Case ID: wis_23/html/0619-01.html
Source: Caselaw Access Project
Author: {"author": "DixoN, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Courtney vs. McGavock.
    
      Lien of attorney on ca/use of action, and on judgment.
    
    1. 'Where plaintiff’s attorney, by agreement with Ms client, is to be paid out of tbe proceeds of tbe judgment, a settlement by stipulation between tbe parties to tbe suit will not be set aside as fraudulent without proof of a fraudulent intent in the defendant, although such intent bn plaintiff’s part is shown, and he is insolvent.
    
      2. The attorney in such a case should notify defendant of the agreement between himself and his client, after which such a settlement would be held fraudulent.
    3. Where the action is for unliquidated damages, the attorney has no lien for his services before judgment; nor (it seems) any lien on the judgment, when rendered, without due notice to the defendant. Otherwise, where the action is on a written instrument in the attorney’s possession.
    4. Whether a stipulation in such settlement, that judgment should go against plaintiff for costs on an appeal taken to the supreme court, would not be held void as to the sureties on the appeal bond, it was not necessary to determine here.
    APPEAL from tbe Circuit Court for Boole County.
    Action for wages alleged to be due plaintiff from defendant, in tbe sum of $250. Plaintiff appealed-from an order dismissing an attachment wbicb be bad sued out against defendant’s goods. While tbe appeal was pending here, defendant’s attor neys filed a stipulation signed by plaintiff, to tbe effect that tbe appeal might be dismissed at bis costs; and it was so dismissed. Thereupon plaintiff’s attorneys filed affidavits tending to show that they brought tbe action at plaintiff’s solicitation, and rendered services and incurred expenditures therein, believing bis claim to be a valid one, and knowing that be was poor and unable to meet tbe expenses of tbe litigation except out of tbe amount wbicb be might recover herein, but relying upon bis honesty and bis assurance that they should be paid out of said recovery; and that they bad no knowledge of any intended settlement between tbe parties until after tbe appeal was dismissed. They further stated in their affidavits that tbe plaintiff was insolvent, and that they bad reason' to- believe, and did believe, that such settlement was made by tbe parties for tbe purpose of defrauding them of tbe amounts justly due for their services, and compelling them to pay tbe expenses and costs in this court, as well as in tbe circuit court, they having secured tbe persons who became sureties on tbe appeal bond. Upon these affidavits they moved to vacate all the proceedings in this court based upon said stipulation, and that the action proceed to judgment and execution as if no such stipulation had been filed. Counter-affidavits were filed, the contents of which need not be stated. The facts, as understood by this court, will sufficiently appear from the opinion.
    
      J\Toggle c& Castle, for the motion:
    An attorney has a lien upon the judgment recovered, for pay for his services, to the amount of the taxable costs; and this as well since as before the Code. To that extent he is regarded as the equitable assignee of the judgment. 15 Johns. 416; 10 Wend. 617; 4 Cow. 416; 1 Paige, 622; 4 Barb. 47; 9 How. Pr. R. 16, 460; 12 id. 136; 16 id. 160-173; 18 N. Y. 368. The attorney’s lien attaches to the claim itself, from the commencement of the action to the judgment. 19 How. Pr. R. 153; 2 Sandf. 637; 7 Abb. 210; 12 id. 325; Howard v. Town of Osceola, 22 Wis. 453. If 'there is any private settlement or collusion in effecting the settlement of an action without paying the costs, the attorney’s lien remains, as well before as after judgment. 9 Johns. 259; 1 Taunt. 341; 21 How. 293; 22 • Wis. 453.
    
      Todd d> Comerse, contra,
    
    contended that before judgment a party may settle his suit without reference to the probability that his attorney might obtain his costs by a trial and judgment. 18 N. Y. 489; 5 How. 347; 4 Bosw. 670; 4 Sandf. 661; 2 Vt. 97; 41111. 140.
   DixoN, C. J.

This is undoubtedly a hard case, so far as the attorneys for the plaintiff are concerned, who have rendered valuable services and advanced considerable sums of money in the prosecution of the action, relying upon the agreement between themselves and the plaintiff, that they should be paid out of the proceeds of the judgment which should ultimately be recovered against the defendant. The conduct of the plaintiff has been grossly unfair and dishonest. By the settlement in question and stipulation to dismiss Ms appeal, be has deprived bis attorneys of all means of obtaining compensation as provided by tbe agreement; and it appears from tbe affidavits that be is utterly insolvent and worthless. The attorneys move to set aside tbe stipulation, and that tbe action may proceed as if it bad not been made, in order that they may prosecute it to'final judgment, and so get satisfaction of their claims according to tbe terms of tbe agreement. It would be very . gratifying to us if tbe law would permit them to do so, and if, at tbe same time, no injustice would be done to tbe defendant. But injustice would be done to tbe defendant; and therefore tbe law will not permit it. Tbe motion proceeds upon two grounds: first, that tbe settlement was fraudulent, and effected for tbe purpose of defeating tbe just claims of the attorneys ; and second, that tbe attorneys have a lien upon tbe cause of action for their fees and disbursements. As to tbe first of these grounds, however fraudulent tbe settlement was as to tbe plaintiff, as to tbe defendant there is no reason for saying that be was actuated by any fraudulent motive whatever in making it. Tbe affidavits do not ■ show, nor is there any ground for supposing, that tbe defendant knew of tbe agreement existing between tbe plaintiff and bis attorneys. Without such knowledge, there was no fraud on tbe part of tbe defendant; and be being innocent, tbe settlement must stand, notwithstanding tbe gross dishonesty of tbe plaintiff. To have obviated this difficulty, tbe attorneys for tbe plaintiff should have given tbe defendant notice of tbe agreement; and then there could have been no valid settlement or discontinuance of tbe action without tbe assent of tbe attorneys.

As to tbe second ground of tbe motion, that tbe attorneys have a lien upon tbe cause of action, we are satisfied that independently of an agreement to that effect between tbe plaintiff and bis attorneys, of which the defendant has received notice, no such lien attaches before judgment to a claim for urdiqui-dated damages of this nature. Tbe authorities on this point seem to be very clear. Getchell v. Clark, 5 Mass. 309; Henchey v. The City of Chicago, 41 Ill. 136; Shank v. Shoemaker, 18 N. Y. 439; Foote v. Tewkesbury, 2 Vt. 97; Sweet v. Bartlett, 4 Sandf. 66; McDowell v. Second Avenue Railroad Company, 4 Bosw. 670. And even after judgment it seems that it is necessary for the attorney to give notice of his lien, and that he insists upon it, in order that he may be protected against a settlement in good faith, or one not made for the purpose of depriving him of his costs and disbursements. But where the action is founded upon a contract in writing, or instrument for the payment of money, which contract or instrument is in the possession of the attorney, there the lien attaches before judgment, from the moment the defendant has notice of the employment of the attornéy, or from the commencement of the action; and any settlement made by the parties without discharging the fees of the attorney, is deemed as,to him so far fraudulent and void. Such is the principle recognized by the decisions of this court in Chappell v. Cady, 10 Wis. 112, and Howard v. The Town of Osceola, 22 id. 453; but it obviously has no application to the present case.

Another ground incidentally urged in support of the motion perhaps requires some notice. It is, that the stipulation of the plaintiff that judgment for costs on the appeal in this court shall be rendered against himself, is fraudulent and void as against his sureties in the undertaking for appeal. If this were a point involved in the decision, I should regard it as by far the most serious question presented. But it is not necessary to be here decided. The judgment here goes only against the plaintiff. If the sureties are to be made liable, it must be by an- action over against them upon the undertaking. When such an action is commenced, and the defense made, it will be time enough to determine whether a corrupt and irresponsible appellant can take advantage of the appeal for the purpose of stipulating money into bis own pocket, and at tbe same time stipulate for a liability over against bis sureties, wbo are wholly unsecured and without remedy, or secured only at tbe expense of tbe appellant’s unpaid attorneys.

JBy the Court. — Tbe motion is overruled, without costs to either party.