Charles D. Gilmore vs. John Devlin et al.

Charles D. Gilmore vs. John Devlin et al. Equity. No. 6344. Decided December 23, 1880. 1. G., who disclaimed any interest in a fund in his possession, filed a bill of interpleader and paid the money into court. Held, That the money being ip the custody and possession of the court, though the court may disapprove of the means by which the fund has been accumulated, it must dispose of it, and in doing so, it will require an honorable settlement between the claimants. 2. Where one has received his share of a fund and disavowed any further claim, he will be estopped from afterwards setting up a right to the remainder by denouncing the men and the instrumentalities by which the fund was created. 3. A fund divided, without preference, between two assignees, each of whom had contributed to its creation, and each of whom claimed the whole of it under separate assignments, both of which the court deemed to be in contravention of law and void. STATEMENT OP THE CASE. This was a bill of interpleader, filed by Charles D. Gilmore, who alleged that he had in his hands a fund of $2,500, to which the several defendants, Devlin, Hilton, Dickinson and Sherman, made separate claim, and which he asked leave to pay into court, and that the defendants might interplead between themselves as to its ownership. The facts of the case are as follows : John Devlin was arrested during the late war by the military authorities. On his person was found about $15,000 in money and bonds, which were taken from him. He was then tried by a military commission upon the charge of forging enlistment papers and selling them to persons who wished to avoid military service. Upon this charge he was convicted and sentenced to undergo ten years’ imprisonment and to pay a fine of $10,000. Afterwards that part of the sentence imposing imprisonment was remitted. The war having closed, Devlin, in November, 1865, employed E. J. Sherman to recover from the United States the $15,000 which had never, been returned. He gave him a power of attorney, and agreed to pay half of whatever might be recovered, Sherman undertaking to employ counsel and to prosecute the claim at his own expense; In pursuance of this agreement, Sherman employed Chipman & Hosmer, attorneys at law, of Washington, D. C., to conduct the case, agreeing to pay them 25 per cent.; that is to say, half of his own fee for their services. In 1868, Chipman & Hosmer recovered $4,956.24 from the War Department without suit. The remaining $10,000 was retained, as was’elaimed, in payment of the fine imposed by the military commission. From the sum recovered, Chipman & Hosmer ded ucted $1,239.06 for their fees, and sent Sherman two drafts, one in his own favor for an amount equal to that retained by them, and the other in favor of John Devlin for the residue ($2,478.12). Upon this last draft, Sherman, by virtue of his power of attorney, which he claimed to be broad enough, endorsed Devlin’s name, had it cashed by a New York bank, and appropriated the proceeds to his own use, in payment, as he claimed, of other services which he had rendered in procuring a pardon for Devlin. When Devlin, who had in the meantime been convicted of another offence, and been sent to the Albany penitentiary for two years, discovered, on his discharge from prison, what Sherman had done, he revoked the power of attorney, gave another to Wm. H. Dickinson, of New York, and employed him to recover the remaining $10,000, upon an agreement similar to that made with Sherman, viz., to pay one-half of whatever might/be recovered. The following is a copy of his agreement with Dickinson : “Whereas, I have this day given Wm. H. Dickinson, of New York city, a writing, dated and acknowledged this day, wherein I authorize him to collect about fifteen thousand dollars, due for sixty-five hundred dollars in U. S. Government Bonds, and three hundred and ninety dollars in currency, and eight U. S. Treasury Bonds, of $1,000 each. Now, I hereby agree to give said Dickinson, in consideration of the services he has performed, or may perform, about the matters referred to in said instrument, as a contingent fee, one-half of all sums which may be recovered for, or paid back to me, my representatives or assigns, on account of the claim referred to in said instrument. Dut it is understood that the said Dickinson shall not charge anything for said services unless something is recovered, and shall charge no more than the above named one-half, in any event. Dated New York, Dec. 28, 1870. (Signed.) John Devlin.” It may be stated here that, upon the discovery by Devlin of Sherman’s appropriation of the $2,478.12, and the employment of Dickinson as attorney, Dickinson instituted suit in Devlin’s name against the bank to recover the proceeds of the draft which had been paid on the endorsement of Devlin’s name. This suit Dickinson subsequently compromised upon the payment of $500 by the bank. eThis compromise, Devlin alleged, was without his knowledge, and also that Dickinson never accounted to him for the money. Chipman & Hosmer, who by this time had abandoned the case, were then re-employhd by Dickinson upon the same terms of compensation which had been made by them with Sherman, to wit, 25 per cent, of the amount recovered. Thereupon they brought suit for Devlin in the Court of Claims. In February, 1872, while the suit was pending, Chipman wrote to Dickinson that Sherman had filed in the Court of Claims an assignment of one-half of the claim, and that he was laboring to defeat it, at the same time urging Dickinson to take Sherman into the case, or else he, Chipman, would retire. Under these representations, Dickinson wrote to Sherman the following letter : “ 59 Liberty Street, April 7,1873. E. J. Sherman, Esq.: Dear Sir : I will assure you 50 per cent, of the Devlin claim, as now pending in the Court of Claims at Washington, if you will assui’e me 50 per cent, of the same. Is that plain ? If Chipman & Hosmer will take 25 per cent., and E. J. Sherman 25 per cent, of the claim, I hereby assure you both that you may collect the claim and your 50 per cent.; but I must have 50 per cent, thereof to treat as I see fit. This, I presume, is satisfactory. There is only one question—that of disbursements. I have paid $50, and shall pay no more. Will you and 0. & H. share the future disbursements with me, the $50 already advanced being credited on account of disbursements ? Tours truly, Wm. H. Dickinson, Attorney for John Devlin, by him, duly authorized to make the above agreement, 59 Liberty street.” In November, 1875, Chipman & Hosmer dissolved partnership, and Devlin’s claim was left in charge of Mr. Charles D. Gilmore, their successor and late partner. Sherman now furnished such information as he had in regard to the facts of the case, and in December, 1877, judgment having been rendered a few months previously for the claimant, a Treasury drait was issued to Gilmore in favor of John Devlin for $10,000. Devlin and Dickinson, being advised of this, came to Washington, and the money having been drawn, Devlin was asked how much he claimed ; to which he replied, $5,000 ; that he made no claim to anything more. Whereupon Gilmore paid him $5,000 and took his and Dickinson’s receipt therefor, as follows : “Washington, D. C., Dec. 31, 1877. Received of Gilmore & Co., this day, five thousand dollars, for my portion of claim collected through a judgment of Court of Claims for me. And I, Wm. H. Dickinson, an attorney for John (H.) Devlin, also consent to this payment as belonging to Mr. Devlin. John Devlin. William H. Dickinson, Witness: H. A. Snow.” As to the remaining $5,000, Devlin said, “you lawyers can fight it out.” Gilmore, then, after deducting, according to agreement, his fee of 25 per cent., held the remaining $2,500 to await a settlement of differences between Dickinson, Devlin and Sherman and his assignee, Hilton. These parties had almost immediately began a quarrel over the fund, and as rival claimants, had each served a notice on Gilmore not to pay it over to the others. Hilton soon after commenced a suit in this court (Equity, No. 6,100) against Chipman, Hosmer, Gilmore and Devlin, in which he claimed the whole $5,000, subject to the fees of Chipman & Hosmer, on the ground that they had been employed by his assignor, Sherman, under the latter’s agreement with Devlin, and were bound to account for the whole to Sherman. Under these circumstances Gilmore filed this bill of inter-pleader, and paid the money into court ; Devlin, Hilton, Dickinson and Sherman appeared and answered. Devlin’s answer stated that in 1866 he had employed the firm of Chipman & Hosmer to prosecute for him a claim against the United States for the sum of $14,890, wrongfully taken from him by officers of the United States, agreeing to pay as compensation 25 per cent, of whatever amount might be recovered ; that they recovered $4,956.24 of this sum from the War Department without suit, no part of which was ever paid over to him; that subsequently they recovered $10,000 for him, through the Court of Claims, collected the judgment, paid him $5,000, and retained $5,000, as he considered, without right. And he alleged that he was entitled to this whole sum of $5,000, and that none of the other defendants were entitled to it, or to any part of it. Dickinson answered substantially to the effect that he (Dickinson), as principal attorney for Devlin, had retained Chipman & Hosmer to prosecute his claim against the United States ; that the judgment had been obtained in the Court of Claims, collected and distributed as alleged in the bill j that his own employment by Devlin was on December 28, 1870, when he (Devlin) executed an agreement to pay him (Dickinson) one-half of all that might be recovered for him as compensation for his services in such recovery, at the same time revoking the power of attorney that had been executed to Sherman in November, 1865 ; that he (Dickinson ) subsequently controlled the case, arranged with Chipman and Hosmer for their fee of 25 per cent., procured the execution of the petition by Devlin, and took testimony in the case ; that Chipman and Hosmer had previously abandoned the case, and knew that Sherman had been discharged, and subsequently to 1870 acted under his direction; that, in 1872, Chipman informed Dickinson that Sherman had filed in the Court of Claims a written statement to the effect that he (Sherman) had an assignment of one-half of the claim, and that Sherman must be employed in the case or he (Chipman) would retire ; that subsequently, in March, 1872, Chipman sent Dickinson a letter from Sherman threatening to defeat the claim unless he was accorded recognition in it under his old power of attorney, and at the same time stating that he could produce testimony in support of it which no other person could ; that, under the influence of these representations from Sherman and Chipman he (Dickinson) wrote the letter to Sherman, dated April 7, 1873 ; that Sherman’s representations were utterly false and fraudulent; and that the contract made by this letter should, therefore, be held to be void ; that out of the $4,956.25 collected by Chipman & Hosmer in October, 1868, one-quarter was retained by them, and three-quarters were appropriated by Sherman to himself, regardless of Devlin’s rights ; that Sherman was never attorney of record, and never had any possession of the fund ; and that none of the other parties had any right to the $2,500 held by Gilmore ; and that he (Dickinson) was entitled to the whole of it. Benjamin S. Hilton answered substantially that Sherman had been retained in the first instance by Devlin to prosecute his claim against the United States for nearly $15,000, upon a contingent fee of one-half the amount that should be recovered ; that Sherman employed Chipman & Hosmer ; that judgment was recovered in the Court of Claims, and the amount of it collected as stated in the bill ; that Sherman had assigned to him (Hilton) all his interest in the proceeds of the claim ; and that he (Hilton) as such assignee was entitled to the whole $5,000 retained by Gilmore, less proper fees and charges, and not merely to the $2,500 paid into court. E. J. Sherman’s answer, substantially the same as Hilton’s, set forth that Devlin had employed him on a contingent compensation of one-half the amount that might be recovered ; and that he (Sherman) had employed Chipman & Hosmer on a similar contingent compensation of 25 per cent, of the claim. He charged misconduct on Gilmore, and claimed the whole $5,000 shonld be paid into court. A decree was passed by the special term requiring the defendants to interplead between themselves as to their respective rights in the premises, and at the same time it was ordered that the testimony taken in the other cause, No. 6,100, Equity, instituted by Hilton against Gilmore, should stand as testimony in this case, with leave to the parties to take such other testimony as might be required. Thereupon, by agreement between the solicitors for Devlin, Dickinson, Hilton and Sherman, the answers of these parties were to be regarded as their several statements of their respective cases ; and some further testimony was .taken besides that in No. 6,100. The two causes were then heard together in May, 1880, at the special term, and a decree passed awarding the fund in coui’t to Hilton, as the assignee of Sherman, and from this decree the present appeal was taken by Devlin and Dickinson. Merrick & Morris for John Devlin : A lien is a personal right, and cannot be assigned, although the claim which it has accompanied may be assigned. The lien cannot be enforced except by the party entitled to it. Ruggles vs. Walker, 34 Vt., 470; Wing vs. Griffin, 1 E. D. Smith (N. Y.), 162; Daubigny vs. Duval, 5 Durnf. & East., 604; Jones vs. Sinclair, 2 N. H., 321; Legg vs. Evans, 6 M. & W., 36. Devlin’s original agreement with Sherman was either an assignment of so much of his claim or a contract to pay him a certain specific share of the amount that might be recovered. In either case it was clearly prohibited by the act of Congress, and was absolutely null and void. Act of February 26, 1853 (10 Stat., 170), U. S. Rev. Stat., sec. 3477; U. S. vs. Gillis, 95 U. S., 407; Spofford vs. Kirk, 97 U. S., 484; Bemiss vs. Taylor, No. 5316, Equity Dock., 16. Sherman has received all that he could or would be entitled to in any event. Out of the original claim of $14,890, he received and appropriated $3,717.18, or within $5.32 of one-quarter of the whole. If his right were fully established, only $5.32 would be due to him. The other services by which he claims to have been entitled to appropriate this money, money, were contrary to public policy, that of procuring a pardon. As to Dickinson’s claim, his contract is equally invalid under the act of Congress. In the next place he has received money from the case— that collected from the bank—which should be deducted from his present demand, even if his right should be established. Frank W. Hackett for Dickinson : Dickinson’s stipulation for fees was legal and valid. Wylie vs. Coxe, 15 How., 415; Stanton vs. Embrey, 93 U. S., 548. Dickinson’s suit against the bank is a transaction separate and distinct from this. The loose and uncorroborated allegation of Devlin, that Dickinson collected money in that suit which he did not pay over (even if it were true) has nothing to do with this case. McPherson & Carlisle for Hilton : A receipt in full, given with full knowledge of all the circumstances, and in the absence of fraud, is conclusive. Abner vs. George, 1 Camp., 392; Benson vs. Bennet, Ib., 394; Bristow vs. Eastman, 1 Esp., 175; Starkie on Ev., part 4, p. 1274; Harden vs. Gordon, 2 Mason, 561. A voluntary payment cannot be recovered back even if. made under mistake of law. Elliot vs. Swortwout, 10 Pet., 137, 153. Where a receipt is something more than an admission of the receipt of money, and contains an agreement between two parties, it is in the nature of a contract, and cannot be varied by parol. Baker vs. Nachtriet, 19 How., 126-130; May vs. Babcock, 4 Ham. (Ohio), 334; see, also, 5 Vt., 520, 1 Esp., 172; 2 Dev., 247; 4 Wash. C. C., 562, and C. & H.’s notes to Phill. Ev., 383. Devlin is estopped by his receipts from setting up any claim against Gilmore or Chipman & Hosmer. McKnight vs. U. S., 93 U. S., 179-185. [MAJORITY — Mr. Chief Justice Cartter] Mr. Chief Justice Cartter delivered the opinion of the court. This is a controversy between parties claiming a fund growing out of a claim against the Government, and is one of that constantly recurring class of cases that the court is called upon in every succeeding term to adjudicate. A man by the name of Devlin was engaged during the war in the creditable business of enlisting men into the service of his country two or three times over—making use of bounty jumpers in aid of the public welfare. He was finally caught in some of his rascality, and by the appropriate work of an appropriate tribunal, was sentenced to the Albany penitentiary as a reward for his public services. While there incarcerated, another set of patriots made their appearance, and proposed to reverse the action of the court, and reinstate this suffering victim of arbitrary government to his usefulness at large, and the most marvelous thing in connection with this case is, that they succeeded, and through the instrumentality of an able and an honest court, procured the restoration of the money which had been taken from him by the military ; money which he had wrongfully obtained by wrongful work. Engaged in this creditable work of defeating punishment was a man by the name of Sherman, another man by the name of Dickinson, and legitimately and professionally employed in the process of doing it were Messrs. Chipman & Hosmer, of this city, whose work was thoroughly professional, and in every regard creditable, so far as we are able to discover in the history of the case. The controversy is now over the ownership of some of this money that rightfully or wrongfully is under the order of this court and in its keeping, and the question is, which of these men shall have it ? . Sherman claims that he is entitled to all of it, because he had an assignment coeval with and in consideration of the effort to get it. He claims that the assignment and power of attorney engrafted upon it was irrevocable, and vested in him an inalienable right to it. He claims that he contributed by his agency and industry and instrumentality much to procure the result, and we have no doubt that he did. That in pursuance of his rights, under the assignment and power of attorney, he employed Chipman & Hosmer as attorneys, who filed the petition and prosecuted the claim to success in the Court of Claims ; and that, therefore, he is established in the exclusive right to it. The interest of Sherman is represented by his assignee, Hilton. Dickinson comes on the scene about this time, under a retainer and a power of attorney from Devlin, and claims, in his turn, that he contributed assistance to the professional success ; that, among other things, he advanced $50 for some costs incident to the legal prosecution of the claim. That his power of attorney constituted a revocation of the prior power to Sherman, and that in fact he was employed because Sherman had been detected in committing a forgery in endorsing his client’s name, and he says that by reason of that malfeasance he, Dickinson, was substituted in his place. Gilmore, who stands in the place of Chipman & Hosmer, says that he has no further interest in the fund ; that he has received and appropriated that portion of the contingent fee that legitimately belonged to him, and that whatever balance remains belongs to somebody else, and he asks the court to distribute it, so that he being out of the case, all that remains is a controversy between Dickinson and Hilton, the assignee of Sherman, and their client Devlin, who wakes up about this time with his indestructible instincts, and claims the whole of it. Now this case is a medley of the moral corruption that surrounds this class of cases, and that can hardly be divorced from them. Devlin says that Sherman is a rascal and committed a forgery, and that he ought not to account to him ; that Dickinson, his last attorney, is another rascal and has already got more than belongs to him ; and that it ought not to be paid to him either. Now, if this was not a fund in the possessisn of the court, which they are charged to get rid of in some way plenary justice would drop the case and let the fund drop with it. These assignments w*ere both void under the law. They were in contravention of the law, and the case that we have before us demonstrates that they were contra bonos mores. Nevertheless the fund is here, and there is an intimation in the authority of the Supreme Court, rising to the dignity of authority, to the effect that where rascals have accumulated a fund by surreptitious means, they shall settle between themselves under the authority of the old rule that prevails among thieves—honorably. The difficulty with Devlin and this fund is, that in the record and history of the case, he has denied that it belongs to him. When he received and receipted for $5,000 of the $10,000 collected, and when Gilmore appropriated the $2,500 that belonged to him in consideration of fees, Devlin took pains to say ; “ This is all that belongs to me, the rest belongs to the lawyers, and let them fight it out among themselves.” Now, we think that Mr. Devlin, after putting a share of the result of this speculation into his pocket, and after having created this divorce between himself and the fund, ought to be estopped from saying that he had rascals for attorneys, and that they are not entitled to anything, when the fund had been accumulated by the men, the machinery and the instrumentalities that he denounces, and that we ought to dismiss him from the case. As to Dickinson and Sherman, though they both have void assignments, they both contributed to the procurement of this fund. After Sherman was sought to be removed and supplanted by Dickinson, by the creation of a new and the revocation of an old power of attorney, they came to an understanding to co-operate in the work of serving the Government by getting this money. The evidence is beyond all controversy that they corresponded and co-operated through the instrumentality of the firm of Ohipman & Hosmer for the collection of this fund. So that, after blackballing and pursuing each other, and after one of the parties had threatened what it is a great misfortune for the public welfare was not carried out, that “ he would sit down on it if he were not permitted to remain in it,” we find a fund disavowed by the original owner, and avowed by him to belong to these middlemen. Now this fund is in possession of the court, and we think that the shortest, wisest, best way to get rid of it, is to divide the child between them ; for we see no force in the argument of precedence and priority and exclusion that has been resorted to in this case. The decree of the court, therefore, is that this fund be equally divided between Dickinson and Sherman’s assignee, Hilton.