101 N.Y.S. 663 | N.Y. Sup. Ct. | 1906
In July, 1905, the petitioner, Henry Klein, as trustee in bankruptcy of the Buedingen Manufacturing Company, procured an order for George V. Fleckenstein to show cause at the Special Term appointed to be held at the courthouse in the city of Rochester on the 31st day of July, 1905, why he should not be compelled to pay over certain moneys collected by him as attorney for the Buedingen Manufacturing Company, for which corporation he had acted as attorney. On the return of said show cause order an order was made at such Special Term, referring the matter to the Honorable Frank Rice, of Canandaigua, N. Y., who was appointed referee for that purpose to take such evidence as might be adduced as to the amount and value of the services of the said George V. Fleckenstein, as attorney for the
Counsel for said George V. Fleckenstein moves, upon the testimony, referee’s report, petition, and affidavits, and upon all the proceedings herein, for a dismissal of these proceedings, with costs, upon the following grounds: First. That the said Fleckenstein had rendered services for which he had not been paid at the time of the institution of these proceedings, and for which he had a lien' on the moneys mentioned in the petition. Second. That Fleckenstein had had a settlement prior to the commencement of the proceedings with Mr. Marth, the assignee of the Buedingen Manufacturing Company, and with Klein, as said trustee in bankruptcy, of the moneys received by him and referred to in the petition. Third. That the proceedings cannot be maintained because the relation of attorney and client had never existed between Fleckenstein and the petitioner, and because there was no proof that the rights of Marth, assignee and client of Fleckenstein, to the moneys mentioned in the petition have been transferred to the petitioner.
Mr. Fleckenstein had been the attorney for the Buedigen Manufacturing Company, and as such had rendered services to the said company, and had collected the moneys in question, but there had been no settlement or accounting between the attorney and the company when that corporation made a general assignment to William Marth, with whom subsequent dealings and correspondence were had by the attorney with reference to this matter, and subsequently, and before the institution of these proceedings, the Buedingen Manufacturing Company went into bankruptcy, and this petitioner, Henry Klein, was appointed trustee, and the rights of the said company to these funds in question came into the hands of this trustee in bankruptcy, and I cannot see any reason why these proceedings could not be maintained by the trustee of this bankrupt corporation as well as by the corporation itself, had no assignment ever been made, and had the corporation never been adjudged a bankrupt. An attorney and counselor at law is an officer of the court, and when he retains his client’s money, claiming a lien thereon for his services, the Supreme Court clearly has jurisdiction to determine the whole question summarily on application to compel the payment of the moneys retained, and the proceedings, both in their inception, on the reference and the present application, are all regular, and are clearly within the power of this court to entertain. Matter of Application of Knapp, etc., 85 N. Y. 284; Matter of Gillespie v. Mulholland, 12 Misc. Rep. 40, 23 N. Y. Supp. 33; Bowling Green Savings Bank v. Todd, 52 N. Y. 489. I cannot agree with the learned
Counsel for Mr. Fleckenstein also moved to strike out the evidence of Mr. Hubbell, in answer to the question on page 195, commencing, “Assume that in the fore part of 1900,” etc., and also moved to strike out the evidence of Mr. Bissell in answer to questions on pages 216 and 220 of the minutes, on the grounds therein stated. Each motion is denied. The evidence is allowed to stand with an exception to Mr. Smith to each ruling.
Counsel for Mr. Fleckenstein, in urging that these proceedings cannot be maintained, cites the case of Jackson v. Moore, 72 App. Div. 217, 76 N. Y. Supp. 164, but I hardly think that is an authority to sustain his contention. In that case the attorney had collected certain sums of money for the plaintiff and her two brothers, which belonged to herself and two brothers in equal shares. There never had been a division of the funds between the plaintiff and her two brothers, and the court held that the plaintiff alone could not maintain the action where the funds in the hands of the attorney belonged to those three parties and had never been divided; the court saying:
“The remedy of either of the three, if he refused to act, or if their respective shares could not be agreed upon, was not an action of trover, for the amount which each one claimed to be his or hers, before an action for an accounting, in which each of the three was a party, so that the respective shares of each could be fully and finally adjusted.”
Moreover, that same case is further considered on a subsequent appeal, and is reported in 94 App. Div., at page 504, 87 N. Y. Supp. 1101, and reading the opinions of the court together it is very clear that that case cannot be considered an authority here, for the facts are not at all like the facts in the case at bar. In this matter there is no sort of question but that Mr. Fleckenstein rendered valuable services to the Buedingen Manufacturing Company in the collection of these moneys. It has been so found by the referee, and his findings are supported by ample evidence. He was entitled to a reasonable and fair compensation of such services. The petitioner by his demand sought to compel the attorney to pay over all of the moneys that he had received, less his disbursements; thus compelling the attorney to look to a bankrupt estate for compensation for the services he rendered in good faith. This would hardly be right, and would not be dealing justly with this attorney. Had the trustee demanded the money that the attorney had collected, after he had deducted a reasonable sum for his services and his disbursements, the situation would have been different, but when the entire sum was demanded, less disbursements, I think the attorney was well within his rights in refusing to pay it over until the amount
Let an order be prepared and submitted accordingly.