Prichard v. Fulmer

• Decision Date: 30 June 1916
• Docket Number: No. 1812.,1812.
• Citation: 159 P. 39,22 N.M. 134
• Parties: PRICHARDv.FULMER ET AL.
• Court: New Mexico Supreme Court

22 N.M. 134

159 P. 39

PRICHARD

v.FULMER ET AL.

No. 1812.

Supreme Court of New Mexico.

June 30, 1916.

Syllabus by the Court.

Under the common law an attorney had a right to a “general” or “retaining” lien, which attached to all papers, documents, and money that came into his hands professionally as an attorney, under which he was entitled to retain possession of such papers, documents, and money until the money due him for professional services was paid.

The courts also recognize what is generally styled an attorney's “charging lien,” which was the right of an attorney or solicitor to recover his fees and money expended on behalf of his client from a fund recovered by his efforts, and also the right to have the court interfere to prevent payment by the judgment debtor to the creditor, in fraud of his right to the same, and also to prevent or set aside assignments and settlements made in fraud of his rights.

The court will not permit an attorney to assert his lien in an independent suit, as by its control of its process in the original suit it can and will afford him an ample remedy.

An attorney's lien, upon a judgment recovered in a foreclosure suit, is waived where he permits his client to purchase the property, ordered sold by the court, in satisfaction of the judgment, and the court without objection on the attorney's part confirms the sale and approves the deeds for the same to his client, and the attorney's lien upon the judgment does not follow the land when the title is perfected in his client.

Appeal from District Court, Lincoln County; E. L. Medler, Judge.

Action by George W. Prichard against J. H. Fulmer, Jr., and the Parsons Mining Company. From a judgment sustaining the Mining Company's demurrer and dismissing the complaint, plaintiff appeals. Affirmed.

An attorney cannot assert his lien in an independent suit, since court will afford ample remedy in original suit.

Renehan & Wright, of Santa Fé, and Geo. B. Barber, of Carrizozo, for appellant.

Lorin C. Collins, of Santa Fé, for appellee.

ROBERTS, C. J.

Appellant was employed by Jacob H. Fulmer, Jr., as attorney, to foreclose three certain mortgages on described real estate, executed to him by the Eagle Mining & Improvement Company to secure an indebtedness of $112,000, represented by promissory notes. Suit was filed pursuant to such employment in January, 1909, and on May 9, 1909, final decree was entered. This decree, after finding that the notes representing the indebtedness, secured by the mortgage, were past due and unpaid, and giving judgment for the amount due, further provided:

“And it is further ordered and adjudged that the plaintiff have and recover of and from the said Eagle Mining & Improvement Company the further sum of 7 per centum on said amount as his reasonable attorney's fees herein incurred in and about the bringing and prosecuting of this suit and the foreclosure of said mortgage, as provided for in the said notes, and that he have execution therefor in the sum of $7,906.10.”

After making provision for the sale of the property and the payment first of the taxable costs, the decree provided:

“* * * And out of the remainder pay the plaintiff the sum of $120,900.50, the amount of his total judgment herein, including attorney's fees, together with the legal interest thereon, from the date of this decree to the date of sale.”

The decree further made provisions for a deficiency judgment, in case the property failed to sell for an amount sufficient to satisfy the judgment. A commissioner was appointed by the court to sell the property, and he was by the court ordered to sell the property for cash, unless the mortgagee, Fulmer, should purchase it, in which event Fulmer was only required to pay cash for any amount which he might bid on the property in excess of the amount of the judgment and costs. Fulmer purchased the property at the sale for $35,000, and the commissioner executed to him a deed, which was approved by the court. No money was paid the commissioner, except the taxable costs and fees of such commissioner. Appellant was not paid his attorney's fee, and thereafter Fulmer conveyed the property so purchased by him to the Parsons Mining Company, of which he was president. The balance of the original judgment, amounting to something over $85,000, has never been satisfied, and is in the form of a deficiency judgment against the original makers of the notes.

On the 14th day of October, 1913, appellant filed his complaint in the trial court, wherein he set out the above facts, and alleged that Fulmer had agreed to pay him, as compensation for services rendered by him in foreclosing the said mortgage, the amount called for and stipulated therein to be paid, which was the amount allowed by the court and carried into the judgment; that he had an attorney's lien upon the judgment rendered in the original action for the sum of $7,909.10; that Fulmer had failed to pay to him any portion of the fee earned by him as aforesaid, and that there was due and owing to him the said sum, for which he was entitled to and did have a lien upon the property purchased by Fulmer at such sale and by him transferred to the Parsons Mining Company; that said Parsons Mining Company had full knowledge of all the facts, and knew that he had not been paid any portion of the fees earned by him in such foreclosure proceeding. Appellant prayed for judgment against Fulmer for the amount stated, and asked, in the event of nonpayment, that the sale of the real estate to Fulmer and to the Parsons Mining Company be set aside, and for a resale for the purpose of paying and discharging his lien.

The Parsons Mining Company demurred to the complaint on the ground that it failed to state facts sufficient to constitute a cause of action, and specifically upon several grounds, only one of which need be stated, for, if well taken, it disposes of this appeal. This was as follows:

“(e) That the said plaintiff, by his failure to assert his alleged lien for attorney's fees at and before the sale was confirmed, and deed executed and delivered to the said defendant Fulmer, waived his said alleged lien on said property, and by operation of law must be held to have elected to look solely to the said Fulmer for his compensation and waive his alleged lien on the property so sold and conveyed.”

The trial court sustained the demurrer, and, appellant refusing to plead further, judgment was entered dismissing the complaint as to the Parsons Mining Company, from which judgment this appeal was taken.

The question presented is whether the trial court erred in sustaining the demurrer to the complaint, and this can be disposed of by a consideration of the ground of demurrer above stated, as we consider it decisive against appellant's right to the relief which he seeks. Before entering upon a discussion of the question it is advisable to briefly refer to the law upon the subject of attorney's liens, in order to obtain a clear understanding of the point presented. In this jurisdiction we have no statute which gives or undertakes to give to attorneys a lien upon a judgment procured by their efforts for the value of their services or the agreed compensation. Most of the states do have such a statute, which in many states is very broad, and extends the lien to the proceeds of the judgment “in whosesoever hands they may come.” The usual code provision reads as follows:

“From the commencement of an action, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client's cause of action or counterclaim, which attaches to a verdict, report, decision or judgment in his client's favor and the proceeds thereof in whosesoever hands they may come, and cannot be affected by any settlement between the parties before or after judgment.”

[1] There being no statute here, in order to determine the rights of an attorney in this regard in this state, we are necessarily required to resort to the common law and to the practice prevailing in courts of equity in such cases. The English courts, at an early date, not easy of ascertainment from the reported cases, recognized the right of an attorney to retain papers or other property that might come into his possession, or money that he in the course of his professional employment had collected, until all his costs and charges against his client were paid. This right on the part of the attorney was known as a “general” or “retaining” lien, and was a common-law lien founded upon possession. This lien was enforced by the English courts as early as 1734. Jones on Liens (3d Ed.) § 113. In the case of Weed Sewing Machine v. Boutelle, 56 Vt. 571, 48 Am. Rep. 821, the court said:

“The former [referring to the retaining lien] attaches to all papers, documents, and money that come into his hands professionally as an attorney without any special contract in regard to the same. Having the possession, he has the right to retain them against his client, assignments, or attachments, until the general balance due him for legal services is paid. The client cannot discharge him and withdraw such papers or money from his hands without first paying the general balance due him for legal services, whether growing out of the special matters then in his hands or other legal matters. This right is said to have its origin partly in custom and partly to prevent circuity of action. Whart. Ag. §§ 623 to 625, and cases cited in the notes; Hutchinson v. Howard, 15 Vt. 544; Hurlbert v. Brigham & Waterman, 56 Vt. 368; Sterling, Ex parte, 16 Ves. 258; Dennett v. Cutts, 11 N. H. 163; Wright v. Cobleigh, 21 N. H. 339. Having possesion of the thing to which the lien attaches, no notice is required to protect it against assignment by the client or attachment by trustee process by his creditors.”

[2] The courts also recognized what is generally styled an attorney's “charging lien,” although it has been frequently stated by ...