Renick v. Ludington

16 W. Va. 378, 1880 W. Va. LEXIS 34

• Court: West Virginia Supreme Court
• Decided: April 3, 1880
• Status: Published

Opinion

Green, Peesident,

delivered the opinion of the Court:

The principal question involved in this appeal is, whether James F. Patton has an attorney’s lien for his fees on the fund in the case of Renick v. Ludington, coming to his client Renick, for his fees in this and other suits, which had been prosecuted by him for the recovery of the claim in favor of Renick v. Ludington, and which claim was recognized and a decree rendered therefor in this suit, as against the assignees without notice of this fund claiming by virtue of assignments made in their favor by Renick. The first inquiry is, whether he ever had such a lien, and then if he had such claim, whether by the arrangements made by him on November 14, 1876, with Renick he waived, abandoned or lost each Hen.

In the English courts the claim of an attorney, to have his fees and disbursements in a suit paid out of judgment he obtains, has been recognized. The courts held that this lien of the attorneys on the judgment in the case could not vary or affect the rights of the defendant in the case; and while therefore, if the defendant paid to the plaintiff after notice by the plaintiff’s attorney not to do so till his fees were paid, he could be compelled to pay the judgment again to the extent of the fees of the plaintiff’s attorney, it being a lien on the judgment. But if paid in good faith without such notice, its payment could not be aghin insisted upon. See Read v. Dapper, 6 T. R. 360; Ormerod v. Tate, 1 East 464. In carrying out these views the courts of common pleas held, that the lien of the plaintiff’s attorney on the judgment was subordinate to the defendant’s right to offset. This view Avas held in the English chancery courts; while the Court of King’s Bench held, that this lien was superior to the defendant’s right to such set-off. See Hull v. Ody, 2 B. & P. 28 ; Ensden v. Darley, 4 B. & P. 22; Simpson et al. v. Lamb, 50 Eng. L. & E. 59; Taylor v. Popham, 15 Ves. 79; Rhodes ex parte, 15 Ves. 541; 4 Bligh N. S. 604. Now under the rule of the courts, 2 W. IV., the plaintiff’s attorney in England has a lien for his fees in the suit, and no offset is allowed to prejudice his claim.

Whether this lien of the plaintiff’s attorney on the judgment he obtained for his fees and - disbursements in the case, should be recognized by the courts in this country, has been in some cases questioned and in others denied. In England attorneys are recognized officers of the court, and are entitled to fees for services performed by them, as are our clerks. These fees are ascertained and paid, and are recognized in the taxation of the costs, and some °f the American coarte deny the existence of any attorney’s lien on the judgment, where there is no taxation of costs on account of the attorney, and restrict it to the costs where its taxation is authorized bylaw. See Frissell v. Hale, 18 Mo. 18; Ocean Insurance Co. v. Ryder, 22 Pick. 210; Carrier v. Boston & Maine Railroad; Kyle ex parte, 1 Cal. 332; Mansfield v. Dorland, 2 Cal. 507; Hill v. Brinkley, 10 Ind. 102; Walton v. Dickerson, 7 Barr 376; Davenport v. Ludlow, 4 How. Pr. R. 438; Benedict v. Harlow and Wendell. 5 How. Pr. R. 350.

But many of the American courts dissent from these views, and hold, that an attorney has a lien on the judgment in favor of his client for his compensation as an attorney in the obtaining of such judgment, whether his fee is taxed in the costs or not by law, and if so taxed, his lien is not restricted to the amount so authorized to be taxed'by law, unless by the law he is prohibited from receiving of his client more than the amount so authorized to be taxed as a fee. The English rule, if it only secured legal costs, they alone being there allowed by law as a compensation, would by irresistable conclusion secure the compensation agreed upon by the parties, when none is provided by law. But the lien in England is not confined to the legal fees taxed, it extends to all the disbursements of the plaintiff’s attorney. The same reasons, which in England extend the attorney’s lien to these disbursements, would extend it to a charge for services, where such charge is proper, as it is in this country. The attorney according to the English decisions, occupies the position of an assignee of the judgment, who takes it subject to all the rights and equities attached to it. The lien of an attorney on his client’s judgment was allowed in England, not because his fees were taxed in the costs, but because it was founded in natural equity, which forbids that a party should enjoy the fruits of the cause without satisfying the legal demands of his attorney; Wilkins v. Carmichael, Douglass 100, as said by Lord Kenyon in Read v. Dapper, 6 T. R. 361, “The principle has long been settled that a party should not run away with the fruits of a cause without satisfying the legal demands of his attorney, by whose industry and expense those fruits were obtained.”

The courts, who hold these views, decide that the taxed costs of an attorney in England have no merit or justice superior to the claim of counsel for reasonable compensation in this day and country; nor does the former contribute more to the success of the party he represents in England, than does the latter in this country ; and therefore there should be in reason and justice a lien in this country on a client’s judgment for a just compensation for his counsel, for the same reasons as tlm attorney’s lien is allowed in England. Substantially these views are held by many American courts; and they decide that the attorney has a lien for his fees or just compensation in a suit on the judgment he obtains. See McDonald et al. v. Leroy Napier, 14 Ga. 89; Warfield v. Campbell et al., 38 Ala. 527; Carter v. Bennett, 6 Fla. 214; Andrews v. Morse, 12 Conn. 447; Stewart v. Flowers, 44 Miss. 513 (7 American R. 707); Hunt v. McClanahan, 1 Heisk. 503; Rooney v. Second Avenue R. R. Co., 18 N. Y. 371; Fox v. Fox, 24 How. Pr. 409. In some cases a distinction has been attempted to be made between a case, where the attorney has agreed upon a certain fee and when there has been no such agreement but the amount of the fee depends upon a quantum meruit; but there is no sound reason for such a distinction. This distinction was supposed to exist in the New York courts at one time, but it was properly repudiated in Fox v. Fox, 24 How. Pr. R. 409. In my judgment the weight of reason and authority is in favor of recognizing the attorney’s lien on a judgment in favor of his client for all services, which he had rendered in obtaining such judg-! ment. This lien is in the nature of an equitable lien (see Brown & Reid v. Bigley, 3 Cooper (Tenn.) Chy. 623) and is based on the natural equity, that the plaintiff ought not to be allowed to appropriate the whole of a ■ “judgment in his favor without paying thereout for the services of his attorney in obtaining such judgment. This is the right of the plaintiffs attorney as against his own client, and it cannot affect the rights and equities of the defendant against whom the judgment is rendered. But if, after he has been notified by the attorney of his claim of such lien, he pays the judgment to the plaintiff, he thereby attempts a fraud on the plaintiffs attorney, and such payment will not be good, to the extent of the claim of the plaintiff’s attorney on the judgment.

Syllabus 2. Of course when the law prohibits an attorney from contracting for or recovering on a quantum meruit more than the attorney’s fees taxed in the costs, the attorney’s lien could not exceed the attorney’s fee so taxed; and this was probably the case at one time in Virginia. See Major’s ex’r v. Gibson, &c., 2 Patt. & H. 48. Since January 20, 1840, an attorney-at-law in Virginia or in this State has been authorized to make contracts with clients for their fees, and their fees are not limited to those taxed by law as a part of the costs of the suit. See Acts of Virginia of 1839, 1840, ch. 50, p. 44; Code of 1849, ch. 164, § 11, p. 636; Code of West Virginia, ch. 120, § 11, p. 591. While the lien of the attorney is a special lien for his services in obtaining the particular judgment or decree only, yet the principles on which it is based obviously extend the lien to all his services rendered in obtaining the particular judgment or decree, though those services may not all have been rendered in the particular suit in which the judgment or decree was rendered, but were in part rendered in other suits, all tending to and finally ending in the judgment or decree on which the lien is claimed. In Newbert v. Cunningham, 50 Me. 231, it was decided that the attorney’s lien extended to fees in suits arising from and incidental to the enforcement of the judgment which he had obtained.

syllabus 5. These principles of law are of easy application in this case. Under them it is obvious that James F. Patton had a primary or prior lien on the proceeds of the judg-meuts in favor of his client, Kenick, against Ludington, which was being collected and distributed in the case of Renich v. Ludington, when he filed his petition in case. Of course his lien might be waived, as other liens of like character may be. See McDonald et al. v. Leroy Napier, 14 Ga. 112; 2 Kent’s Com. 640, Story on Agency 378-381. The intention of the parties appears to be the polar star which guides the courts in determining whether a lien of this character exists. Thus in Correll v. Simpson, 16 Ves. 275, where a solicitor was employed in certain business, and papers left with him in connection therewith, on which the solicitor claimed a' lien for his business fees, the party confessed a judgment for the amount of bis claim, and afterwards gave a note to the solicitor for the amount payable in three years after its date. The court held that the talcing of the note was an implied waiver of the lien, because being payable in three years after its date, it could not be supposed that the parties intended that the solicitor should retain these papers for that time, which would result if the lien was not waived thereby. Though some expressions are used by Lord Eldon in this case which might lead to a different conclusion, yet the above was the true ground of this decision, as appears from Stevenson v. Blacklock, 1 M. & S. 535, where the facts were somewhat similar, but which Lord Ellenborough distinguishes from this case, because the bills of exchange, which had been given for the solicitor’s fees, had been dishonored, when the lease on which the lien was claimed came into the hands of the solicitor. Lord Ellenborough says : “It is unnecessary to canvas this doctrine in Correll v. Simpson, inasmuch as there is a material distinction between that case and the present, for there the bills were running, and there was no reason to presume that they would not be duly paid ; in this case the bills have been refused payment.” The lien it was held had not been waived by the taking of these bills.

So io° *a Dennett v. Cutts, 11 N. H. 163, it was held that the giving of a note by the client for the amount of the fees due an attorney did not destroy his lien for his fees on a bond placed in his hands for collection by the client. So too in other equitable liens it is held, that, whether a waiver of the lien has taken place, depends on the intention of the parties in the transaction supposed to amount to said waiver. The implied vendor’s lien has never been much encouraged by the courts, still where it is once declared to exist, it will not be held to be waived, unless from the transaction between the vendor and the vendee it may be reasonably inferred, that it was the intention of the parties that it should be surrendered.

In McClandish v. Keen et al., 13 Gratt. 624, Judge Lee after first showing that the vendor’s implied lien is but little countenanced anywhere, and is repudiated in many States, and is especially inappropriate in Virginia, admits that it has nevertheless been recognized in Virginia and he proceeds: “As the lien is generally presumed, it would seem that the burden is upon the purchaser of showing that it is waived, Hughes v. Kearney, 1 Sch. & Lef. 132; Machreth v. Symmons, 15 Ves. 239; Garson v. Green, 1 John. Chy. 308. But this the purchaser can do not only by showing an express agreement to that effect, but also by reasonable inference and implication from the circumstances. Now it would seem well settled that the mere taking of a bond, promissory note, bill of exchange, or a simple covenant of the vendor himself will not repel the lien, because, as said by Lord Eldon, it may have been given not to supersede the lien but for the purpose of ascertaining the debt and countervailing the receipt endorsed upon the conveyance. But it is equally clear that when a distinct and independent security is taken, either of other property, or the responsibility of a third person, the party having carved out his own security, the law will not come to his aid by creating another, and the equitable lien will be gone. Bonn v. Kent, 2 Vern. 281; Faywell v. Hellis, 2 Amb. 724; Naine v. Prowse, 6 Ves. 752; Cole v. Scot, 2 Wash. 141; Fish v. Howland, 1 Paige 20; Wilson v. Graham’s ex’r, 5 Munf. 297; Gilman v. Brown, 1 Mason 191; S. C. 4 Wheat. 255. In such cases the waiver of the lien is placed upon the ground of intention, deduced from the parties taking a special security. See 3 Sugd. Vend. 191; 4 Kent’s Com. 153. So when although the responsibility of a third person be not taken, if it appear that the note, bond or covenant was substituted for the consideration-money, and was in fact the thing bargained for, the lien will not exist. Then it may be inferred that the credit was given exclusively to the person on whom the security was taken.”

In Machreth v. Symmons, 15 Ves. 329, White and Tudor’s Leading Cases in Equity vol. 1 side page 298 top page 454, Lord Eldon says: “The case put by the Master of the Polls in Naine v. Prowse, 6 Ves. 760, of a mortgage upon another estate also affords strong, perhaps not quite conclusive, evidence against the lien, considering the value of the mortgaged estate in general is much more than the amount of the money. It does not however appear to me a violent conclusion, as between vendor and vendee, that notwithstanding the mortgage, the lien should subsist. The principle has been carried this length : that the lien exists, unless an intention, and a manifest intention, that it shall not exist, appears. That the taking of independent security will not necessarily waive the vendor’s lien may be inferred from Kyles v. Tait’s adm’r, 6 Gratt. 44. The true rule is, that the waiver arising from the acceptance of collateral security is presumptive, and may be rebutted by evidence from other circumstances, of an intention not to rely exclusively upon it, but to retain the equitable lien. See Campbell v. Baldwin et al., 2 Humph. 248-258 ; Marshall v. Christmass et al., 3 Humph. 616, 617; Prime v. Macon and Western Railroad Co., 3 Kelley 333, 342. From these principles it necessarily follows, that the taking of a mortgage or collateral security will not extinguish the lien, when there is an express agreement that it shall survive. See Daughaday v. Paine, 6 Minn. 443.

Syllabus 6. I have dwelt upon the circumstances which would be held to be sufficient to amount to a waiver of a vendor’s implied lien, because in my judgment the circumstances in this case would be insufficient to justily the court in inferring that even such a lien was waived, and we may safely assume that the attorney’s lien for his fees on the judgment he has obtained for his client will not be held as waived by circumstances, which do not indicate that it was the intention of the parties to waive such lien, at least as strong as would be required to justify such inference in the case of a vendor’s implied lien, which has ever been so much discountenanced by the courts. The true principle to be applied in determining whether an attorney’s lien for his fees in a case on a judgment he has recovered for his client exists, is that stated by Lord Eldon, and is: that the lien exists, unless an intention, and a manifest intention, that it shall not exist, arp'pears. Does such manifest intention to waive this lien appear in this case? The taking of his client’s bond for the fees certainly shows no such intention, for it is well settled that the taking of the vendor’s bond for the purchase-money is no'waiver of a vendor’s lien. IN o such intention can be inferred fairly from his taking from his client, Renick, a confession of judgment on this bond. Under the circumstances, under which this confession of judgment was actually taken, we cannot fairly infer that Patton intended to rely exclusively on this confession of judgment for his fees, as we cannot reasonably suppose that he was willing to take this as sole security, when he knew that Renick, his client, was utterly insolvent; and this he certainly knew, as it was fully disclosed in the suit of Ford & Son, &c., v. Renick, &c., in which he was a party. But if any doubt could exist in this case, as to whether Patton in taking this confession of judgment on Renick intended to rely on it alone, to the exclusion of his reliance on the judgment or decree against Luding-ton, it is.completely- removed by the fact, that, at the very time he took this confession of judgment, he an assignment of this judgment or decree against Lud-ington to pay his fees against Renick. It thus is made to appear clearly, that the parties did not intend that Patton should rely solely on this confession of judgment to secure his fees, but that both parties intended at the time, that he should still look to the judgment or decree of Renick v. Ludington as the means by which it was to be paid. As Patton’s lien on this judgment against Lud-ington can only be held as waived by its being shown that he relied for the payment of his fees solely on this confessed judgment against Renick, it seems to me that there is a complete failure to show such waiver. So far from its being waived, the assignment of this Ludington judgment to him demonstrates that his claim to be satisfied out of it was not abandoned, but was intended by the parties to be expressly admitted, and its extent clearly defined. The lien of Patton therefore is still in full force.

syUatus4. It is claimed by the appellee’s counsel, that this lien is subject to the rights acquired by Dunn and Reid and the other assignees of Renick by their assignments of the decree or judgments of Renick v. Ludington, as these assignments were made to them when they had no notice of the Patton’s attorney’s lien on this decree or these judgments. We have seen, that Patton’s lien was subject to all equities which the defendant, Ludington, might have had against the plaintiff, Renick, and that had he paid this decree or these judgments to Renick before he had notice express or implied of the lien and claim of Patton, he would have been protected by the courts in such payment. But the lien of Patton would be recognized as superior to any offsets which Ludington subsequently acquired. See Warfield v. Campbell, 38 Ala. 527. But to make the lien of an attorney for his fees on a judgment in favor of his client, which he has obtained, perfect against an assignee of his client, no notice of the existence of such lien need be given to the assignee. The assignment of a judgment is not a legal transfer of the judgment; it operates only as an equitable transfer ; and upon well settled principles he must take this equitable assignment subject to all the equities which attached to the judgment when assigned. This is expressly decided in Sexton et al. v. Pike, 13 Ark. (8 Eng.) 193. The reasons for this conclusion are so satisfactorily set forth by Justice Scott in delivering the opinion of the court, that nothing which I can say can add aught to their force. There is really no hardship in this; for the attorney’s lien on the judgment is not hidden, secret or concealed. It stands out in bold relief upon the record, not only giving the party, about to take an assignment of the judgment, means of informing himself whether the judgment has been satisfied, but also the name of the attorney for the plaintiff, of whom he may enquire, whether his fees have been paid. If he neglects to make such enquiry, he is guilty of gross negligence, and to this, and not to the law, should be attributed any loss he may sustain.

Syllabus 7. The appellee’s counsel insist, that as the appellant has only appealed from the decree of November 22, 1878, rendered in the two causes of Renick v. Ludington et al., and Ford & Son et al. v. Renick et al., which were then for the first time heard together, and that as the question involved in this appeal had been decided by the court in its decree of November 17, 1877, in the suit of D. S. Ford & Son et al. v. Renick et al., in which the appellant was a defendant, the appellant was bound by the decision of the court then rendered, and that the court therefore in rendering the same decision in the decree appealed from necessarily committed no error, as the question then raised was not adjudicated. The decree of November 17, 1877, was but an interlocutory decree, and might therefore have been by proper proceedings corrected in the circuit, court, if erroneous. But a complete answer to this position of the appellees’ counsel is, that the only matter really adjudicated by the decree of November 17, 1877, was that the debts due to the appellees, Dunn and Beid, were paid, one of them in part and the other altogether. It is true, the commissioner had reported that these payments were made by the assignment of the the judgment of Renick v. Ludington; but in reaching this conclusion neither the commissioner nor the court acted upon the attorney’s lien of Patton, or expressed any opinion with reference thereto, as it had never been called to the attention of the commissioner or court by Patton ; nor was he under any obligation to call the attention of the court to it in that cause. The fund which represented this judgment of Renick v. Ludington was under the control of the court properly only in the chancery cause of Renick v. Ludington et al.; and this was the only cause in which the court could properly decide to whom this fund was coming, whether to the assignees of Benick or to his attorney to satisfy his attorney’s lien for fees. Patton properly called upon the court to decide it in that cause; and because of the indirect effect which its decision had upon the other cause of Ford & Son et al. v. Renick et al.. the court properly heard the two causes together, and decided to whom the fund in Renich v. Ludington was to be paid ; and if the court erred in this decision, Patton had a right to appeal therefrom. It is true that the reversal of this decision may render it necessary for the circuit court to reconsider and correct the error in the cause of Ford & Son, &c., v. Renick, &c., arising from its having, as it now turns out, held that a larger portion of the appellees’ debts were paid than perhaps on the facts now appearing it may consider, was really paid by these assignments. But this necessity imposed on the court to correct this injustice to the appellees in that cause, if any has really been committed, which this court does not decide the one way or ^ie other, cannot operate to prevent the appellant an appeal from an improper decision in another cause in a matter which could only be disposed of properly in this other cause.

I conclude, therefore, that so much of said decree of November 22, 1878, as decided that the defendant, J. F. Patton, by the assignment taken fixed the plan as well as the amount of his fee, and that in view of the facts in their answers he is not entitled to an attorney’s lien against the assignees of the plaintiff, Rehick, upon the debt mentioned in his petition, must be reversed, set aside and annulled, and also so much of said decree as is based on said error of said circuit court; and the appellant must recover of the appellees, John W. Dunn and of J. P. Reid and James A. Reid, administrators of J. J. Reid, to be levied of the estate of their intestate in their hands to be administered, his costs about his appeal in this court expended; and this court, proceeding to render such decree as the court below ought to have rendered, doth adjudge, order and decree that the defendant, J. F, Patton, is entitled to an attorney’s lien upon the debt mentioned in his petition, and that such lien has priority over any of the assignees of B. F. Renick of portions of said debt; and this cause is remanded to the circuit court of Greenbrier, with instructions to so modify and correct the said decree of November 22, 1878, as shall make it conform to this prior right, of J. F. Patton to have his claim set out in his petition first satisfied out of said debt named in his petition, and also to so modify and correct, if necessary, the decree of November 17, 1877, in the cause of D. F. Ford & Son et al. v. B. F. Renick et al., and all other decrees in said cause or in the cause of B. F. Renick et al. v. Samuel C. Ludington, as shall make them consist with this priority of lien of J. F. Patton to his claim set up in his petition on the debt named in his petition; and these causes are to be further proceeded with in the circuit court of Greenbrier on the principles laid down in this opinion, and according to the principles which govern courts of equity. But nothing in this decree is to be interpreted as affecting in any manner the priorities of any of the assignees of said Benick as among themselves, or the validity or the extent or meaning of any of said assignments, or as affirming or disapproving of any decrees in either of said causes determining any of these questions, or as affirming or disapproving the decision of the circuit court of November 17, 1877, so far as it held the debt due to Beid as paid, none of these questions being before this this court properly by this appeal, nor is their decision to be prejudiced or in any manner affected by this decree, except so far as it is necessarily done by giving to the claim of said Patton, as set up in his petition, a priority over all the assignees of said Benick.

The Other Judges Concurred.

Deoree Beversed. Cause Bemanded.