State v. National Surety Co.

SULLIVAN, C. J.,

Dissenting. — I am unable to concur in the conclusion reached by the majority of the court. The majority opinion proceeds upon the theory, as I understand it, that under certain constitutional provisions and under the laws of this state an attorney who has been engaged to prosecute a claim in favor of the state and obtains judgment for *687the state has not an equitable, charging lien against said judgment before it is paid over to the state.

The lien claimed in this case is not claimed under the attorney’s lien law of the state, and the main question to be determined is whether the attorney is entitled to the payment of a reasonable attorney’s fee for the services rendered in procuring a judgment amounting to nearly $154,000 in favor of the state. The amount of the attorney’s fee is not involved in this appeal.

If it were held on this appeal that the attorney’s fee and certain costs were payable out of the proceeds of said judgment, the matter would then have to be sent back to the district court to determine the value of the attorney’s services.

In limine, since the matter involved in this ease has been injected largely into the politics of the last campaign, and great injustice done the appellant by reason of misrepresentations made, as has appeared from the public press of the state and otherwise, I shall state the facts involved in considerable detail and the law applicable to those facts.

The main action against the surety company by the state to recover the loss occasioned by the defalcation on Allen’s official bond was commenced in November, 1915. It appears from the record that appellant was employed as special counsel for the state in said matter on or about December 15, 1915, by the attorney general, and the state depository board of the state of Idaho. At the time of said employment the compensation of appellant was not fixed, but it was mutually understood that he should be paid the reasonable value of his services. He began his work under such employment about December 17, 1915, and was engaged therein practically without intermission from said date until July 22, 1916. In the course of his employment he worked under the direction of the state depository board, and pursuant to directions received by him from said board, he was permitted to have the assistance of a former deputy state treasurer, who was then confined in the state penitentiary and was very familiar with the books kept by the state treasurer, Allen, since he had kept said books of account and knew where all the *688false entries had been made. With such assistance the appellant made a complete examination into the affairs of the state treasurer during the whole of said Allen’s term as state treasurer, covering the years of 1911, 1912, 1913 and 1914. Said examinations were made upon the orders of the state depository board for two purposes: First, to ascertain and report whether everything irregular in said office had been discovered and pointed out by certain experts; and, second, to obtain data and information upon which to file an amended complaint in said action. During that time appellant was called upon by said depository board to act in the capacity of special guard of the penitentiary during the entire time that said deputy state treasurer was assisting appellant in said work, and during the entire trial was called upon by said board to act in the capacity of special guard for said ex-treasurer and his said deputy, who were in attendance during the trial. The appellant had entire charge of the preparation of said cause for trial, and the entire charge of said case at said trial. He drew all pleadings of the plaintiff in said cause, including the findings of fact and conclusions of law and decree.

Appellant is a resident of Pocatello, Idaho, and has been a resident there since December 8, 1915, and maintains an office there. Pursuant to his said employment and the wishes of the attorney general and the state depository board, he had been away from his office in Pocatello from December 17, 1915, up to the time of the trial of said cause in July, 1916, with the exception of perhaps two weeks. In the preparation of said cause for trial, certain depositions were taken in Chicago, Illinois, and appellant personally went to Chicago and was present at the taking of said depositions.

While acting as special guard for said Allen and his deputy, who were then confined in the state penitentiary, he incurred certain expenses for meals while- they were in the city and certain expenses for taxicab to take them to and from the penitentiary and to and from the court, such expenses amounting in all to $168.85, no part of which has been paid by the state.

*689The stenographer who reported said case charged over $900 for his services, which has not been paid, and it appears that there are no appropriations available out of which said expenses can be paid, and that unless they can be paid out of the proceeds of said judgment, deficiencies will be created in violation of the provisions of the law (Sess. L. 1915, p. 361). The appellant has no other remedy than the subjecting of said judgment to the payment of his expenses and fees, and if all of the proceeds of said judgment are paid in to the state treasurer, petitioner claims that he will be remediless.

Appellant claims that his services were reasonably worth $12,500, but concedes that he has not the right to fix the value of such services, and states in his complaint in intervention as follows:

“That this affiant concedes that it is not his right to fix the amount of his compensation, and is likewise of the opinion that it is not right and just, under the circumstances, that the State Depository Board should be permitted to fix the same, and this affiant asks nothing more than his day in Court, with an opportunity to have this Honorable Court [The District Court] after full hearing, determine the right of this affiant to compensation out of said judgment, and the fair and reasonable amount of such compensation; and that a portion of the proceeds of said judgment be placed in such shape that should this Honorable Court decide in favor of this affiant the means of enforcing such judgment will not be taken away.”

The appellant thus admits that he cannot fix his attorney’s fee in said matter, but claims that the reasonable value of his services is $12,500, and all that he asks is to have the question submitted to a court of competent jurisdiction in order to have it determine the value of his services.

It appears from the record that he was regularly employed to perform this service; that he performed it with honor to himself and with great profit to the state. The state accepted his services, and ought it not in common fairness and honesty be willing to pay the reasonable value of such services ? But the majority holds that the contract of employment be*690tween the state depository board and the appellant was absolutely void for the reason that no appropriation had been made for the payment of such services. The majority opinion states: “Therefore, if appellant’s contract of employment was made with the attorney general, it must have been understood by appellant that it was in pursuance of an appropriation made by law.” 'Why say, “it must have been understood” that such contract of employment was in pursuance of an appropriation made by law when it was known to all concerned that no such appropriation had been made?

Then, for the majority to argue “that it must have been understood,” etc., is certainly very remarkable when we take into consideration that for the purposes of this appeal the allegations of the complaint in intervention must be taken as true. The majority opinion, after quoting that part of the Laws of 1915, sec. 6, p. 350, declaring any indebtedness created or attempted to be created in excess of the appropriations made shall be absolutely void, states: “It is, therefore, quite evident that the attorney general was without authority to create any indebtedness against the state in excess of the appropriation for his office, and if there was no appropriation out of which the claim of the appellant could be paid, any attempt to create an indebtedness in favor of appellant by the attorney general, and against the state, would be absolutely void.”

It might be inferred from the foregoing quotation from the majority opinion that the attorney general alone made the contract of employment with the appellant, but that idea is iiot borne out by the first paragraph of the complaint in intervention, which is as follows: “That he was employed as special counsel for the plaintiff in the above-entitled cause on or about the 15th day of December, 1915, by J. H. Peterson, Attorney general of the State of Idaho, and by the State Depository Board of the State of Idaho. ’ ’ The record therefore clearly shows that the appellant was employed to perform the services he did perform by the attorney general and the state depository board.

*691As I view it, there was no effort made in this matter to create a claim' against the state. The attorney general, the depository board and the appellant all well knew that there was no attempt in this matter to create a claim against the state. If the officers so understood it, they are clearly guilty of a crime. They knew that if they did undertake to do that, they were violating the provisions of Sess. L. 1915, p. 361, which declares: “No officer, employee or State Board .... shall enter, or attempt or offer to enter into any contract or agreement creating any expense or incurring any liability, moral, legal or otherwise, or at all, in excess of the appropriation made by law for the specific purpose or purposes for which such expenditure is to be made or liability incurred.....Any indebtedness attempted to be created against the state in violation of the provisions of this act, or any indebtedness attempted to be created against the state in excess of the appropriation provided for in any act, shall be void.”

Sec. 3 of said act provides that “Any person or persons violating the provisions of this Act shall be deemed guilty of a misdemeanor, and shall be disqualified from holding any State office,” etc.

The parties to this contract certainly knew of those provisions, and they all knew that the only way that the costs and expense and attorneys’ fees in this action could be legally paid would be out of the judgment recovered against the surety company. It seems to me to be most unreasonable to contend in this matter that the compensation of the appellant in procuring said judgment is a claim against the state that necessarily must be presented to the board of examiners and could not be paid until an appropriation had been made therefor, unless that was the contract between the parties, and a contract was distinctly made that the compensation should not be paid out of the proceeds of the judgment obtained.

That section of the Laws of 1915 above quoted clearly contemplates and refers to matters or purposes for which an appropriation has been made, since it is declared that “No *692officer .... shall enter, or attempt or offer to enter into any contract or agreement creating any expense or incurring any liability, moral, legal or otherwise, or at all, in excess of the appropriation made by law for the specific purpose or purposes for which such expenditure is to be made, or liability incurred.” That section of the statute clearly does not apply to a case like the instant case, for no specific appro-' priation was ever made for the employment of counsel in the instant case.

In a similar case, that of Kirby v. State, 68 Misc. Rep. 626, 125 N. Y. Supp. 742, the court in considering a statute like the one above quoted said, “That it was not the intention of the legislature that the provisions of the finance law quoted should be applicable to such a ease as the one at bar.”

I shall not presume that it was the intention of the depository board to violate that statute and thus become liable to be deprived of their offices. The reasonable presumption is that there being no specific appropriation for the payment of counsel fees and expenses in prosecuting the instant case, the board contemplated that the attorney’s fees and costs must be paid out of the judgment rendered. Under the statute, .as it now stands, the claims against the state must be filed with the state auditor, and before they are presented to the board of examiners for allowance, the state auditor must certify as follows: “I certify that the above account has been audited and found correct; that there is authority of law for its payment; that there is sufficient money in the proper fund for its payment, and that proper receipts for each item charged accompany the account.” If the act of the legislature requiring such a certificate from the auditor before any claim may be presented to the board of examiners is a valid act, it would be impossible to have any claim passed upon by the board except those for the payment of which appropriations had been made.

Is it reasonable to presume that the depository board in the employment of the appellant to prosecute said case intended that he should never receive anything for his services, or that he should not be reimbursed for the necessary *693cash lie paid out in the preparation of the case for trial ? I think not; and I do not believe that it was the intent that he should prosecute said case at his own cost and expense and the state go scot-free from paying for his services and the necessary expense for court stenographers and other legal costs involved in the case.

The depository board employed two attorneys to resist this claim of the appellant in the district court, and the record shows that those two attorneys were paid out of the proceeds of this very judgment that the board now claims is too sacred to be touched in any manner for the payment of legal costs or for the value of the attorney’s services in procuring said judgment. Said attorneys urged upon this court the proposition that the intervenor must present his claim to the board of examiners, when, as a matter of fact, they were paid their attorneys’ fees for urging that proposition out of this very judgment and without having presented their claims to the board of examiners. It has been said that consistency is a jewel.

When a reasonable view of this case is taken, under the law, as it stands, when it is considered that no appropriation was ever made for attorneys’ fees or the cost of the prosecution of this case, for the reason that the legislature did not foresee that it would be necessary to go to such an expense, no reason appears why the state authorities should not protect the interests of the state, even though it required a part of the judgment recovered in favor of the state to pay the costs and expense of such prosecution, and this could be done without creating any claim against the state that would require an appropriation to be made to pay it.

Everyone knows, every lawyer knows, and the state authorities know the persistency with which surety companies contest their liability upon any of the bonds given by them, and the necessity of having a lawyer to prosecute such case who is able to cope with the best lawyers in the land, such as surety companies usually employ, and the danger of loss to the state unless such cases are thoroughly tried, — these and many other things conclusively show the wisdom of the *694depository board in employing counsel who could properly protect the interests of the state. The further fact that the depository board knew that it had no authority to enter into any contract or agreement creating an expense or incurring any liability in excess of the appropriation made by law for any specific purpose, is convincing to me that they did not intend to violate the law but did intend that the attorney’s fee, as well as the other legal costs of this prosecution, should be paid out of the judgment and thus create no claim against the state.

It is true no money can be drawn out of the treasury of the state without an appropriation, but the money represented by this judgment never was in the treasury of the state, and there is the distinction. The majority opinion holds that it is a part of the revenue of the state, when in fact it clearly could not become a part of the revenue of the state in the state treasury, until it had been paid into the state treasury, and it has never been in the state treasury. The state brought this action in the district court against the surety company. It recovered a judgment, and about $14,000 of that judgment is still in the hands of the court and has never been 'in the possession of the state.

Sec. 13, art. 7, of our constitution, is as follows: “No money shall be drawn from the treasury but in pursuance of appropriations made by law.” The money represented by the judgment in question never has been in the treasury, and that section has no application whatever to the payment of attorney’s fees and the legal costs of the prosecution of this case. The district court has full authority to require attorneys ’ fees and all legal costs to be paid out of said judgment before the balance is turned in to the treasury of the state. The money stolen from the state by the ex-treasurér and his deputy was taken from the state treasury, but the money represented by this judgment was never in the state treasury until a portion of it was paid there under the direction of the court. The balance of about $14,000 never has been in the state treasury. It is now held in the hands of the court. It never has become a part of the revenue of the state *695held by the treasury of the state; hence it is clear that said section of the constitution above quoted has no application whatever to said fund now in the hands of the court.

I will now proceed to cite authorities which, as I view it, fully sustain the position above taken.

The doctrine is well established that an attorney’s general or retaining lien is a common-law lien which has its origin in the inherent power of courts over the relation between attorneys and clients. The courts have the power to enforce the performance by the attorney of his duties toward his client, and this power enables the court to protect the rights of an attorney against his client. This lien is one which the courts have long recognized and protected. (See Everett v. Alpha Portland Cement Co., 225 Fed. 931, 141 C. C. A. 55; In re Wilson, 12 Fed. 235.)

The equitable charging lien, which is the one involved in this case, is entirely different from the common-law lien, and it will be noted from the authorities that all characteristics of a charging lien are in their inherent nature equitable. As long ago as 1795, Lord Kenyon, Chief Justice, said that “The principle .... was settled long ago, namely, that the party should not run away with the fruits of the cause without .satisfying the legal demands of his attorney, by whose industry, and in many instances, at whose expense, those fruits were obtained.” (Read v. Dupper, 6 Term Rep. 361, 101 Full Reprint, 595.)

The case of Louisville etc. Co. v. Wilson, 138 U. S. 501, 11 Sup. Ct. 405, 34 L. ed. 1023, quotes with approval the following from the supreme court of West Virginia (Renick v. Ludington, 16 W. Va. 378, 392):

“The lien (even in cases of quantum meruit) is in the nature of an equitable lien (Van Leer v. Van Leer, 3 Cooper’s Tenn. Ch. 23), and is based on the natural equity that the plaintiff ought not to be allowed to appropriate the whole of the judgment in his favor without paying thereout for the services of his attorney in obtaining such judgment.”

If the proceeds of the judgment in this case had been paid over to the state, a different case would be presented, but *696since the fund, on which the lien is claimed, is still in the hands of the court, and never has been in the treasury of the state and never has been a part of the state’s revenue,-it ought not to be permitted to be withdrawn from the court without first paying the appellant a reasonable compensation as attorney’s fee.

The question now presented is whether or not the principles which establish the right of an attorney to a lien upon the proceeds of a judgment in favor of his client for his necessary and proper expenses, and for his fees, apply where the client is the sovereign state.

At the time the legislature was in session in 1915, the only claim which it was known that the state of Idaho had against the former state treasurer and his sureties was a claim of $93,000, being the actual shortage in cash in the treasurer’s office that had been taken from the state treasury, and the legislature, if they considered the matter at all, which it is not at all likely they did, no doubt concluded that it was a very simple matter to establish the state’s case against the surety company, but the state depository board and the executive officers having this matter in charge, after the adjournment of the legislature made certain investigations which led them to believe that the claim of the state against the surety company was greatly in excess of said sum, and considered it highly essential that the state’s interests should be placed in the hands of counsel skilled in mathematics and possessing some knowledge of bookkeeping. They certainly knew that proper preparation was essential tó ultimate success against the surety company, and that the case could not be prepared for trial and the evidence collected without incurring some expense. They also knew that legal counsel could not be obtained without some provision being made for his compensation, since the legislature had made no provision therefor by appropriation. Thus an emergency was placed before the state officials. The rights of the state were here involved, which not having been foreseen by the legislature, was left unprovided for, and it was the bounden duty of the officers of the state to use their best judgment in *697obtaining for the state whatever it was entitled to recover from the surety company, and to do this certain expense must be incurred, including counsel fees. That existing appropriations were insufficient to meet the state’s expenses in obtaining the large benefits which ultimately accrued from this litigation, is clearly evidenced by the fact that necessary expenses were incurred amounting to $1,556.93 in excess of those appropriations, and counsel fees for which no appropriation whatever had been made.

The results of the litigation fully justified the state officers in the course pursued. At the very outset the state officers were confronted with the fact that there was an absence of an appropriation out of which to pay counsel or to pay the expenses of the trial. And is it more than fair to assume that no attorney would have been willing to take such a ease if there were no means by which he could be paid? That no attorney would be willing to pay out of his own money for the necessary expenses of his client unless he relied upon some contract by which he could be reimbursed for his disbursements ?

The state officers and the appellant, it must be presumed, knew that all the indebtedness incurred in excess of existing appropriations was void and that he could have no claim against the state for his fees or expenses, unless there were appropriations available out of which they could be paid. He therefore did not rely upon a claim against the state, within the ordinary meaning or acceptation of that phrase. It is apparent that the officers of the state and the counsel employed realized that the compensation for services and reimbursements for expenses must be made a charge upon the fund recovered or they could not be paid at all.

Had no judgment been recovered in this case, counsel could not have recovered a single dollar, and under the decision of the majority, he is now unable to recover one cent of the money expended by him in procuring witnesses and in preparing said case for trial, to say nothing of his fees.

*698Appellant was employed and actually tried the case, and for his compensation no funds are available other than the proceeds of this judgment.

It will not be presumed that the officers of the state intended to put up a “job” on appellant and procure the great legal services he performed, and then beat him out of his compensation by claiming that their contract of employment was void.

A very similar case was presented to the attorney general of New York where an action was instituted to test the constitutionality of what was known as the “eighty cent gas law, ’ ’ and it was most vital to the interests of the state that the law should be upheld. The attorney general was confronted with the necessity of employing counsel with technical knowledge, the absence of any appropriation out of which his fees could be paid, and the following positive statutory enactment:

“A state officer, employee, board, department or commission shall not contract indebtedness on behalf of the State, nor assume to bind the State, in an amount in excess of money appropriated or otherwise available. ’ ’

The attorney general employed counsel in the ease of Kirby v. State, 68 Misc. Rep. 626, 125 N. Y. Supp. 742, and the court, in the face of such a situation, made use of the following language:

“A legislature, in making appropriations for a current year for the attorney general’s office, could not foresee the exact amount required for all unanticipated emergencies and contingencies and provide specifically for the payment of each of them. It appropriated an amount for the contingent expenses of the office, and left the attorney general clothed with the authority of the executive law to safeguard the interest of the state according to the necessities of each case as it arose. The attorney general, being charged with a positive duty of defending actions brought against the state, could not justify a refusal to perform such duty on the ground that the legislature had made no appropriation to meet an emergency which it could not foresee. If such were the case, the *699state might suffer great loss and the attorney general would be derelict and culpable. Neither could the legislature properly provide for the defense of an action not brought while it was in session, requiring the employment of special and technical counsel.....The claimant, under such agreement, rendered valuable services to the state, protected its interest, and the litigation ultimately resulted in the establishment of the validity of the law. The laborer is worthy of his hire; and the state, having accepted and received the benefit of the claimant’s skill and services, should in fairness and equity pay their just worth.”

The opinion in the above-quoted case is very instructive and peculiarly applicable to the facts of this case. The depository board accepted for the state the benefit of appellant’s skill and services in the trial of the instant case, and it should in all fairness and equity pay the just worth or value of such services.

It appears from the record that the state officers who have charge of this matter have offered to pay appellant an attorney’s fee of $750, which is $157 less than the amount charged by the special court reporter in the ease. It is alleged in the complaint in intervention, and so far as this proceeding is concerned is admitted as true, that said alleged offer to pay appellant $750 was not made by the depository board upon an impartial effort to set a fair and reasonable value upon appellant’s services, but it was the result of wilful failure to exercise an honest judgment, and was made for the express purpose of depriving appellant of a fair and reasonable compensation for the services rendered, thus presenting an issue of law and fact to be determined by the court.

As significant of the views taken by the depository board in other similar matters, the failure of the Bank of Nampa might be cited, since that matter has become a part of the history of the state. An unusual situation arose in that matter. The personal sureties on the depository bond of the bank turned over to the state a number of mortgages, real and chattel, and considerable personal property. To realize the greatest returns from these securities, it was necessary to *700take possession of and administer the property, which consisted of livestock, crops, etc. No state official could perform those duties. No office was created and no appropriation existed designed by law to meet such a situation. Must the state lose the benefit of these securities, or were the executive powers of the sovereignty sufficient to meet those conditions ? The attorney general very properly ruled that the state depository board could employ such labor and assistance as were necessary and could pay all necessary compensation and expenses incurred in the administration and liquidation of these securities out of the funds thus created. The ruling of the attorney general was evidently correct, and is supported by ample authority. The soundness of the attorney general’s opinion in that matter is based upon the evident economic principle that the sole lawful interest of the state in that property was only the net profits after all proper expenses of administration and liquidation had been paid out of the property itself. In the absence of statutory command as to the methods to be employed, the executive branch of the government not only may, but in the discharge of its duty must, employ such practical business methods as will produce the best results for the state.

The view taken of that matter by the executive department was the only reasonable view to be taken, but suppose that department had concluded that there was no appropriation to pay the expense of administering on the state of the defunct bank and thus occasion great loss to the state, the officers would certainly be held to be derelict in their duty. And so in the case at bar; if they neglected to perform their duty and prosecute this case with reasonable diligence, they would have violated their official duty.

I will now proceed to investigate the legal principles involved in applying to the state the general rule as to attorney’s equitable liens.

Can a lien exist as a matter of right upon the property of the sovereign, and if so, under what circumstances is the remedy available for its enforcement?

*701In the case of Briggs v. A Light Boat, 89 Mass. (7 Allen) 287, and 93 Mass. (11 Allen) 157, it was held that a lien did exist against the United States under the facts of that particular ease, and that a remedy for its enforcement was available. Three light boats had been built for the United States by a contractor. Upon completion they were paid for, and the United States had actual possession of them. Briggs and another claimed and perfected a statutory materialman’s lien upon the boats for lumber furnished to the contractor to be' used in their construction. They then petitioned for the enforcement of the lien and the trial court held that no lien could exist against public property in the possession of the United States and used by them as an instrumentality of government. From that judgment the petitioners appealed and obtained a reversal. The supreme court held (7 Allen, 287) that the lien had attached under the statute while the boats were in the possession of the contractor, and that the United States was a purchaser from him, taking the property subject to the lien. The court said:

“The truth is, that when the government becomes the purchaser of property, it tabes the title subject to the same rules as those which regulate the transfer of it to private persons. If it is subject to liens or encumbrances, it passes cum onere. So it is held in eases of ordinary maritime liens. If the government becomes the owner of the vessel by purchase, forfeiture or otherwise, it takes a title subject to the same liens for salvage, wages, bottomry and other claims as would attach to it if sold to private persons.”

The matter was then referred to the assessor and auditor, upon whose reports judgment was entered for the amount found due the petitioners. The United States then appealed, and in the decision (11 Allen, 157) the court said:

“The question which has now been argued is not of the petitioners’ title, but of the mode of asserting it; not of right, but of remedy. The United States do not now deny that they took their title subject to the lien of petitioners. That point was determined by this court, after full consideration, upon the former argument of one of these cases.....
*702“At that argument the attention of counsel was chiefly, and of the court exclusively, directed to the question of title; it was assumed by the court that the lien carried with it the right to maintain this process; the effect of the possession of the United States upon the possibility of enforcing the lien in this form of proceeding, although involved in the ruling which the superior court had made at the trial, was not considered. ’ ’

It is there held that it is an elementary principle of English and American constitutional law that no direct suit can be brought against the sovereign without its consent, and the court among other things said:

“Nor is this case like one in which the government has, by bringing a civil action to enforce its own rights to property in the possession of an individual, submitted itself to the jurisdiction of the court, and, being itself the actor, needs the assistance of the court to recover its property.
“The United States have never, by general statute or special order, submitted themselves or their rights in this matter to the jurisdiction of the state courts. But, on the contrary, as soon as notified of these petitions, and before answering on the merits, they filed a special appearance, and a plea distinctly setting forth the grounds on which they claimed exemption from the state process.”

The exemption of the state from suit in its own courts was held to apply also to the United States in the state courts, and after referring to the fact that the property subjected to this lien had been delivered to the United States by the contractor and the price paid by them to him, the court said: ‘ ‘ The petitioners suffered the title to pass, and the possession to be delivered, to the United States, before they took one step in the state courts to establish their lien.” (11 Allen, 164.)

The distinction between that case and one like the case at bar, where the proceedings were instituted before the property came into the possession of the sovereign, is then stated as follows:

*703“If they had filed their petitions and attached the vessels before these came into the possession of the United States, they might well have contended that the courts of the commonwealth had acquired a jurisdiction of the cases, which could not be divested until the object of the suits was accomplished.”

In the case of United States v. Wilder, 3 Sumn. 308, 28 Fed. Cas. No. 16,694, a lien asserted against goods of the United States was upheld and enforced. Mr. Justice Story delivered the opinion in that case, and it was argued on behalf of the government that it is a prerogative of sovereignty that no lien can exist against the sovereign. The court said:

“The argument rests the objection upon the- ground of public inconvenience, if it should be held that whenever a lien exists against a private person, it is to be held that the like lien attaches against the United States.”

It was pointed out in that case that the law enforces a contribution in such a case upon the ground of justice and equity. The court said: “And it gives a lien in rem for the contribution, not as the only remedy, but as, in many eases, the best remedy, and in some cases the only remedy..... It is said that, in cases where the United States are a party, no remedy by suit lies against them for the contribution; and hence the conclusion is deduced that there can be no remedy in rem. Now, I confess that I should reason altogether from the same premises to the opposite conclusion. .... I cannot therefore but think, that the circumstance that the United States can in no other way be compelled to make a just contribution of its share in the general average, so far from constituting a ground to displace the lien, created by the maritime law, does in fact furnish a strong reason for enforcing it. For I know no reason why this court should create by its own mere authority an exemption, nowhere found recognized in the maritime law, and standing upon no very clear or urgent ground of public policy..... The argument, therefore, addressed to this court, on behalf of the government, ab inconvenienti, does not seem to have any very solid foundation. On the other hand, the argument *704ab inconvenienti on the other side is very cogent and persuasive ; for it is beyond doubt that if there be no lien, there is no remedy to enforce an incontrovertible right.”

Mr. Justice Story then quotes from Yattel as follows:

“If there exists any difficulty on this account, it is equally conformable to prudence, to the delicacy of sentiment, which ought to be particularly conspicuous in a sovereign, and to the love of justice, to cause them to be decided by the tribunals of the state. This is the practice of the states that are civilized and governed by laws.”

This state ought to be governed by laws, rather than by the mere caprice and whim of any board.

In The Siren case, 7 Wall. (74 U. S.) 152, 19 L. ed. 129, the steamer “Siren” was captured by the U. S. navy in February, 1865. A prize crew was placed in charge and she was ordered to Boston for adjudication. On her way she stopped at New York and proceeding thence ran into and sunk the sloop “Harper.” On her arrival in Boston, a libel in prize was filed against her by the United States, and she was condemned and sold. The proceeds of the sale were deposited with the assistant treasurer of the United States, subject to the order of the court. In rendering the decision of the court Mr. Justice Field cites several authorities, and after reviewing the Light Boats cases, says:

“A claim or lien existing and continuing will be enforced by the courts whenever the property upon which it lies becomes subject to their jurisdiction and control. Then the rights and interests of all parties will be respected and maintained.....So, if the property belonging to the government, upon which claims exist, is sold upon judicial decree, and the proceeds are paid in to the registry, the court would have jurisdiction to direct the claims to be satisfied out of them.”

Upon these principles the case was remanded, “with directions to assess the damages and pay them out of the proceeds of the vessel before distribution to the captors.”

The question as to whether a lien can be enforced in such cases was well considered by the courts in the Light Boats *705cases, and in those cases, after a full review of authorities, it was held that such a lien cannot be enforced where, in order to do this successfully, it is necessary to bring suit against the United States. It is also held that no suit in rem, can be maintained against the property of the United States when it would be necessary to take such property out of the possession of the government by writ or process of the courts. It is a well-established doctrine that proceedings in rem to enforce a lien against the property of the United States are only forbidden in cases where, in order to sustain the proceeding, the possession of the United States must be invaded under processes of the court. The doctrine is well established that when the government itself seeks its rights at the hands of the court, equity requires that the rights of other parties interested in the subject matter shall be protected.

In Cunningham v. Macon etc. R. R. Co., 109 U. S. 446, 3 Sup. Ct. 292, 609, 27 L. ed. 992, it was said:

“It has been held in a class of cases where property of the state, or property in which the state has an interest, comes before the court and under its control, in the regular course of judicial administration, without being forcibly taken from the possession of the government, the court will proceed to discharge its duty in regard to that property. And the state, if it chooses to come in as plaintiff, as in prize cases, or to intervene in other cases when she may have a lien or claim on the property, will be permitted to do so, but subject to the rule that her rights will receive the same consideration as any other party interested in the matter, and be subjected in a like manner to the judgment of the court. Of this class are the cases of The Siren, 7 Wall. (74 U. S.) 152, 157, 19 L. ed. 129, 132; The Davis, 10 Wall. (77 U. S.) 15, 20, 19 L. ed. 875, 877, .... and others.”

In the United States v. Wickersham, 10 Fed. 505, it was held that it may be assumed that the United States, whenever it comes into court and brings its suit against a citizen, consents to submit to and carry out whatever decrees may be lawfully made against it in the course of the legal procedure.

The principle upon which those cases rest applies to an *706attorney’s lien. And it was so held in the ease of State of Texas v. White (In re Paschal), 10 Wall. (77 U. S.) 483, 19 L. ed. 992. In that case Mr. Paschal had been retained as special counsel for the state of Texas and had conducted to a successful conclusion a great deal of litigation in regard to certain indemnity bonds.

Out of moneys collected by Paschal, upon judgments which he had obtained for the state, he retained $47,325 to cover his counsel fees and disbursements. The state appeared by other counsel and moved the court to strike Paschal’s name from the docket as its attorney, and to order him to deposit the $47,325 in court for its benefit. The defense of Paschal was that he had an attorney’s lien upon this money, and that he held it under his lien for compensation and expenses. The argument of the state was that the United States supreme court was without jurisdiction to pass upon a claim set up by a citizen against the state of Texas; that it is a presumption of law that a sovereign power will do justice, and that those who contract with the state must rely on the discretion and good faith of the legislative body. The court in that case briefly reviews the authorities dealing with attorneys’ liens as between-private parties, which it says are ‘ ‘ decidedly in favor of his lien, ’ ’ and then says:

“As the original retainer was made in Texas, we are inclined to the opinion that the rights of the parties are to be regulated by the laws of that state. But if this be not the case, this court would be guided by what it deems to be the prevailing rule of this country; and, according to this rule, we are of the opinion that the respondent has a lien on the fund in his hands for the disbursements and professional fees in relation to the indemnity bonds.”

Here we have a direct decision that an attorney’s lien was a valid and subsisting right even against the state. This case is practically on all-fours with the instant case, since the funds are still in the hands of the court who rendered the judgment in favor of the state, and have not been turned over to the state. The court has jurisdiction of such funds *707to pay all proper costs and expenses incurred in such, litigation.

In the case of State v. Ampt, 6 Ohio Dec. 699, 7 Am. Law Rec. 469, 5 Cent. Dig., “Attorney and Client,” Column 1974, the court held that “the attorney has a lien on the money of the state which comes into his hands as the fruit of his services, for his compensation and necessary expenses, the same as though his client were an individual, and he can apply the same in payment of such compensation and expenses.”

Upon the principles laid down in the foregoing cases it is clear that a sovereign, as well as an individual, can obtain the services of an attorney under such circumstances as will give to the attorney the right to assert a lien for his disbursements and fees against funds in the hands of the court obtained upon a judgment in favor of the state.

The above cases, or the most of them, were discussed and applied by the supreme court of Minnesota in a case wherein the conclusion reached is precisely that contended for by the appellant. They were held to establish the right of an attorney as against his client, the sovereign, to assert and enforce a lien for his fees and expenditures under a contract of employment similar to that in the case at bar. (Board of Commrs. v. Clapp, 83 Minn. 512, 86 N. W. 775.) In that case it was held that the only part of the recovery which could be legally termed “public funds” was the amount remaining after the expenses of litigation were paid. So in the case at bar, the amount of this judgment belonging to the state as a part of its public funds would only be what remained after paying the entire cost of the litigation, including attorneys’ fees. In the Clapp case the court said:

“There is no sound distinction to be drawn between money expended in such proceedings in the way of disbursements and in the way of attorneys’ fees.....It must be noted that the doctrine is founded upon the fact that such fund is created by the exertions of the attorney, and grows out of his contract relation with reference thereto, and has application only to such a condition. The statute (section 687, supra) does not prohibit such application as was made in this in*708stance by respondents. If they had not retained their fees, but had paid over to the county the entire amount collected, then the method of collecting their claim against the county would be regulated by the section cited.”

This case is directly in point, as I view it.

In the case of Union Pacific R. Co. v. United States, 2 Wyo. 170, goods belonging to the United States were shipped under the usual bill of lading contract over the lines of the railroad company from Omaha to Rawlins, Wyoming. The goods were stored and held by the railroad company under claim of a common carrier’s lien for freight charges. Without paying the charges, the federal government brought this action in replevin to recover the goods. The court held that had the ownership of this property been in a private citizen, “the company would have had the usual common carrier’s lien upon it for these charges. ’ ’ The only question presented was whether the same lien was good upon the property of the United States. The court first considered the ease upon the theory that government property is exempt from a common carrier’s lien, and that the government can retain or waive this exemption. As to that theory it was held that in that particular case, if the exemption did exist, it had been waived. The court, however, goes directly to the real merits of the situation in a very able investigation as to whether such exemptions do exist, and said:

“But the exemption does not exist. The exemption would incalculably cripple the public service, the liability would equally promote it; no consideration of justice or policy favors, every consideration of justice and policy forbids, the exemption; the liability enlarges, the exemption narrows, sovereign action; the liability, not the exemption, is a privilege, and therefore an attribute of sovereignty. The learned counsel for the defense in error has submitted to us no adjudication to the contrary, which we should follow as a guide, or respect as advisory; and we are convinced that such adjudication does not exist. On the other hand, all the analogies of the commercial and maritime law, and the federal decisions under that law, are directly the other way. In 9 Wheat. (22 U. S.) *709409, 6 L. ed. 122, St. Jago de Cuba, it was decided in 1824 that seamen and materialmen, who served and supplied the ship after her seizure as a slaver, had respectively liens upon her against the United States for wages and supplies, and that she stood pledged to them accordingly.”

This is a very instructive case, and we quote further from it:

“The counsel for the government claims that the district court could render judgment for but not against it; we have listened with attention and respect to his argument, advanced in favor of this proposition; and candor requires us to admit that he has presented it as well as it could be presented; but candor also compels us to say that the proposition is throughout and throughout a fallacy. To what consequences does the proposition lead? The United States may invoke the jurisdiction of the court; it may accept that which does, and discard that which does not, accord with its supposed interests ; it may dictate the exercise of the administration of the law; it is not bound by the rules of equal justice; it is a privileged suitor; the district court having rendered a judgment against it, this court must reverse; having rendered one for it, this court can only affirm; it can sit in appeal, must mechanically obey, cannot revise; nay, further, — having brought the suit, and effected a caption, its aim is accomplished; it needs no judgment, for but one judgment can be rendered in the case, and that in its favor; if, having made the caption, it neglects to prosecute the writ, á motion to dismiss for want of prosecution will be unavailing; still further, the demand in the writ for judgment is meaningless, the undertaking of the sureties without force, the writ is superfluous ; and the suit is farcical, because it is intended to effectuate under the forms of law what can as well be accomplished by the violent hand under an irresponsible will. Does not the proposition result in a pure reduetio ad dbsurdumt

It was there held that a suit cannot be instituted against the property of the government, if the bringing or the institution of the suit requires the issuance of process against the government, or the disturbance of its possession of its property; *710that the exemption is personal, and the will to retain is a will to waive it in the exercise of sovereign interests. When it does waive the privilege invoking the jurisdiction of the court it submits to that jurisdiction, presenting a claim for adjudication. It asks that the claim be adjudicated on its merits, and allowed or rejected accordingly. In closing the court said: “Were we to send the case to the district court, we should direct it to embrace in its judgment the attorney fees, fixed at a reasonable amount upon the principle above stated.”

The railroad company, however, waived the fees and judgment was entered in the supreme court for the transportation charges and costs. (See, also, United States v. Boyd, 79 Fed. 858.)

It must be borne in mind that the fund sought to be charged with the attorney’s' fee and expenses in this case has never been in the possession of the state, and, in my view of the matter, under the facts and law of this case, there is ample authority for holding that the appellant is entitled to the payment of his legal expenses and attorney’s fees out of the fund now in the hands of the court.

It has been contended by counsel for the state that this is a claim against the state, and that the constitution and statutes provide an exclusive procedure for obtaining payment. There is nothing in this contention. If the appellant were seeking to have a claim presented to the state board of examiners and to have it paid out of the treasury, then there might be something in that contention; but such is not the case. Appellant is seeking to subject to the payment of his fees a fund that has never been in the state treasury, and the state’s possession of the fund could not be disturbed by such payment.

In this ease no process has ever been issued against the stats of Idaho or any of its officers, no possession of the state has ever been or can be disturbed. No personal judgment can be given against the state upon which execution can be levied upon any state property. This is a proceeding in rem against the property not in possession of the state, but in the hands of the court, and any decree that may be rendered will be *711satisfied out of the property now in the hands of the court. The state was not brought into court by any process. It came in voluntarily, by itself, as plaintiff seeking the assistance of the court for the recovery of a judgment against the surety company. By so doing it submitted to the jurisdiction of the court, and cannot in one breath ask the court for its assistance in recovering a judgment against a surety company, and in the next breath deny to the court the right to protect its officers in that proceeding and to administer justice fairly and honestly in that case.

The state has accepted the services of appellant. The record shows that he served the state faithfully and well, and no sufficient reason is shown why the state should attempt to evade its liability to pay for his services. Can any good reason be offered why the state in this matter should be unaffected by considerations of morality and right which ordinarily bind the conscience? The observance of honesty and fair dealing on the part of the state becomes of higher importance — of higher importance to the state — than the money involved in this case. It was said in Woodruff v. Trapnall, 10 How. (51 U. S.) 190, 13 L. ed. 383, that “we naturally look to the action of a sovereign state, to be characterized by a more scrupulous regard to justice, and a higher morality, than belong to the ordinary transactions of individuals.” Is there any justice or morality in the state’s attempting to avoid the payment of just compensation for services that it contracted for and received, and which services were of great value to the state ? It seems to me that under the pleadings in this case the honor and good faith of the state is put to the test, and no hair-splitting statutory constructions should be made by the state to avoid the payment of an obligation where it has received the services.

Sec. 10, art. 5, and sec. 18, art. 4, of our constitution, provide a process by which a claimant seeking to enforce a claim against the state may overcome two obstacles which in the absence of those provisions would make it impossible for him to obtain any remedy whatever. The first is to divert the possession of its personal property or money; the second, to *712bring the sovereign within the jurisdiction of the court. If neither of these obstacles are presented to a claimant seeking to enforce payment against the state, how can it be reasonably said that he must nevertheless pursue methods or a procedure that has no application whatever? The board of examiners may hear claims against the state in order that they may be paid out of the money in the possession of the state, or in its treasury. They cannot order such claims paid out of money that never was in the possession of the state treasury, and unless the claim presented to such board is to be paid out of the treasury, the board has no jurisdiction whatever, either under the constitution or the law, to pass upon it. The board has jurisdiction of the money in the possession of the state in so far as the payment of claims against the state out of such money is concerned, but it has no jurisdiction whatever to pass upon any claim which has to be paid out of funds which are within the exclusive 'jurisdiction and control of the court and never has been in the state treasury.

The main question before the court is as to whether the attorney’s fees and costs of the litigation in this ease may be paid out of the judgment obtained, and it is clear to me that they ought to be so paid and that the case should be remanded to the district court to determine a reasonable fee to be paid to the appellant.