Sandberg v. Victor Gold & Silver Mining Co., 18 Utah 66

Sandberg v. Victor Gold & Silver Mining Co.

18 Utah 66 | Utah | 1898

After stating the facts as above,

Bartch, J,

delivered the opinion of the court.

The respondent contends that the order made in this case is not a final judgment, and hence not appealable, and that Brown & Henderson were not parties to the original suit. While they were not parties of record in that suit, still they were counsel, and were parties to the proceedings wherein the order complained of was made. The same question was raised between practically the same parties in the case (decided at the present term) of the Victor Gold and Silver Mining Company v. The National Bank of the Republic, where the plaintiff and Brown & *72Henderson were the appellants. In that case the controversy on appeal was over a judgment for costs. On a motion to off-set that judgment against other judgments which had been obtained against the plaintiff, the trial court granting the motion, ordered the judgment for costs to be satisfied of record, holding that the plaintiff’s attorneys, Brown & Henderson, who had advanced the costs, had no lien on the judgment for the same. From the order so made an appeal was taken, and this court in deciding whether or not an appeal would lie, said: “ That decision as to those costs, and the rights of the plaintiff in the original action and his attorneys, was a final judgment, preventing either of the parties from ever recovering them in any way. The order was made in a matter distinct from the general subject of litigation, and was final in its nature, affecting only the parties to the particular controversy. By that judgment or order the rights of the appellant to the costs were absolutely determined, and, therefore, they had a right to bring the cause to this court for review.” So, in this case, the order which constitutes the basis of appeal, was made in a proceeding distinct from and independent of the general subject of controversy. It finally and conclusively, except on appeal, determined the rights of the parties, as to the subject-matter of such proceeding, and on the authority of the case referred to, we held that the order made was a final judgment and appealable.

The appellants contend that in this State attorneys have a lien, at common law, on the cause of action for their fees. We do not think this contention well founded. There is no such lien in this State at common law, nor have we noticed or been cited to any statute creating such a lien as is here contended for. To hold that a lien attaches to a cause of action before judgment would be to *73place parties to controversies at the mercy of an attorney, for it would not be within their power to effect a settlement, or to in any way dispose of the canse of action, until the liens were satisfied. It would clothe the attorney with power to embarrass parties in any attempt at amicable settlement of suits, and prevent results which are encouraged by the policy of the law, which is that parties may adjust their differences at any time if they can. High in our regards, as we hold the legal profession, and much as we think attorneys ought to have all reasonable protection, against collusion and fraud of clients who may endeavor to deprive the attorneys of just compensation for services, we are not disposed, especially 'under our practice, where fees are left to the agreement of the parties, to favor a lien which would enable an attorney, independently of the wishes of his client, by exacting an unreasonable fee, to control the most important interests of the client and prolong litigation for his own benefit. It is always desirable, and in harmony with public policy, that parties to a controversy should be permitted to make a bona fide settlement of their difficulties, and courts are not inclined to favor a lien which may be used as an instrument to embarrass or prevent such settlement. It is very clear that before judgment an attorney has no common-law lien on the cause of action for his fees. Pulver v. Harris, 52 N. Y. 73; Randall v. VanWagenen, 115 N. Y. 527; Shank v. Shoemaker, 18 N. Y. 489; Sherry v. Oceanic Steam Nav. Co., 72 Fed. Rep. 565; Swanston v. Morning Star Min. Co., 13 Fed. Rep. 215; Simmons v. Almy, 103 Mass. 33; Gretchell v. Clark, 5 Mass. 309; Nelson v. Tewksbury, 2 Vt. 97; Hobson v. Watson. 34 Me. 20; Kusterer v. City of Beaver Dam, 56 Wis. 471.

If then the appellants are entitled to the protection, *74which they now seek, it must be upon some other ground than that of a common-law lien on the cause of action. The next point of inquiry, therefore, will be whether the assignment of the cause of action by the plaintiff was made in good faith, or whether it was so tainted with fraud that the court ought not lend its aid, in the substitution of attorneys, when it would be likely to result in cheating the attorneys out of just claims for services rendered. That the appellants are able and skilled lawyers is not questioned. Nor is there any contention that they did not faithfully guard the interests of and perform their duties to their client. It appears from the record that the appellants commenced this action and prosecuted it, under and according to the plaintiff’s directions and with his full knowledge and approval, until he sold and assigned his claim and cause of action to Knox. It is shown that the assignment was made secretly, without any knowledge, on the part of the attorneys, and that, after it was made, Sandberg continued to consult his attorneys professionally. When one of them finally heard of the transfer and that other attorneys were assuming to act, he communicated with Sandberg, who promptly denied that he had made the transfer, stating that if any writing to that effect existed it was fraudulent and void. Thereupon one of his attorneys sent for Sandberg, and together they proceeded to Nephi, the attorney bearing expenses of the trip, and there when confronted with the instrument of assignment, Sandberg admitted its execution, and acknowledged that his former statement denying the assignment was a falsehood. It was charged by affidavit that plaintiff and Knox, the assignee, acted in bad faith, in the matter and in fraud of the rights of the áttorneys, and this charge is not denied by the assignee, so far as shown by the record.

*75Reference to the record, further in detail would seem unnecessary, for, under the facts and circumstances of this case, it is difficult to ayoid the conclusion that the transaction was collusive and in fraud of the rights of the attorneys. It savors very much of a case where an attempt is made to cheat attorneys out of their fees. If the assignment was made in good faith, as claimed by Sand-berg in his affidavit, why did he not at once inform his attorneys thereof, as an honest man would? Why, when already indebted to them for services performed satisfactorily to him, still put them to more trouble and expense after the assignment ? Why, when asked about it, insist upon a falsehood and pretend that the writing was a forgery ? Surely such conduct is not an element of good faith, and cannot commend itself to a court of justice. Nor is it easy to explain the silence of the assignee. Nor has there been an attempt to explain it, and yet, as president of the bank, which was a defendant in the action, he must have known that the appellants were the attorneys of his assignor, i and that they had some rights as such attorneys. If upon stepping into the shoes of his assignor, he had promptly notified them that their services in the action, would no longer be required, it would, at least, have had a tendency to relieve him from the imputation of bad faith. It is argued, however, on behalf of respondent, that this is not a case of substitution, since the cause of action had been sold and assigned. But the assignment created no change in the right of action. The case was continued so far as the record shows in the name of the original parties, at least this could be done. Knox simply succeeded to the rights of Sandberg, and received no other or greater rights. Under the circumstances, it must be treated as a case of substitution, and the assignee so treated it by his motion* to substitute attorneys. No one, *76in the absence of special agreement to the contrary, doubts the power of a client to discharge his attorney arbitrarily at any time, with or without cause, but, when he seeks to enforce such discharge without cause, by order of substitution of record, the court will not aid him in perpetrating a wrong upon its own officer, and will withhold such order, until reasonable compensation for his services already rendered, and proper expenses, are paid or secured to the attorney. This is not because of any lien of the attorney, for on a cause of action before judgment, he has none, but because the machinery of a court of justice can never be employed to perpetrate a fraud 'or wrong.

Where, therefore, the circumstances, leading to the application for substitution of attorneys, indicate bad faith, or collusion, or fraud, or an attempt to cheat the attorney of record out of his just claims, the court will not make an order of substitution until such claims are paid.

In Meacham on agency, Sec. 856, the author, after stating the rule that a client has the undoubted power to discharge his attorney at any time with or without cause, says: “The client, however, will not be permitted to discharge his attorney without cause, unless he first pays or secures the attorney’s fees and charges, and the court will not enforce substitution unless this has been done.”

In Creighton v. Ingersoll, 20 Barb. 541, which was an action for partition, after the plaintiffs’ attorney had become entitled to certain fees for his services, and to a certain sum for disbursements, the plaintiffs assigned their shares in the property to C. and wife, and one of the plaintiffs assigned also all costs and allowances that he might have by the suit. The assignees claimed the right to substitute a new attorney, and continue the suit, without paying the former attorney anything. The court refused to allow the substitution until the disbursements *77were paid. In passing upon the question of costs, the court said: “The assignees, when they bought, must have known that the attorney would have a claim for these costs. And" when they took an assignment of the action as it stood, and the benefit of the progress then made in it, they'took it with the burthens then incident to it, and one of these should be liability to have the costs then incurred deducted from the recovery by them, when judgment should be obtained.”

So, in Board of Supervisors v. Brodhead, 44 How. Pr. 411, it was observed: “Certainly the court ought to see that its own officers, when charged with no misconduct, should be paid for their services, before the security is taken away which the control of a suit and the possession of papers gives them.” 3 Am. & Eng. Ency of Law, 409. Hoffman v. VanNastrand, 14 Abb. Pr. 336. Sloo v. Law, 4 Blatchf. (U. S.) 268. Hooper v. Welch, 43 Vt. 169. Coughlin v. N. Y. C. & H. R. R. Co., 71 N. Y. 443. Henchey v. The City of Chicago, 41 Ill. 136. Randall v. Van Wagenen, 115 N. Y. 527.

We are of the opinion that the court, under the facts and circumstances of this case, ought to have withheld its aid in the substitution of attorneys, until the appellants were paid reasonable compensation for their services, or were secured for the same, and that it erred in making the order in the premises.

The judgment is therefore reversed, with costs, and the cause remanded with directions to the court below to proceed in accordance with this opinion.

Zane, C. J. and Miner, J. concur.