State v. National Surety Co.

• Decision Date: 13 December 1916
• Citation: 161 P. 1026,29 Idaho 670
• Parties: STATE, Plaintiff-Respondent, v. NATIONAL SURETY COMPANY, a Corporation, Defendant-Respondent; T. C. COFFIN, Intervenor-Appellant
• Court: Idaho Supreme Court

161 P. 1026

29 Idaho 670

STATE, Plaintiff-Respondent, v. NATIONAL SURETY COMPANY, a Corporation, Defendant-Respondent;

T. C. COFFIN, Intervenor-Appellant

Supreme Court of Idaho

December 13, 1916

ACTIONS AGAINST THE STATE - JURISDICTION - CONSTITUTIONAL AND STATUTORY CONSTRUCTION-ATTORNEY'S LIENS-APPROPRIATIONS-LIMITATIONS-CLAIMS AGAINST THE STATE-OFFICERS AUTHORIZED TO CREATE-LIMITATION OF AUTHORITY.

1. The right to enforce an attorney's lien against the proceeds of a judgment in favor of the state in this jurisdiction depends upon constitutional and statutory provisions. This court will not be bound by, or follow, decisions of appellate courts of other jurisdictions in the enforcement of attorney's liens against the proceeds of a judgment in favor of the state and in the custody of the court, where such decisions are directly in conflict with the constitution and statutory provisions of this state.

2. Sec 4900, Rev. Codes, as amended by Sess. Laws 1911, c. 167, p 563, fails to provide for an attorney's lien in favor of an attorney who appears on behalf of the state, which attaches to a verdict, report, decision or judgment in favor of the state, or to the proceeds thereof. Said statute makes no reference to the sovereign power, and the sovereign is not included within the foregoing statutory provisions, either by express words or by necessary implication. As the government of the state is established for the good of the whole, and can only be supported by means of its revenues, courts in the construction of general laws will not ordinarily apply to the state such as upon their face seem to have been intended only to declare or regulate the rights and remedies of individuals and which, if so applied, would have the effect of obstructing the speedy collection of the public revenues.

3. Held, that no equitable lien attaches in favor of an attorney for services alleged to have been rendered the state that is enforceable against the proceeds of a judgment in the custody of the court, where the constitution and the provisions of the statutes in express terms provide the procedure that must be followed in order to authorize the payment of any claim against the state.

4. Sec 18, art. 4, of the constitution, provides that "The Governor, Secretary of State, and Attorney General shall constitute a Board of Examiners, with power to examine all claims against the State, except salaries and compensation of officers fixed by law," etc. This clause of the constitution is supplemented by the statutes, sec 146, Rev. Codes, as amended by Sess. Laws 1913, c. 15, p. 58, as follows: "It shall be the duty of the State Board of Examiners to examine all claims against the State, except salaries and compensation of officers fixed by law." All claims of whatever character against the state must be submitted to the state board of examiners for their approval or rejection. To permit state officers to be harassed and hindered in the recovery of moneys embezzled by public officials, and to stop such moneys in transitu and charge the same with an attorney's lien for alleged services rendered the state in procuring said judgment, would be contrary to good public policy and detrimental to the due administration of the affairs of the state.

5. Any indebtedness created or attempted to be created against the state, by a state officer, whose duty it is under the law to represent the state in an action to recover moneys embezzled by a state officer, in excess of the appropriation made to such officer, is void.

6. Held, that there is a total absence of constitutional or statutory authority, authorizing the state depository board to create an indebtedness of the character sought to be recovered by appellant in this action, and all expenses authorized by law to be incurred by said board, in the performance of its official duty, must be audited and allowed as provided by law by the state board of examiners.

[As to lien of attorneys, see note in 51 Am.St. 251]

APPEAL from the District Court of the Third Judicial District for Ada County. Hon. Charles P. McCarthy, Judge.

Action in intervention, to subject the proceeds of a judgment in favor of the state to an attorney's lien for services rendered and expenses incurred. Temporary restraining order issued and thereafter vacated. Affirmed.

Judgment of the trial court affirmed. Costs awarded to respondent.

Richards & Haga, V. P. Coffin and T. C. Coffin, for Appellant.

The equitable charging lien, which is the one involved in the case at bar, is entirely different from the common-law lien. It rests upon the broad principle that an attorney is entitled in equity to a lien for his fees and disbursements upon the judgment which his services and skill have produced. This seems to be the only ground upon which it has ever been put. (Reed v. Dupper, 6 Term Rep. 361, 101 Eng. Full Reprint, 595; Baker v. St. Quentin, 12 Mees. & W. 441; 152 Eng. Full Reprint, 1270.)

The authorities are collected and very ably reviewed in Weed Sewing Mach. Co. v. Boutelle, 56 Vt. 570, 48 Am. Rep. 821; Warfield v. Campbell, 38 Ala. 527, 82 Am. Dec. 724; McDonald v. Napier, 14 Ga. 89, 110; Renick v. Ludington, 16 W.Va. 378, 392; In re Knapp, 85 N.Y. 284; Goodrich v. McDonald, 112 N.Y. 157, 19 N.E. 649; Barnes v. Taylor, 30 N.J. Eq. 467.

The power which the courts have summarily to enforce the performance by the attorney of his duties toward his client enables the court to protect the rights of the attorney as against the client. (Everett v. Alpha Portland Cement Co., 225 F. 931, 935, 141 C. C. A. 55; Cowdrey v. Galveston etc. R. R. Co., 93 U.S. 352, 23 L.Ed. 950; Zentmire v. Brailey, 89 Neb. 158, 130 N.W. 1047; Merchants' Nat. Bank v. Armstrong, 107 Ga. 479, 33 S.E. 473; Walker v. Floyd, 30 Ga. 237; Fuller v. Clemmons, 158 Ala. 340, 48 So. 101.)

If the fund on which the lien is claimed is paid into court, the court will not permit it to be withdrawn without first paying the attorney out of it. (McKelvey's Appeal, 108 Pa. 615; Ex parte Plitt, 2 Wall. Jr. 453, 19 F. Cas. No. 11,228, p. 883.)

In Dahlstrom v. Featherstone, 18 Idaho 179, 110 P. 243, this court recognized "the justness of the rule that an attorney may take such steps against his client as to have an equitable lien decreed by the court against the judgment to the extent of the balance due him for his services in procuring the judgment."

J. H. Peterson, Atty. Genl., A. A. Fraser and J. T. Pence, for Respondent.

If this is not a claim against the state, then it is no claim at all. (Thomas etc. v. State, 16 Idaho 81, 100 P. 761.)

Sec. 10, art. 5, and sec. 18, art. 4, of Idaho Const., must be construed together, and, as was said by this court in the case of Bragaw v. Gooding, 14 Idaho 288, 293, 94 P. 438: "The board of examiners were created by and derive their jurisdiction and authority from the same source as this court, and while acting within the scope of such authority, the courts have no power to direct or control their actions."

Under these two sections of the constitution as construed by this court, there is only one way by which a claim against the state can be prosecuted. It must first be presented to the board of examiners, and if by them disallowed, come before this court, secure a recommendatory judgment and with such judgment go before the legislature.

It is a general rule that statutes do not apply to the sovereign power without express words of reference. (Thomas v. State, supra; Hendrick v. Posey, 104 Ky. 8, 45 S.W. 525, 46 S.W. 702; Wood v. State, 125 Ind. 219, 25 N.E. 190; United States v. Knight, 39 U.S. (14 Pet.) 301, 307, 10 L.Ed. 465, 469; Compton v. State, 38 Ark. 601.)

Appellant has his remedy clearly defined by the constitution. (Rathbun v. State, 15 Idaho 273, 97 P. 335.)

The equitable lien doctrine has no application in the face of the clear constitutional provision declaring how a claim against the state must be enforced. The district court has no jurisdiction to entertain it. (Armstrong v. Mayer, 60 Neb. 423, 83 N.W. 401; Messner v. Giddings, 65 Tex. 301; Hollister v. State, 9 Idaho 8, 13, 71 P. 541.)

"The state board of examiners is given power under section 18, article 4, of the constitution, to examine all claims against the state except salaries or compensations of officers fixed by law; and such power cannot be exercised by a district court." (Thomas v. State, supra.)

The sovereign, as well as an individual, can obtain the services of an attorney under such circumstances as will give to that attorney the right to assert a lien for his disbursements and fees against funds in the hands of the court obtained upon a judgment in favor of his client. (The Siren, 7 Wall. (74 U.S.) 152, 19 L.Ed. 129; In re Paschal, 10 Wall. (77 U.S.) 483, 19 L.Ed. 992; State v. Ampt, 6 Ohio Dec. 699, 7 Am. Law Rec. 469; Board of Commrs. v. Clapp, 83 Minn. 512, 86 N.W. 775; Union Pacific R. Co. v. United States, 2 Wyo. 170; United States v. Boyd, 79 F. 858; Commonwealth v. Herr, 1 Pears. (Pa.) 328.)

Where it is necessary to incur expenses to recover, preserve or protect a trust fund, the fund itself is directly chargeable with those expenses. (Trustees of Impr. Fund v. Greenough, 105 U.S. 527, 26 L.Ed. 1157; Colley v. Wolcott, 187 F. 595, 109 C. C. A. 425; State ex rel. Marshall v. Butler County, 164 Mo. 214, 64 S.W. 176; In re Creighton's Estate, 93 Neb. 90, 139 N.W. 827.)

Hawley & Hawley, for Respondent, National Surety Company.

BUDGE, J. Morgan, J., concurs. SULLIVAN, C. J., Dissenting.

OPINION

BUDGE, J.

One O V. Allen was elected at the biennial election held on November 8, 1910, to the office of state treasurer of the state of Idaho for the years 1911 and 1912, and on November 5, 1912, Allen was re-elected to said office for the...