Norrell v. Chasan

• Decision Date: 06 February 1939
• Docket Number: No. 222.,222.
• Parties: NORRELL v. CHASAN et al.
• Court: New Jersey Supreme Court

4 A.2d 88

125 N.J.Eq. 230

NORRELL

v. CHASAN et al.

No. 222.

Court of Errors and Appeals of New Jersey.

Feb. 6, 1939.

Appeal from Court of Chancery.

Suit by Richard J. Norrell against Raymond Chasan and others, involving right to enforce attorney's lien. From a decree advised by the Vice Chancellor, 122 N.J. Eq. 534, 195 A. 340, for complainant, the named defendant appeals.

Reversed and remanded.

Richard Doherty, of Jersey City, for appellant.

Robert S. Hartgrove, of Jersey City, for respondent.

HEHER, Justice.

The single point in contention is whether appellant Chasan, an attorney at law and solicitor in chancery, has a lien on funds in his possession belonging to the defendant Elnora Smith for unsatisfied fees for professional services rendered to her.

These moneys, $1,576.45, came to this defendant as the beneficiary of a policy of insurance issued by the Prudential Life Insurance Company upon the life of her deceased sister, Margaret Ethridge. The latter died testate. She bequeathed all her personal property and devised a life interest in certain real estate to Smith. Before the probate of the will, the testatrix's husband, Charles H. Ethridge, filed a bill in equity to have it decreed that he was the absolute owner of all real and personal property held by his deceased wife at the time of her death, and that the will should be denied probate for reasons not pertinent to this inquiry. The named insurer filed a bill of interpleader, and paid the proceeds of the policy into the Court of Chancery. The defendant Smith was, of course, joined as a party to these proceedings; and she retained appellant Chasan to interpose such pleadings as might be necessary to safeguard her interests, and to represent her throughout the litigation. So far as is disclosed, Chasan fulfilled the duty thus undertaken.

It was ultimately decreed that complainant Ethridge had not established his asserted ownership of the personal property so held by his wife, or his right to the proceeds of the insurance policy adverted to; that his deceased wife's will dated July 19, 1930, was "valid and effectual only to the extent" that it disposed of "the personal estate of which" she "died seized or possessed," and "invalid and void" so far as it "attempted to devise or transfer title" to certain lands therein identified, which were "declared and determined to be the property in fee simple absolute of the said Charles H. Ethridge;" that a paper writing dated May 19, 1917, purporting to be the last will of Margaret Ethridge, "be declared null and void;" and that the defendant Smith was entitled to the insurance moneys, and that the sum so paid into court, less the clerk's commissions, be paid to her, "or to Raymond Chasan, her solicitor."

In consonance with this provision of the decree, the deposited insurance moneys were turned over to Chasan. Asserting an express undertaking by his client to pay him one-third of her "total interest in suit," in consideration of the services thus bargained for, he claimed a fee of $1,164.62, and tendered the difference, $411.83. This fee was calculated on the basis of a total personal estate of $3,493.87, including the insurance moneys and certain death benefits. The tender was refused. In the instant proceedings, Smith denied the asserted undertaking as respects the quantum of the fee for the services to be rendered. The obligation she assumed, so she testified, was to pay the reasonable value of the services.

Meanwhile, in June, 1933, the complainant herein, the undertaker who conducted the funeral of the deceased Ethridge, brought an action at law against Smith and the deceased's husband for the recovery of the funeral bill. He pleaded that Smith had contracted for the service, and individually had undertaken the payment of the charge therefor. The amount of the bill was $660; $150 had been paid on account; and the action was brought to recover the balance. Service of process seems to have been made in due course. Ethridge answered, but Smith did not. No further proceedings were had until September 18, 1934, shortly after Chasan submitted his bill for services rendered in the litigation referred to. A rule was entered directing Smith to plead to the complaint within five days. Shortly thereafter, there was filed in the cause an "affidavit" made by Smith, acknowledging a debt of $501.29 and consenting to judgment in that amount. Judgment was accordingly entered against her, and proceedings were thereupon instituted for the satisfaction of the judgment out of the moneys in Chasan's possession. The Hudson Common Pleas ruled that Chasan was entitled to retain but $525.49 for his services, and entered an order directing the liquidation of the judgment from the balance. Pointing out that this order was made without proof, and that Chasan had not admitted the possession of sufficient moneys of the judgment debtor to satisfy the debt, the Supreme Court on certiorari set aside the order as in excess of jurisdiction. Chasan v. Court of Common Pleas, 178 A. 61, 13 N.J.Misc. 300.

By the bill filed in the case at hand, the judgment creditor seeks an accounting by the executor of the deceased Ethridge, and a decree that Chasan holds the moneys thus turned over to him "in trust and for the benefit" of Smith, subject to "a first lien" thereon in favor of complainant for the moneys due upon his judgment, and for payment of the same to him, and that complainant also has "a prior and first lien on the proceeds" of the estate of the deceased "for payment of his said judgment debt."

The learned Vice-Chancellor concluded that Chasan's claim of "an attorney's lien on the funds" in his hands "is untenable, since a lien exists only by statute;" that the Attorney's Lien Act of 1914 (Pamph.L. p. 410, Rev.Stat.1937, 2:20-7) "specifies the conditions under which such a lien exists and limits it to cases in which the person claiming it files a bill in an action at law or equity or files a counter-claim in an action at law;" that this act "should not be extended beyond its terms" (citing McCarthy v. McCarthy, 117 N.J. Eq. 22, 174 A. 751); that Chasan therefore holds the fund "as trustee for the benefit of Elnora Smith and complainant," who "are entitled to payment therefrom;" and that the estate of Margaret Ethridge is chargeable "to the extent of Elnora Smith's interest therein with payment of any balance remaining uncollected from" Chasan. He deemed it unnecessary to determine whether the sum claimed by Chasan "is excessive," and so made no finding in that regard. It suffices to say as to this, that the asserted contract respecting fees is one to be closely scrutinized to safeguard the client against overreaching by the attorney. See Schomp v. Schenck, 40 N.J.L. 195, 29 Am. Rep. 219.

The determination thus made did not take into account the essential difference between an attorney's general, possessory, or retaining lien and what has been commonly termed a charging or special lien.

Unless excluded by special contract or inconsistent with the particular service, the general or retaining lien attaches to all papers, books, documents, securities, moneys and property of the client coming into the possession of the attorney in the course of, and with reference to, his professional employment, and confers the right to retain possession thereof until the general balance due him for legal services, as well as costs and disbursements, shall have been paid. It is not limited to the moneys due in the particular cause out of which possession of the property came; it embraces all such indebtedness arising out of other matters in which the professional relation existed between them. Delaney v. Husband, 64 N.J.L. 275, 45 A. 265; Pennsylvania Fire Insurance Co. v. Rinaolo, 108 N.J.Eq. 167, 154 A. 528; In re Woodworth, 2 Cir., 85 F.2d 50; Webster v. Sweat, 5 Cir., 65 F.2d 109; In re Stronge & Warner Millinery Co., D.C., 33 F.2d 1001; Everett, Clarke & Benedict v. Alpha Portland Cement Co., 2 Cir., 225 F. 931; Prichard v. Fulmer, 22 N.M. 134, 159 P. 39. 2 A.L.R. 474; Reynolds v. Warner, 128 Neb. 304, 258 N.W. 462, 97 A.L.R. 1128; Robinson v. Rogers, 237 N.Y. 467, 143 N.E. 647, 33 A.L.R. 1291; In re Heinsheimer, 214 N.Y. 361, 108 N.E. 636, Ann.Cas.1916E, 384.

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