Summary
recognizing attorney's lien where attorneys retained control and hence possession of monies recovered for client
Summary of this case from Bros. in Christ v. Am. Fidelity Fire Ins.Opinion
No. 29980.
April 25, 1932.
1. ATTORNEY AND CLIENT.
Attorney has paramount lien on funds recovered for client.
2. ATTORNEY AND CLIENT.
Attorney's lien applies so long as attorney has funds recovered in his possession.
3. ATTORNEY AND CLIENT.
Attorney's lien on funds recovered for client applies alike to exempt, as well as non-exempt, funds.
4. ATTORNEY AND CLIENT.
Where money recovered by attorney for client was deposited in bank to credit of client on condition that no check on deposit would be good until countersigned by attorney, fund held in possession of attorney as regards right to lien.
5. ATTORNEY AND CLIENT.
That, after attorneys' lien on funds recovered for client was discharged by payment, bank in which undistributed balance was deposited closed, held not basis for recovery of part paid to attorneys.
APPEAL from chancery court of Chickasaw county. HON. JAS. A. FINLEY, Chancellor.
J.H. Ford, of Houston, and Thos. G. Abernethy, of Okolona, for appellants.
The right of appellants to the full five thousand dollars exempt to them as heirs of M.L. Abernethy, deceased, under the statute (section 1757, Code of 1930), was forever settled by the final decree of this court.
Abernethy v. Savage, 159 Miss. 506, 132 So. 553.
Appellees estopped to deny payment of half attorney's fee from exempt fund.
21 C.J. 1063-1067, 1202-1241, 1241-1246; Stone v. Morgan, 65 Miss. 247, 3 So. 580; McFarlane v. Rondle, 41 Miss. 411.
The decree of this court in the former case settled it that no part of that fee should be paid out of appellants' five thousand dollars as was done. Thus it was settled by that decision that the attorneys never had any lien for their fee against any part of that fund.
Delta Insurance Realty Co. v. Benjamin, 122 Miss. 275, 84 So. 226; section 1757, Code 1930; Dendy v. Commercial Bank Trust Co., 143 Miss. 56, 108 So. 274.
The attorneys are charged with full knowledge that they were being paid the two thousand eight hundred three dollars and thirty cents of their fee from the five thousand dollars exempt to the heirs, and with the fact that said exempt fund stood so segregated in the hands of the administrator from the remainder of said insurance funds.
This exempt fund was due to have been paid over to appellants within a reasonable time after it came into the hands of the administrator and certainly on their demand. It belonged to them. They could have recovered it by suit brought by them directly against the insurance company.
Equitable Life Assurance Society v. Hartfield, 187 Miss. 548, 40 So. 21.
Of course, the attorneys have a lien for the half of their fee on the funds to the credit of the administrator now in the bank. But no authority cited by counsel holds that they had a lien on the exempt fund where there was sufficient over for that purpose, so far as we have been able to find or from those cited which are available to us.
Stovall Stovall, of Okolona, and Owen Garnett, of Columbus, for appellees.
The attorney has a lien on the funds in his possession for services rendered in collecting the money for his client.
Braham v. National Life Accident Ins. Co., 87 So. 79; Chattanooga Sewer Pipe Works v. Dumber, 120 So. 450, 453; Stewart v. Flowers, 44 Miss. 513, 528.
The attorney has a prime lien granted by law and growing out of the relation of the parties, on funds which his services have produced whether such funds be exempt or nonexempt.
Stewart v. Flowers, 44 Miss. 513, 528.
Where a fund is brought into court through the services of an attorney who looks to that alone for his compensation, he is regarded as the equitable owner of the fund to the extent of the reasonable value of his services, and the court administering the fund will intervene for his protection and award him a reasonable compensation to be paid out of it. This lien is not affected by the fact that the client was an executor, and that the services were rendered and the money received on behalf of the estate, especially if the property is recovered or preserved for the estate.
6 C.J., page 782, sec. 394.
No matter how the amount of the fee got into the attorney's hands, as long as they were unpaid their lien on it was prime and paramount against all the world, and they have a right to hold it.
Unless the act or admission has been the inducement to a course of action which would result in a loss if appellant were permitted to change his position and enforce the right which he seemed virtually to waive by his acts as enumerated, they do not amount to an estoppel.
Davis v. Bowmar, 55 Miss. 671, 748.
Estoppel operates only in favor of one who, in reliance upon the act, representation, or silence of another, so changes his situation as that injury would result if the truth were shown.
Davis v. Butler, 128 Miss. 847.
Thos. L. Haman, of Houston, for appellees.
An estoppel will not be predicated upon a portion of the record and of the facts, but upon the whole thereof.
21 C.J. 1063-1064.
Equitable estoppel is based on an assumption of a position inconsistent with such claim to the prejudice of another who has acted in reliance on such conduct or representations.
21 C.J. 1202.
A failure to comply with a void decree of distribution is not a breach of the bond.
24 C.J. 1078, section 2585.
The exemption being fixed by law, the amount being segregated by law and held inviolable by the act of the administrator or order of the court, hedged about set apart by that statute, can the administrator or any one else be heard to say that he paid of that segregated fund money for other purposes of the estate, when the payment was made from a mixed fund, and where in that fund there was left more than five thousand dollars of the proceeds of life insurance.
The probate court did not have full jurisdiction before final settlement and final account filed to finally decree a specific amount to be distributed to the heirs. The statute provides that distribution may not be compelled without bond given.
Appellants are entitled to money as it may be collected by administrator from the insurance money deposited in bank to the extent of whatever amount is found to be exempt, but not by judgment in this suit, and not in any event from the surety or administrator on account of his bond unless he should fail to pay same over and judgment obtained in proper proceeding, after amount ascertained. The suit here is not for such relief and if it were, such relief could only be asked as against the administrator and not his surety.
The administrator is merely an officer of the court and is protected in refusing to pay out all of the exempt funds, pending appeal to the supreme court on account of uncertainty of amount, order of lower court, lack of bond given and insolvency of estate.
Dobbs v. Chandler, 84 Miss. 372, 36 So. 388.
M.L. Abernethy died intestate on January 25, 1927. Appellee W.E. Savage was appointed administrator of the estate, which was found to be insolvent, there being but little, if any, property unincumbered and available as general assets, except two policies of insurance on the life of the decedent. These policies were issued by the same insurance company and were in the sum of five thousand dollars each. The insurance company denied liability, and refused to pay any part of either of said policies, and it became necessary for the administrator to institute suit and to prosecute the same through the federal courts. The administrator was without funds to employ attorneys for this purpose by the payment of a cash fee, and was therefore obliged to contract for the service on a contingent basis. The administrator, with the approval of the chancellor, employed appellees Stovall Stovall as attorneys to prosecute the action, with the agreement that the attorneys would be paid for their services contingent upon recovery, and at such a percentage of the total amount collected as should be fixed by the chancery court, if and when the recovery should be accomplished.
The suit was duly and successfully prosecuted by the attorneys, and the judgment obtained by them in the trial court was affirmed by the federal circuit court of appeals. Mutual Life Ins. Co. v. Savage (C.C.A.), 31 F.2d 35. Thereafter the insurance company paid the amount required by the affirmance of the federal court of appeals in three checks, aggregating the sum of eleven thousand two hundred thirteen dollars and twenty-one cents. These checks were payable jointly to the administrator and to the attorneys, and when received were placed in bank to the credit of the administrator, but with the condition and indorsement upon the face of the bank account that no check upon said deposit would be good until countersigned by one of said attorneys. The fund thus remained until the chancery court convened, at which time the court made an order fixing the percentage which the attorneys should receive out of the said insurance funds at one-half of the aggregate amount. Thereupon the administrator, on May 27, 1929, issued to the attorneys his check on said bank account for the sum of five thousand six hundred six dollars and sixty cents, being one-half of the sum which the attorneys had brought into the estate by their services aforesaid, and there was left on hand in bank, to the credit of the administrator, the other one-half of the funds.
In the order of the chancery court allowing the attorneys one-half of the funds for their services, it was directed that the administrator pay the fee proportionately out of the five thousand dollars of the fund exempt by law to the heirs of the decedent and out of the remainder above five thousand dollars. But, as already mentioned, the administrator paid the attorneys in one check drawn on the entire funds as then on deposit as aforesaid. The heirs at law were dissatisfied with the order that a proportionate part of the fee should be charged against the exempt part of the insurance money, and appealed to this court, where it was held in Abernethy v. Savage, 159 Miss. 506, 132 So. 553, that, inasmuch as there was sufficient of money to pay the attorneys in full and thereupon have left over more than the five thousand dollars exempt, the administrator should pay to the heirs at law the entire amount of their five thousand dollars exemption. Pending the appeal aforesaid, the administrator had paid to the heirs, under an agreement that the payment should be without prejudice to their appeal, the sum of two thousand one hundred ninety-six dollars and seventy cents, leaving a balance on deposit of two thousand seven hundred fifty-seven dollars and seventy-nine cents, and which balance resulted after the payment also out of the funds of funeral expenses and a few other items not necessary here to mention. Before the appeal aforesaid could be determined by this court, the bank closed its doors, and it is now in liquidation, with the result in doubt as to when or how much of the balance which was on deposit in said bank will be paid. The present suit is by the heirs against the attorneys and against the administrator to recover of them jointly the balance of the exempt money or the sum of two thousand eight hundred three dollars and thirty cents. The court on the hearing dismissed the bill on its merits so far as concerns the appellee attorneys, and dismissed it without prejudice as to the administrator.
The dismissal without prejudice as concerns the administrator was correct, because the bill was not framed so as to present the issues as to which the court made the reservation of dismissal without prejudice, and, as to the issues actually tendered by the bill, the decree is correct on the facts.
The law in this state has long been settled that an attorney has a prime and paramount lien on the funds which his services as an attorney has produced for his client, and that this lien applies alike to exempt as well as nonexempt funds. This lien applies so long as the attorney has the funds in his possession and is superior to any other claim. Halsell v. Turner, 84 Miss. 432, 36 So. 531. The facts recited, in respect to the deposit, show that the attorneys retained the funds within their control, so that in the sense of the law in respect to the attorneys' lien the whole of the fund remained in their possession. When the court fixed the amount of their contingent fee at fifty per cent of the entire amount collected, the attorneys' lien, which then and all the while had rested upon the entire amount both as to the exempt and nonexempt portion, could not be discharged or satisfied except by the payment to them of the full amount of said one-half, or the sum of five thousand six hundred six dollars and sixty cents, which was the exact payment which was made to them. When they received this amount, they received no more and no less than the precise amount to which they were entitled. In the payment to them of said sum of five thousand six hundred six dollars and sixty cents, they received only that which was their own, and which thereupon became their absolute and separate property without any conditions or contingencies or drawbacks whatsoever adhering therein, or possible of creation by any subsequent happenings to the remainder of the funds. Questions respecting the remainder of the funds after the payment to the attorneys of their half, and as to what was to be done with that remainder, or arising out of what happened to the said remainder, are all questions between the heirs, the creditors of the estate, and the administrator. The attorneys cannot now be drawn back into those questions by attempting to take from them a part of what was theirs and what was paid to them as theirs, and which then and at all times since has remained their own property, so far as any other of the parties to this suit are concerned.
Affirmed.