Opinion
38604 Record No. 3211.
June 9, 1947
Present, Holt, C. J., and Gregory, Browning, Eggleston, Spratley and Buchanan, JJ.
1. EXECUTORS AND ADMINISTRATORS — Attorney's Fees — For Securing and Enforcing Judgment — Prior to Sale of Judgment Debtor's Lands and Payment of Judgment against Administrator — Case at Bar. — In the instant case, a suit to enforce a judgment, the judgment was obtained on a note which was the sole remaining asset of an estate of which appellant's decedent had been trustee and which he had dissipated. After the filing of a commissioner's report, setting out the real estate held by defendants and the liens thereon, a portion of the real estate was taken by condemnation proceedings and the consideration therefor paid into court. Beneficiaries of the trust estate, who had obtained a judgment against appellant, intervened and were held to be entitled to the fund paid into court after payment of costs and a fee of ten percent to appellant's attorney. Appellant contended that compensation should have been allowed appellant's counsel for securing the judgment, to enforce which suit was brought, and for accumulating and preserving a fund for the estate of appellant's decedent.
Held: That not until the lands of defendants set out in the commissioner's report had been sold could it be determined what fund appellant's counsel had brought into the cause, and no part of his fee should be taxed against the beneficiaries of the trust estate, so that no counsel fees should be paid until their judgment had been paid.
2. ATTORNEY AND CLIENT — Compensation — Contributing to Fees of Counsel of Other Party. — Except in rare instances, the power of a court to require one party to contribute to the fees of counsel of another party must be confined to cases where the plaintiff, suing in behalf of himself and others of the same class, discovers or creates a fund which enures to the common benefit of all; but the discretion vested in the court should never be exercised in a case where the interests of the party whose fund is sought to be charged are antagonistic to the party for whose benefit the suit is prosecuted.
3. JUDGMENTS AND DECREES — Collateral Attack — Judgment by Court Having Jurisdiction. — A judgment by a court having jurisdiction to render it, can be vacated only by some direct proceeding at law, either in the court in which the judgment was recovered or some other court having appellate jurisdiction.
4. EXECUTORS AND ADMINISTRATORS — Collateral Attack on Judgment against Administrator — Contention That It Was Barred by Statute of Limitations and Not Supported by Proof — Case at Bar. — In the instant case, a suit to enforce a judgment, the judgment was obtained on a note which was the sole remaining asset of an estate of which appellant's decedent had been trustee and which he had dissipated. After the filing of a commissioner's report, setting out the real estate held by defendants and the liens thereon, a portion of the real estate was taken by condemnation proceedings and the consideration therefor paid into court. Beneficiaries of the trust estate, who had obtained a judgment against appellant, were held to be entitled to the fund paid into court after payment of costs and a fee of ten percent to appellant's attorney. It was contended that the judgment obtained by the beneficiaries was barred by the statute of limitations and was not supported by adequate proof.
Held: That if the judgment had been barred by the statute of limitations or was not supported by adequate proof, the remedy was by appeal.
5. EXECUTORS AND ADMINISTRATORS — Limitation of Actions — Requirement of Code Section 5810. — The statute of limitations, section 5810 of the Code of 1942 (Michie), requires that a claim against a decedent's estate must be reduced to judgment within five years from the date of qualification of his personal representative, but it does not require that it be enforced within that time.
6. TRUSTS AND TRUSTEES — Statute of Limitations — Pleading against Beneficiaries under Express Trust — Case at Bar. — In the instant case, a suit to enforce a judgment, the judgment was obtained on a note which was the sole remaining asset of an estate of which appellant's decedent had been trustee and which he had dissipated. After the filing of a commissioner's report, setting out the real estate held by defendants and the liens thereon, a portion of the real estate was taken by condemnation proceedings and the consideration therefor paid into court. Beneficiaries of the trust estate, who had obtained a judgment against appellant, were held to be entitled to the fund paid into court after payment of costs and a fee of ten percent to appellant's attorney. Appellants contended that the judgment obtained by the beneficiaries was barred by the statute of limitations.
Held: That the statute of limitations could not be pleaded against the beneficiaries under the express trust.
7. EXECUTORS AND ADMINISTRATORS — Enforcement of Judgment — Intervention — Beneficiaries of Trust Estate of Which Decedent Was Trustee — Case at Bar. — In the instant case, a suit to enforce a judgment, the judgment was obtained on a note which was the sole remaining asset of an estate of which appellant's decedent had been trustee and which he had dissipated. After the filing of a commissioner's report, setting out the real estate held by defendants and the liens thereon, a portion of the real estate was taken by condemnation proceedings and the consideration therefor paid into court. Beneficiaries of the trust estate, who had obtained a judgment against appellant, intervened and were held to be entitled to the funds paid into court after payment of costs and an attorney's fee.
Held: That the beneficiaries had the right to intervene, since the trust was for their benefit, and the proceeds of the note should be applied to the trustee's debts.
Appeal from a decree of the Circuit Court of Russell county. Hon. E. T. Carter, judge presiding.
Affirmed and remanded.
The opinion states the case.
A. T. Griffith, for the appellants.
I. M. Quillen and Raymond J. Boyd, for the appellees.
W. A. Howard was appointed trustee to administer certain funds under the will of I. F. Jones, deceased. These funds he took over and in one way or another dissipated them. All that was left of this trust estate was an unsecured note of date May 11, 1932, for $4,030.00, executed by Ira E. Thompson and Ollie Thompson, his wife, to W. A. Howard, trustee. It passed to C. W. Davis, substituted trustee, and was at one time thought to be of little value. Subsequently it came into the possession of J. H. White, administrator of the Howard estate, and was reduced to judgment as of September 12, 1939. This suit to enforce it was instituted November 5, 1945.
In December, following, a decree of reference was entered in which a master commissioner was directed to report what lands said defendants owned and the liens thereon. It was referred to a master commissioner and was executed by Commissioner L. S. Owens, who on January 16, 1946, filed his report, in which he set out in detail the real estate held by these defendants.
Since the filing of that report, a portion of their real estate has passed to the County School Board of Russell County by virtue of condemnation proceedings. The consideration paid therefor was $5,000, which is now under the control of the court, to be paid out as directed.
These are the liens reported: First, one for taxes, $267.97; second, a judgment on a $4,030.00 note, which, with interest, attorneys' fees and costs, amounted to $8,078.36, of date January 11, 1946.
There was another decree of reference entered on the 17th day of September, 1946, executed by Master Commissioner I. A. Beauchamp, from which it appears that there is outstanding a judgment against J. H. White, administrator of the estate of W. A. Howard, deceased, of date March 1, 1939, entered in the chancery cause of Miriam G. Thomas, et al., beneficiaries under the will of I. F. Jones, deceased, v. J. H. White, Administrator, et al., for the sum of $17,501.88, subject to certain credits, leaving a balance due of $6,800.46.
The decree of March 1, 1939, was in substance a judgment in favor of the beneficiaries of Jones and against the personal estate of W. A. Howard, held by White, administrator.
To the report of Commissioner Beauchamp, these exceptions were taken:
"(1) Because the court is without jurisdiction to hear and determine in this suit the matters attempted to be raised in the petition and pleadings;
"(2) Because there has not been offered any sufficient legal evidence upon which to base a finding for the petitioners Miriam Thomas and others; and
"(3) Because the claim of the petitioners, Miriam Thomas and others is barred by the statute of limitations, and a recovery cannot be had thereon."
It is said that taxes reported have since been paid. That is not denied, but even if they have not been paid, there is under control of the court funds out of which they can and should be paid. For these reasons, we may dismiss that charge from further consideration.
The judgment on the $4,030.00 is not under attack, although the manner in which its proceeds are to be distributed is.
We have seen that there was paid into court by the County School Board of Russell County $5,000 for land condemned, and it is contended that this sum stands just as did the land taken. Code, section 4374.
The court directed that costs be paid; that there be paid to complainant's attorney a fee of 10% on the net balance, and that the residue be paid over to Miriam D. Thomas, and others, or their attorneys.
If this were a final settlement, that decree might be premature, but it is not. This brings up the claim of appellants' counsel for compensation. That claim is urged in more than one assignment and may be finally disposed of at this time.
He brought an ordinary chancery suit for the enforcement of a judgment. There were two references and two judgments — one for $8,078.36 and one for $6,800.46. Counsel should be paid a reasonable compensation for his services, but not until the lands mentioned in the original bill and set out in the report of Master Commissioner Owens are sold can we know what fund he has brought into this cause. Moreover, in fixing his fee two things are to be remembered: Said master commissioner has already allowed him 10% on the $4,030.00 note and interest, reduced, as we have seen, to judgment. Also no part of his fee should be taxed against Miriam Thomas and others, petitioners, for he has not only not represented them but has sought in every proper way to defeat their claim. It follows that no counsel fees should be paid until the $6,800.46 judgment shall be paid in part or in full.
In Stuart v. Hoffman Co., 108 Va. 307, 61 S.E. 757, the court said:
"The last utterance of this court upon the subject was in McCormick v. Elsea, 107 Va. 472, 59 S.E. 411, in which Judge Whittle, speaking for the court, said:
" 'Except in rare instances, the power of a court to require one party to contribute to the fees of counsel of another party must be confined to cases where the plaintiff, suing in behalf of himself and others of the same class, discovers or creates a fund which enures to the common benefit of all; but the discretion vested in the court should never be exercised in a case where the interests of the party whose fund is sought to be charged are antagonistic to the party for whose benefit the suit is prosecuted.' "
It is said that that judgment is barred by the statute of limitations and was not supported by adequate proof.
In Wynne v. Newman, 75 Va. 811, Judge Burks said:
"Such judgment by a court having jurisdiction to render it, can be vacated only by some direct proceeding at law, either in the court in which the judgment was recovered or some other court having appellate jurisdiction. See 2 Story's Eq. Jurisprudence, sec. 1571; Graham Waterman on New Trials, ch. 17, pp. 1482, 1483, and cases cited." See also, Alvis v. Saunders, 113 Va. 208, 74 S.E. 153, and Rosenberger v. Bowen, 84 Va. 660, 5 S.E. 697.
The petition of February 18, 1946, was not to establish a lien on land but to collect from the administrator the balance due to the heirs of Jones on the judgment of March 1, 1939, for $17,501.88. If there was anything the matter with the original judgment the remedy was by appeal. Not only was this claim of these heirs presented to White, administrator of the estate of Howard, deceased, but on it a judgment was actually entered.
It is charged that petitioners' judgment of $6,800.46 was rendered on insufficient proof. If that be true, the remedy was by appeal.
In Turk v. Ritchie, 104 Va. 587, 52 S.E. 339, this court said:
"The decree asserted by appellee in this cause, being a valid decree, settled all questions as to the validity of the debt claimed by her, and that the debt was not barred by the statute of limitations when the decree was made. Brewis v. Lawson, 76 Va. 36, and authorities cited; Smith v. Moore, 102 Va. 260, 46 S.E. 326."
The statute of limitations relied upon, Code, section 5810, requires that a claim against a decedent's estate must be reduced to judgment within five years from the date of qualification of his personal representative. It does not require that it be enforced within that time.
In Sipe v. Taylor, 106 Va. 231, 55 S.E. 542, it was said that a decree against a personal representative of an estate was conclusive so far as the statute of limitations was concerned, and that Code, section 2920 (now Code, section 5810), had no application.
If petitioners are beneficiaries under the Howard trust, then, in no event, could the statute of limitations be pleaded against them. Berry v. Berry, 119 Va. 9, 89 S.E. 242; 34 Am. Jur., sections 175, 176.
These petitioners had the right to intervene. The $17,501.88 represented the entire liability of Howard, trustee. That trust was for the benefit of the Jones heirs, and petitioners are the Jones heirs. When they sought to intervene, the only asset of the trust estate was the $4,030.00 note, once thought to be of little value. If these petitioners could not be paid out of the proceeds of this note, they could not be paid at all. Its proceeds should be applied to this trustee's debts, and, so far as the record goes, there is no valid claim against it, except the claim of the Jones heirs.
Negotiations were in progress between White, administrator, and Ira E. Thompson, under which the claim against Thompson was to be settled for $5,000. These petitioners then knew nothing about it. Had it been consummated, they could never, under any conditions, have been paid the amount of their claim.
Equity takes but one bite at a cherry.
Among assignments of error we deem it necessary to pass upon these:
Should counsel for plaintiffs' in the original bill be paid out of the fund by order of court a fee for professional services? We hold that he should ultimately be so paid, subject to the limitations which we have noted. This assignment is in fact premature. The chancellor below has not undertaken in advance to pass upon any allowance which should be made to counsel and of course he could not until the amount of the fund which may be realized is in fact known.
Had petitioners a right to be heard? They had, and for reasons heretofore noted. Are their claims barred by the statute of limitations? They are not, and that also for reasons noted.
Arguments on other errors claimed have wandered far. They are without merit to an extent which would make a detailed discussion of them unfruitful.
The decree appealed from is affirmed, and this cause is remanded.
Affirmed and remanded.