Case Name: CLORA MARKLE DAHLSTROM, Plaintiff, and PORTLAND MINING CO., Defendant, Appellants, v. A. H. FEATHERSTONE, Petitioner, et al., Respondents
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1910-05-03
Citations: 18 Idaho 179
Docket Number: 
Parties: CLORA MARKLE DAHLSTROM, Plaintiff, and PORTLAND MINING CO., Defendant, Appellants, v. A. H. FEATHERSTONE, Petitioner, et al., Respondents.
Judges: 
Reporter: Idaho Reports
Volume: 18
Pages: 179–200

Head Matter:
(May 3, 1910.)
CLORA MARKLE DAHLSTROM, Plaintiff, and PORTLAND MINING CO., Defendant, Appellants, v. A. H. FEATHERSTONE, Petitioner, et al., Respondents.
[110 Pac. 243.]
.Appellate Practice — Oeder After Final Judgment — Final Judgment — Attorney’s Fee — Attorney’s Charging Lien — Equitable Lien on Judgment — Procedure fob Acquiring Lien.
(Syllabus by tbe eourt.)
1. Where a final deeree has been entered in a foreclosure suit awarding judgmlnt and attorney’s fees in favor of the creditor, and thereafter the judgment is satisfied of record by the judgment creditor in the manner provided by statute, and the court, on motion of the attorney who procured the judgment, vacates and sets aside the satisfaction of judgment and enters an order or judgment adjudging the attorney to be the equitable assignee of the judgment in the amount of fees still due Mm, and ordering an execution to issue out of the original action in favor of the attorney, such a judgment or order is a final judgment witMn the purview and meaning of subd. 1, sec. 4807, Pev. Codes, and an appeal may be prosecuted therefrom witMn one year from the entry of such judgment.
2. A judgment in .a foreclosure suit awarding attorney’s fees to the judgment creditor may be collected in full by the judgment creditor, and satisfaction thereof may be entered by him in conformity with the provisions of see. 4461, Rev. Codes, unless the attorney has previously given notice to the judgment debtor and taken steps for the purpose of establishing the equity of his lieu and having the same lay hold upon the original judgment procured by him for the security and payment of the fees earned by Mm in obtaining the original judgment.
3. In the absence of notice that the attorney’s fees have not been paid and that the attorney claims a lien on the judgment for that purpose, the judgment debtor is authorized and protected in paying the entire judgment to or settling it with the judgment creditor.
4. Where a judgment has been satisfied of record in conformity with the provisions of statute, sec. 4461, Rev. Codes, the attorney who procured the judgment and who has failed and neglected to take any steps for the purpose of fastening the equity of his lien upon the judgment cannot bring the parties into court by the service of a notice and motion on the attorneys who represented the respective parties in the original aetion and by service of a notice through the mails on his quondam client.
5. Where an attorney who has not been paid his fees for procuring a decree of foreclosure of a mortgage seeks to have the satisfaction of the judgment vacated and set aside and execution issue in Ms favor for the amount of his unpaid fees, on the grounds that such judgment was satisfied through fraud and collusion between the judgment debtor and judgment creditor for the purpose of defrauding him out of his fees, he is under the necessity of establishing the amount of fees still due him as against the client and of establishing the charge of fraud and collusion as against both his client and the judgment debtor, and the parties are entitled to their day in court for the purpose of joining issue and having a hearing thereon.
APPEAL from tbe District Court of tbe First Judicial District, for tbe County of Shoshone. Hon. E. T. Morgan, Judge.
Petition and motion by respondent, A. H. Featherstone, to bave tbe equity of bis lien for attorney’s fees established as a charge against a judgment procured by him, and to bave tbe satisfaction of that judgment vacated and set aside on the grounds of fraud and for an execution on the original judgment. Judgment entered in favor of tbe petitioner, and tbe judgment debtor and one of the judgment creditors appeal.
Reversed.
A. Gf. Kerns, for Appellants.
One cause of action cannot be grafted on to another to hold parties before a court indefinitely. (French Trustee v. Hay, 22 Wall. (U. S.) 245, 22 L. ed. 854.)
The owner of a judgment may receive property, securities, or any other thing of value in satisfaction of the same, if he so chooses, and when he has once accepted any substitute for money, his acceptance becomes irrevocable. (2 Black on Judgments, 987.)
Unless an attorney has an interest in or lien upon a judgment, his client may, in good faith, settle and compromise the same in any manner he chooses, without consulting the attorney, and he has no right to interfere with or prevent such settlement. (Wagner v. Goldschmidt, 51 Or. 63, 93 Pac. 689; Day v. Larsen, 30 Or. 247, 47 Pac. 101; Stearns v. Wollen-berg, 51 Or. 88, 14 L. R. A., N. S., 1095, 92 Pac. 1079; Wolfe v. Lewis, 19 How. (U. S.) 280, 15 L. ed. 643; Platt v. Jerome, 19 How. (U. S.) 384,15 L. ed. 623; Wright v. Ellison, 1 Wall. 16, 17 L. ed. 555.)
Payment produces a permanent and irrevocable discharge, after which the judgment cannot be restored by any subsequent agreement, nor kept on foot to cover new and distinct engagements. (2 Freeman on Judgments, 466.)
In Idaho as in California there is no statute giving an attorney a lien upon, and therefore an interest in, a judgment;, and the attorney must consequently recover for his services in the ordinary mode. The “ordinary mode” is by an action against his client, and not against the judgment debtor. (Ex■ parte Kyle, 1 Cal. 332, and cases cited.)
Mr. Featherstone was never a party to the suit, and was not made so by intervention. He could not intervene after-judgment. (1 Black on Judgments, 219; Seamster v. Black-stock, 83 Va. 232, 5 Am. St. 262, 2 S. E. 36.)
The only adequate and proper remedy in such case is by a separate action where all parties claiming an interest are brought before the court. (Mayer v. Sparks, 3 Kan. App. 602, 45 Pae. 249; McCutcheon v. Allen, 96 Pa. 319.)
Gray & Knight, W. K. Shissler, and Carlton Fox, for Respondents.
'Attorney’s fees may be awarded where the mortgage provides therefor, and when awarded, constitute a lien upon the property foreclosed. (Stockton Sav. & L. Soc. v. Donnelly, 60 Cal. 481; Broadbent v. Brumback, 2 Ida. 366, 16 Pac. 555; Warren v. Stoddard, 6 Ida. 692, 59 Pae. 540; Porter v. Title Guaranty & Surety Co., 17 Ida. 364, 106 Pac. 299; Gray v. Denhalter, 17 Utah, 312, 53 Pae. 976.)
The attorney is the equitable assignee of a judgment or decree, to the extent of the attorneys’ fees therein allowed. (Loofbourow v. Hicks, 24 Utah, 49, 66 Pac. 603, 55 L. R. A. 874; Newbert v. Cunningham, 50 Me. 231, 79 Am. Dec. 612; 3 Am. & Eng. Ency. of Law, 2d ed., 458, subd. “f.”)
A court of equity will protect its attorneys in any lien or equitable interest which they may have acquired for attorneys’ fees in a judgment. (Gray v. Denhalter, supra; Stearns v. Wollenberg, 51 Or. 88, 92 Pac. 1079, 14 L. R. A., N. S., 1095; Exhibition Co. v. Crane, 167 N. Y. 505, 60 N. E. 768; Curtis v. Richards, 4 Ida. 437, 95 Am. St. 134, 40 Pae. 57; Goodrich v. McDonald, 112 N. Y. 157, 19 N. E. 649, at p. 653; Weeks v. Wayne Circuit Judges, 73 Mich. 256, 41 N. W. 269; Falconio v. Larson, 31 Or. 137, 48 Pac. 703, 37 L. R. A. 254; Curtis v. Railroad Co., 118 Mo. App. 341, 94 S. W. 762; Carpenter v. Myers, 90 Mich. 209, 51 N. W. 206; Potter v. Hunt, 68 Mich. 242, 36 N. W. 58; Phelps v. Mutual Reserve Life Fund Assn., 112 Fed. 453, 50 C. C. A. 339.)
The case of Mahone v. So. Tel. Co., 33 Fed. 703, is very instructive on the question of when a party, dealing with property in litigation, has constructive notice of an attorney’s lien thereon or equitable interest therein for fees. (See, also, Covington v. Bass, 88 Tenn. 496, 12 S. W. 1033.)

Opinion:
AILSHIE, J.
A motion bas been made to dismiss tbis appeal on tbe ground that it was not taken witbin sixty days after tbe order or judgment was made. Tbe order or judgment from wbieb tbe appeal bas been prosecuted was made in the case of Clora Markle Dahlstrom, Plaintiff, v. Portland Mining Co., Alvan Markle and Markle Banking and Trust Co., Defendants, and some three years after tbe rendition and entry of the original judgment. The order involved in tbis appeal was made and entered on July 3, 1905, and directed that tbe satisfaction of the original judgment which bad been made and entered be vacated and set aside, and that Albert H. Featherstone, who bad been the attorney of record for tbe defendant and cross-plaintiff Alvan Markle in tbe original action, was "tbe equitable assignee of tbe Markle judgment . to the. amount of $5,987.24, together with tbe interest thereon at the rate of seven per cent per annum from the 5th day of December, 1902," tbe latter date being tbe date of the original judgment.
The order or judgment from which this appeal is taken also adjudges and decrees that Alvan Markle, defendant and cross-plaintiff in the original action, is indebted to Featherstone in the sum named, and that an execution issue in the original action in favor of Featherstone and against the defendants in the sum named, and that the property described in and covered by the original decree be sold to make the amount named. While this order or judgment, whichever it may be called, is entitled in the original action and in that sense is an order made after final judgment, still in effect and as a matter of fact it is a judgment in favor of Featherstone, who was not a party to the original action, and adjudicates his rights and demand as against both the plaintiff and defendants in the original action, and the order or judgment of the court should, therefore, be treated as a final judgment for the purposes of allowing the party aggrieved to prosecute his appeal within the statutory period of one year as provided by subd. 1 of see. 4807, Rev. Codes.
The same order was before this court on certiorari in Dahlstrom v. Portland Minmg Co., 12 Ida. 87, 85 Pac. 916, and the court by unanimous opinion, in speaking of the scope and effect of this order, said: "It appears from the record before us that the time has expired for an appeal from the order of July 1, 1905, but it appears that a decree of judgment was entered after said order was made. An appeal may be taken from that judgment within a year after the entry thereof. ' '
The motion to dismiss the appeal is denied.
The judgment and decree rendered in the original case was for foreclosure of a mortgage or trust deed, and decreed a recovery by Clora Markle Dahlstrom in the sum of $85,800.10, and a judgment in favor of Alvan Markle in the sum of $68,620.03. These judgments were entered against the Portland Mining Co. and ordered and decreed the sale of certain mining property covered by the mortgage as security for the payment of the debts. Immediately after the satisfaction of these judgments on January 10, 1905, and on the same date, confessions of judgment were entered in favor of the respective parties for the same sums. Mr. Featherstone, who had been attorney for Alvan Markle, in procuring the original judgment filed a petition in the district court setting forth the facts of his services in the premises and that he had not been paid, alleged the amount still due him, and that the original judgment had never in truth and in fact been paid, but that the satisfaction was entered through collusion and fraud, practiced between the judgment creditor and judgment debtor, and prayed for an order vacating the satisfaction of judgment and establishing his claim and authorizing the issuance of an execution against the Portland Mining Co. for the sale of the property on which the judgment was a lien for the amount of his claim. A copy of the petition and notice of the hearing was served personally on A. C. Kerns, as attorney for the Portland Mining Co., and on W. W. Woods, as attorney for Clora Markle Dahlstrom, and by mail' on Clora Markle Dahlstrom and Alvan Markle. Alvan Markle did not appear. The Portland Mining Co. and Clora Markle Dahlstrom each appeared specially and protested and objected', to the jurisdiction of the court, and alleged that the court had lost jurisdiction both over the persons of the Portland Mining Co. and Clora Marble Dahlstrom and likewise over-the subject matter involved in the original action. The district court overruled these motions and the parties refused' to appear further, and the court thereupon made findings and entered the judgment from which this appeal is taken. The appeal is prosecuted' by the Portland Mining Co. and Clora-Maride Dahlstrom.
Satisfaction of the original judgment in this case was entered by the judgment creditor himself in the manner prescribed by the statute, sec. 4461, Rev. Codes. Under the pro- visions of the foregoing section, a judgment may be satisfied by the clerk upon return of the execution satisfied, or it may be satisfied by the judgment creditor or by the attorney of' record. The statute of this state does not provide for an attorney's lien on the judgment. The attorney's fee allowed in a foreclosure ease is allowed to and in the name of the party in whose favor judgment is entered, and can only be allowed., in such sum as the evidence shows would be a reasonable attorney's fee in such case. (Broadbent v. Brumback, 2 Ida. 366, 16 Pac. 555; Warren v. Stoddard, 6 Ida. 692, 59 Pac. 540; Porter v. Title Guaranty & S. Co., 17 Ida. 364, 106 Pac. 299.)
This judgment does not run in favor of the attorney, but~ in favor of his client, and is allowed for the purpose of compensating the client in the amount it is necessary for him to pay his attorney for prosecuting his action. The presumption of law is that the client has already either paid his attorney this sum or has become liable to the attorney for that. amount. As a matter of fact, in practice the attorney generally receives a part of the amount in cash at the time or - before rendering the service, and expects to wait until the judgment is collected for the balance of his fee. In the meanwhile, however, the judgment entered belongs to the judgment. creditor and may be paid to him, and he may satisfy the same, he may compromise the judgment, or, if he sees fit to-do so, may give it to the judgment debtor. This, however, would not release the client from the obligation to pay the-attorney the balance of any fee that he may owe him for the - service. The obligation and liability however, if not other-. wise secured, is merely a personal liability of the client to the attorney. We fully recognize the justness of the rule that an attorney may take such steps against his client as to have an equitable lien decreed by the court against the judgment to the extent of the balance due him for his service in procuring the judgment. This, however, is a matter purely between the attorney and client, and the procedure is covered by the ordinary rules- applying in such matters, and any order or judgment entered would attach to the original judgment and would constitute notice to the judgment debtor and all the world that the attorney is the owner of the judgment to the extent of the amount named in the order or judgment in his favor. Where he fails, however, to give notice to the judgment debtor or to take the necessary steps prior to the payment or satisfaction of the judgment in the statutory manner, he has no such standing as a party to the action as will enable him to come in by a summary proceeding and have the satisfaction of the judgment vacated and be himself substituted as a judgment creditor for a share in the original judg-ement. It is suggested, however, that if the satisfaction of the judgment was the result of fraud and conspiracy between the original judgment debtor and judgment creditor, the attorney who has not been paid his fee would have a right to have that judgment vacated and have the equity of his claim lay hold upon the judgment. We may concede the correctness of that position for the purposes of this case and still the attorney is confronted with the difficulty that he cannot do so by summary proceeding and service on the former attorneys of the parties or by a constructive service of notice of motion. He at once tenders an issue against both parties to the original judgment and they are entitled to their day in court to join issue and be heard on their proofs, the same as in any other original action. He is under the necessity of showing, in the first place, that his erstwhile client is still indebted to him in a specific amount. He is then under the further necessity of proving that his client and the judgment debtor have entered into a conspiracy to defraud him out of his fees, and that the judgment, although having been satis- fled in the statutory manner, is still, as a matter of fact, due from the judgment debtor to the judgment creditor, and that the judgment debtor is not in equity entitled to have the satisfaction appear of record.
The principal case of Gray v. Denhalter, 17 Utah, 312, 53 Pac. 976, on which respondent relies, is not applicable to the facts of this case. The rule applied there was eminently just. The sale was not made and proceeds applied in conformity with the decree in that ease, and the trial court set aside the execution sale and ordered a resale and the payment of the attorney's fees in conformity with the provisions of the original decree. The supreme court of Utah affirmed the decree.
In this state the legislature has never attempted to deal with the subject of attorney's liens. At common law an attorney had no lien on a judgment recovered by him. (4 Cye. 1006, and note; 51 Am. St., note at 258, 259.) In the absence of statute, however, the courts, either in the exercise of their equitable jurisdiction or under the theory of their absolute power, control and authority over the judgments and processes of their own courts, have announced various and sundry rules for the protection of attorneys in the collection of their fees and in declaring equitable liens against judgments procured by the attorney. These liens have been termed "charging liens." It is wholly impossible to reconcile the decisions of the several courts on this subject, and this is perhaps due to the fact that the rule applied in these eases has no analogy in any other branch of the practice or in any other class of litigation, and is one that has simply grown out of the equities of the case and has been adopted by the courts for the protection of their officers. As said by Mr. Freeman in his note to Hanna v. Island Coal Co., 51 Am. St. 257: "Little is known of its origin, but the principle has long been recognized that a 'party should not run away with the fruits of the cause without satisfying the legal demands of his attorney, by whose industry, and, in many instances, at whose expense, those fruits are obtained.' " The -above-mentioned note in 51 Am. St. Reports is very exhaustive, and collects the authorities and gives a large number of instances in which the courts have intervened for the protection of the attorney, and have declared a lien on the judgment obtained by him. An examination of this note is worth the while of anyone who is looking for authorities on the subject. (See, also, 4 Cyc., pp. 1005 to 1009.) It will be found that the courts are quite uniform in allowing an attorney an equitable lien on a judgment procured by him as security for his fees earned in that case. The matter of procedure, however, in the enforcement of such a lien is not uniformly established. Where the contest is solely between the attorney and his client, some of the courts have determined the matter in a summary manner on motion of the attorney, while others have required him to establish his claim in an action at law in the regular manner, and have laid hold upon the original judgment in favor of his client as a thing in rem, in somewhat the same method pursued to establish a vendor's lien or remove a cloud from title, and thereby fastened the equity of his lien upon the judgment and authorized the execution to issue out of the original case. As we view the matter, it is of very little consequence, where the sole controversy arises between the attorney and his client over the attorney's equity in an existing judgment, whether the client be brought in by petition in the original action or by an independent action, provided the client is- served and is given his day in court. The result in either event must be the same if the attorney is successful in establishing his claim.
A very different question arises, however, where the original judgment has been satisfied and the case is no longer pending and the parties are no longer in court. The statute has specifically and positively authorized the client to enter satisfaction of a judgment in his favor. When he does so, that ends the ease and dismisses the parties from the jurisdiction of the court. We have no doubt of the right of an attorney who has been defrauded by this process to prosecute his action against the parties for relief from such a fraudulent transaction and to have the judgment reinstated. When he does so, however, it is necessary, as we have above said, for him to bring the parties into court, and he cannot do so by service on the attorneys who represented them in the original litigation. As the record appears in this ease, it would seem that respondent's remedy is as available against the judgment that was entered by confession as it was against the original judgment, if in fact he can show that it is simply a renewal of the original obligation which he prosecuted to final judgment in the first instance. We conclude that the judgment in this case was entered without jurisdiction, and must be reversed. Costs awarded to appellant.