Where the remarks in the opinion are not necessary to the
decision, which was placed mainly on other grounds, and are
contrary to all earlier decision, this Court is at least warranted
in treating the question as at large.
Although it might be its duty to do so, it would be a strong
Page 232 U. S. 118
this Court to decide that there was nothing to warrant a
conclusion, whether of law or of fact, sanctioned by the highest
court of a territory that has since become a state upon a matter no
longer subject to review here. Phoenix Ry. v. Landis,
231 U. S. 578
An informal business transaction should be construed as adopting
whatever form, consistent with the facts, as is most fitted to
reach the result seemingly desired. Sexton v. Kessler,
225 U. S. 90
It is an ancient principle even of the common law that words of
covenant may be construed as a grant when they concern a present
In equity, a contract to convey a specific object even before it
is acquired will make a contractor a trustee as soon as he gets
An obligation to pay, but definitely limited to payment out of
the fund, creates a lien. There should be but one rule in this
respect, and that is the one suggested by plain good sense.
Where parties have a lien on a fund, they can follow it, as soon
as identified, into the hands of others than the person originally
receiving it. On this point, this Court follows the territorial
In this case, held
that parties promised for a
consideration a definite portion of a contingent fee if earned had
a lien thereon when received by the promisor that they could follow
13 Ariz. 338 affirmed.
The facts, which involve the validity of a judgment obtained by
the defendants in error against the plaintiff in error in the
courts of the Territory of Arizona, are stated in the opinion.
MR. JUSTICE HOLMES delivered the opinion of the Court.
The proceeding out of which this case arises was brought by the
appellant, Mrs. Barnes, for an account of the property
Page 232 U. S. 119
received in settlement of certain mining suits and for a
recovery of one-fourth of the same. The defendants, Shattuck,
Hanninger, and Marks, were parties to these suits, and employed as
their attorneys the firm of Barnes & Martin and one O'Connell
under an agreement that the lawyers should have as their
compensation one fourth of all that was received by the said
defendants. It may be assumed that Mrs. Barnes represented this
claim. While the present suit was pending, another firm, whose
claim now is represented by the appellees, intervened and claimed
one-third of this contingent fee of one-fourth. At the trial, it
appeared that the original defendants had paid to O'Connell the
amount due; $18,750. Pending the suit, O'Connell paid over $10,625
of this to Mrs. Barnes, retaining $6,250 and paying Martin, the
junior member of the firm of Barnes & Martin, $1,875. The court
entered no decree against the original defendants, but did decree
that Mrs. Barnes was liable to the appellees for $6,250, being
one-third of the contingent fee. She appealed to the supreme court
of the territory, but it affirmed the judgment below. 13 Ariz. 338.
The other two appellants in this Court are the sureties on her
The main question is whether the facts set forth in the findings
certified justify the conclusion of the courts below. The whole
matter rests on conversations, in one of which Barnes said to
Street and Alexander:
"If you will attend to this case, I will give you one-third of
the fee which I have coming to me on a contingent fee from
Shattuck, Hanninger, and Marks. Mr. O'Connell, who is associated
with me, is entitled to the other third."
In others also he explained what his firm was to have, and told
Street and Alexander that they should get one-third of that if they
would do certain work that he had not time to attend to. Street and
Alexander did the work required, it does not matter whether it was
more or less; there
Page 232 U. S. 120
was some attempt to raise a question about the fact, but we
regard it as beyond dispute. The only serious argument is that,
whatever they did, their compensation depended upon a personal
promise that gave them no specific claim against the fund. For this
proposition, reliance is placed upon Trist v.
21 Wall. 441. In that case, Child had an
agreement with Trist that Child should take charge of a claim of
Trist before Congress, and should receive twenty-five percent of
whatever sum Congress might allow. The suit alleged a lien on the
sum allowed, and prayed that Trist might be enjoined from
withdrawing the money from the Treasury, and might be decreed to
pay the amount due. The bill was dismissed on the ground that the
contract was illegal, but it was added that Child had no lien,
because it was forbidden by act of Congress, and also, it was said,
because there was no sufficient appropriation of the fund, so that
the only remedy, if there had been one, would have been at law.
1 Wall. 16; Christmas
14 Wall. 69. This decision, so far as
it concerns us here, seems to have overlooked Wylie v.
15 How. 415, which decided that a contract
for a contingent fee out of a fund awarded constituted a lien upon
the fund. The remarks in Trist v. Child
were not necessary
to the decision, which was placed mainly on other grounds, so that
at least we are warranted in treating the question as at large.
It would be a strong thing to decide that there was nothing to
warrant the conclusion, whether of law or fact, sanctioned by the
highest court of a territory that since has become a state, upon a
matter no longer subject to review by us. See Phoenix Ry. Co.
v. Landis, 231 U. S. 578
it might be our duty, and we pass that consideration by. We start,
however, with the principle that an informal business transaction
should be construed as adopting whatever form consistent with the
facts is most fitted to reach the result seemingly desired.
Page 232 U. S. 121
Kessler & Co. 225 U. S. 90
225 U. S. 96
Obviously the only thing intended or desired was to give the
appellees a claim to one-third of the fund received by Barnes if
and when he should receive it. It is true that there was in a sense
as to which present words of transfer might have
been used. There was a right vested in Barnes, unless discharged,
to try to earn a fee contingent upon success. But, in a speculation
of this sort, the parties naturally turned their eyes toward the
future and aimed at the fruits when they should be gained. They
therefore used words of contract, rather than of conveyance; but
the important thing is not whether they used the present or the
future tense, but the scope of the contract. In this case, it aimed
only at the fund. Barnes gave no general promise of reward; he did
not even given a promise qualified and measured by success to pay
anything out of his own property, referring to the fund simply as
the means that would enable him to do it. See National City
Bank v. Hotchkiss, 231 U. S. 50
promised only that if, when, and as soon as he should receive an
identified fund, one-third of it should go to the appellees. But he
promised that. At the latest, the moment the fund was received, the
contract attached to it as if made at that moment. It is an ancient
principle even of the common law that words of covenant may be
construed as a grant when they concern a present right.
Sharington v. Strotton,
Plowden 298, 308; Hogan v.
143 Mass. 538; Ladd v. Boston,
151 Mass. 585,
588. And it is one of the familiar rules of equity that a contract
to convey a specific object even before it is acquired will make
the contractor a trustee as soon as he gets a title to the thing.
Mornington v. Keane,
2 DeG. & J. 292, 313; Holroyd
10 H.L.C. 191, 211.
The obligation of Barnes was as definitely limited to payment
out of the fund as if the limitation had been stated in words, and
therefore creates a lien upon the
Page 232 U. S. 122
principle not only of Wylie v. Coxe, supra,
Ingersoll v. Coram, 211 U. S. 335
211 U. S.
-368, which cites it and later cases. See
further, to the same point, Burn v. Carvalho,
4 My. &
Cr. 690, 702-703; Rodick v. Gandell,
1 DeG. M. & G.
763, 777-778; Harwood v. La Grange,
137 N.Y. 538, 540. It
is suggested that there is an American doctrine opposed to that
which is established in England. We know of no such opposition.
There is or ought to be but one rule -- that suggested by plain
After making their contracts, the parties seem to have construed
them as we have done. Barnes wrote to his partner, when they had
succeeded in the cases concerned, in terms showing that he regarded
their own claim as specific, "to have one-fourth of the ground,"
the principle on which this suit was brought, and when a settlement
was to be made, he went to Phoenix and notified Street and
Alexander. For the same reason, the latter firm filed no claim
against the estate of Barnes, thinking that it owed them nothing,
but that they had one-third of the contingent fee. It is not
necessary to consider whether the lien attached to what we have
called the res,
before the fund was received, as a
covenant to set apart rents and profits creates a lien upon the
land. Legard v. Hodges,
1 Ves.Jr. 477. It is enough that
it attached not later than that moment. We have considered the case
upon the merits. The argument upon them for the appellants is mixed
with others as to the sufficiency of the complaint in intervention.
Upon the point of pleading, we see no occasion to go behind the
decision below. Phoenix Ry. Co. v. Landis, 231 U.
Another matter argued is that the appellees should not have been
allowed to prove the payment made after the suit was begun. But the
appellees properly were allowed to intervene in a suit to recover
the fund. Rev.Stat.Arizona 1901, § 1278; London, Paris &
American Bank v. Abrams,
6 Ariz. 87; Louisville, Evansville &
Page 232 U. S. 123
Louis R. Co. v. Wilson, 138 U.
. Even if their lien was only inchoate when the
suit was begun (which we do not intimate), they had a right to
protect their interest, and, of course, were not deprived of it by
the plaintiff's reaching the result that they also desired. Having
a lien upon the fund, as soon as it was identified, they could
follow it into the hands of the appellant Barnes. On this point
also, we shall go into no question of pleading or procedure, but
shall accept the decision of the territorial supreme court.
The only remaining objection that seems to us to need a word of
answer is that, as Mrs. Barnes only received $10,625, she should
not have been charged with the whole third, $6,250. As the lien of
the appellees attached to the whole two-thirds of the quarter
remaining to Barnes and Martin after taking out O'Connell's third,
we do not see on what ground she could complain, if the objection
is open. It seems probable that it is only an afterthought of
counsel, and that the sum retained by Martin was what would come to
him after deducting the share of Street and Alexander's fee that
properly fell upon him as between him and his former partner's