delivered the opinion of the Court.
At issuе on this appeal from the granting of appellee’s motion for summary judgment, is the question whether an insurance carrier may defeat the statutory lien of an attorney for his fee by applying funds held in escrow, pursuant to an order of the Workmen’s Compensation Commission, to satisfy an overpayment made to a claimant.
The facts in this case are not in dispute. The appellant, Leon Hoffman, a practicing attorney in Baltimorе City, represented a claimant, Homer Ross, before the Workmen’s Compensation Commission for injuries sustained in the course of claimant’s employment. The appellee, Liberty Mutual Insur
Since the appеal by the appellee did not stay the award of the Commission, the appellee forwarded in care of the appellant, on June 27, 1961, two checks due the claimant. They were in the amount of $1925 and $1131.43 and reprеsented respectively ,permanent partial benefit payments which had accrued to date, and temporary total disability benefits due urn der the award. The appellant, pursuant to an agreement with the aрpellee, forwarded $1105 in care of the claimant’s employer, reimbursing the employer’s disability benefits carrier, for health and accident benefits previously paid to the claimant, to which the claimant was not thеn entitled because of the award of the Commission.
On February 7, 1962, the appeal was tried in the Baltimore City Court before Judge Oppenheimer and a jury, at which
While the appeal was pending the appellee paid out to the claimant a total of $2250, which was all of the money due under the permanent partial disability award, with the exception of the appellant’s fee and doctors’ fees, all of which were being held in escrow pending the outcome of the appeal. Upon the completion of the appeal and after the new attorney’s fee had been awarded, the appellant requested payment of his fee, as approved by the Commission, but the appellee refused to pay it, on the ground that all payments ordered by the Commission pursuant to its modified award had been made to the claimant as requested, and that there was in fact a $375 overpayment owed by claimant to the employer and insurer, so that there was no money in the hands оf the appellee due the claimant upon which appellant’s claimed lien could be asserted.
Upon refusal of the appellee to pay him the fee, the appellant instituted suit in assumpsit in the Baltimоre City Court, and accompanied his pleading with a motion and affidavit for summary judgment. Appellee answered the motion and at the hearing thereon, at the suggestion of the trial judge, filed its own motion for summary judgment. On January 3, 1963, Judge Oрpenheimer denied appellant’s motion and granted a summary judgment in favor of the appellee" for costs.
Code (1957, 1962 Cum. Supp.), Article 101, § 57 provides that if a claim for an attorney’s fee is approved by the Com
The effect of the above mentioned statute and rule is to impose a lien in thе amount of the attorney’s fee upon a part of the award equal to the amount of the fee approved by the Commission, which is to be held in escrow by the insurer. It is this amount in escrow to which the lien attaches. This is an intеrception of the money in the hands of the insurer. The appellee recognized this lien and stopped payments when the amount of permanent partial disability awarded reached a sum which, when added to the attorney’s fee and doctors’ fees, would equal the total original award. It now contends that when the court, on appeal, reduced the amount of the award, no money remained in its possession upon which the lien could attach.
Although Maryland has no statute providing for an attorney’s lien as such, Article 101, supra, does provide for a lien in Workmen’s Compensation cases. The lien attached when the Commission issued its initial award. It was not abated by the appeal, but the amount of the lien was subject to change by the result of the appeal. Appellee was still compelled to keep in an escrow fund an amount equal to the ultimate fee.
The purpose of Rule No. 22 is obviously to protect attorneys who represent claimants before the Commission. We think the language in
Lehigh & N. E. R. Co. v. Finnerty,
“To adopt this view would eliminate from the statute the protection which the Legislature clearly intended to аfford an attorney against being deprived of his fee, where he has brought an action or suit for a plaintiff, which action or suit was settled between the parties without such attorney’s consent. * * * To take any other view [othеr than that he may go against the employer first] would defeat the purpose which called the statute into being.”
Although that case was based on a different factual situation, the same principle applies. Articlе 101, § 57, and Rule No. 22 are designed to protect attorneys. The appellee cannot set aside in escrow the original fee, prosecute an appeal resulting in a lower award, and then take the pоsition that the attorney’s lien does not apply. This would defeat the purpose of the law and the rule adopted pursuant thereto. The fact that appellee was compelled to make payments during the pendency of the appeal was not the result of appellant’s action, but of the law, for this has been established since
Branch v. Indemnity Ins. Co.
(1929),
“The lien did not spring from the contract, but from the statute, and it secured the compensаtion of the intestate [the attorney having died] as payable under correct legal rules. When the settlement was arranged, the stipulated fund which by payment to McLeod [the client] was to carry it out and into which the cause of action was transformed was charged with the lien. The defendant having knowledge of the lien may not say that it disregarded it and parted with the entire fund. It was bound to retain, and the law conclusively assumes it has retained, sufficient to pay the sum which the plaintiff was entitled to receive.” (Italics supplied).
Here the appellee had knowledge of the lien and it can not be heard to say it paid that amount to claimant, particularly sinсe the fund was in escrow.
In view of what has been said above it follows that the trial judge was in error in awarding summary judgment to the appellee, and that summary judgment should have been entered for the appellant for the amount of the fee.
Judgment reversed and judgment entered for appellant against appellee for $600, with interest from April 6, 1962. Costs to be paid by appellee.