Lindberg v. Humphrey

• Decision Date: 07 May 1923
• Docket Number: 3858.
• Citation: 289 F. 901
• Parties: LINDBERG v. HUMPHREY et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

289 F. 901

LINDBERG v. HUMPHREY et al.

No. 3858.

United States Court of Appeals, District of Columbia.

May 7, 1923

Submitted November 7, 1922.

Appeal from the Supreme Court of the District of Columbia.

B. E Hinton, of Washington, D.C., for appellant.

Peyton Gordon, Vernon E. West, and W. C. Prentiss, all of Washington, D.C., for appellees.

Before SMYTH, Chief Justice, ROBB, Associate Justice, and BARBER Judge of the United States Court of Customs Appeals.

BARBER Acting Associate Justice.

This is an appeal from an order of the Supreme Court of the District of Columbia overruling a motion of appellant Lindberg to quash service attempted to be made on him by publication, to vacate the order purporting to authorize the same, and to dismiss the bill of complaint. The facts necessary of consideration may be briefly summarized as follows:

Lindberg a citizen of the United States and resident of the state of New Jersey, had sustained losses as a subcontractor in constructing certain buildings for the United States, and employed Humphrey an attorney, a citizen of the United States and of the state of Washington temporarily domiciled and practicing law in the District, to draft and obtain legislation under which Lindberg might secure reimbursement for his said losses and also to represent him before the Treasury Department in presenting and obtaining payment of his claim. The employment agreement was not in writing, was of course made before Lindberg's claim was allowed, and was, as set out in the bill, that Lindberg was to pay the plaintiff--

'as his fee a sum equal to 10 per centum of any or such amount as might be recovered through legislation granting relief to defendant in the premises, and to pay such fee to the plaintiff out of the proceeds of any draft or warrant issued to defendant pursuant to any such legislation, when and as received by the defendant.'

Thereafter, as a result in part, at least, of Humphrey's services, legislation by Congress was obtained (see Acts of August 25, 1919, and March 6, 1920 (41 Stat. 281, 507)) for the relief of contractors and subcontractors of post offices and other buildings, under and by virtue of which Lindberg, in common with others, became entitled to present his claim to the Treasury Department for audit, settlement, and allowance.

Soon after the legislation was enacted Lindberg rejected the further services of Humphrey, which he was all the time ready to perform, presented his own claim to the department upon which he received an allowance of $21,000, and refused to pay the plaintiff's fee under the above contract. Humphrey thereupon brought his bill in equity against Lindberg, the Secretary of the Treasury, and the Treasurer of the United States, alleging the foregoing facts, and that it was the purpose of Lindberg, upon receiving payment of his claim, to remove the funds from the jurisdiction of the court, 'and thus deprive the plaintiff of his equitable lien upon the proceeds of said claim when paid to said defendant,' therein asking for an injunction restraining Lindberg from receiving and the treasury officials from paying Lindberg's claim to him, and for the appointment of a receiver to receive the amount allowed to him and retain the same subject to the further order of the court.

The bill also prayed for a decree that Humphrey was entitled to 10 per centum of the amount found by the Treasury Department to be due Lindberg, alleged Humphrey had a lien thereon for his fees and that the plaintiff was without any plain, adequate, and complete remedy at law. There was no allegation that a check or warrant had been drawn to pay the claim or that Lindberg was insolvent.

Lindberg entered no appearance in the suit or in any manner submitted to the jurisdiction of the court. Such proceedings were had that an order of notice by publication to him under section 105 of the District Code was issued, and the treasury officials, Mellon having been in the meantime substituted for Houston and Allen for Burke, were enjoined pendente lite from paying to Lindberg any part of his claim in excess of 90 per cent. thereof.

After the order of notice by publication was entered, Lindberg appeared specially by attorney and only for the purpose of moving to quash the service, to vacate the order therefor and dismiss the bill on the ground that he was a nonresident of the District, that the debt of the United States to him had no situs in the District, that therefore the court had no jurisdiction to issue said order for service, that the plaintiff's remedy, if any, was at law, and that it did not appear that the plaintiff had any valid lien upon the fund.

This motion was overruled and pending the determination of Lindberg's appeal therefrom publication was deferred. After the appeal was taken, it further appeared that Lindberg's claim had been finally audited and allowed at $85,788.55. Before the appeal was allowed the defendant treasury officials answered the bill, admitting that Lindberg had submitted a claim to the Treasury Department, but denied that the same had been adjusted, settled, and allowed, and alleged that there was then nothing due him.

There is no claim that the bill does not state a case of employment and the rendering of legitimate and effective service thereunder. It is apparent that the question here is: Had the Supreme Court of the District jurisdiction under section 105 of the District Code to issue the order of notice by publication? That section provides for service by publication upon nonresident defendants for the enforcement of liens against real or personal property within the District, and in all other actions of law and equity which have for their immediate object the enforcement or establishment of any lawful claim, right, or demand to or against any real or personal property within the jurisdiction of the court.

As between Lindberg and Humphrey, the argument here proceeds upon the theory, assuming the facts alleged in the bill to be true, that only two important questions stand for determination: (a) Does the claim of Lindberg against the government constitute property having a situs in the District? (b) Has Humphrey a lien thereon? Lindberg also contends that the plaintiff has a plain, adequate, and complete remedy at law.

Section 3477, Revised Statutes (Comp. St. Sec. 6383), provides that transfers and assignments of claims against the United States shall be absolutely null and void, unless made in the manner set forth in the section, 'after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof.'

We proceed to the consideration of point (b). In Nutt v. Knut, 200 U.S. 13, 26 Sup.Ct. 216, 50 L.Ed. 348, the material facts were similar to those in the case here. The contract was that the attorney who agreed to prosecute a claim against the United States should receive 'a sum equal to 33 1/3 per cent. of the amount which may be allowed on said claim, the payment of which is hereby made a lien upon said claim, and upon any draft, money, or evidence of indebtedness which may be issued thereon.'

The court distinctly held that this contract, entered into before the claim was allowed, gave the attorney no interest or share in the claim asserted against the government, created no lien thereon or on any draft or evidence of indebtedness issued by the government on account of the same, and to that extent was void under the above statute. It was also held that, although under the agreement the attorney had no interest or share in the claim itself, or any interest in the particular money paid over to the claimant by the government, the contract did, nevertheless, establish an agreed basis for any settlement as to the attorney's compensation that might be made after the allowance and payment of the claim to the claimant or his estate, and simply created a legal obligation on the part of the claimant's estate to pay such attorney, which could have been enforced by suit for his benefit without violating the statute.

In National Bank of Commerce v. Downie, 218 U.S. 345 31 Sup.Ct. 89, 54 L.Ed. 1065, 20 Ann.Cas. 1116, the application of section 3477 was again fully considered and the earlier decisions reviewed. Upon mature consideration it was in effect held that thereunder all voluntary assignments of claims against the government, before allowance thereof, the ascertainment of the amount due, and the issuing of a warrant for the payment of the same, were absolutely null and void, and did not pass to the assignee any interest,...