Court Opinion

ID: 6739179
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:41.907911+00
Date Added: 2024-06-11T16:01:54.251592
License: Public Domain

Bronson, J.
This is a proceeding upon an attorney’s lien. On November, 16, 1916, the plaintiff, an attorney, made a contract with one Franz, to prosecute an action against the defendant for injuries received by Franz upon a contingent-fee basis. The contract provided for a fee of 25 per cent contingent upon the amount recovered in suit or settlement, after deducting certain costs and expenses.
Pursuant thereto, on November 23, 1916, such attorney instituted an action against the defendant in behalf of Franz, and served notice of his attorney’s lien. This action was thereafter removed by the defendant to the Federal court. Subsequently, Franz made another contract with Jacobson & Murray, attorneys at law, for the prosecution of the same action. This contract provided for a contingent fee of 33¿ per cent of' the amount to be recovered in suit or settlement, and further provided that no settlement should be made by Franz without the consent of his attorneys. Such attorneys thereupon prepared a formal dismissal of the action already instituted in behalf of Franz; the same was signed by Franz and forwarded to the clerk of the Federal court. Thereupon another action was commenced in the Federal court, against the defendant,, upon the same cause of action.
In May, 1919, the subject-matter came up for the consideration of the Federal court, both actions appearing upon the calendar. Upon proceedings had in the Federal court, the action was dismissed on an order entered by the court that the amount of the contingent fee, provided for the plaintiff herein, be retained by the defendant pending the further' order of the court. Thereupon, the second action was settled for the sum of $11,000, subject to the provision that the defendant should protect itself by retaining sufficient funds or by means of indemnification against the lien of the plaintiff herein. Settlement was made by payment of the money through the First National Bank of Mott, apparently upon an express understanding, or through an undertaking of indemnity, for the retention of sufficient moneys to protect the defendant upon plaintiff’s lien.
This action was instituted to recover the amount of such lien, to wit,, $2,750, from the defendant.
*256In the trial court the action was tried to the court, a jury trial being refused, and, pursuant thereto, upon findings of the court, judgment was entered in favor of the plaintiff for $2,750, with interest and costs. This appeal is from the judgment rendered, and a demand is incorporated for a review of the entire case.
Plaintiff’s action is founded upon a lien accorded by statute. Comp. Laws 1913, § 6875. To enforce this lien necessarily he must seek to foreclose it as provided by statute Comp. Laws 1913, § 6878. This court has jurisdiction over the enforcement of this lien and the parties. Scharmann v. Union P. R. Co. 144 Minn. 290, 175 N. W. 554.
Franz had the undoubted right to discharge the plaintiff as his attorney, either with or without reason. Schouweiler v. Allen, 17 N. D. 510, 516, 117 N. W. 866. He had the further undoubted right to settle, er compromise the action involved, without the consent of the plaintiff. Paulson v. Lyson, 12 N. D. 354, 97 N. W. 533, 1 Ann. Cas. 245; Southworth v. Rosendahl, 133 Minn. 447, 3 A.L.R. 468, 158 N. W. 717. Accordingly, after the dismissal of the plaintiff as an attorney, his contract for services was both executory and incapable of performance. Specific performance was arrested by the action of Franz in dismissing him. The question presented now is whether the plaintiff is entitled to recover in accordance with his contract, the full measure agreed, the same as if the services had been performed by him, or whether as an attorney he should recover either his damages for breach of the contract, er, in disregard of the contract, the reasonable value of his services. In this case, the plaintiff is not subject alone to principles of equitable consideration, but to conscionable dealing as an officer of this court. In equity, and as an officer of this court, his contract fairly and justly made with his client for the enforcement of his client’s rights should undoubtedly be upheld and enforced for services justly rendered and performed for his client. But in the relation of attorney and client, there exists besides, other considerations, the duty of an attorney, as an officer of this court, to so act in the just expedition of his former client’s cause, without seeking any sum due or unconscionable advantage by reason of his retainer based alone upon the plain absolute terms of the contract. A client who has the right of dismissing an attorney has the right to employ another. Thus, it might well happen that, in contingent-fee contracts, the entire amount of the client’s cause of action might be stip*257ulated away before tbe attorney, finally employed, might render, in fact, the services stipulated to be rendered for the cause of action involved. Upon this record, the client’s cause was finally settled and one cause of action dismissed, both with his knowledge and without his objection, for the reason that provision was made for the retaining of funds sufficient to compensate his employment.
In such event the plaintiff, as an attorney, is entitled to receive payment for services rendered in behalf of his client, measured either by quantum meruit, or by damages actually sustained through breach of the contract. See Southworth v. Rosendahl, supra.
It appears, necessarily, that the attorneys Jacobson & Murray, by reason of their contract, are interested in the fund or moneys retained by the defendant in the settlement made. Franz necessarily is interested in such amount, for whatever is not justly due his attorneys belongs to him. The contract of Franz’s second attorneys, which contained the stipulation prohibiting a settlement without the consent of his attorneys, was invalid as against public policy, and limited such attorneys, in the event of a suit, to recovery based upon the reasonable value of the services rendered by them. Moran v. Simpson, 42 N. D. 575, 173 N. W. 769. See Southworth v. Rosendahl, supra; note in 3 A.L.R. 472.
Therefore, it follows that, in any event, the amount, if any, out of such fund to be paid to Jacobson & Murray, is only that which might be due them for the balance of the reasonable value of their services rendered, if heretofore or otherwise they have not been so fully compensated. It therefore follows, in accordance with the view expressed herein, that the judgment should be reversed and the case remanded for further proceedings in the District Court consonant with this opinion with specific directions to the trial court to cause the second attorneys, Jacobson & Murray, and the former client, Franz, to be made parties to this proceeding for the purposes of determining their respective interest in the moneys involved and retained. It is so ordered. No costs will be allowed either party on this appeal.
Grace, J., concurs.
Eobinson, J. I concur in result.
Birdzell, J. I dissent.
*258Robinson, J.
This is an appeal from a judgment against defendant, for $2,750 and interest. The case was tried before the court without a jury, and appellant demands a new trial. The complaint is based on the statute in regard to attorneys’ liens. The complaint avers that in 1916-at Regent, North Dakota, through the negligence of the defendant, one John P. Franz was run over by a car of defendant, which cut off one foot and destroyed both feet and made him a cripple for life; that as attorney at law, t-he plaintiff, was retained by Franz to commence an action to recover from defendant $50,000 for the injury; and that, in writing, Franz promised to pay the plaintiff 25 per cent of the sum recovered ; that plaintiff commenced the action and served on defendant notice of his contract and his claim for a lien of $12,500; that afterward defendant paid Franz $11,000 in full settlement of the claim for damages.
"While the action was pending, attorney Murray, rather unprofessionally, dictated and caused Franz to sign and mail to plaintiff rather insulting letters forbidding him to prosecute the action; that, pursuant, to an agreement signed by Franz, Murray commenced a second action in the United States district court, and there met the censure of JudgeAmidon, when he moved to dismiss the first action.
However, on assurance that Mr. Simon, the plaintiff in this action, should be paid his fees, the matter was arranged, and the first action dismissed by order of Judge Amidon.
The defendant settled the case by -paying Franz, or his attorneys; $11*000. As it seems, the railway company refused to settle until Mr. Murray deposited in the bank the sum sufficient to indemnify the company against the claim of Simon. The deposit was made and the-bank signed a bond to indemnify and save harmless the railway company. And so it appears that Mr. Murray, or Jacobson & Murray are the real party defendants in this action.
The total amount of attorney fees should not have exceeded $1,000. The case is very simple, and the attorneys did little suffering and little work.
However, some four years ago, in a personal injury suit, a majority of this court erroneously held that in personal injury suits the statutes-gives a lien for attorney fees. Greenleaf Case, 30 N. D. 115, 151 N. W. 879, Ann. Cas. 1917D, 908. Here is the statute, § 6875: “An attorney has a lien for . . . money due his client in the hands of the ad*259verse party, or attorney of such party, in an action or proceeding in which the attorney claiming the lien was employed from the time of giving notice in writing to such adverse party or the attorney . . . [of the lien claimed] ; . . . which notice shall state the amount claimed and in general terms for what services.”
Now the principle of law is this: A cause of action for a breach of promise to marry, an assault and battery, a libel, or personal injury, cannot be transferred or mortgaged; it is not assignable; it is not. a debt, and when a person cannot transfer or mortgage the subject of an action he cannot subject it to a lien. The statute gives the attorneys a lien for money due in the hands of the adverse party. Now the rule of common-law pleading is that when money is due the law implies a promise to pay it, and it may be recovered in an action of assumpsit; but surely in cases of assault and battery, libel, false imprisonment, personal injury, and such like, the law does not imply a promise to pay. An assault or personal injury does not create a debt, although it may give a cause of action for damages. To give such a lien would be contrary to the statute and the policy of the law, and that is well exemplified in this case. In this simple action for a personal injury, the attorney drafted a summons and complaint and caused them to be served on the defendant, and at the same time asserted a lien on the claim for $12,500, thus barring his client from a legal right to make a settlement. He had neither a legal nor moral right to claim such a lien.
The statute permits an attorney to make a reasonable and fair contract in regard to his fees, but it does not permit him to take an unfair advantage of the necessities and distress of his client. At the time when the contingent contract was drawn the injured party was in no position to bargain with his attorneys, and, as we have said, the suit was very simple; the attorneys sustained no injuries; they did little work and should not be permitted to charge an exorbitant price. In so simple a case 10 per cent for collection is commonly a fair fee. In the contest between the attorneys and the injured party the court should see that the rights of the latter .are fully protected and guarded, even against any unfair compromise.