Crosby v. Hatch

McClain, C., J. It is conceded that under the' contract between plaintiffs and Alice Royder, plaintiffs became entitled to receive from her as attorney’s fees one-half the amount recovered by her in her action against this defendant, or received by her under any settlement of the suit which she should make; and that a settlement was made, by which defendant paid $1,500 in settlement of the suit. It is also conceded that in said action, brought by Alice Royder against this defendant, plaintiffs, as attorneys, gave proper notice of a claim for attorney’s fees on any judgment which should be recovered and upon any [314] money due or owing to the plaintiff in that action from the defendant, specifying the lien as being “in the sum of $5,000 for services rendered and to be rendered.” It is also conceded that the settlement, in pursuance of which this defendant paid $1,500 in full of his liability to Alice Hovder, was made without the knowledge or approval of these plaintiffs as her attorneys. The provision in the Code, relating to attorney’s lien, is as follows: “Sec. 321. An attorney has a lien for a general balance of compensation upon: . . . Money due his client in 'the hands of the adverse party . . . from the time of giving notice in writing to such adverse party . . . which notice shall state the amount claimed, and in general terms, for what services.” i. Attorney’s suffiS¿ncytíce: The contention for appellant is that, as plaintiffs did not give notice of the terms of their contract with Alice Hoyder, under which they were entitled to one-half the amount recovered or received by her in n . . settlenient> their lien, as against the appellant, should be limited to the amount of a reasonable compensation for services which had been performed by them at the time of settlement; and that such reasonable amount did not exceed 'the sum of $200, which had been placed in the hands of a trustee to secure appellant against any claim which plaintiffs might have against him under their lien. In the case of Smith v. Chicago, R. I. & P. R. Co., 56 Iowa, 720, it was held that under this statutory provision notice of a lien, given at the institution of a suit, is effectual to entitle the attorney to a lien against the defendant in the suit for any amount which may become due to the attorney from his client for his professional services; and that it is not necessary, in order to protect the attorney against a settlement between his client and the adverse party, that the notice specify the amount due; and that the adverse party, in making settlement with the client without consulting his attorney, becomes liable [315] to the attorney for the amount of the attorney’s fees actually due. In Parsons v. Hawley, 92 Iowa, 175, it was held that the defendant is charged with notice of an attorney’s lien properly given; and that if he settles with the plaintiff he is liable for the fees of the attorney in whatever amount may be found to be due. In that case, there was no contract between the attorney and the client as to the amount of fees to be paid, and the court allowed the attorney to recover only what was reasonably due. In Barthell v. Chicago, M. & St. P. R. Co., 138 Iowa, 688, it was held that notice of a lien to the extent of fifty percent of the claim was sufficient. In Cheshire v. Des Moines City R. Co., 153 Iowa, 88, the attorney, who had a contract for a contingent fee to the extent of one-half the amount received by his client as .damages, and had given notice that he claimed an attorney’s lien in á specific sum, was allowed to recover from the defendant one-half the amount paid by defendant to his client in settlement of the case; and it was said that it was not incumbent on the attorney, in serving notice of his claim for the purpose of asserting a lien, to state the terms of his contract of employment, and that, if the defendant, settling with the client, has notice sufficient to establish a lien, then he settles at his peril, and may not ■assume that the lien of the attorney is limited to a reasonable compensation, regardless of the terms of the contract. From these eases, it is clear that the plaintiffs in the case before us had given sufficient notice to entitle them to a lien for whatever amount was due to them from their -client, and that under this notice the defendant entered into a settlement with the client at his peril. If he assumed that $200 would cover the entire amount of plaintiffs’ valid claim, he did so at his own risk. Plaintiffs’ contract with their client being perféctly valid and enforceable, so far as appears from this record, to the extent of $750, we ■see nothing to excuse the defendant from the payment of that amount. [316] The case of Gibson v. Chicago M. & St. P. R. Co., 122 Iowa, 565 (followed without particular’ comment in Kauffman v. Phillips, 154 Iowa, 542) is not in point on the question now under consideration. In that case, although the attorney had a contract for a contingent fee to the extent of one-half the amount which should be recovered in the action or received by way of settlement, it appeared that the contract of employment had been abrogated, the action brought in pursuance of it had been dismissed, and a new attorney employed, who brought another action, which was finally settled. No contract of employment can prevent a client from dismissing' one attorney and entering into a new arrangement with another. Such conduct may subject the client to liability to the attorney for damages for breach of contract, but can not prevent his discharge and the consequent conversion of his claim into one of damages for breach of contract, instead of one for services rendered under an existing contract. In the case just cited,“it was not denied that the attorney who was discharged might have a lien upon the amount due on the claim subsequently settled to the extent of his right of compensation or damages as against his client; but it was held that the lower court erred, in allowing proof of the value of services rendered by another attorney, brought into the case without the client’s consent. Without now more fully reviewing that case, it is sufficient to say that it has no application to the case before us, in which plaintiffs remained the attorneys of Alice Royder until after the settlement between her and this defendant had been fully made. This is a ■case where the defendant, disregarding the notice of a lien, effected a settlement with the client, assuming for himself to determine the measure of the attorneys’ rights to compensation; and this he necessarily did at his peril. [317] forcement [316] The taking of a default judgment in this action, against Alice Royder for the amount of plaintiffs’ compensation did not waive plaintiffs’ right to the enforcement [317] of their lien against this defendant. "Whatever may be the rule in other states, it is well settled in this state that after judgment against the client the attorney may still enforce his lien as against the adverse party. Smith v. Chicago, R. I. & P. R. Co., 56 Iowa, 720; Hubbard v. Ellithorpe, 135 Iowa, 259. 3' amount of recovery. The contention that plaintiffs should be allowed only one-half of the amount actually paid to Miss Royder, which was $1,300, instead of one-half the amount which it .was agreed she should receive in settlement, which was $1,500, is without merit. Defendant was to pay $1,500 in settlement, and did pay that amount; the sum of $200, however, being reserved, in making payment to Miss Royder, and placed in ■the hands of a trustee, to be .held until Miss Royder should settle with her attorneys. The trustee is not a party to this suit. Defendant is entitled, no doubt, under his arrangement with the trustee and Miss Royder, to have this $200 applied in satisfaction of the judgment recovered against him; but, so far as his liability is concerned, he must pay plaintiffs on the basis of the settlement. If we should reduce the judgment against him to $650, plaintiffs would have no means of enforcing the payment to them of their proper portion of the remaining $200 now in the hands of the trustee without an independent suit; and they are under no obligation to assume ■any such burden. The agreed settlement between defendant and Miss Royder was for $1,500; and that amount was paid by defendant in disregard of the lien of plaintiffs. There was no error, therefore, in the amount of the recovery and the judgment is affirmed.