Court Opinion

ID: 6737330
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:30.793443+00
Date Added: 2024-06-11T16:01:50.129017
License: Public Domain

On Petition for Rehearing (Eiled March 18, 1915).
Goss, J.
A strong petition for rehearing has been filed. The writer can add but little to what has been well said in the main opinion by Justice Bruce. As the only statutes identical with our statute of peculiar phraseology are those of Kansas and Iowa, decisions from those states should have great weight in declaring the construction of our statute. Especially is this so when it had received a construction by the supreme court of Kansas before or practically contemporaneous with its adoption here. The decision in 1876 of Kansas P. R. Co. v. Thacher, 17 Kan. 92, characteristic of opinions written by Justice Brewer, left little unsaid. It is directly in point, and supports every contention of the plaintiffs, and is based on the same statute. That decision has ever continued without modification as the law of that state and as a satisfactory construction of the statute before us. Smith v. Chicago, R. I. & P. R. Co. 56 Iowa, 720, 10 N. W. 244, the first pronouncement of the supreme court of Iowa on the subject in tort action, cites and follows the Kansas case, and has likewise remained the law of that state. This statute was adopted here as § 9 of chapter 18 of Revised Codes of Dakota territory of 1877 prior to its construction in Iowa, but one year after it had been construed in Kansas. With the adoption of the *131statute from Kansas was also adopted its construction, and this is true whether it was indirectly adopted therefrom through Iowa or directly from Kansas. The statute first appeared in Iowa as § 2 of chapter 167 of Laws of 1870. It existed prior to 1866 in Kansas.
Up to two years ago Minnesota had a statute somewhat similar, which read, “upon money in the hands of the adverse party,” instead of like ours, “upon money due his client in the hands of the adverse party.” The Minnesota holding, Anderson v. Itasca Lumber Co. 86 Minn. 480, 91 N. W. 12, 291, has been against the right to a lien on settlement before judgment until the holding in Desaman v. Butler Bros. 118 Minn. 198, 136 N. W. 747, Ann. Cas. 1913E, 643, holding that a collusive settlement after verdict renders the party against whom the verdict was had liable for an attorney’s lien as for the settlement of a judgment. See note to Ann. Cas. 1913E, 646. Nebraska and Minnesota long had the same statute. It is significant that on the identical statute, as so construed in Minnesota, Nebraska in Corson v. Lewis, 77 Neb. 454, 114 N. W. 281, has elected tc follow Kansas and Iowa, whose statute we have. After answering every contention made by respondent’s counsel in the instant case, including that of nonassignability of causes of action for tort, the Nebraska supreme court in 1907 said: “We prefer to follow the courts of Kansas and Iowa in holding that in a pending cause of this nature, notice of an attorney’s lien properly given binds the defendant, so that a settlement between the parties and payment before judgment will not operate to defeat the attorney’s right.”
And legislation in at least three of the states whose precedent we are urged to adopt, viz., New York, Minnesota, and Wisconsin, establishes that the early statutes, as construed in those states, were so unsatisfactory in practice as to cause the enactment of unequivocal statutes granting the attorney a lien on the cause of action whether in tort or in contract. Subdivision 3 of § 4955, Minn. Den. Stat. 1913,, amending prior law, and Smelker v. Chicago & N. W. R. Co. 106 Wis. 135, 81 N. W. 994. In Fischer-Hansen v. Brooklyn Heights R. Co. 173 N. Y. 492, 66 N. E. 395, 13 Am. Neg. Rep. 396, Justice Vann reviews the legislation of that state. This case is also authority for the kind of action brought in the instant case, — a separate action in equity to define, determine, and enforce the attorney’s lien of the plain*132tiffs, instead of the procedure sometimes used in some other states, that of continuing proceedings entitled as in the former action or by intervening therein, as illustrated by Desaman v. Butler Bros. and Corson v. Lewis, supra, respectively. See note in 51 Am. St. Rep. 251; also discussion in text with citation of authority at 2 E. O. L. 1080-1086. Here a statutory attorney’s charging lien, sought to be enforced by an independent action in equity, is being dealt with. No common-law lien rules apply. The trend of decisions is toward adequate protection to the attorney against unjust and inequitable settlements. My conclusion is that this lien existed in an inchoate form from and after notice thereof given until a condition arose whereunder it became complete; and such was the situation immediately upon the agreement made between the client and the defendant, whereby the unliquidated liability in tort became converted into an amount certain and a recovery in the action. Standidge v. Chicago R. Co. 254 Ill. 524, 40 L.R.A.(N.S.) 529, 98 N. E. 963, Ann. Cas. 1913C, 65. Thereupon the lien of the attorney immediately attached to the fund, whatever its form. It was then money due “in the hands of the adverse party” within the meaning and intent of the statute.
Nor is the right of the defendant to buy its peace involved; nor is the right of the plaintiff to make a bona fide settlement with defendant necessary to be considered. As to these respective rights the courts of all states, those denying as well as those granting the attorney’s lien, are in accord. Courts have the power, and exercise it, to protect the client from the unscrupulous attorney whenever necessary, and that power must not be confused or confounded with authority to likewise preserve the attorney’s rights from his unscrupulous client in a collusive settlement with a naturally unfriendly defendant. These questions are discussed in Fischer-Hansen v. Brooklyn Heights R. Co. and in Desaman v. Butler Bros. supra, and eases cited. Paragraph 13 of the complaint charges a collusive and fraudulent settlement “secretly for the purpose of cheating and defrauding said firm out' of their attorney fees in said action.” As the lien attached to this money in the hands of the opposite party in that pending action before its payment to the plaintiff in that action, it was not discharged by said payment; and for the purposes of this action, to the amount of the lien, the fund is to be treated as still in the hands of the defendant company and sub*133ject to court order. This assumes, of course, on demurrer only, the truth of all matters in the complaint.
Rehearing is denied.