Prudential Ins. Co. of America v. Byrd

• Decision Date: 17 July 1939
• Docket Number: 12701,12737.
• Parties: PRUDENTIAL INS. CO. OF AMERICA v. BYRD et al. BLACKBURN v. PRUDENTIAL INS. CO. OF AMERICA et al.
• Court: Georgia Supreme Court

4 S.E.2d 175

188 Ga. 527

PRUDENTIAL INS. CO. OF AMERICA v. BYRD et al.

BLACKBURN v. PRUDENTIAL INS. CO. OF AMERICA et al.

Nos. 12701, 12737.

Supreme Court of Georgia

July 17, 1939

Syllabus by the Court.

1. In this State an attorney at law is given a special lien superior to all other liens, except liens for taxes, on judgments and decrees for money and 'for the recovery of real or personal property' obtained for their clients. This lien of an attorney attaches to real or personal property for the rendition of services in successfully defending his client's title thereto as against an adverse claim.

(a) While the appointment of a receiver for property on behalf of one holding a security deed thereto, in aid of a suit upon the indebtedness, does not determine the rights of the parties or adjudicate the issues of right and title to the property or the income thereof, the purpose of a receivership being merely to preserve the property and the income pendente lite, to await the final judgment of the court, a judgment rendered in such proceeding upon reversal of the appointment of a receiver by this court, adjudging that the defendant was entitled to the income of the property collected pending such receivership, as against the claims of the plaintiff, amounts to such a recovery of judgment in favor of the defendant by his attorney as will entitle the attorney to a lien thereon for the reasonable value of his services. This is true although a receiver was thereafter appointed for the same property, and a judgment obtained by the plaintiff on the indebtedness.

(b) Where a fund recovered by an attorney in behalf of a client is in the hands of a court of equity, the court may, on motion of the defendant's attorney in said case, the defendant consenting thereto, impress a lien of her attorney on the funds to which she was entitled.

2. Where the judge was authorized to find that after the reversal by this court of a judgment appointing a receiver for certain property, the receiver, pursuant to an agreement of the parties, continued to collect the rents of the property pending a new hearing for the appointment of a receiver, to be subject to the judgment rendered therein, it was not error to hold that the rents so collected belonged to the plaintiff, where it appears that a receiver was thereafter appointed and a judgment was obtained by the plaintiff upon the indebtedness.

3. Upon dissolution of the order appointing a receiver as erroneous ab initio, the owners of the property have the right only to restoration of the property and to be made whole from losses sustained as a result of the receivership. Thus, where it appeared that pending the receivership the receiver, under an order of the court, had paid certain city, state, and county taxes assessed against the property, which were past due and unpaid at the time of the appointment of the receiver, and that he had advanced the defendants $250, and had at their request made repairs on said property, the court did not err in allowing said expenditures as proper charges against said fund.

4. Nor did the judge err in disallowing an expenditure representing receiver's commissions and certain commissions paid to real-estate agents for procuring leases on the propert. Nor can it be said that the judge erred in disallowing certain expenditures made in repairing said property, where the nature, character, and extent of the repairs made do not appear to have been inquired into at the hearing.

King, Hitz & Partridge, of Atlanta, for Prudential Ins. Co. of America.

Hooper & Hooper and Robt. B. Blackburn, all of Atlanta, for Byrd et al. and Blackburn.

REID Chief Justice.

The Prudential Life Insurance Company of America obtained an appointment of a receiver for certain property conveyed by a security deed, ancillary to and in aid of its suit for a judgment on the debt secured thereby, based upon the alleged insolvency of the defendants, Mr. and Mrs. Byrd, and the inadequacy of the security. See Mitchell v. LaGrange Banking & Trust Co., 166 Ga. 675, 144 S.E. 267; Gunby v. Thompson, 56 Ga. 316, 317; Crockett v. Wilson, 184 Ga. 539, 192 S.E. 19; Hart v. Respess, 89 Ga. 87, 14 S.E. 910. The appointment of the receiver was reversed by this court (Byrd v. Prudential Insurance Co., 182 Ga. 800, 187 S.E. 1), and the trial court adjudged, in making the judgment of this court the judgment of the court below, that: 'Mrs. Cora M. Byrd (the actual owner of the property conveyed by the security deed) is entitled to have paid over to her all moneys so collected and now in the custody of the receiver, * * * free from any and all costs incident to the appointment of the receiver and all court proceedings relating or pertaining thereto, which costs are taxed against the Prudential Insurance Company of America.' The specific amount to which Mrs. Byrd was entitled under this judgment was to be thereafter ascertained upon the receiver filing his report; and although the receiver duly filed his report, no further judgment was rendered in this connection, and the matter remained in abeyance. In the meantime, upon a new hearing of the prayers for receivership under the allegations of the original petition, and under additional allegations added by amendment presented to the trial judge on the same day the remittitur was filed in the lower court, a receiver was again appointed for the property, the court naming the same person originally appointed. The evidence was different from that produced at the original hearing, and on writ of error this judgment was affirmed. Byrd v. Prudential Insurance Co., 185 Ga. 310, 195 S.E. 403. Thereafter the plaintiff obtained judgment against the defendants for principal, interest, and attorney's fees; and judgment was thereupon entered, making the receivership permanent. The verdict and judgment in favor of the plaintiff on the indebtedness was affirmed by the court. Byrd v. Prudential Insurance Co., 185 Ga. 625, 196 S.E. 72. Under order of the court the property was sold to the plaintiff as the highest bidder, but for an amount less than its judgment. The receiver made a final report showing a small cash balance in hand, which represented the difference between the amount of rents collected and the expenditures actually made under the first and erroneous receivership, and also a cash balance of rents collected under the second receivership. Mrs. Byrd's attorney, Robert B. Blackburn, intervened in his own behalf, and applied to the court to impress an attorney's lien in his favor against the amount that should be awarded Mrs. Byrd under the judgment vacating the first receivership (which is quoted in part above), for services rendered by him as her attorney. The plaintiff resisted this claim. The judge, after hearing evidence, allowed certain expenditures made by the receiver from the fund, disallowed others, and decided in favor of Blackburn in the amount found due to Mrs. Byrd, as a reasonable compensation for his services in her behalf. Blackburn and the Prudential Insurance Company each took a bill of exceptions to this judgment. For convenience the cases may be disposed to together.

1. In this State an attorney at law is given a special lien superior to all other liens except liens for taxes, on judgments and decrees for money and 'for the recovery of real or personal property' obtained for their clients. Code, § 9-613, par. 3. While it is the rule in some States that an attorney has no lien for rendition of services in successfully defending his client's title to real or personal property against an adverse claim thereto (King v. Acuff, 218 Ala. 619, 119 So. 833; Owens v. Gunther, 75 Ark. 37, 86 S.W. 851, 5 Ann.Cas. 130; Avey v. Via, 225 Ky. 155, 7 S.W.2d 1057; Butler v. Givens, 137 Tenn. 438, 193 S.W. 1063; Morey v. Schuster, 159 A.D. 602, 145 N.Y.S. 258, affirmed 217 N.Y. 639, 112 N.E. 1066; Elliott v. Orton, 69 Okl. 233, 171 P. 1110, L.R.A.1918E, 103), in this State the contrary rule applies. Code, § 9-613, par. 5. In Fry v. Calder, 74 Ga. 7, it was held: 'Attorneys who were employed to resist the liens claimed by mechanics and contractors on real estate, amounting to five or six hundred dollars, and who succeeded in reducing the recovery to about sixty dollars, had a lien for their fees upon such property as against the owner who employed them. The reduction of the claims against the property was equivalent to a recovery to that extent.' In Dyal v. Watson, 174 Ga. 330, 162 S.E. 682, it was held that attorneys who were employed to represent a non-resident defendant against whom an equitable action had been brought by a creditor, wherein certain property, the equitable title to which was in the defendant, had been attached and seized by the sheriff acting in the nature of a receiver, were entitled to a lien on the property where the plaintiff, upon being unable to meet a demurrer pointing out that the cause of action declared upon was barred by the statute of limitations, voluntarily dismissed the action. See also Lovett v. Moore, 98 Ga. 158, 26 S.E. 498; Strohecker v. Irvine, 76 Ga. 639, 2 Am.St.Rep. 62. Under the judgment vacating the original receivership of the property, as above quoted in part, Mrs. Byrd became entitled, not only to the actual balance of the rents then in the hands of the receiver, but also to be made whole as to any illegal expenditures made from this fund. This judgment was final as to the rights of the parties to these rents, though it was necessary thereafter to determine the exact amount due Mrs. Byrd. It is true that upon the judgment of this court reversing the judgment appointing a receiver being made the judgment of the court below, the plaintiff was entitled to a new hearing for a receiver under the allegations of the original...