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ΑΝΝΟΤΑTION.

Merits of client's cause of action or defense as affecting attorney's lien or claim for his compensation against adverse party, in case of compromise without former's consent.

The weight of authority is to the effect that where the case is compromised without the attorney's consent or knowledge, the latter's rights, as against the adverse party, depend entirely upon the merits of his client's case. In other words, if the claim or defense is groundless, he cannot recover; but otherwise, if he could have successfully prosecuted or defended the case. The following cases support this general rule: Gray v. Lawson (1867) 36 Ga. 629; Jones v. Morgan (1869) 39 Ga. 310, 99 Am. Dec. 458; Twiggs v. Chambers (1876) 56 Ga. 279; Coleman v. Ryan (1877) 58 Ga. 132; Rodgers v. Furse (1889) 83 Ga. 115, 9 S. E. 669; Swift v. Register (1895) 97 Ga. 446, 25 S. E. 315; Brown v. Georgia, C. & N. R. Co. (1897) 101 Ga. 80, 28 S. E. 634; Atlanta R. & Power Co. v. Owens (1904) 119 Ga. 833, 47 S. E. 213; Hall v. Lockerman (1907) 127 Ga. 537, 56 S. E. 759; Pickard v. Yencer (1880) 21 Hun (Ν. Υ.) 403; McCabe v. Fogg (1880) 60 How. Pr. (N. Y.) 488; Deutsch v. Webb (1882) 10 Abb. N. C. (N. Y.) 393, note; Tullis v. Bushnell (1883) 65 How. Pr. (N. Y.) 465; Smith v. Baum (1884) 67 How. Pr. (N. Y.) 267; Whittaker v. New York & H. R. Co. (1886) 22 Jones & S. (N. Y.) 8; Gallison & H. Co. v. Rawak (1889) 24 N. Y. S. R. 318, 3 N. Y. Supp. 802; Casucci v. Allegany & K. R. Co. (1892) 65 Hun, 452, 29 Abb. N. C. 252, 20 N. Y. Supp. 343; Gulf, С. & S. F. R. Co. v. Williams (1915) 49 Okla. 126, 152 Pac. 395; Whitehead v. Spriggs (1916) Okla., 158 Pac. 439; Culver v. Diamond (1917) Okla. -, 167 Pac. 223; Allen v. Shepherd (1918) Okla. 169 Pac. 1115; CRUMP v. GUYER (reported herewith) ante, 331; Smelker v. Chicago & N. W. R. Co. (1900) 106 Wis. 135, 81 N. W. 994.

一,

Thus, in Oklahoma, under statutes which in effect provide that an attorney shall, upon notice, have a lien upon his client's cause of action or 2 A.L.R.-22.

counterclaim which attaches to findings, judgments, and settlements made with the consent of the attorney, and the proceeds thereof, and which cannot be affected or destroyed by any settlement between the parties, made without the approval of the attorney; that it shall be lawful to contract for a stipulated or a contingent fee, and that the lien therefor cannot be affected by a compromise or settlement between the parties without notice to and consent of the attorney, but the adverse party shall be liable to such attorney for the fee due him or to become due him under his contract, which liability may be enforced by action; and that where the amount of the fee is not fixed by contract the lien shall be for an amount which it might be reasonably supposed would have been earned had he been allowed to complete his contract, and that upon the hearing the attorney may present the facts essential to establish the merits of the cause in which he is employed, -the well-established rule is as laid down in the reported case (CRUMP v. GUYER, ante, 331), that in case a cause of action is compromised without the knowledge or consent of a party's attorney, the attorney may sue the adverse party for the amount of his fee, and upon the trial present the facts essential to establish the merits of his client's cause, and that recovery depends upon such cause being a meritorious one, there being no enforceable lien if his client did not have a good cause of action. To the same effect are Allen v. Shepherd (1918) Okla. 169 Pac. 1115: Culver v. Diamond (1917) — Okla. —, 167 Pac. 223; Whitehead v. Spriggs (1916) - Okla. —, 158 Pac. 439 (holding that, in the absence of evidence sustaining the merits of the client's cause of action, a demurrer to the evidence should be sustained); and Gulf, C. & S. F. R. Co. v. Williams (1915) 49 Okla. 126, 152 Pac. 395.

一,

And see also Herman Constr. Co. V. Wood (1912) 35 Okla. 103, 128 Pac. 309, wherein the pertinent provisions of the statute (Okla. Sess. Laws, 1909, chap. 4) are set out in full.

And in Georgia, under a statute providing that parties cannot, by settlement between themselves, defeat the attorney of any lien or claim under contract with his client of which the opposite party had notice prior to the consummation of such settlement, the rule is that where a settlement is made by the parties without the consent or against the consent of the plaintiff's attorney, the case should be sent to the jury on the merits as between the parties, where the defendant had notice of such attorney's contract rights, it being expressly held that whether the defendant in such a case shall pay the fees of the plaintiff's attorney must depend upon the recovery by the plaintiff in a trial upon the merits of the cause sued on. It was so held in Gray v. Lawson (1867) 36 Ga. 629, applying Georgia Rev. Code, § 1980, and Jones v. Morgan (1869) 39 Ga. 310, 99 Am. Dec. 458.

So, under the Georgia Act of 1873, as embraced in § 1989 of the Code, which declares that "attorneys at law shall have a lien upon suits, judgments, and decrees for money, and no persons shall be at liberty to satisfy said suit, judgment, or decree until the lien or claim of the attorney for his fees is fully satisfied, and attorneys at law shall have the same right and power over suits, judgments, and decrees to enforce their liens as their clients had, or may have, for the amount due thereon to them," it is held that an attorney's rights cannot be defeated by a compromise or a settlement between the parties, made without his knowledge or consent, and that such an attorney has a right to prosecute the suit in the name of the plaintiff and recover his fee, provided the plaintiff had a good case. Coleman v. Ryan (1877) 58 Ga. 132; Rodgers v. Furse (1889) 83 Ga. 115,9 S. E. 669 (holding that where a judgment was set aside with plaintiff's consent, it must have been done subject to the right of his attorney for

fees, who subsequently may proceed to establish same, in doing which he must establish the plaintiff's right to recover on the state of facts existing at the time the case was first disposed of, independently of the question of fees); Swift v. Register (1895) 97 Ga. 446, 25 S. E. 315 (holding that, in order for an attorney to recover a contingent fee in an action settled by the parties without his approval, it is absolutely indispensable that he should prove by competent evidence the right of the plaintiff to recover in the original case); Brown v. Georgia C. & N. R. Co. (1897) 101 Ga. 80, 28 S. E. 634 (holding that a claim for contingent fees is extinguished by the granting of a nonsuit). And under another provision of the same section of the Georgia statute, namely, that "upon all suits for the recovery of real or personal property and upon all judgments or decrees for the recovery of the same attorneys at law shall have a lien on the property recovered," it has been held that the attorney has a "lien on the suit which is perfect at once," and an inchoate lien on "the property" which is perfected by recovery, in consequence of which the attorney's right to recover depends upon the merits of the suit, which cannot be dismissed without the attorney's consent. Twiggs v. Chambers (1876) 56 Ga. 279. And under Georgia Civil Code, § 2814,2, authorizing an attorney who has a lien upon a suit to prosecute it for the purpose of enforcing the payment of his fees, the court in Atlantic R. & Power Co. v. Owens (1904) 119 Ga. 833, 47 S. E. 213, held that where a suit has been settled by the parties without the knowledge or consent of the plaintiff's attorney, when the suit is prosecuted by the attorney there can be no recovery of fees unless the evidence is of such a character that a recovery in behalf of the client would be authorized if the suit were still pending for his benefit. And see Hall v. Lockerman (1907) 127 Ga. 537, 56 S. E. 759, wherein, in holding that attorneys have no right to enforce a judgment obtained by surprise, the court said: "The attorneys had no interest in the case except in that

which the client could recover. The interest of the attorneys was wholly dependent upon a right of recovery by the client. If the client had no cause of action," he acquired none merely by employing an attorney to represent him, and attorneys' rights are no greater than those of their clients.

And in Pickard v. Yencer (1880) 21 Hun (N. Y.) 403, construing New York Code of Civil Procedure, § 66, as in effect before the Amendment of 1879, and under which an attorney was entitled to costs in case of a settlement made with a design of defrauding him, where a settlement and discontinuance of an action were set aside as in fraud of the attorney's lien for fees, it was held that the attorney could proceed with the suit in the name of his client, but that the defendant could not be held liable for costs, except upon a recovery of an amount sufficient to carry costs under the statutes. And under § 66 of the Code, as amended in 1879, which gives an attorney of record from the commencement of an action or service of a counterclaim a lien upon the client's cause of action or counterclaim which attaches to a verdict, report, decision, or judgment in his client's favor and the proceeds thereof, and which cannot be affected by any settlement between the parties before or after the judgment, it has been held that it is no longer necessary to establish fraud or collusion, but that, in order to enforce a satisfaction of an attorney's lien in case of settlement before judgment, he must prosecute the action to a judgment in favor of his client. See McCabe v. Fogg (1880) 60 How. Pr. (N. Y.) 488; Deutsch v. Webb (1882) 10 Abb. N. C. (N. Y.) 393, note (holding that an attorney, after settlement without his consent, may proceed with the trial for the purpose of enforcing his lien, but that, if unsuccessful in proving the cause of action, he is personally answerable to the defendant for the trial fee and the disbursements of trial); Tullis v. Bushnell (1883) 65 How. Pr. (N. Y.) 465; Smith v. Baum (1884) 67 How. Pr. (N. Y.) 267 (holding that the existence of the plaintiff's cause of ac

tion is in issue, that the defendant is entitled to have such issue tried by a jury before he can be mulcted in costs, and that how far an amount paid in settlement may be taken as an admission of indebtedness must be determined at the trial); Whittaker v. New York & H. R. Co. (1886) 22 Jones & S. (N. Y.) 8 (holding that where a case was settled pending an appeal from a judgment in plaintiff's favor and without the consent of his attorney, the latter had a valid lien, enforceable against the adverse party, provided he could prosecute the litigation to a final judgment in favor of his client); Gallison & H. Co. v. Rawak (1889) 3 N. Y. Supp. 802 (holding that where the parties settled a suit before judgment, without the consent of the plaintiff's attorney, the latter could obtain permission to prosecute the action for the protection of his lien, which, under § 66 of the Code of Civil Procedure, was not affected by the settlement, and could recover upon proving that his client had a good cause of action at the time the suit was commenced); and Casucci v. Allegany & K. R. Co. (1892) 65 Hun, 452, 29 Abb. N. C. 252, 20 N. Y. Supp. 343 (expressly holding that where a settlement is so far set aside as to permit the plaintiff's attorney to prosecute the action and recover the amount of his lien, he must, in order to so recover, establish the liability of the defendant upon the merits of the questions in issue; and that the compromising of the claim by the defendant was not, under § 66 of the Code, an admission upon his part of liability to the plaintiff).

So, in Wisconsin, under a statute enacted in 1891 (Rev. Stat. 1898, § 2591A), which authorized one claiming a right of action in tort or for unliquidated damages to contract for an attorney to prosecute the same, and gave him a lien for fees, and provided that, after notice thereof to the adverse party, no adjustment or settlement should be valid as against the lien, it has been held that where a settlement has been made in violation of the rights of the plaintiff's attorney to a contingent fee, the procedure is not to bring an action in such attorney's name, but by prosecuting the original action; and that in so doing it is necessary to establish the existence of the original demand with the same certainty as though the original party was still prosecuting it, since the recovery must be based upon the actual injuries shown. Smelker v. Chicago & N. W. R. Co. (1900) 106 Wis. 135, 81 N. W. 994.

But it has been held, under a statute giving an attorney a lien upon "money due his client in the hands of an adverse party," as is done by Iowa Code, § 215, subd. 3, that there is a valid and enforceable lien where the case is settled by the parties by an agreement for the payment of damages irrespective of the validity of the client's claim. Thus, in Barthell v. Chicago, M. & St. P. R. Co. (1908) 138 Iowa, 688, 116 N. W. 813, it was expressly held that in such a case the attorney did not need to prove that his client had a meritorious claim. And see Smith v. Chicago, R. I. & P. R. Co. (1881) 56 Iowa, 720, 10 N. W. 244, wherein it was held that where the parties to a personal injury action settled the same by the payment of damages before judgment, without the consent of the plaintiff's attorney, and in violation of his rights, such at

torney could sue the defendant for the amount of his fee, the court saying that the lien exists in all actions where there is a money liability from the adverse party to the client, provided proper notice of the lien has been given.

And in Missouri, under a statute (Sess. Acts 1901, p. 46, § 2) providing that an attorney in any suit or action may sue for a contingent fee, that such agreement shall operate as a lien from the date of notice thereof upon the claim or cause of action and upon the proceeds of any settlement made without the attorney's consent, it has been held that where an action is settled before judgment, and without the attorney's consent, an action may be maintained by the latter against the adverse party, and that in such an action it is not necessary for the attorney to show that his client had a meritorious cause of action, it being said that the contention that it was necessary for the attorney to prove that his client's case was meritorious and such as entitled him to a verdict was incompatible with the text of the statute. Yonge v. St. Louis Transit Co. (1904) 109 Mo. App. 235, 84 S. W. 184. G. J. C.

С. А. ВЕСКER et al., Plffs. in Err.,

V.

MRS. BEULAH FITCH.

Oklahoma Supreme Court - Aug. 14, 1917.
(- Okla. -, 167 Рас. 202.)

Gaming - recovery by stranger.

1. A third person whose money, without his consent or connivance, has been lost at gambling by another, may recover same in an action at law against the person or persons winning and receiving the same; and all persons concerned in conducting a system of gambling, whether as principals or agents, by which such money is so lost, may be made to respond in damages to the owner of the money to the extent of the amount so lost. [See note on this question beginning on page 345.]

Same what must be proved.

2. Before a third person can recover money lost by another at gambling, Headnotes by STEWART, С.

the evidence must show that the money belonged to such third person; that it came into the possession of another

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ERROR to the District Court for Oklahoma County to review a judgment in favor of plaintiff, and denying a motion for new trial, in an action brought to recover money alleged to belong to her, and to have been lost by her husband at gambling on defendants' premises. Reversed.

The facts are stated in the Commissioner's opinion.

Messrs. Ames, Chambers, Lowe &

Richardson for plaintiffs in error.

Messrs. George H. Giddings, E. J. Giddings, and J. T. Dortch for defendants in error.

Stewart, C., filed the following opinion:

The parties will hereinafter be styled as they were in the court below, as plaintiff and defendant. The plaintiff sought to recover from the defendants the sum of $253, and interest, for money alleged to belong to the plaintiff, to come into the possession of plaintiff's husband Harry Fitch, and to be lost by her said husband in a turf exchange, or pool room, conducted by the defendants in Oklahoma City, by means of certain bets and wagers made by the said Harry Fitch on horse races, which bets, it is alleged, were made with the defendants in such place of business. The issues were joined and, upon trial, the jury returned a verdict in favor of the plaintiff and against the defendants for the sum sued for, and the court accordingly rendered judgment. Motion for a new trial was duly filed and overruled, and defendants duly appeal to this court.

There is no doubt as to the legal proposition that a third person

whose money has been lost by an-
other at gambling may recover the
same in an action at law against
the person or per-
sons winning and Gaming-recove
receiving the same.

by stranger.

Those conducting a gambling institution, either as principals or as agents, where money of a third person is thus lost, are liable in such an action, to the extent of the money lost and received. Unquestionably, the transaction described in the petition, by means of which it is alleged the money was lost, is gambling. The petition states a cause of action.

It is contended by the defendants that they were entitled to an instruction to the effect that the conducting of an exchange upon which bets are made on foreign races was not a violation of the statutes of Oklahoma at the time named in the petition. It is not necessary for us to determine whether such business was, at the time, a violation of an express statute. It was contrary to good morals and sound public policy, and, if the allegations are supported by the evidence, the plaintiff is entitled to recover. There are, however, two questions presented in the brief of defendants,

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