Where a fund is brought into court upon proceedings under a bill
to foreclose a mortgage, it is altogether irregular for the court
to order an investigation into the general accounts between the
attorney and his client during past years and to order that the
attorney shall be paid, out of the fund in court, the balance which
the master may report to be due. The persons interested in this
decree were not properly before the court as parties.
The present appeal was from a collateral decree of the district
court under the following circumstances:
Lewis had been for many years the attorney of Thomas A. Ronalds,
the deceased testator of the present appellants. In the course of
his practice, he had filed a bill in chancery to foreclose a
mortgage and thus obtain payment of a debt which was due to his
client. The money was voluntarily paid without a sale, and brought
into court. Lewis then claimed a lien upon that fund not only for
his professional services in that particular case, but also for a
general balance which he alleged to be due to him from his client,
upon a general settlement of accounts between them. At November
term, 1848, the court passed the following order:
"
Order referring matters of account between Lewis and his
clients to the Standing master, to report &c., at November,
1848, and Order to continue."
"Come the parties by their solicitors, and, by their consent, it
is ordered by the court that all matters of account between John H.
Lewis, Esq., and his late client, the said Thomas A. Ronalds,
deceased, and between the said John H. Lewis and the said John D.
Wolfe, executor, and Maria D. L. Ronalds, executrix, of the last
will and testament of the said Thomas A. Ronalds, deceased, be
referred to the standing master in chancery, and it is further
ordered that said master report a statement thereof and of all his
proceedings relative thereto to the next term of this court. And it
is further ordered, that this cause be continued."
Under this order, the master went into a detailed examination of
all the transactions between Lewis and his client for many
preceding years, and made the report which is mentioned
Page 60 U. S. 281
in the opinion of the court. From this report, when confirmed by
the court, the present appellants appealed.
MR. JUSTICE McLEAN delivered the opinion of the Court.
The bill was filed to foreclose a mortgage, given to secure the
payment of $12,000. Payments on this debt were made, amounting to
the sum of $8,527, the last payment being made the 9th of October,
1839. An account was prayed, and that the mortgaged premises might
be sold.
A supplemental bill was filed the 30th of November, 1843,
stating that the last installment of the mortgage debt had become
due and praying that the premises might be sold to satisfy that
payment also.
The answer admitted the allegations of the bill, but claimed an
additional credit of $600 on the mortgage. On the 23d of May, 1844,
a final decree was entered directing a sale of the mortgaged
premises to pay the amount due, stated to be $10,077.68, with
interest to the time of sale. Afterwards, at November term, 1848,
the commissioner, who had been appointed to make the sale, returned
that Cox, the defendant, had, without sale of the property, paid
him the balance due under the decree, after deducting certain
payments made before his appointment, which amounted to the sum of
$8,318.47, which was brought into court.
At that term, an entry in the cause was made by consent of the
solicitors of the parties, that all matters of account between John
H. Lewis and his late client, Thomas A. Ronalds, deceased, and
between the said Lewis and John D. Wolfe, executor, and Maria D. L.
Ronalds, executrix, of the last will and testament of Thomas A.
Ronalds be referred to the standing master in chancery, "who was
directed to report a statement thereof, and of all his proceedings
relative thereto, to the next term of the court."
At November term, 1850, the master filed his report, which was
exceedingly voluminous -- covering more than two hundred and sixty
pages of the record.
Page 60 U. S. 282
The master states an account in which he charges Lewis with all
sums, and interest, from the time he became chargeable up to the
date of the report, 25th of November, 1850, amounting to the sum of
$63,461.71. He shows the amount of credits claimed by Lewis, to
same date, amounting to the sum of $55,966.82. Exceptions were
filed to this report by both parties, and at May term, 1854, the
court made a final decree on the master's report in which is set
out the manner in which the controversy arose, and referring to the
order of November term, 1848, founded upon the motion in the Cox
case, to remove Lewis from his capacity as attorney, so as to
procure the payment to the complainants directly of the proceeds
under the decree brought into court. And the court states that it
considers the proceedings as presented not within its cognizance
inasmuch as no writ had been issued as between these parties, no
bill filed, and no suit in any form commenced; there was no
allegation or charge on the one side, or response or denial on the
other, nor was the matter collateral to or growing out of any case
pending.
On consideration, the court, though disposed to strike the
matter from the docket, yet decreed that as a large sum of money
had been paid in under its order, it must be, in the language of
the court, in some way paid out, and the exceptions to the master's
reports were overruled and the same was confirmed, and the marshal,
as receiver, was ordered to pay over to Lewis the sum of $4,336.42
of the proceeds in his hands, and the residue, $3,982.05, he was
directed to pay to the complainants. From this decree the
complainants appealed.
This was an irregular proceeding, and without the authority of
law. The bill was filed originally against Bartley Cox, the
defendant, against whom the decree for the sum of $10,077.68 was
entered. This being done, Lewis procured an order for his dismissal
from the case, that he might bring up an account against Thomas A.
Ronalds in his lifetime and his executors since his decease for
professional services. And this was done without the form of suit,
or the matter having any relation to the case before the court. And
when it is considered that Ronalds was a citizen of New York, and
that his representatives are citizens of New York and do not seem
to have had any notice of this illegal procedure, it can receive no
sanction from this Court.
It is contended that Lewis, as counsel, had a right to receive
and receipt for moneys in the case, and whether he was entitled to
reserve any portion thereof or not can be properly tested only by a
bill filed by the appellants against him to account.
Page 60 U. S. 283
But the whole proceeding in behalf of Lewis, as against the
complainants, was irregular and void, the court having no
jurisdiction of the matter. The order was of no importance that the
decree should be without prejudice to either party, and not
pleadable in bar to any subsequent litigation between them upon the
same subject matter, as the proceedings were invalid. But as
regards the complainants, it was error in the court to order any
part of its original decree in their favor to be paid to one who
was not properly before it as a party. For this purpose, neither
complainants nor the defendant Lewis were before the court or
amenable to its jurisdiction. The decree is therefore
Reversed with costs. And the court direct that an order be
transmitted to the circuit court to require the defendant Lewis to
pay over any money received by him under the decree to the proper
officer of the court, that it may be paid to the
complainants.
