Chancey v. Bauer

• Decision Date: 07 June 1938
• Docket Number: No. 8704.,8704.
• Citation: 97 F.2d 293
• Parties: CHANCEY v. BAUER et al.
• Court: U.S. Court of Appeals — Fifth Circuit

97 F.2d 293 (1938)

CHANCEY v. BAUER et al.^*

No. 8704.

Circuit Court of Appeals, Fifth Circuit.

June 7, 1938.

C. A. Hiaasen, of Fort Lauderdale, Fla., for appellant.

Harold W. Fraser, of Toledo, Ohio, and Bert Winters, of West Palm Beach, Fla., for appellees.

Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.

HUTCHESON, Circuit Judge.

Appellant is a lawyer, who, to recover fees claimed to have been earned in connection with a suit in the state court, intervened in a foreclosure proceeding in the Federal court, claiming a lien upon the bonds involved, and the funds realized therein. His claim was that the services he rendered in the state court suit were rendered for the holders of the bonds under a contract with the bondholders' committee in whom the title to, and authority over the bonds were vested, by a contract authorizing them to employ counsel, and to charge the expenses of the committee, including counsel fees, upon the bonds and their proceeds.

The defense was that the claim he made was for services rendered in another suit, under a contract personal in its nature, and carrying no charging lien; that the Federal court suit involved only the distribution of funds realized from the foreclosure, and unless he had a lien he could not maintain his intervention: (1) because his claim was in part against citizens of Florida, and was an effort to litigate in the main suit matters having nothing to do with it, and therefore not suable in it; and (2) because the leave to intervene was granted solely on the ground that he claimed and was asserting a lien, and if he had none, the intervention ought to be dismissed.

The claim asserted was for services in a long litigation in the state court, in which appellant had represented several interests, all harmonious, and all arranged for under the same employment. It has two bases, one, that his services have contributed to the recovery of the fund so as to give him a charging lien; the other, that he has a lien by contract.

In Florida, as in most states, a lawyer has a retaining lien upon papers in his hands, and, according to the circumstances, a charging or equitable lien on recoveries obtained for his client in the suit for the services in which the charge is made. Carter v. Davis, 8 Fla. 183; Alyea v. Hampton, 112 Fla. 61, 150 So. 242; Scott v. Kirkley, 113 Fla. 637, 152 So. 721, 93 A.L.R. 661; 5 Am.Jur., Attorneys at Law, §§ 219 to 248, incl.; 7 C.J.S., Attorney and Client §§ 211 to 217, incl. Federal courts have always recognized and enforced these liens. United States ex rel. Payne v. Call, 5 Cir., 287 F. 520; Cooper v. McNair, D.C., 49 F.2d 778, 779. Cf. Webster v. Sweat, 5 Cir., 65 F.2d 109. In Florida, as elsewhere, the charging lien is an equitable right to have the costs and fees due him for services in the suit secured to him in the judgment, or recovery in that particular suit. 7 C.J.S., Attorney and Client, § 211. It is based on the natural equity that plaintiff should not be allowed to appropriate the whole of a judgment in his favor without paying for the services of his attorney in obtaining such judgment. Graeber v. McMullin, 10 Cir., 56 F.2d 497; Cohen v. Goldberger, 109 Ohio St. 22, 141 N.E. 656. No lien may therefore arise where there have been no proceeds recovered in the suit as to which the services are claimed. 5 Am.Jur. 395; Trustees of Internal Improvement Fund v. Greenough, 105 U.S. 527, 26 L.Ed. 1157. The value therefore of services rendered in one suit cannot be included in a judgment establishing the lien of an attorney for his fees on property recovered by his client in a different suit. Davis v. Webber, 66 Ark. 190, 49 S.W. 822, 45 L.R.A. 196, 74 Am.St.Rep. 81.

The proceedings in the state court were defensive throughout. Nothing was, nothing will be, recovered in that suit. No basis upon which a charging lien could attach exists for services rendered in it, indeed this has been specifically adjudicated as to appellant in the state court. "There is no fund arising out of that suit either in this court or the circuit court upon which petitioner Chancey could have any lien for his services as attorney, because there was no fund brought into the court in that suit." Vosges Syndicate v. Everglades Club Co., 122 Fla. 267, 164 So. 881, 886.

We do not understand that appellant claims the contrary. We understand his claim to be that the services in the state court suit, which was a controversy for control, permitted the Federal court foreclosure, in which he was also of counsel, to be proceeded with to a successful conclusion, and that he should have a lien on the foreclosure proceeds, on the theory that the state court defense was in effect ancillary and incidental to the Federal court suit, in which the fund was realized.

In support of this view he relies upon the text of 5 Am.Jur. at 396, Note 13, Newbert v. Cunningham, 50 Me. 231, 79 Am.Dec. 612, and on Cowdrey v. Galveston, H. & H. R. Co., 93 U.S. 352, 23 L.Ed. 950, and Louisville, Evansville & St. Louis R. Co. v. Wilson, 138 U.S. 501, 11 S.Ct. 405, 34 L.Ed. 1023.

We think it plain that none of these reliances will avail him. The state court suit, for services in which he makes claim, was in no sense, within the principles invoked, an ancillary or incidental suit to the Federal court foreclosure. In the Louisville, E. & St. Louis R. Co., Case the only allowance made was for moneys recovered by the attorney under an employment in the suit in which the allowance was made, for moneys recovered in a suit brought by him under that employment. His claims for services other than for the moneys recovered in that suit, and made available in the suit he was employed in, were expressly disallowed. In the Cowdrey Case the allowance was for services in connection with a bond foreclosure, rendered by an attorney employed by the trustee under an agreed fee, the court correctly holding that the bondholders could not displace him in the suit without compensating him. This rule is of universal application. Cf. Vosges Syndicate v. Everglades Club Co., supra. Appellant, then, has not made out a case upon his theory that the facts in connection with the state court services raised a charging lien on the Federal court funds.

We think he stands no better upon his other theory, that his employment by the Committee, authorized by the deposit agreement to employ counsel, and to charge the Committee expenses, including counsel fees, against the bond proceeds, gave him an equitable lien thereon. The books are full of cases discussing and laying down the conditions under which equitable liens and assignments will be held to exist, and the rights of lawyer and client thereunder. They make it clear that where it sufficiently appears from the contract that it was understood and agreed that the lawyer was to look to a fund for his compensation, and that he undertook to and did perform the work in that reliance, any words or acts which clearly show an intention to give such a lien or assignment will be so construed and given effect. Texts cited supra, and United States Fidelity & Guaranty Co. v. Levy, 5 Cir., 77 F.2d 972, at pages 975, 976.

Here the only contract appellant had was with the Committee under an arrangement by which it was to fix the amount of his recovery. It is true that the Committee was obliged to act reasonably, and that appellant was entitled to a reasonable fee. McGill v. Cockrell, 88 Fla. 54, 101 So. 199; Crichlow v. Doepke, 5 Cir., 56 F.2d 599. Nothing in the contract, however, gives rise to the view that the bonds, or any part of them, were assigned to him, or charged with a lien in his favor. We think it plain that he stands with nothing but a personal contract, to be enforced as such, and that he has no lien upon the funds. So much of the decree, then, as adjudges that he is without lien and dismisses him from the suit, is affirmed. Cf. Lone Star Cement Corp. v....