Gray v. Denhalter

53 P. 976, 17 Utah 312, 1898 Utah LEXIS 70
CourtUtah Supreme Court
DecidedJune 13, 1898
DocketNo. 895
StatusPublished
Cited by4 cases

This text of 53 P. 976 (Gray v. Denhalter) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gray v. Denhalter, 53 P. 976, 17 Utah 312, 1898 Utah LEXIS 70 (Utah 1898).

Opinion

Bartch, J.:

This case results from a failure of the appellant, who purchased certain property at a foreclosure sale under a deed of trust, to comply, as is claimed, with the terms of the decree of foreclosure respecting a certain sum directed to be paid as an attorney’s fee. It appears from the record that the plaintiff, M. J. Gray, bad previously purchased the same property at a sale made under a second trust deed, and afterwards brought an action in ejectment for the property against the Denhalters, and, still later on, a suit in equity for the appointment of a receiver to take charge of the property. In the equity suit, the Jarvis-Conklin Mortgage Trust Company was made a defendant. J. H. Bacon was the trustee in both trust deeds, and the agent of the defendant trust company. Respondent J. W. Judd was its attorney, and filed a cross complaint for it in the equity suit, joining in the prayer for a [314]*314receiver and to obtain a decree of foreclosure of its trust deed, and obtained tbe decree to sell tbe property. In tbe meantime tbe defendant trust company itself went into tbe bands of receivers, and tbe receivers assigned tbe deed of trust and tbe debt therein secured to tbe appellant, Crebbin.

There is some conflict in tbe evidence as to whether tbe respondent was employed as tbe attorney of Bacon or of tbe trust company, but tbe court found that be represented tbe trust company, and this, we think, is supported by tbe proof. Bacon was appointed in tbe decree of foreclosure special commissioner to sell tbe property, and out of tbe proceeds was to retain bis fees; then pay to J. W. Judd, attorney for cross complainant, $1,000 as attorney’s fees; and, after having paid tbe costs, turn tbe balance over to tbe cross complainant or its attorney, in payment of the sum of $23,793, found due on tbe trust deed, and interest. At tbe sale tbe property was bid off by tbe appellant, Crebbin, tbe then owner of tbe debt and judgment, for $25,300. Tbe commissioner executed a certificate of sale, but payment of attorney's fee was refused; nor does it Appear that any part of tbe purchase price was paid to tbe commissioner. Thereupon tbe respondent Judd moved tbe court for a resale of tbe property. Tbe court granted tbe motion, and ordered that appellant, Crebbin, pay to J. W. Judd, $1,000, within 30 days from a certain date, and, upon failure thereof, that “tbe premises be sold to pay tbe several amounts provided for in tbe decree, including tbe attorney’s fee” and costs. This action of tbe court is made tbe basis of complaint by tbe appellant on this appeal.

Tbe decisive question appears to be whether tbe respondent bad such an interest in tbe decree, and in lien upon the property, as would authorize the court upon motion [315]*315to make the order in controversy. It is insisted for the appellant that the attorney’s fees form a part of the judgment, and go to the mortgagee, or, in this case, to the as-signee of the mortgagee, and that the respondent had no. standing in court to make and insist on the motion, and had no lien on the judgment. It is true this court in McClure v. Little, 15 Utah, 379, used the language: “Attorney’s fees, when allowed, go to the mortgagee or trustee,, and become a part of the judgment.” In a certain sense-this is true, but -not in the sense that the mortgagee may hold such fees as his property. They do form a part of the judgment, and may go to the mortgagee, but, if they do, the mortgagee receives them in trust for the attorney, and has no tangible interest in them. Nor has he any right to retain them as liquidated damages or as a penalty for the default of the defendant. They are allowed to indemnify him against expense which he may incur,, through the default in the payment of the obligation, but he has no other interest in them than as for such indemnity. Nor can he share in a division of such fees. These views are in harmony with the statute found in chapter 29, p. 25, Sess. Laws 1894, and with McClure v. Little, where it was said: “This statute was enacted to prevent a division of the fees provided for in the mortgage between the attorney and the mortgagee, and to allow only such reasonable attorney’s fees to be taxed against the defendant as were actually agreed to be paid or were paid for his services.”

The statute referred to provides (section 1): “In alT cases oir foreclosure, when an attorney or counsel fee is claimed by the plaintiff, no other or greater amount shall be allowed or decreed than the sum which shall appear by the evidence to be actually charged by and to be paid to the attorney for the plaintiff; and if it shall appear that [316]*316there is an agreement or understanding to divide such fees between the plaintiff and his attorney, or between the attorney and any other person except an attorney associated with him in the cause, only the amount to be re-tainéd by the attorney or attorneys shall be decreed as against the defendants. Nothing herein contained shall be deemed to in any wise prevent the court from passing upon the reasonableness of counsel or attorney’s fees in such cases.” Under this enactment, it is clear that the moment a counsel fee, in a foreclosure suit, is allowed, the attorney for the plaintiff has a property interest in it which cannot be defeated by the purchaser at the sale or the mortgagee. It is equally clear that the plaintiff can have no such interest in such fee, not even by agreement with the attorney; for, in the absence of an agreement between the parties to the suit, the fee must be ascertained by the court from the proof, and, in any event, it must be “paid to the attorney for the plaintiff.” When the amount of such fee has thus been adjudicated and made a part of the judgment, the attorney has an interest in the judgment, and doubtless a lien thereon to the extent of the amount allowed, and this lien cannot be discharged by payment to any one except the attorney, who, to the amount thereof, is deemed the equitable assignee of the judgment. With reference to an attorney’s lien upon the judgment which he recovers, Mr. Justice Harris, in Rooney v Railroad Co., 18 N. Y. 368, said: “It is a valid and established right to receive, out of the moneys to be collected upon the judgment, the amount due him from his client for his services and expenses in obtaining it. In the absence of any agreement on the subject, I suppose, the sum recovered by the party, as an indemnity for his expenses, would be the measure of compensation allowed to the attorney. This, then, would be the extent of his [317]*317lien. But, where there has been an agreement’ for more or less than that sum, the amount which by agreement he is entitled to receive will determine the extent of his lien. It is still true that the attorney is to be regarded as the equitable assignee of the judgment to the extent of his claim for services in the action.” Railroad Co. v. Wilson, 138 U. S. 501; Marshall v. Meech, 51 N. Y. 140; Curtis v. Richards, (Idaho) 40 Pac. 57; Cowdrey v. Railroad Co., 93 U. S. 352.

The California cases, cited by counsel for the appellant, to the effect that an attorney has no lien for his fees, are not in point, under the statute of this state.

In view of the principles above stated, it now becomes important to ascertain what rights the respondent has under the decree in this case. So far as material here, the decree provides that J. H.

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Cite This Page — Counsel Stack

Bluebook (online)
53 P. 976, 17 Utah 312, 1898 Utah LEXIS 70, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gray-v-denhalter-utah-1898.