In re Winkler

139 N.Y.S. 755 | N.Y. App. Div. | 1913

Miller, J.:

The respondent was retained by one Sophia Nugent to bring an action against the appellant, the Onward Construction Company, for the. con version of certain chattels, household furniture, personal effects and the like, of the alleged value of upwards of $8,000. His agreement with his client provided that he should be paid $200, and in addition thereto one-third of whatever sum might be collected, or if the chattels were returned to the plaintiff, one-third thereof in specific articles which were enumerated in a supplemental agreement. The action was brought, and the defendant interposed an answer in which it set up as a separate defense that it had an innkeeper’s lien for upwards of $1,500. The action was brought on for trial, but, the plaintiff being unable to prove the value of the chattels, a juror was withdrawn and the case was set for trial on a subsequent date. Meanwhile the case was settled without the knowledge of the respondent by the plaintiff paying the defendant the sum of $850 and accepting a return or surrender of the property. Thereafter this proceeding. was instituted solely against the appellant. On an appeal to this court (146 App. Div. 92f) the order of reference was modified so as to direct that said Sophia Nugent be made a party to the proceeding and so as to provide that the referee take proof as to the value of the property which was the subject of the controversy, the matters relating to the contract of employment of the petitioner by the plaintiff in said action, the nature and extent of his services and the amount of compensation to which he was entitled for his services. The referee found that the value of the property was $1,200, that the value of the petitioner’s services was $1,200 and his disbursements $25, and that the petitioner was entitled to recover upon a quantum meruit by reason of his client having settled the action without his knowledge or consent. The order appealed from adjudges that the petitioner is entitled to a lien to the extent of $1,200, and adjudges that he recover that sum of the appellant, the Onward Construction Company, together with costs and disbursements, amounting in all to the sum p£ $1,617.05.

We think that, in any event, the contract between the petitioner and his client limits'the amount for which he is entitled to assert a lien. The learned referee cited Matter of Snyder (190 N. Y. 66) in support of the conclusion that the petitioner was entitled to assert a lien for the full value of his services. It was decided in that case that a clause in an agreement of retainer, prohibiting the client from settling without the consent of the attorney, was void as against public policy, and that in the particular contract under consideration the clause fixing the amount of the attorney’s compensation at a certain percentage of the recovery was so closely connected with the void clause as to fall with it. We think it necessarily follows that a settlement by the client without the attorney’s consent is not á breach of the agreement of retainer and that, if such agreement does not contain a void clause, prohibiting a settlement, the stipulated method of computing the compensation to- be paid the attorney for his services must control, even though the suit is settled without his consent. It follows that the petitioner was entitled to assert a lien only to the extent of $625.

We are also of the opinion that the provision of the order directing a recovery of the appellant should be eliminated. Plainly, it was not in accordance with the order Of reference as resettled by this court, and it was not justified by the facts of this case, even if it is ever proper in a summary. proceeding under said section 475 of the Judiciary Law to direct a recovery of the adverse party of the sum for which the attorney is adjudged to have a lien on his client’s cause of action. (Vide Rochfort v. Metropolitan Street R. Co., 50 App. Div. 261.)

The appellant, the defendant in the action, did not pay any sum in settlement of the action to which the lien might attach, and which, under the authority of Fischer-Hansen v. Brooklyn Heights R. R. Co. (173 N. Y. 492), it would be estopped to deny that it still had in its hands. It never admitted the plaintiff’s cause of action, and it never asserted title to the property which it was charged with converting. It merely asserted a lien upon that property, and, instead of paying money to the

plaintiff in settlement of the suit, it received from the plaintiff in satisfaction of its lien a lesser sum than it claimed. Having accepted the sum agreed upon in satisfaction of the lien, it could not refuse to surrender possession of the property without being guilty of conversion. To what, then, did the lien attach ? Certainly not to the sum paid by the plaintiff to the defendant to satisfy the hen asserted by the latter, and, if it attached to the chattels, the defendant was not required to retain unlawful possession of them to aid the attorney in the enforcement of his hen. Ho doubt, as between the respondent and his chent, he was entitled to the specific articles enumerated in the supplemental agreement. But the defendant was not chargeable with notice of that agreement. It was chargeable with notice of hen upon the cause of action asserted by the plaintiff, which was an action to recover a sum of money as damages for conversion. . If the appellant made a collusive settlement with the chent, to cheat the attorney out of his fees, it could, no doubt, in a proper action or proceeding and upon proper proof, be held accountable to the extent of. the attorney’s hen on the cause of action asserted in the complaint; and the practice formerly was in such case to set aside the discontinuance and allow the attorney to proceed with the suit for the purpose of establishing the right tó "recover in the action as it originally stood, and to permit a recovery to- the extent of the attorney’s costs. (Randall v. Van Wagenen, 115 N. Y. 527.) Plainly, then, where the adverse party does not admit the cause of action and pays nothing in settlement of it, but merely agrees upon a discontinuance, or where, as here, he accepts satisfaction of a hen asserted by him on chattels which he thereupon surrenders, no longer having even a claim of right to retain them, the attorney, in order to enforce a claim against him, must establish two things, 1, the right of the plaintiff to recover in the action, and 2, that the parties colluded to deprive him of his fees. It is unnecessary for us to determine how the petitioner should proceed to enforce his claim against the appellant if he have any, but it is sufficient for the purposes of this decision to hold that he has not established in this proceeding the right to recover any sum of the appellant. He has succeeded merely in having the amount of his hen determined which, of course, will be conclusive upon the parties in any subsequent proceeding or action which he may be advised to bring.

The order should be modified so as to provide merely that it be adjudged that the petitioner is entitled to a lien upon the cause of action of the plaintiff, Sophia Nugent, in the action instituted in this court, entitled “Sophia Nugent, Plaintiff, against The Onward Construction Company, * * * Defendants,” to the extent of the sum of $625, together with the costs and expenses of the reference, and as thus modified, it should be affirmed, with ten dollars costs and disbursements to the appellant, without prejudice to the respondent’s right to institute such action or proceeding as he may be advised to enforce his lien.

Ingraham, P. J., Laughlin, Clarke and Scott, JJ., concurred..

Order modified as directed. in opinion, and as modified affirmed, with ten dollars costs and disbursements to the appellant, without prejudice to respondent’s right to institute ■ proceedings to enforce lien. Order to be settled on notice.