Opinion
(Filed 10 April, 1918.)
1. Attorney and Client — Fees — Prior Assignment — Notice — Action — Prima Facie Case.
Where an attorney has collected by suit monies for his client upon the latter's building contract, and has retained a part thereof as compensation for his services, in an action by a prior assignee of the contract, the plaintiff makes out a prima facie case against the attorney by showing the assignment of the contract to himself, the amount of the indebtedness and that the attorney acted with notice of his claim.
2. Same — Burden of Proof — Quantum Meruit.
Where an attorney has collected in part upon his client's contract and has retained a part thereof as his fee, the burden is on him to show, in an action by the assignee of the contract, upon his making a prima facie case, in the absence of a special contract between them, that he is entitled to his compensation upon a quantum meruit, and that he has properly distributed the funds in his hands.
3. Same — Pleadings — Amendments — Courts.
Where the plaintiff sues his debtor's attorney for the entire sum collected by the attorney upon a contract assigned to him for security of a loan, the position taken by the trial judge that he could not recover without an amendment setting up a quantum meruit is incompatible with the priciple [principle] cause of action, and a nonsuit upon his failure to so amend. when he has made out a prima facie case, is reversible error.
APPEAL by plaintiff from Lyon, J., at February Term, 1918, of (339) NEW HANOVER, on judgment of nonsuit.
John D. Bellamy Son for plaintiff E. K. Bryan, McClammy Burgwyn, and George Rountree for defendants.
CLARK, C. J., concurring.
WALKER, J., did not sit on the hearing of this case.
In 1909, defendant O'Brien entered into a contract with the County of Kershaw, South Carolina, to build the concrete abutments to a bridge over the Wateree River. This contract, "with all of the equity, payments, and other considerations received and to be received from the County of Kershaw," was duly assigned to plaintiff as collateral security to O'Brien's notes to plaintiff, given for money advanced with which to prosecute the work.
It becoming necessary to sue the County of Kershaw on the contract, suit was instituted in name of O'Brien in the Federal Court of South Carolina and prosecuted for several years by defendants Davis Wilcox as attorneys. They finally recovered $3,106.10, of which they paid $606.10 to O'Brien and retained $2,500 for their professional services.
The plaintiff bank now sues to recover the whole of the $3,106.10 from defendants Davis Wilcox, claiming that they should have paid it over to plaintiff as assignee of the contract with Kershaw County. The defendants deny the right to recover and aver that they are entitled to retain the $2,500 as the value of their professional services in conducting the protracted litigation.
At the conclusion of plaintiff's evidence the court sustained motion to nonsuit upon the ground that in no view of the evidence could plaintiff recover the entire sum and offered to allow plaintiff to amend its complaint and set up a quantrum [quantum] meruit. The plaintiff declined to amend and appealed from the judgment of nonsuit.
We are of opinion that the court erred. The plaintiff could not be required to make an amendment to its complaint that is in (340) compatible with its principal cause of action. If the evidence was sufficient in any view of it to make out a prima facie case, plaintiff had a right to have it submitted to the jury in a proper issue and under proper instructions.
When plaintiff put in evidence the contract with Kershaw County and its assignments to it and proved O'Brien's indebtedness for which the contract was security, and proved by the answer or otherwise notice of the assignment and the collection of the money by said defendants, plaintiff made out a prima facie case.
It was the incumbent on defendants to account for the money received under the contract and to justify its disposition. As there is no evidence of a special contract for their legal services, the burden was on the defendants to set up the quantum meruit and show what their legal services were worth and that they had the legal right to retain their compensation out of the sum collected by them.
The testimony of the president of the plaintiff, the only witness examined, is to the effect that "he did not agree to pay Mr. Davis any fee in the prosecution of the suit."
The evidence of the witness is somewhat ambiguous. It may be that the jury would draw the inference that the bank was to bear no part of the expenses of litigation, and that nothing was to be deducted on that account from the proceeds of litigation. Or it may be the jury would conclude from the transactions and negotiations between witness and Davis that the attorneys were not to look to the plaintiff for any compensation, but were to retain it out of the fruits of litigation only.
We know that it is a common custom for attorneys to accept claims for collection and to retain their compensation out of the proceeds of collection. It is possible the jury may infer that defendants did not intend to release their right to compensation but only to forego the liability of the plaintiff for it. We think that an issue should be submitted as to how much, if any, is plaintiff entitled to recover.
Under such issue every phase of the case can be presented to the jury by plaintiff as well as by defendant.
New trial.