Longworth v. Handy

Spencer, J., delivered the opinion of the court. Since this proceeding has been commenced, the defendant, under an order of the court, has paid over to Long-worth the amount admitted to be due him, leaving still in his hands $180, claimed as his fee; and the cause awaits further order, and for the proper disposition thereof has been reserved for the settlement of the questions of law pertaining to it. This proceeding is founded upon the sixth section of the act regulating the admission and practice of attorneys and counselors at law (3 Curwen, 2345), which reads as follows : “ Every attorney receiving money for his client, and refusing or neglecting to pay the same when demanded, shall be proceeded against in a summary way, on motion, before any court of record, either in the county in which judgment shall have been rendered, on which such money shall have been collected, or in the county in which such attorney or counselor shall reside, in the same manner, and be liable to the same penalties, as sheriff's and coroners are liable to, for money received on execution.” The law regulating the liability of sheriffs, in such eases, provides that the “ sheriff, or other officer, shall on motion in open court, and two days’ notice thereof in writing, to be given such sheriff by the plaintiff, or his attorney, be amerced in the amount of said debt, damages and costs, with ten per centum thereon, to and for the use of the said plaintiff or defendant, as the case may be.” 3 Chase, 1716, sec. 32 ; also Code, sec. 451-453. These provisions, while they are intended to furnish a summary remedy in favor of suitors, or parties to actions, for moneys collected by officers of' the court, or standing in that relation, on proceedings in court, where the amount of — 80 — the party’s claim is clearly ascertained, are, nevertheless also penal in their character; and so far, at least, as a penalty is asked to be enforced, must receive a strict construction. In Duncan v. Drakely, 10 Ohio, 47, the court say, “ in proceedings under the statute authorizing the amercement of an officer, great strictness is required ; and he who would avail himself of the remedy therein provided, must bring himself both within the letter and spirit of the law, because the remedy is summary, and in its consequences highly penal. There is no trial by jury, and but little,if any, discretion is left to the court.” And in Webb v. Anspach et al. 3 Ohio St. 527, such proceedings are said to be “ strictissimi juris.” With regard to attorneys and counselors, to authorize such a summary proceeding, it must appear that the relation of attorney and client subsists between the party making the motion and the party sought to be charged by it. The language of the law is, “ every attorney receiving money for his client, and refusing to pay the same when demanded, shall be proceeded against in a summary way, on motion,” etc. The provision does not extend in terms to the assignee of the client. Nor is it natural that it should. Between the assignee and the attorney the fiduciary relation of attorney and client does not exist — clearly not when the .money is received by the attorney before notice of the assignment. And to require him, at his peril, to determine the rights of the assignee, or an attaching creditor, under penalty of amercement, would in many, if not in most cases, subject an attorney to great embarrassment. The confidence between attorney and client is mutual and reciprocal, the client relying on the fidelity of the attorney to pay over on demand, and the attorney depending upon the justice of his client in making adequate compensation for his services rendered. But where a judgment has been assigned by the client, there is no such mutual confidence subsisting between the attorney and assignee. There is no voluntary relation whatever established between them. Assuming the attor — 81 — ney to have a claim upon the amount collected, for his just compensation, the client may be well supposed to know the extent and value of the services rendered by the attorney, and is, therefore, the fittest person to settle with him in regard to them. Of these the assignee can form but little judgment, and the attorney should not be thrown upon him for settlement, at his peril. It seems to us, therefore, that the remedy by amercement was not intended to be given to an assignee of a judgment, or claim for money collected upon it by an attorney, between whom and. the assignee the relation of attorney and client does not exist. And such we understand to be the practice in the English courts, where it has been held that the court will not order an attorney to pay over a sum of money received by him, except upon the application of the client to-whom the money is due. 1 Nev. & Man. 262 ; 4 Barn. & Ad. 424. Kemp v. Burt. Waiving this point, however, as to which it is not now-necessary perhaps to express a positive opinion, we have no-doubt that the proceeding to amerce is so far penal in its character, as that it does not apply to a case where- the attorney has a bona ficle claim upon the fund collected, or acts in good faith in refusing to pay it over — as for example, where some- other party makes a claim upon it. The statute undoubtedly contemplates a case- where the duty of the attorney to pay over is clear, and where his failure to-do so is a breach of the confidence reposed in him by his. client. It is no excuse for the- refusal of an attorney to pay over, that his client refuses to give him a receipt on settlement. His duty is absolute to pay on demand, and the law imposes, no obligation on- a party receiving money in payment to-give an acquittance for it. A fortiori, where an attorney who has received money admits that a certain portion of it justly belongs to his client, he has no right to refuse to pay over such portion, because of the refusal of the client to. — 82 — give him an acquittance for the whole sum collected, or otherwise to settle his account. In the present case, it is not pretended that the defendant, at any time, refused to pay over to Albro all that he ad-mitted to be due him, or that he required from Albro, in any wise, an acquittance. On the contrary, as appears from his own affidavit, which stands uncontradicted, the defendant offered to pay Albro the amount admitted by defendant to be his due, and give him a check for the amount, which was received, and afterward returned because Mr. Longworth refused to receive less than the whole amount collected; and defendant further insists that he has always been, ready and willing to pay this amount to Albro. It is claimed, however, that the defendant refused, upon an application of Mr. Longworth, to pay over to him the amount admitted to be due, without a receipt in full from him. It is true, that had the defendant made such payment, he would have been protected in law from any claim by Al-bro. But it is not by any means clear that he was .bound to pay over anything to Longworth, until he had some authority from Albro, or that he was bound to settle with Longworth at all. He had a right, at least, to wait until an, opportunity to settle with Albro had occurred, and proved fruitless. He was not bound, as it seems to us, to settle with both parties, or rather to have two settlements. So far, then, as the refusal to pay over to Longworth, on demand, the admitted balance in his hands is concerned, we do not see that such a want of good faith ‘is exhibited, as requires that the defendant should be amerced on that ground. The only remaining, and indeed the chief question in the case, is whether the defendant is culpable for not paying over to Albro, or to Longworth, on demand, the full amount of the judgment collected. The defendant, it will be observed, claimed to retain a certain sum, out of the fund collected, as a reasonable compensation for professional services rendered in such collection. Had he a right to make — 83 — any such claim as agaiust Albro, or his assignee ? If he had, was the right exercised in good faith ? The question as to whether an attorney at law in Ohio has a lien upon his client’s papers, in his possession, or upon the judgment rendered in his client’s favor, does not appear to be settled by any authoritative judicial decision. Nor does it seem to us to be absolutely necessary to decide it in the present case. The principles, however, upon which such a claim is made to rest elsewhere, will aid us materially in determining the question in controversy. So far as a lien upon papei’s and documents in the attorney’s hands is concerned, it is well settled, in the coui’ts of common law, that such a lien does exist for expenditures in the cause, and even for a general balance due the attorney in the course of general employment. See 1 Foster, 340, Wright v. Cobleigh. Such lien, like any other at common law, depends upon possession of the subject of it. It seems equally well settled in England, and in some if' not all of the States of this Union, that a lien exists in favor of an attorney, upon a judgment obtained by him, for the advancements and disbursements made by him in the progress of the cause, and such as are usually included in the bill of costs. The lien thus allowed is sui generis. It does: not depend upon possession, because the attorney can not be said in any sense to have possession or exclusive control over-the judgment. But.it is founded in the principle of an. equitable assignment of an interest in the judgment, to the extent of the advances made. To render it, effectual, as-against the judgment debtor, it is necessary for the attorney to notify him of the extent of his claim, and that he intends-to enforce it. 1 Doug. 238 ; 6 T. R. 361 ; 2 B. & Ad. 413 ; 22. E. C. L. 113 ; 1 Foster, 340; 3 Caines, 165 ; 15 Vermont, 544 ; 2 Wallace, Jr. 479; 7 Harris, 95 ; 8 English (Ark.) 193. But as to an assignee of the judgment — he stands in the place of the assignor, and has no greater equity than the latr ter has, and therefore takes subject to the prior equity of the attorney; so that as against him the, lien exists without. — 84 — notice. 8 English, 193, Sexton v. Pike. And if he collect the money upon the judgment may be compelled to refund to the extent of the lien. Ibid. In England, and in some of the American States, this lien has been confined to costs and disbursements incurred or made by the attorney in the case, and has not been extended to- services rendered, (see cases above cited,) while in other States it has been held to compensate the attorney for all his services, as well as expenditures in the case. 7 Harris, 95 : 2 Wallace, Jr. 479 ; 8 English, 193. The reason for this distinction, between a claim for disbursements and for services, undoubtedly had its origin in the consideration that professional services, rendered in procuring the administration of justice, were not considered the subject of compensation or reward at common law. But there is no ground for any such distinction in Ohio, nor in most of our sister States. Here we hold that such services are not merely honorary, but meritorious, deserving of recompense; and hence enforce payment of them by suit, as much so as the repayment of advances made; and whether an attorney expends his labor, his time, or his money, in securing to his client the fruit of his claim, it would seem as if he had an equally just claim upon that fruit, for his recompense. In ex parte Plitt, 2 Wallace, Jr. 479, the court say, “we have no doubt of the power of the court, where a fund is within its control, to take care of the rights of the solicitors who have claims against it, whether for their costs, technically speaking, or their reasonable counsel fees. We can regard them in no other light than as meritorious assignees of a part interest, and they are so regarded in the English chancery;” citing White v. Pearce, 7 Hare, 278, and other cases. In ordinary cases, the attorney relies upon the judgment as a means of procuring recompense from his client for his services rendered, and it is in consonance with immemorial usage here to retain, from the sum collected, the am — 85 — ount of his reasonable fee. If a court of equity will protect his claim upon the fund within its control for distribution, how much more should his claim upon the fund be respected when within his own possession, and is acquired by his own industry. However then the question might be decided, with regard to the defendant’s lien upon this judgment, before collection, it seems to us clear, as well upon principle, as upon acknowledged general usage, that as against Albro, the plaintiff in the judgment, the present defendant had aright to retain, from the amount collected by him, a reasonable fee for his trouble. Nor is it any less clear that he has the same right to retain as against Longworth, the assignee of Albro. The service rendered by the defendant for Albro was an entire thing from the commencement of the suit until it ended in fruition, by collection of the money. Before the result was complete Albro assigned to Longworth. There is no pretense that the defendant had notice of this assignment, until the money had been collected as Albro’s. Longworth himself allowed it to be so collected. The equity of the defendant to retain for his services was at least equal to that of Longworth under the assignment, and was accompanied by actual possession. No action at common law could have been maintained by Longworth against the defendant, and he could have no better equity against him than Albro had. Holding that the defendant had a right to retain a reasonable fee, the only remaining inquiry is whether it has been exercised in good faith. If so, the motion to amerce must fail, and the plaintiff be remitted to his action. The court is not called upon, in this summary way, to fix the measure of compensation as between attorney and client, further than to ascertain whether the claim of the former is made in good faith. The rule applicable to such cases is stated in Balsbaugh v. Frazer, 7 Harris, 99, thus : “ An attorney, who has money in his hands which he has recovered for his client, may deduct his fees from the amount, and payment of the — 86 — balance is all that can be lawfully demanded. If the client is dissatisfied with the sum retained, he may either bring suit against the attorney, or take a rule upon him. In the latter case, the court will compel immediate justice, or inflict summary punishment on the attorney, if, the sum retained be such as to show a fraudulent, intent. But if the answer to the rule convinces the court that it was held back in good faith, and believed not to be more than an honest compensation, the rule will be -dismissed, and the client remitted to a jury trial.” The case before us does not disclose any fraudulent or wrongful intent on the part of the defendant. The fee is seemingly very large, in proportion to the benefit derived by Albro, or his assignee, from the services rendered; yet we can not say that it is clearly disproportioned to the labor performed. Thirty days are said to have been spent by the defendant and his associate, in managing the cause. If well employed, the fee charged would not be deemed extravagant. It may or may not be that so much time and labor were necessary to its proper management. On this point we have no evidence on either side, and are not called upon to pronounce. It is enough that the defendant has shown his claim to be made with an honest belief in its justice. This is sufficient to shield him from an amercement. The motion, therefore, should be dismissed, leaving the plaintiff' to pursue such other remedy as he may deem, proper. Motion to amerce overruled.