251 N.W. 51 | Iowa | 1933
Lead Opinion
The only questions raised in this appeal are whether or not the court erred in dismissing defendants' plea in abatement; and in overruling defendants' motion to dismiss Myerly's petition of intervention. The facts upon which the questions raised are to be determined are substantially as follows:
In January, 1930, the plaintiff bank obtained judgment against the defendant Maggie McHarg for about $9,400 and interest. That, during the period of the indebtedness upon which said judgment was obtained, the defendant Maggie McHarg, in October, 1925, conveyed two tracts of land aggregating 176 acres to the defendant Ethel Kuefner. This action was commenced in September, 1930, to set aside the above-named conveyances on the grounds they were made with the intent of hindering, delaying, and defrauding her creditors, and especially this defendant, and were made without any consideration whatsoever. Thereafter certain judgments were rendered against Ethel Kuefner by other creditors. In April, 1932, the real estate in question was conveyed to the defendant C.E. Hunn, trustee, for the benefit of all of her creditors.
The defendants Maggie McHarg, Ethel Kuefner, and Albert Kuefner filed their answers to the petition in this action in July, 1931, and the defendant Hunn, trustee, filed his answer in December, 1932. The answers in substance plead a general denial.
In March, 1933, a receiver was appointed for the plaintiff bank. Until that time the bank was a going concern. The inventory filed by the receiver does not list the judgment in question as one of the assets of the bank, and the receiver makes no claim thereto in this action, and has not intervened. Neither is there any showing that the plaintiff corporation has been actually dissolved, or that the corporation has ceased to exist. *638
The answers of all the defendants except the trustee were on file almost two years, and the answer of the trustee Hunn for several months prior to the appointment of a receiver for the plaintiff bank.
In May, 1933, the defendants filed a plea in abatement, and as grounds therefor allege in substance as follows:
1. The appointment of a receiver for the plaintiff bank and that the action abates for lack of a proper party plaintiff.
2. That the judgment in question was no longer the property of the plaintiff bank, but, by virtue of certain agreements between the bank and some of its directors, one of the directors became subrogated to all rights of the bank in said judgment; that the bank is no longer the owner of said judgment; that the receiver has no right, title, or interest therein; that neither the plaintiff nor the receiver are proper parties in interest; and therefor have no right to pursue this action.
3. That other creditors of the defendants are proper parties to this action, but were not brought in.
J.G. Myerly, an attorney, on June 1, 1933, filed a petition in intervention claiming a common interest with plaintiff in the relief prayed for in plaintiff's petition, alleging his employment by the plaintiff bank in securing the judgment against Maggie McHarg upon which plaintiff's action is founded. He also alleges that, pursuant to his employment as attorney for plaintiff in that action, he performed many and valuable services, resulting in the judgment in question, for which he duly filed and effected an attorney's lien against said judgment. The defendants moved to dismiss the petition in intervention on the ground that the intervenor fails to show any interest or ownership in the subject-matter of the suit.
The lower court sustained plaintiff's motion to dismiss the defendants' plea in abatement, and at the same time overruled the defendants' motion to dismiss intervenor's petition of intervention.
[1] I. It is the general rule of law that, unless there is a statutory provision forbidding it, a pending action will not be abated because of bankruptcy or insolvency proceedings commenced against a plaintiff, after the original action was commenced. It is also the general rule that the appointment of a receiver will not abate the action, but it may be continued in the name of the original party, unless there is a statutory provision to the contrary. This is especially true where there has been no motion made to have the *639
receiver substituted for the plaintiff, and where the receiver does not voluntarily intervene to claim any interest in the action. In such cases the action may be prosecuted by or against the original party. 1 C.J. 144, section 226; 1 R.C.L. 48, section 51; Weigen v. Council Bluffs Ins. Co.,
The cases hereinabove referred to, including the Iowa cases cited, have adopted the rule that, where an action has already been commenced, before any receivership proceedings were begun, it may be continued in the name of the original party where other parties are not brought in on motion.
In Weigen v. Council Bluffs Ins. Co.,
"It will be observed that there is no allegation that the corporation has been dissolved, or that the court, in appointing the receiver, enjoined it from exercising any of its corporate powers. No statute of this state limits the powers of acorporation upon the appointment of a receiver, and those of the defendant were restrained only by depriving it of its property. The right to sue and be sued, conferred by the statute, was retained. No relief was asked against the receiver, and he was not a necessary party, though he might, in the discretion of the court, be permitted, by intervening, to interpose any proper defense to the action. The authorities seem in entire harmony on these propositions."
In Wilsey v. Jewett Bros Co.,
"Certainly such proceedings did not operate to abate the same; nor did the fact that plaintiff subsequently failed to schedule the claim sued upon as an asset have any such effect. Section 3476 of *640 the Code provides that no action shall abate by the transfer ofany interest therein during its pendency, and new parties may be brought in as necessary. Now, conceding that the claim was properly an asset, and should have been scheduled, plaintiff still had the right to continue in its prosecution until deprived of that right by some action on the part of the bankruptcy court, or the trustee appointed by it. * * * But aside from this, if there was any wrong committed in not scheduling the claim, it was not a wrong done to this defendant. It was in no sense prejudiced thereby, and there is no principle upon which to rest a holding that its liability became extinguished by reason of such fact."
The rule is settled in this state that the mere appointment of a receiver long after an action has been commenced will not abate the prosecution of the action by the party for whom a receiver has been appointed. If the receiver was the proper party in interest, he could have been brought into the case on motion. Searles v. Life Ins. Co.,
The general rule is that the appointment of a receiver for a corporation, which does not operate to dissolve it, does not affect its right to sue or to enforce judgments previously obtained. 14-a C.J. 885; People v. Barnett,
[2] II. It is also contended that this action should be abated because it appears that the plaintiff is not the real party in interest. Under this ground it is claimed that the obligation sued on was simply held by the bank as trustee; the same having been equitably assigned to one Shawver as such trustee. It is the general rule that, even though an assignment of the cause of action had been made to another, the original party can prosecute the action. Code, section 10991; Emerson v. Miller,
This action was originally commenced by the plaintiff, and was based upon a judgment rendered in its favor, and not as an agent or trustee of another. Plaintiff, being the holder of the legal title of the judgment in question, is therefore entitled to proceed with the enforcement thereof.
[3] III. The record shows that the intervener, J.G. Myerly, duly filed and perfected an attorney's lien on the judgment docket in which the judgment referred to was entered. An attorney has a lien for his services upon any money due his clients in an action prosecuted by him, and in which the judgment was recovered. Such lien, when perfected, operates as an equitable assignment of the interest in the judgment, and gives such attorney an interest thereon from the time it is perfected, by proper entry in the judgment docket in which the judgment is entered. Code, section 10924; Coombe v. Knox,
Section 11174 of the Code provides that:
"Any person who has an interest in the matter in litigation * * * may become a party to an action."
In the case at bar the attorney's client brings an action, based upon the judgment obtained through the services of its attorney, to set aside certain deeds and conveyances, for the purpose of having the real estate subjected to the judgment. The effect of an attorney's lien is tantamount to an assignment of an interest in the judgment. The attorney, therefore, is personally interested in the action to subject the real estate wrongfully conveyed to the judgment.
The rule is well stated in Coombe v. Knox,
"The lien granted by the statute operates as an equitable assignment of so much of the judgment as will satisfy the lien, and, for the purpose of securing payment, subrogates the attorney to the right of his client to that extent."
The record in this case shows that the attorney's lien was perfected. Where such lien has been perfected, it therefore gives him such an interest in the judgment that he may become a party to the action to subject the real estate to the satisfaction thereof. The rule is also well expressed in Lown v. Casselman,
"Such is the appellant's reasoning; but, unfortunately for him, it is not supported by the weight of authority. All the principles so involved in arriving at such a conclusion have been by this court concluded against appellant by the case of Clark v. Sullivan,
In Byram v. Miner (C.C.A.) 47 F.2d 112, a case arising under the statute of Minnesota, the case had been settled and dismissed, and it was held that the case could be reinstated for the purpose of enforcing the lien against the defendant.
For all of the foregoing reasons we are constrained to hold that there was no error in the action of the lower court in dismissing *643 defendants' plea in abatement, nor in overruling defendants' motion to dismiss intervenor's petition.
The judgment of the lower court is therefore hereby affirmed.
ALBERT, C.J., and STEVENS, ANDERSON, MITCHELL, and KINDIG, JJ., concur.
Concurrence Opinion
I concur in the conclusion announced in the foregoing opinion, but find myself out of harmony with the pronouncement that the lien of an attorney operates as an equitable assignment of the judgment. It seems to me that this conclusion is not in harmony with either the statute or numerous prior decisions of the court.
The right of Myerly to intervene may be conceded, but, as notice of his attorney's lien was not made of record on the judgment docket until after the conveyance complained of was had, he has no independent cause of action. Recovery, if any, must be upon the merits of the plaintiff's cause of action. The intervention is, for the reason stated, wholly without prejudice to the appellants. The lien of an attorney under the provisions of section 10924 is upon money due his clients in the hands of the adverse party or the attorney therefor. Subdivision 4 of the section does not change the nature of the lien. It provides a method of giving notice to the adverse party or the attorney therefor of the lien upon the money due in the hands of either the adverse party or the attorney therefor. The statute does not give a lien upon the judgment. Winslow v. Central Iowa Railway Co.,
The lien of an attorney, under a contract for services, is not tantamount to a right to a share of the recovery stipulated for in the contract. Kauffman v. Phillips,
MITCHELL, J., concurs.
