Takehara v. H. C. Muddox Co.

Opinion

PETERS, J.

The parties to this appeal are all judgment creditors of H. C. Muddox Company. Muddox recovered a judgment for $24,000 against certain parties not involved in this appeal on July 16, 1968. Prior thereto, on October 20, 1965, Mission Clay Products, respondent herein, obtained an order granting it a lien on the Muddox cause of action and any subsequent judgment pursuant to section 688.1 of the Code of Civil Procedure. Between March and June of 1968, the three appellants herein obtained

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orders granting liens on the Muddox cause of action. The trial court ruled that the Mission Clay Products lien would take priority over the later liens, and since that lien when added to the attorney’s fees allowed exceeded the amount of the Muddox judgment, the other lien claimants would receive nothing. They have appealed the order of the trial court granting priority to the lien of Mission Clay Products.

The question is whether the judgment creditor who first obtains an order granting him a lien under section 688.1 has priority as against judgment creditors who subsequently obtain such orders or whether all of the judgment creditors share in the debtor’s recovery pro rata. We conclude that the judgment creditors have priority based on the date of the orders granting them liens.

Section 688 of the Code of Civil Procedure, which specifies the property subject to execution, was amended in 1941 by the insertion of the proviso, “no cause of action nor judgment as such, shall be subject to levy or sale on execution.”

Section 688.1 was added in the same year and now reads in part: “[Ujpon motion of a judgment creditor of any party in an action or special proceeding made in the court in which the action or proceeding is pending upon written notice to all parties, the court or judge thereof may, in his discretion, order that the judgment creditor be granted a lien upon the cause of action, and upon any judgment subsequently procured in such action or proceeding, and, during the pendency of such action, may permit such judgment creditor to intervene therein. Such judgment creditor shall have a lien to the extent of his judgment upon all moneys recovered by his judgment debtor in such action or proceeding and no compromise, settlement or satisfaction shall be entered into by or on behalf of such debtor without the consent of such judgment creditor, unless his lien is sooner satisfied or discharged. The clerk or judge of the court shall endorse upon the judgment recovered in such action or proceeding a statement of the existence of the lien, the date of the entry of the order creating the lien, and the place where entered, and any abstract issued upon the judgment shall contain, in addition to the matters set forth in Section 674 of the Code of Civil Procedure, a statement of the lien in favor of such judgment creditor.”