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Richfield Oil Corp. v. LaPrade

Supreme Court of Arizona

September 30, 1940

RICHFIELD OIL CORPORATION, a Corporation, Petitioner,
ARTHUR T. LaPRADE, as Judge of the Superior Court of the State of Arizona in and for the County of Maricopa, Respondent

Original proceeding in Mandamus. Alternative writ quashed.

Messrs. Woolf & Shute and Mr. W. T. Elsing, for Petitioner.

Messrs. Lewkowitz & Wein, for Respondent.


Page 1116

[56 Ariz. 101] LOCKWOOD, J.

James O. Jackson, hereinafter called plaintiff, filed a suit in the superior court of Maricopa county against Richfield Oil Corporation, [56 Ariz. 102] hereinafter called defendant. On May 15, 1940, defendant moved for an order requiring security for costs to be given by plaintiff. On May 29th plaintiff filed an affidavit of his inability to give such security, and on May 31st established his contention to the satisfaction of the presiding judge. It appeared, however, that plaintiff had employed Herman Lewkowitz and Raymond R. Wein as his attorneys in the action, and that they had accepted such employment upon a fee contingent upon the winning of the suit and payable only out of any judgment that might be obtained therein, and that they had advanced a small amount for plaintiff's court costs, which he was to repay them as he could earn it. Upon this showing, defendant moved that the attorneys be required to give security for the costs or show their inability to do so, and that upon their failure to do one or the other the suit should be dismissed. The presiding judge denied the motion, and defendant has brought the matter before us on a petition for a writ of mandamus.

The precise legal question raised by the proceeding is whether when an attorney takes a case for a fee payable only out of the proceeds of any judgment or settlement which he may obtain therein and his client is unable to give security for the costs, the former is obliged to give such security to make proof of his inability to do so, in the same manner as his client, under penalty of having the action dismissed.

The question is one of first impression in this court, and the practice has not been uniform in the superior courts of the state. The right to require security for costs has generally been regarded as wholly statutory, except perhaps where the plaintiff was a non-resident. Ex parte Bennett,

Page 1117

231 Ala. 223, 164 So. 298; State ex rel. Macek v. Busher, 46 Ohio App. 148, 187 N.E. 874; Griffin v. Allendale Bank, 170 S.C. 212, 170 S.E. 149; Turmelle v. Jefferson, 166 Misc. 70, [56 Ariz. 103] 2 N.Y.S. (2d) 30. Most of the states, including Arizona, have adopted statutes on this subject, and it is held that such a statute is to be regarded as remedial and liberally construed in order to effect its object. Miami Copper Co. v. Strohl, 14 Ariz. 410, 130 P. 605; Castle v. Delta Land & Water Co., 58 Utah 137, 197 P. 584. Our statute, so far as material, reads as follows:

"3790. When may be required. At any time before trial of an issue of law or fact, on motion of the defendant, supported by affidavit showing that the plaintiff is a non-resident of the state, or that the plaintiff is not the owner of property within the state, out of which the costs could be made by execution sale, the court shall order the plaintiff to give bound for the security for the costs of the action.... If the plaintiff fail so to do within the time fixed by the court the action shall stand dismissed."

"3791. Where plaintiff unable to give security. If the plaintiff is a Bona fide resident of the state and shall, within five days after the order, make strict proof of his inability to give the security, then the order to give security shall be vacated...."

The issue involved herein has arisen in a number of other jurisdictions and the decisions thereon are not in harmony. A large majority of the federal courts, and some state courts, hold that an attorney taking a case on a contingent fee falls within the terms of such statutes. The reasoning of the courts following this rule is set forth in the case of United States ex rel. Randolph v. Ross, (6 Cir.) 298 F. 64, 66, 33 A.L.R. 728, as follows:

"It would be unfortunate that a deserving plaintiff be denied opportunity to try his case because of his attorney's refusal to furnish security or make excusatory affidavit. But we are disposed to think that in practical effect a much greater evil would result from opening the door to litigation which may or may not prove meritorious, by holding the attorney under a contingent [56 ...

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