Koons v. Beach

Hackney, J. This was a suit by the appellee to declare and enforce a lien for attorney’s fees against a fund remaining in the hands of Koons, administrator, and primarily distributable to the appellant, Cory, but claimed by the other appellants as assignees of Cory. Two questions are presented: The action of the court in overruling the several demurrers of the appellants to the complaint, and in overruling their motion for a new trial. The complaint alleged that the appellee was an attorney in regular practice; that Koons, as administrator, held for collection a pplicy of life insurance, payable to the estate of which he was administrator, and that Cory was, after the payment of the debts and costs of settling the estate, entitled to the balance of any sum collected upon said policy; that the insurance company was denying its liability npon said policy, and the. administrator had employed attorneys to enforce the same; that said Cory had employed the appellee to assist in securing a compromise of the differences between said company and the estate, the compensation for such service having been agreed upon, in an amount stated, and it having been agreed that appellee should be paid from the sum to be obtained in such compromise and settlement; that the appellee did assist in securing a compromise and settlement with said company by which fifty per centum of the policy was paid to said administrator; that the appellee entered upon the probate record containing the ap [139] pointment of Koons, at the entry of said appointment, a notice of intention to maintain an attorney’s lien for said fees; that a large snm will remain, upon final settlement of the estate, for distribution to the credit of said Cory; that said Cory is insolvent and has assigned his interest in said fund and all other property to the appellant, Landis, and has given orders to others, his creditors, for sums which the administrator threatens to pay to the exclusion of the appellee’s claim, and without retaining any sum for his benefit. As a legal lien, authorized by section 7238, Burns’ R. S. 1894 (5276, R. S. 1881), the facts pleaded are not sufficient. Such a lien may be held “on any judgment rendered in favor of any person or persons employing such attorney, to obtain the same: Provided, That such attorney shall, at the time such judgment shall have been rendered, enter, in writing, upon the docket or record wherein the same is recorded, his intention to hold a lien thereon, together with the amount of his claim.” In this case so far as the complaint discloses, no judgment was rendered, no notice of lien was entered upon any judgment docket or order book, wherein a judgment would have been proper, and, necessarily, the basis for such legal lien did not exist. 1 Watson on Indiana Statutory Liens, section 34; Alderman v. Nelson, 111 Ind. 255; Hill v. Brinkley, 10 Ind. 102; Hanna v. Island Coal Co., 5 Ind. App. 163. While the complaint alleges notice of lien, entered upon the order appointing the administrator, its facts can only be considered with reference to the theory of an equitable lien. It is true that this court said, in Alderman v. Nelson, supra, “It is not necessary to inquire whether an attorney had a lien on his client’s judgment at common law, for the statute covers the entire subject and creates a lien, and that is the only one that can be enforced.” [140] This statement was made with reference to liens upon judgments, and, if our statute covers the entire subject of such liens, it is clear that it does not attempt to cover the question of liens upon funds secured by the client through the aid of his employed attorney, and by other steps than a judgment. In the more recent case of Justice v. Justice; 115 Ind. 201, it was clearly established that the statutory lien was not the only lien afforded for the security of the attorney, in the performance of services beneficial to his client, but that equity supplied a lien, independent of the statute. In that case it was quoted with approval from Puett v. Beard, 86 Ind, 172, as follows: “It is generally agreed, both here and in England, that a solicitor has a lien for his costs upon a fund recovered by his aid, paramount to that of the persons interested in the fund or those claiming as their creditors,” citing authorities. And it was further quoted: “The reason for this rule is .that the services of the solicitor have, in a certain sense, created the fund, and he ought, in good conscience, to be protected.” This proposition is quoted with approval in Hanna v. Island Coal Co., supra. In 1 Watson on Indiana Statutory Liens, section 36, it is said: “An agreement between an attorney and his client that the attorney shall have a lien for his services to a certain amount upon the proceeds of any judgment recovered, constitutes a valid equitable assignment of such proceeds pro tanto which attaches to such proceeds as soon as the judgment is entered. Such an agreement is within the principle that an agreement between a debtor and a creditor that the creditor shall have a claim upon a specific fund for the payment of his debt is a binding equitable assignment of the fund pro tanto.” See 21 Am. Law Rev. 79; Blankenbaker v. Bank of Commerce, 85 Ind. 459; [141] McNagney v. Frazer, Fxr., 1 Ind. App. 98; Williams v. Ingersoll, 89 N. Y. 508; Courtney v. Courtney, 4 Ind. App. 221. From the rules stated it follows that the fund acquired by the aid of the employed attorney is burdened by the agreed fee and cannot be relieved by any act of the client. In Justice v. Justice, supra, it was held that such lien was paramount to a judgment against the client, rendered before the proceeding in which the attorney’s services aided in securing the property against which it was sought to enforce the judgment. It was there said: “A court of equity will control the legal lien of the judgment, and limit it to the actual interest of the judgment debtor in the property, and will fully protect the rights of those parties who have prior equitable interest in such property, or the proceeds thereof.” The complaint, in our opinion, made a case within the rules stated, and the demurrers were correctly overruled. On the motion for a new trial one question is discussed, involving the weight of the evidence, and we are asked to pass upon conflicting testimony. This, it has many times been held, we are not permitted to do. It is complained finally that the trial court erred in permitting the appellee to testify to a conversation had by him with an agent of the insurance company as to defenses against the policy, and as to offers of compromise. Counsel do not'refer us to the record in support of this complaint and no reason occurs to us why such conversations may not have been proper in the discharge of appellee’s duties as the attorney for Cory, and proof of them proper to establish his participancy in the negotiations which led to the compromise and settlement. [142] We find no error for which the judgment should be reversed. Judgment affirmed.