Court Opinion

ID: 8177809
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:23:34.225593+00
Date Added: 2024-06-11T16:40:03.157390
License: Public Domain

Miller, Judge,

(dissenting) j

RobiNSON, Judge,

(concurring)

The sharp and distinctive point presented for decision is not whether assets in the hands of a special receiver are in custodia legis, and subject to the jurisdiction of the court appointing him; nor whether attorney’s fees for services rendered a special receiver generally, are properly allowed to him as part of his expenses of administration; but whether on the appointment of a special receiver, by the circuit court of one county, the circuit court of another county is thereby deprived of the jurisdiction and authority which it otherwise-would have to settle and enforce the lien of an attorney for services rendered in a suit begun and pending therein at the-time of such receivership, on the judgment or decree' recovered therein, and to invest in the court appointing such special receiver sole and exclusive authority and jurisdiction in the premises, and where, as in this case, and by the distinct order of the court appointing him, such special receiver continues the prosecution of such suit in the court where pending, not in his name, but in the name of the insolvent debtor, and. after years of litigation, the money adjudged to plaintiff is-brought into that court by the services of the same counsel' and is ready for distribution. The facts assumed in so stating-the question are fully shown by the record.
It is settled law by repeated decisions of this court, beginning with Renick v. Ludington, 16 W. Va. 378, and ending,, perhaps, with Burkhart v. Scott, 69 W. Va. 694, that: “An. attorney has a lien on the judgment or decree, obtained by •hirri for his client, for services and disbursements in the ease, whether the amount of his compensation is agreed upon or depends upon a quantum meruit.” Indeed the rule is as old as the common law itself. Weeks on Attorneys at Law,. *488609, et seq. And in the case last cited, opinion by Judge Whjjams, supported by the many decisions cited, it was decided, point 3 of the syllabus, that: “An attorney’s remedy in such case (collusive settlements) is not in equity by injunction, but he can apply to the court in which the action is pending, and ask to have the case proceed to final judgment in the name of the. client, for his own benefit.” According to Fisher v. Mylius, 62 W. Va. 19, opinion by Judge Poefen-barger, an attorney has such an interest in a judgment or decree obtained by him, that he can be compelled to contribute to the expenses of his client incurred in another suit in equity to recover the amount of such judgment. Where such is the legal relationship between attorney and client, with respect to a recovery, the lien of the attorney on his client’s judgment is in effect the same as if the client had assigned it to him as collateral security for fees and disbursements. 2 R. C. L. 1079. In some states the lien with proper proceedings prescribed for its enforcement is provided by statute. But without statute the lien exists and is enforceable in the suit in which the services were rendered.
So far as my investigation has gone our decisions do not furnish a precedent for allowance of counsel fees for services rendered a special receiver outside of the suit in which the receiver was appointed. The general rule, however, is that the lien for attorney’s fees must be enforced in the court wherein the services for which the lien accrued were rendered. 2 Thornton on Attorneys at Law, section 654. Citing many cases English and American. This rule is recognized, I think, in Burkhart v. Scott, supra. In Oishei v. Pennsylvania R. Co., 102 N. Y. Sup. 368, it was decided that the state court where the suit was brought did not lose jurisdiction to enforce such lien on the proceeds of a settlement made by the parties, though before such settlement the action had been removed to the federal court. To the same effect is Central Railroad &c. Co. v. Pettus, 113 U. S. 116. Where a lien was asserted by solicitors on amounts decreed to others than' their immediate clients, who came into the suit prosecuted for the bene’fit of plaintiffs and all other creditors who would come in and contribute to the expenses of the suit, it was decided in the Pettus Case, agreeably to Trustees v. Greenough, 105 U. S. *489527, that it was proper to give these solicitors a lien upon the property brought under the control of the court by the suit and the decree, such lien being authorized by the law of Alabama.
In In re King, (N. Y.) 60 N. E. 1054, it was decided that: “The state courts have power to determine the amount for which an attorney’s lien should be established for services rendered a foreign trustee, wrho desires to remove the securities under the control of the courts in this state into another state, where a lien is claimed on such securities by attorneys for services rendered in this state.” And agreeably to the rule stated in our case of Burkhart v. Scott, supra, the New York court says in the King Case: “If the thing recovered was in a judgment, and notice of the attorney’s claim had been given, the court would not allow the judgment to be paid to the prejudice of the attorney. If paM after such notice in disregard of his rights, the court would, upon motion, set aside a discharge of the judgment, and allow the attorney to enforce the judgment by its process, so far as was needful for his protection. See, also, Thompson v. Railroad Co., 45 N. Y. 468, 473; Sheppard v. Steele, 43 N. Y. 52, 3 Am. Rep. 660; In re Regan, 167 N. Y. 338, 60 N. E. 658.” And in the same connection it is further said: “We are mindful of the authorities holding, in substance, that contracts made by foreign executors or administrators for the benefit of the state do not bind or create a charge upon the assets of the estate, but these eases have no application to the questions under consideration. The trustee now desires to remove the securities from this state into the state of New Jersey. The securities are under the custody and control of the courts of this state. He, as trustee, can become liable only for so much of the securities as the courts here determine to deliver- over to him. The services of the attorneys claiming the lien were rendered in this state in an action pending in the courts of this state, resulting in a recovery of the property now sought to be charged with the lien. Our courts have jurisdiction thereof, and now have the -power to determine what is fair and reasonable compensation, and the amount for which the lien should be established.” I can see no reason why the *490same rule should not prevail as’between co-ordinate courts, of the same state.
But the opinion of the majority says the assets of the bank,, after the receivership, were in custodia legis; that the receivership annulled all existing executory contracts, and that thereafter no lien on such assets could attach or be acquired, even in favor of the counsel whose years of professional services were responsible for the large recovery and the money brought into the court where their services were rendered. I cannot concur in this proposition. The particular assets on which the lien was decreed were in custodia legis before the receiver was appointed. The suit in Marion County was an attachment suit in equity, and was brought to set aside fraudulent conveyances, and to sequester the property of Bryan and bring it'or the proceeds thereof into court to satisfy the amount decreed. Many other creditors of Bryan were brought into that suit, and it became a general creditor’s suit, all the funds being-subject to the control and order of that court. And as already noted, Howard, receiver, by the distinct order of the court directing him, continued the prosecution of "that suit. The court and receiver thereby submitted themselves to the jurisdiction of that court, and to be bound by its lawful orders and decrees. Numerous decisions of this and other courts say that assets, of decedent in the hands of his personal representatives are in custodia legis, and cannot at law be attached or garnisheed in his hands. But such assets can be reached in equity in satisfaction of any lawful lien or claim against the same. See cases collated in 5 Ency. Dig. Va. & W. Va. Rep. 706. And many decisions say that an attorney’s right to a lien is not affected by the fact that his-client is an executor, administrator, or other trustee. Burleigh v. Palmer, 74 Neb. 122, 12 Am. & Eng. Anno. Cases, 777, and valuable note, p. 778, citing many cases.
What reason can there be then for attempting to differentiate and take special receivers-out of the class of-trustees- and administrators generally ? I can preceive none. In Wipfler v. Warren, 163 Mich. 194, it was held that a court-substituting one attorney for another might properly preserve the lien of the first attorney on the funds and property in the hands of a special receiver, and that an ■ order to that *491effect could not be impeached by another court in an independent suit. In Ward v. Craig, 87 N. Y. 550, it was held that an assignment will not disturb the lien of an attorney on the property and funds brought into litigation. In Louisville, &c., R. R. Co. v. Wilson, 138 U. S. 507, it was ruled that the lien of attorneys on engines and rents therefor recovered was not disturbed 'by the appointment of a receiver of the railway company for whose benefit the recovery was had. And in Central Railroad, &c., Co. v. Pettus, supra, it was said that when an allowance to the complainant is proper, on account of solicitor’s fees, it may be made directly to the solicitors themselves, without any application by the immediate client. So I think the opinion of the court is not well founded either on authority or correct legal principles.
The reason for the rule that money or other property in custodia» legis cannot be attached or a lien .thereon enforced at law, is that it disturbs the orderly administration thereof. But the application of that rule' should not be made here, because appellant will only be chargeable with the net proceeds of the decree, after deducting counsel fees, and the administration of the trust fund can in no way be disturbed by the allowances to and deductions for counsel fees, in the distribution of the fund which the Marion County court is required to make. One of the reasons for the rule that the court in which the recovery is had and into which the money has been brought, is the proper tribunal to determine th'e amount and adjudge to counsel their fees, is that the court where the services are performed is best advised on that subject and more competent than any other court to make proper decree thereon.
The question is presented whether the court had jurisdiction of the parties. No process on counsel’s petition was issued or served on Howard, receiver. The petition of the receiver, intervening, challenged the jurisdiction not oh any question of fact, or as to the reasonableness of the fees decreed; but mainly for want of jurisdiction of the subject matter. Denying want of jurisdiction of the subject matter the court so far opened the subject on the filing of appellant’s petition as to permit him to show cause against the reasonableness of the amounts allowed counsel, but which appellant *492declined, electing to stand solely on the questions of jurisdiction. I think the receiver was.entitled to be heard on the question of the reasonableness of the amount allowed counsel, but having declined when the opportunity to be heard was accorded him, there was nothing for the court to do but to confirm the report of the master to whom the cause had been referred, and decree accordingly.
I would, therefore, affirm the decree.