Heath v. Gray

• Decision Date: 01 September 1954
• Docket Number: No. 5751,5751
• Parties: HEATH v. GRAY et al.
• Court: New Mexico Supreme Court

Page 620

274 P.2d 620

58 N.M. 665

HEATH v. GRAY et al.

No. 5751.

Supreme Court of New Mexico.

Sept. 1, 1954.

Rehearing Denied Oct. 18, 1954.

Jess R. Nelson, Truth or Consequences, David Chavez, Jr., Santa Fe, Hannett & Hannett, G. W. Hannett, W. S. Lindamood, Albuquerque, for appellant.

C. R. Brice, Roswell, H. A. Kiker, Santa Fe, for appellees.

Thomas B. Forbis, per se.

SEYMOUR, Justice.

This case concerns attorney's fees and involves many facts of which a large number may and will be omitted, since they have no relevance to the jurisdictional issue upon which disposition of the appeal is made.

Appellant, represented by his attorney Forbis, the appellee, filed suit in Sierra County against Gray, seeking a money judgment and other relief in connection with a construction contract unrelated to the problem presented here. Gray's answer to the complaint, insofar as material to the instant case, was a counterclaim asserting a joint venture agreement between himself and the appellant, involving the acquisition of oil and gas leases, providing for an equal ownership thereof, and an equal division of profits therefrom; this counterclaim charges appellant with a failure to account to Gray for his share of the proceeds derived from an oil and gas lease covering approximately 2,444.40 acres located in San Juan County, New Mexico, describing the same, and a failure to transfer to him 1/2 of a 2% overriding royalty allegedly retained by appellant on this acreage; the counterclaim seeks both a money judgment and a decree of specific performance as to the royalty interest.

Perhaps because this counterclaim presented a controversy entirely unrelated to the controversy initiated by appellant's original complaint, appellant and his then attorney, the appellee Forbis, entered into a new or supplemental fee agreement for the defense against this counterclaim. The agreement was for a contingent fee of an undivided 1/4th interest in whatever was successfully saved to appellant by a defense to the counterclaim.

The suit was tried and concluded in a dismissal with prejudice of the counterclaim. The trial court so found and further found that the appellee Forbis became entitled to his fee by this defeat of the counterclaim. These findings are supported by substantial evidence and make unnecessary a detail of the labyrinth of facts which culminated in the dismissal of the counterclaim.

The issues now before us arise from the intervention of the appellee Forbis in this case, subsequent to the dismissal of the counterclaim, asserting his claim for attorney's fees against his former client, the appellant.

The petition in intervention premitted by the trial court alleges a fee agreement, petitioner's successful performance of legal services, that appellee was the record owner of the oil and gas lease described in the counterclaim, that he, appellee, was entitled to an undivided 1/8th or 12 1/2% interest in the entire leasehold estate, that he was entitled to an order determining that he is the owner thereof or, in the alternative, that the reasonable value of his services in the defense of the second counterclaim was $15,000, to secure the payment of which he was entitled to a lien upon the entire leasehold estate. Intervenor's-appellee's prayer conforms with his pleadings in seeking an order determining him to be the owner of an undivided 1/8th interest in the particular San Juan County leasehold estate, or in the alternative, that he be given judgment for $15,000 and have a lien against the leasehold estate to secure the payment thereof.

Final judgment of the trial court on the matter of the intervention reads in part as follows:

'* * * the Court * * * finding and concluding that the intervenor, Thomas B. Forbis, is entitled to a lien to secure his attorney's fees which the Court has found to be an undivided one-eighth (1/8) of the property described in defendant's second counterclaim * * * to-wit:

'(here is exact description of oil and gas lease covering 2444.40 acres in San Juan County, New Mexico)

* * *

* * *

'Wherefore, it is ordered, adjudged and decreed by the court that the intervenor, Thomas B. Forbis, is entitled to, and there is hereby impressed, a lien upon and against all of the above described property to secure his attorney's fee of an undivided one-eighth (1/8) interest in and to said above described property.' (Parentheses ours.)

Any understanding of the disposition of this case requires noting of certain factors: The propriety of the original intervention was properly raised. It was disposed of by the trial court as follows:

'* * * It is the holding of the Court that Mr. Forbis is properly before the Court for the assertion of his attorney's lien, and to invoke the aid of the Court to protect him for his fees agreed upon or accrued, earned,--whether or not the method he has pursued, that is an intervention, so-called, under the Statute, Sec. 25-1310, is or is not properly applied, or the proper method to be pursued. No ruling as to the applicability of that section is required here, or as to whether an intervention, as such, may be brought in. It is sufficient that the applicant, the Attorney Forbis, has by apt measures applied to the Court for aid, relief and protection as to his fees, and that has been simply called to the attention of the Court by the method pursued,--that is the so-called Intervention applied for.'

In short, the trial court was apparently acting within an area of equitable power to protect the fees of a member of his court. It is to be further noted that the original counterclaim sought an accounting and a transfer of 1/2 of a 2% overriding royalty on a specific oil and gas lease. As the result of the dismissal of the counterclaim, intervenor asserts as a fee a one quarter interest in whatever was saved to his client by such victory. Without explanation, he asserts this to be an undivided 1/8th interest in a particular oil and gas lease covering 2,444.40 acres in San Juan County, asking that he be declared the owner thereof. The trial court apparently adopted this substantial change of appellee's theory; this would appear to be true from the court's assumption that the dismissal of the counterclaim saved appellee an undivided 1/2 interest in this oil and gas lease. The judgment, in part quoted above, was the result.

In the trial court and as a ground for reversal by this Court, appellant has denied the jurisdiction of the trial court under the Fourth subdivision of Sec. 19-501, N.M.S.A. 1941, providing as follows:

'When lands or any interest in lands are the object of any suit in whole or in part, such suit shall be brought in the county where the land or any portion thereof is situate.'

The briefs of the parties include an extensive review of all of the authorities bearing upon this venue statute. Both sides argue strenuously as to whether a suit to impress a lien on real property must be brought in the county where the property is located. Appellee, having proven to his own satisfaction that such an action is transitory, states that this conclusion 'is totally immaterial in this case, as it is an action to enforce specific performance of a contract to convey real property, and such actions by general law and by statute are transitory.' In support of this proposition of law, there is cited Sec. 25-1601, N.M.S.A. 1941.

There are other theories presented on this question, and all these theories lead to one necessary conclusion, namely, that, before a decision can be rendered on the jurisdictional question, this Court must decide for itself what sort of action is involved.

In making this determination, if we look at the initial pleading, the petition in intervention, there is clearly asserted there by intervenor a 1/8th undivided interest in a particular oil and gas lease. In New Mexico, the interest covered by an oil and gas lease is real property. Vanzandt v. Heilman, 1950, 54 N.M. 97, 214 P.2d 864, 22 A.L.R.2d 497; Sims v. Vosburg, 1939, 43 N.M. 255, 91 P.2d 434; Staplin v. Vesely, 1937, 41 N.M. 543, 72 P.2d 7. Intervenor, in the body of his petition, states that he is entitled to an order determining that he is the owner thereof. We cannot escape the conclusion that this portion of the petition in intervention falls within the wording of the venue statute, 'When lands or any interest in lands are the object of any suit * * *.' This is even more apparent when the petition asserts an undivided interest in the leasehold estate pursuant to the provisions of Sec. 25-1310, N.M.S.A.1941, a section in the quieting title portion of our compiled laws providing for intervention by plaintiff's attorney to protect his fees. We have heretofore quoted the comments of the trial court as to the applicability of this statute, and are in general agreement with his doubt that such statute has any relevance in the instant case. However, this clearly points up the fact that an interest in land was the object of the petition in intervention; and the judgment of the court, even though not rendered under this act, has reached a result comprehended within its terms.

This same petition in intervention contains an alternative assertion of services fairly valued at $15,000, requests judgment therefor and alleges the right to a lien against the oil and gas lease to secure payment of such a judgment. This alternative plea raises the more difficult question argued by the parties as to whether a suit to impress a lien on real estate comes within the purview of the quoted section of the venue statute.

This latter question requires no answer here because it is our conclusion that the judgment of the trial court, in spite of its use of the word, 'lien,' did not in fact adjudicate a lien securing the performance of any duty or obligation on the part of appellant.

We must take this judgment as it is written and determine what it accomplished. The substance of the trial court's judgment is...