Court Opinion

ID: 6896913
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:50:48.683616+00
Date Added: 2024-06-11T16:06:01.957020
License: Public Domain

On Rehearing.
[40 Pac. 1014.]
Opinion by
Mr. Justice Wolverton.
A motion for rehearing having been filed in this case, and with it a vigorous and very able brief by Messrs. Dolph, Nixon and Dolph, of counsel for appellants, we have been impelled to review with much care and pains our former opinion, but with the same result. When the former opinion was rendered we had some misgivings as to whether we were right in hold*27ing that the provisions of the decree concerning attorneys’, referee’s, and stenogragher’s fees were not so entirely without the scope of the pleadings as to render them void, simply because we had been cited to no adjudicated cases that seemed to bear directly upon the question, and were unable to find any at the time that were in point, but believed the opinion to be founded upon sound principles of law. Further research has confirmed us in this view. The authorities will be cited and discussed later on. Counsel do not controvert the soundness of the decision in Rader v. Barr, 22 Or. 495, (29 Pac. 889,) but contend that it has no application to the case at bar, and assign as the sole ground for this contention that the provisions of the decree to which they take exception are without the scope of the pleadings. But, conceding the premises to be true, non constat that the conclusion contended for would follow. Let us examine the premises, and determine their effect in a case of this nature.
3. As a general proposition all provisions of a decree outside of the issues raised by the pleadings are void, but this cannot be predicated of a consent decree. All the authorities cited by counsel support the general proposition, but are not applicable to consent decrees. Nor is any allusion made in these authorities to such decrees, except in Jones v. Davenport, 45 N. J. Eq. 77 (17 Atl. 570). This was a suit to set aside a deed to certain real property as fraudulent and void as against creditors. The complaint also contained a general allegation that a certain one hundred shares of bank stock had been transferred in fraud of the creditors. The lower court by its decree set aside the deed, but refused to disturb the transfer of bank stock, for the reason that the allegations of the complaint *28were insufficient to show a fraudulent disposition of such stock. Afterwards an amended decree was entered under the same pleadings, by consent of the parties, as of the date of the original, decreeing that the transfer of the stock was also fraudulent. Subsequently, however, upon application to the same court, the decree as so amended was declared to have been irregularly entered, and for that reason set aside. Upon appeal to the supreme court Van Fleet, V. 0., said of this proceeding: “There can be no doubt that that decree was an absolute nullity. The principle is authoritatively settled that a decree or judgment on a matter outside of the issue raised by the pleadings is a nullity, and is nowhere entitled to the least respect as a judicial sentence.” But a consent decree is not in a strict legal sense a “judicial sentence.” “It is,” says Mr. Gibson in his excellent treatise entitled Suits in Chancery, § 558, “in the nature of a solemn contract, and is, in effect, an admission by the parties that the decree is a just determination of their rights upon the real facts of the case, had such been proved. As a result, such a decree is so binding as to be absolutely conclusive upon the consenting parties, and it can neither be amended or in any way' varied without a like consent, nor can it be reheard, appealed from, or reviewed upon a writ of error. The one only way in which it can be attacked, or impeached, is by an original bill alleging fraud in securing the consent.”
Mr. Beach, in his Modern Equity Practice, § 792, says: “Parties to a suit have the right to agree to anything they please in reference to the subject-matter of their litigation, and .the court, when applied to, will ordinarily give effect to their agreement, if it comes within the general scope of. the case made by the pleadings.” See, also, Pacific Railroad v. Ketchum, *29101 U. S. 297. In Schermerhorn v. Mahaffie, 34 Kan, 108, (8 Pac. 199,) it was held that a decree rendered by consent oí the parties was not void as between themselves, because it did not give to each just what the petition called for, and what ought as a matter of right have been given to each of them. Chancellor Walworth, in Bank of Monroe v. Widner, 11 Paige, 533, (43 Am. Dec. 768,) says: “An agreement to refer a suit pending to an arbitrator, and that a judgment shall be entered in the cause in conformity with his decision, will justify the entry of a judgment accordingly, which judgment will be binding upon the par ties, as a judgment by consent.” Chief Justice Waite, in Pacific Railroad v. Ketchum, 101 U. S. 297, after giving utterance to the language quoted above from Beach’s Modern Equity Practice, says: “It is within the power of the parties to this suit to agree that a decree might be entered for a sale of the mortgaged property without any specific finding of the amount due on account of the mortgage debt, or without giving a day of payment. It was also competent for them to agree that if the property was bought at the sale by or for the bondholders, payment of the purchase money might be made by a.surrender of the bonds. * * * All these were matters about which the parties might properly agree; and, hawing agreed, it does not lie with them to complain of what the court has done to give effect to their agreement.” Fletcher v. Holmes, 25 Ind. 458, was a case wherein suit was brought to foreclose a mortgage in which neither the mortgage nor the complaint to foreclose showed any right to a personal decree against the defendant, but he appeared, ' and with his consent one was rendered. Regarding such decree the court says: “It cannot be doubted that without May’s consent such a judgment against him, *30upon that complaint, would not have been warranted. We need not say whether or not it would have been void. But he consented to it. Was it theD void as against May, because the complaint did not allege sufficient facts to justify it without such consent? We can conceive of no reason why a judgment entered by agreement, by a court of general jurisdiction, having power in a proper case to render such a judgment, and having the parties before it, should not bind those by whose agreement it is entered, notwithstanding the pleadings would not, in a contested case, authorize such a judgment. The object of a complaint is to inform the defendant of the nature of the plaintiff’s case. It is for his protection that it is required. If he wishes to waive it, or agrees to the granting of greater relief than could otherwise be given under its averments, without amendment, and such relief is given by his consent, we think that the judgment is not even erroneous,- and much less void as to him.”
A judgment or decree entered upon the pleadings or after contest must fall within the issues raised by the pleadings, but a consent decree will be valid and binding upon the parties if its provisions fall within the general scope of the case made by the pleadings. This distinction is clear and incisive, and, it will be seen by the foregoing authorities, is recognized both by the text writers and the courts. In a recent case just reported a suit was instituted by the Central Trust Company of New York to foreclose a mortgage given by the Marietta and North Georgia Railway Company, with which was consolidated a creditor’s suit by V. E. McBee and others against the trust company and others to restrain the prosecution of the foreclosure suit, and the enforcement of other liens claimed upon the mortgaged property, and praying for *31a sale, and payment oí their claims from the proceeds. It was decreed, among other things, “that the counsel representing the claimants in the original bill of V. E. McBee and Company et al. v. Knoxville Southern Railroad Company et al., viz., Washburn and Templeton, are entitled to compensation out of the general fund arising from the sale of the road for their services in bringing said sale, and administering the assets of said insolvent railroad company, and a lien is declared upon said fund in their favor.” This portion of the decree was approved by the circuit court of appeals of the United States Sixth Circuit. Taft, J., speaking for the court, says: “The complainants who filed the creditors’ bill and brought in all the lien holders did a work in the administration and direction of the assets of the railroad company beneficial to all concerned. For services in filing the bill, therefore, and bringing in all lien claimants, it was not improper for the court to order a fee id aid to complainants’ counsel out of the fund realized from the sale”: See Central Trust Company v. Condon, 14 C. C. A. 314 (67 Fed. 84, 110). In Central Railroad v. Pettus, 113 U. S. 124, (5 Sup. Ct. 387,) which was a creditors’ suit, it was held that “when an allowance to the complainant is proper on account of the solicitors’ fees, it may be made directly to the solicitors themselves, without any application by their immediate client.” This doctrine was based upon the authority of Trustees v. Greenough, 105 U. S. 527. So that we here find authority for entering a decree directly in favor of the attorneys for the plaintiff. These were creditors’ bills, it is true, but the,decrees were rendered in contested cases, without issues being formed under the pleadings by the attorneys or solicitors as parties litigant. Now, in the light of these authorities, can it be said that the decree here pur*32ports to adjudicate matters outside of and beyond the-general scope and purview of the case made by the pleadings? As was said in the former opinion, the plaintiff sues as trustee, each step taken by him was in the capacity of a trustee, and whatever sum of money he may realize by a sale under the decree of the court would come into his hands as trust funds, to be distributed to the bondholders in just p'roprotión to their several demands. Under the terms of the mortgage he is entitled to recover a reasonable attorney’s fee, together with his costs and disbursements. Now, if, by his direction, and with the consent of the defendant, it is decreed by the court that he recover the attorneys’, referee’s, and stenographers’ fees in trust for the very persons whom he has employed, and who have rendered him services in his capacity as trustee, there exists no good and sufficient reason why it should not be binding upon all the ■parties interested, and the right to have execution issue at their instance would not affect its legality. The decree of the court has', at his instance, only extended his trusteeship, as regards the funds to come into his .hands, so that he has become trustee to the use of his attorneys and the officers of the court, as well as the bondholders, of a fund in which they are all entitled to share, and whether the- property brings a small or large sum cannot change the situation. Aside from all this, when it is determined that plaintiff is party to a decree from which there is no appeal, a determination of this question upon either contention would still leave this court powerless to relieve him in this proceeding. We still adhere to the opinion, and the reasoning upon which it is based, that plaintiff is without a remedy by appeal, *33and no good results could come of enlarging upon it here.
4. Another question briefly. It is insisted “that an attorney at law has no implied authority to enter a consent decree, or to consent to a decree by which a definite fee is given to him, and made a first lien upon the property which is the subject of the action.” Conceding the soundness of this proposition, it is not apparent how it can aid the appellant, in the absence of proof that the act complained of was done without express authority. We cannot say here in this proceeding that Messrs. Crawford and Hyde acted only upon their implied authority from Schmidt. There is. not a scintilla of evidence in the record to show whether they acted with or without authority, and, for all that appears, they may have had the most ample and complete power and authority to request, consent to, and have entered just such a decree as was entered, and which the plaintiff now seeks to have reviewed on appeal by this court. In Pacific Railroad v. Ketchum, 101 U. S. 297, Chief Justice Waite says: “A solicitor may certainly consent to whatever his client authorizes, and, in this case, it distinctly appears of record that the company assented through its solicitors. This is equivalent to a decree finding by the court as a fact that the solicitor had authority to do what he did, and binds us on appeal so far as the question is one of fact only. The remedy for the fraud or unauthorized conduct of a solicitor, or the officers of a corporation, in such a matter, is by an appropriate proceeding in the court where the consent was received and acted on, and in which proof may be taken and facts ascertained.” *34The law governing the reciprocal and correlative duties of attorney and client are well settled, and if these attorneys have exceeded their authority to the injury of the appellant he is not without a remedy, but it is not by an appeal, unless facts accompany the record to show the dereliction of duty.
A REHEARING IS DENIED.