The Flush

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Citation277 F. 25
Decision Date16 November 1921
Docket Number157.
PartiesTHE FLUSH. Appeal of THOMPSON. BULK OIL TRANSPORTS, Inc., v. ROBINS DRY DOCK & REPAIR CO. et al.

The libelant is a New York corporation and is engaged in the business of ship repairing. Its shipyard is at the Erie Basin in the borough of Brooklyn in the city of New York. It filed its libel against the steamship Flush, in which it alleged that it had furnished materials and supplies, and performed work, labor, and services, in repairing the steamship, in the amount of $201,971.31, which it avers is the reasonable value thereof. It claimed interest on that sum from July 30, 1918. It admitted that it had received in part payment $30,000, and claimed as the amount due and unpaid $171,971.31, with interest from the date before mentioned, and for this it asserted its right to a lien under the Act of June 23, 1910 (Comp. St. Secs. 7783-7787).

The Bulk Oil Transports, Inc., hereinafter referred to as the claimant, as the owner of the steamship, filed an answer, in which it alleged that on September 12, 1917, the libelant entered into an agreement with it in writing, in which it covenanted to complete the work within 75 days thereafter and that the work was not completed until August 20, 1918, 9 months and 26 days after the time specified. For this it claimed damages in the sum of $163,200. It claimed certain additional damages.

The claimant gave security in the sum of $185,000, through a bond executed by the National Surety Company, and one Christoffer Hannevig, who owned all or nearly all of the stock of the claimant, became the indemnitor on the bond. The security having been given, the claimant filed a cross-libel, in which it asked to have the libel filed by the Robins Dry Dock &amp Repair Company stayed under rule 53 of the Admiralty Rules (267 F. xx). Then on October 2, 1920, T. Langland Thompson the appellant, was substituted as proctor for the claimant in the place and stead of Bullowa & Bullowa. On February 11 1921, Hannevig was adjudicated a bankrupt and receivers were appointed. Shortly thereafter the attorneys for the National Surety Company asked Mr. Thompson, the appellant, to consent to a substitution of their firm as proctors for claimant. Mr. Thompson agreed to such substitution on the condition that his fee for services rendered be paid. His offer was not accepted.

On the 6th day of April, 1921, the receivers of Hannevig, through Saul Myers, moved for an order to compel Thompson to turn over to the receivers all papers in this suit, on the ground that the receivers hold all the stock of the claimant company. This motion was denied. 274 F. 133. On May 25, 1921, the National Surety Company made a motion for permission to intervene as a party respondent, on the ground that it was on the 'stipulation for value' in the sum of $185,000. This motion was denied, and an opinion rendered.

On the 29th day of August, 1921, the claimant made a motion, through Saul S. Myers, for an order substituting said Myers as attorney for it. This motion was granted and entered on the 20th day of September, 1921. On the 21st day of September, 1921, appellant duly appealed from said order, and served and filed said motion of appeal, assignment of error, and bond for costs. The essential part of the order providing for the substitution of attorneys, and which is the order appealed from, may be found in the margin. [1] It provides for substitution of attorneys upon the condition that Mr. Thompson's lien is to attach to the proceeds of the cross-libel if any there shall be, and to the papers of the claimant. It also directs that the substituted Mr. Myers is to have access to all of the papers in the possession or under the

control of the displaced attorney, and which the latter received from the claimant, or from any other source.

T. Langland Thompson, of New York City (Hans P. Treece, of New York City, of counsel), for appellant.

Spier Whitaker and Saul S. Myers, both of New York City, for appellee.

Before ROGERS, HOUGH, and MAYER, Circuit Judges.

ROGERS Circuit Judge (after stating the facts as above).

Before this cause was heard upon the merits, a motion was made to dismiss the appeal, on the ground that the order from which the appeal was taken was not a final order, and therefore was not one from which an appeal would lie. We denied the motion and held the order appealable, in accordance with our decisions in In re Oceanic Steam Navigation Co., 204 F. 259, 124 C.C.A. 347, and in Cavalliotis v. La Fonciere de France et des Colonies, 272 F. 803. The order finally determined the appellant's rights as an attorney in the case. It is a complete determination of the question as to who shall act as the claimant's attorney, and it gave the right to the substituted attorney to inspect the papers upon which the removed attorney claims a lien, and the provision of the order directing a special master to determine the amount of the appellant's lien and report did not destroy the finality of the order.

In denying the motion to dismiss the appeal, we granted a stay of further proceedings until two days after the filing of the opinion in this court deciding the appeal. The case having been heard, we shall now dispose of it upon its merits.

This appeal raises two questions for the consideration of this court. The first is whether a litigant, during the course of a litigation, can displace his attorney, who has not misconducted himself, and substitute another attorney in his place and stead, without first paying or securing to him his fees and disbursements. The second question is whether a client or his attorney has the right to inspect the papers belonging to the client, but retained in the possession of the displaced attorney under the claim of an attorney's lien, without first paying or securing his fees.

In Everett, Clarke & Benedict v. Alpha Portland Cement Co., 225 F. 931, 938, 141 C.C.A. 55, this court had occasion to consider the validity of an order allowing the substitution of attorneys and the turning over of papers upon which the attorneys claimed a lien. We then stated that it could not be questioned that a client has the right to change his attorney at any stage of the proceeding and without assigning a reason, that he might make an application to the court to have a new attorney of record substituted and that the court might grant an order of substitution, imposing such terms as might be justified under the circumstances to protect the rights of the attorney, if he be free from fault.

That a client has the right to discharge his attorney at any time, either with or without cause, is clearly established law. Yates v. Milwaukee, 10 Wall. 497, 19 L.Ed. 984; Silverman v. Pennsylvania R.

Co. (C.C.) 141 F. 382; Kelly v. Horsely, 147 Ala. 508, 41 So. 902; Love v. Peel, 79 Ark. 366, 95 S.W. 998; Gage v. Atwater, 136 Cal. 170, 68 P. 581; Glover v. Dimmock, 119 Ga. 696, 46 S.E. 824; Wipfler v. Warren, 163 Mich. 189, 128 N.W. 178; Delaney v. Husband, 64 N.J.Law, 275, 45 A. 265; In re Dunn, 205 N.Y. 398, 98 N.E. 914, Ann. Cas. 1913E, 536. Indeed, in Crosby v. Hatch, 155 Iowa, 312, 316, 135 N.W. 1079, the court declared that--

'No contract of employment can prevent a client from dismissing one attorney and entering into a new arrangement with another.'

If a substitution of attorneys cannot be made by consent of both client and attorney an order for such substitution must be obtained by making proper application to the court. Wilkinson v. Tilden (C.C.) 14 F. 778; Krekeler v. Thaule, 73 N.Y. 608.

If the application for substitution is based on the misconduct of an attorney, it has been held that the court may direct an unconditional substitution, and order that he give up the papers without payment of his fees, and leave him to bring an action for his fees. Sloo v. Law, Fed. Cas. No. 12,958.

But if the client brings no charges of misconduct against the attorney, but merely elects to have a substitution, the court will grant it imposing such terms as justice requires; and in such cases it is the general rule that a substitution will not be authorized, without providing that the fees and expenses of the displaced attorney shall be paid or secured to him, or his lien in some way preserved. In re Paschal, 10 Wall. 483, 19 L.Ed. 992; New York Phonograph Co. v. Edison Phonograph Co. (C.C.) 150 F. 233; Lanagan v. Wayne Circuit Judge, 170 Mich. 435, 136 N.W. 398; In re Dunn, supra. In the case last cited the New York Court of Appeals declared it--

'well settled that the courts will not enforce a substitution of attorneys, where the first attorney is without fault, unless the amount due the attorney for his services and expenditure is either paid or secured.'

As respects the first question involved, we have no difficulty in holding that the law is clearly established that an order providing for the substitution of attorneys, in a case where no professional misconduct is alleged, should not be made until or unless his fees for services rendered and expenses incurred have been paid or secured. The order appealed from is in our opinion invalid, as it provides for no such security. It simply provides that the attorney's lien shall 'attach to the proceeds of the cross-libel,' if any there shall be, and to the papers of the claimant. It is hardly necessary to point out that, if it should turn out that there should be no proceeds from the cross-libel, the security would amount to nothing. Moreover, the attorney to be displaced was not retained under an agreement for contingent fees. In this connection, however, we call attention to Du Bois v. Mayor, etc., of the City of New York, 134 F. 570, 69 C.C.A. 112, which was decided by this court, and which involved...

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    ... ...         He has now availed himself of the provisions of this order and appeals therefrom ...         It is settled law that a client, with an order of court, has the right to discharge an attorney, with or without cause. In re Paschal, 10 Wall. 483, 19 L.Ed. 992; The Flush, 2 Cir., 277 F. 25; United States v. McMurtry, D.C., 24 F.2d 145. We have held that an attorney dismissed without charge of misconduct will be protected by the court when it grants leave to substitute another attorney; that an attorney under a contingent fee contract is vested with an interest in ... ...
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  • Rector v. United States
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1 books & journal articles
  • Lien cases
    • United States
    • James Publishing Practical Law Books Florida Causes of Action
    • 1 Abril 2022
    ...Derived from the common law, the existence of the lien does not depend on any agreement between the lawyer and the client. The Flush , 277 F. 25, 29 (2d Cir. 1921) (retaining lien “established on general principles of justice”), cert. denied , 257 U.S. 657, 42 S.Ct. 184, 66 L.Ed. 421 (1922)......

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