, Julian Dana de Cordova, in consideration of services rendered and to be rendered by E. Irving Smith in the matter of my interest in the property and funds now held by Arthur J. Wellington and Edgar Weeks, the present Trustees under the will of Thomas Dana, and in further consideration of the agreement by the said Smith to pay out of money he may receive under this assignment debts now owed by me to the amount of twelve thousand dollars ($12,000), do hereby assign, transfer and convey to the said E. Irving Smith all my right, title and interest in and to the said property and funds and all my claim on account thereof against the said trustees to the amount of sixty-two thousand dollars ($62,000), with' full authority to the said Smith to collect and receive the same." It is not a defence in equity that the assignment was only of part of the fund, and the controversy is over the enforceable rights of the plaintiff. Security Bank of New York v. Callahan, 220 Mass. 84, 87.
The undisputed material allegations of the bill, and the plaintiff's statements in his answer to the cross bill, abundantly show, that he was retained in October, 1922, by de Cordova "to extricate the estate to which de Cordova had fallen heir from the grasp of certain persons who had made a loan of $40,000 upon his expectancy and now demanded a sum in excess of the entire estate." The plaintiff, acting under his employment, brought suit which resulted in saving for his client a very substantial part of the trust fund. De Cordova v. Weeks, 246 Mass. 100. At the date of the assignment, and thereafter de Cordova was "without money and without resources; . . . judgments [were] outstanding against him and poor debtor court citations, and that he did not know which way to turn; . He feared . to lose his whole estate-." It was under these circumstances that the plaintiff told him, "that in view of the uncertainty of the results of litigation and the doubt whether anything would be recovered" he "was entitled to an absolute assignment of the trust funds . to the extent of $50,000 on account of services rendered and to be rendered." The bill alleges in the fourth paragraph, that the assignment in so far as the plaintiff's individual interests are concerned was in consideration of services rendered and to be rendered in respect to said litigation, and "that the same was received and accepted by the plaintiff as payment on account of said services; that the said assignment was made for that consideration; and that the plaintiff is entitled under the terms thereof, to the immediate payment or satisfaction of the same." The third and fourth prayers are, that the plaintiff is entitled absolutely to the transfer of the amount subject to the claim of the defendant Kimball from whom the plaintiff borrowed $1,000 and gave as collateral security a transfer of his interest under the assignment. The judge's findings, that the plaintiff as trustee for de Cordova is entitled to $12,000 to be expended in payment of certain debts shown by the exhibit attached to the final decree, the remainder to be returned to the administrator, leaves $50,000 which he ordered the trustees to transfer to the plaintiff.
There was due the plaintiff for past services at the date of the assignment $1,200, which according to the plaintiff's own evidence was included in the debts referred to in the assignment, and is also one of the items allowed in the final decree as part of the $12,000 to be received and disbursed by him. But, the bill having alleged generally that the assignment was for past, as well as future services, and the defendants in DeCordova v. Weeks, supra, not being necessary parties to the present suit as the demurrants contended, the interlocutory decree overruling the demurrer should be affirmed.
It is settled, that the relation of attorney and client is one of trust and confidence. Its fiduciary character precludes the application of conditions governing ordinary mercantile bargaining. The doctrine is founded on public policy. It; is demanded by the welfare of society. Manheim v. Woods, 213 Mass. 537, 542. Rolikatis v. Lovett, 213 Mass. 545. Holdsworth v. Healey, 249 Mass. 436. The plaintiff's money was to come out of the fund then subject to the assignor's creditors as security for their debt. If the suit against them failed, the plaintiff's assignment was of no value. But if it was successful, he was to participate for his own benefit in property connected with, and forming part of the litigation. The assignment if absolute is under such circumstances unenforceable. The maintenance of a suit in consideration of some bargain to have part of the thing in dispute, or some profit out of it, was illegal at common law. Hall v. Hallett, 1 Cox Ch. 134. Wood v. Downes, 18 Ves. 120. Thurston v. Percival, 1 Pick. 415, 416. Belding v. Smythe, 138 Mass. 530. Boston Bar Association v. Hale, 197 Mass. 423, 437. Berman v. Coakley, 243 Mass. 348. But even if the judge could properly find on the evidence, that it was the intention of the parties, that the assignment, although absolute in form, was actually given as security for contemplated and necessary professional services and disbursements and the transaction as thus limited was not champertous, the plaintiff may recover only their fair value, with incidental disbursements. Tapley v. Coffin, 12 Gray, 420, Ackert v. Barker, 131 Mass. 436. Blaisdell v. Ahern, 144 Mass. 393, 396. Delval v. Gagnon, 213 Mass. 203. Dudley v. Nickerson, 214 Mass. 274. Bennett v. Tighe, 224 Mass. 159.
During the trial, the judge announced: "I find for the purposes of this case that the $50,000 was substantially more than the plaintiff would have had a right to charge for his services in the absence of any agreement," and in his final findings, says "The assignment was mainly in consideration of future litigation but in part for past services. The plaintiff if not successful knew that it would be difficult to collect payment for his services, but I am not able to find from the evidence that there was an understanding that he was to receive no pay if not successful." But, after treating the assignment as security for future services, he erroneously ruled, that the full amount was recoverable. While the final decree must be reversed, the finding that the trustees should transfer to the plaintiff $12,000 in trust to be disbursed among the creditors of de Cordova as shown by the schedule, is to stand; and further proceedings are to be taken in the trial court not inconsistent with the opinion. Old Corner Book Store v. Upham, 194 Mass. 101, 106. The rights of the defendant Kimball also will be thereby fully protected, as the amendment for this purpose to the final decree after it had been entered was on the record invalid. White v. Gove, 183 Mass. 333, 340.
The cross bill was dismissed rightly. The function of a cross bill is to secure affirmative relief which cannot be administered under the answer to the original bill. The plaintiff as trustee has not received anything under the assignment for which at present he should account, and in the establishment of his claim for services whatever he may have obtained in any form by way of partial payment, is to be deducted.
Ordered accordingly.