93 N.Y.S. 883 | N.Y. App. Div. | 1905
Lead Opinion
The judgment and’ order should be affirmed, with costs, úníess the defendant elects to serve a supplemental answer and have a. new trial upon the conditions hereinafter provided, in which case the judgment; arid order should be vacated and set aside and a new trial granted. ■ '
The action was brought to recover damages for personal injuries; alleged to have b'een caused by the negligence of the defendant. The injuries were received in an accident upon defendant’s street railway, while plaintiff was a passenger, October 29, 1903, They •were quite severe and the verdict rendered by the jury for $7,500 was not an excessive one.
The action was commenced November 4, and. the answer served November 24,' 1903. The trial of the case was begun April 14, 1904. Two. days prior thereto and on April' twelfth, defendant’s claim agent, Barnes, went to plaintiff without the knowledge of plaintiff’s attorneys and made -a settlement' of .the case, andhe left with the plaintiff $500 in money. He procured him to sign three papers; one, a release and discharge of the cause of action in consideration of $500 paid at the time, and of the further sum of $2,000, and a doc.-tor’s bill of $200 to be paid -thereafter. This paper was acknowledged by plaintiff. A second paper, a receipt for the $500, and the third paper, a stipulation’ of discontinuance of the action without costs, providing that an order might be entered .thereon on the application of either party Without notice. This stipulation was. also signed, for defendant -by Connette, its ■ vice-president. Two days later, when the case was moved for trial, no objection to proceeding was made by defendant’s attorneys who were present. A jui;y was called and the trial was entered, upon. Some concession as to the facts was made and then defendant’s attorneys presented to the court the stipulation of discontinuance and asked for an order -there
The defendant’s attorneys did not ask that any amendment be made or that any postponement of the trial be granted' to enable them to procure such an amendment. The case was thereupon opened by plaintiff’s attorney and the taking of evidence was proceeded with. The plaintiff gave evidence, and, in answer to questions by his own counsel, stated that he signed the stipulation that same week, and thereupon defendant’s attorneys offered the stipulation in evidence, and asked if the $500 was paid at the time. Objection was made that the stipulation and evidence
The defendant’s attorneys also called the minister who. was with the claim agent when the alleged, settlement was made, and proved by him' the same facts, .and made the same offers to. prove as in the ■ .cáse of. the claim agent, and the same, objections were taken and rulings made and exceptipns taken. The defendant’s attorneys then tendered plaintiff’s, attorneys $1,500 in gold for their-costs or dis^ charge of their.lien therefor, upon the settlement, which was refused
The case was summed up by plaintiff’s attorneys, defendant’s attorneys declining to address the jury. The court charged the jury; at the close of the charge defendant’s attorneys excepted to the submission of any questions to the jury, and requested the court to charge as to the right of plaintiff to settle the action, which was refused on the ground that there was no question as to a settlement before the jury. Exceptions were taken to the refusal by the defendant’s attorneys. The jury rendered the verdict in question.
The foregoing facts with reference to the occurrences upon the trial appear from the case and exceptions settled and ordered tiled by the court.
Three days later, and on April eighteenth, there was presented to the justice who presided at the trial the stipulation, the release and the affidavits of defendant’s vice-president, Connette, its claim agent, Barnes, and its attorney, Gannon, and upon them an order was granted requiring the plaintiff and his attorneys to show cause the •next day, April nineteenth, why the verdict so rendered should not be set aside on the ground that the action was settled and discontinued before the trial commenced, and why an order of "discontinuance should not be granted upon payment to plaintiff’s attorneys of their costs, disbursements and compensation to which they were entitled upon, the basis of the settlement. These affidavits were on the subject of the settlement and what occurred ón the trial. When the matter came on the next day, April nineteenth, the plaintiff’s attorneys tendered back the $500 received by plaintiff at the time of the alleged settlement which was refused. They also stated they would credit the $500 on any execution issued on the judgment. They then presented in opposition to the motion on the
■, Defendant’s attorneys asked for a stay of thirty days and the ' 1 usual time to make a .case and exceptions. The court so ordered; the-plaintiff to tax costs and enter judgment, and stayed all further proceedings. After all this had occurred plaintiff’s, attorneys asked leave to file tlieir .affidavits in opposition to the application, which was granted. Then defendant’s attorneys repeated their objections ■ to' the reception .of plaintiff’s affidavits already made, and added that they desired and requested the. privilege, if they should elect, of filing answering affidavits of the claim agent and minister. This ,¡request was' denied with exception. The ofdey appealed from recited the request by defendant to be permitted to file,answering affidavits and the refusal by the court to grant such request.
The affidavits filed by plaintiff’s attorneys were sufficient to authorize the finding that the settlement and papers were invalid by reason of the fraud practiced upon the plaintiff by the claim agent and minister.
We have thus carefully and’ in detail stated all the facts bearing upon the questions involved' on this - appeal as to the alleged-settle- ~ 'merit and. discontinuance of the action. There is no question involved as to the right of the attorneys to c'ontinue the. trial' for the establishment and enforcement of their lien for compensation under, section 66 of the Code of Civil Procedure. When the question of a settlement first arose at the trial, the plaintiff was not present and
v It might still be asserted with some reason that, the court Would have no power to settle the question of an honest settlement on motion without plaintiff’s consent, as he would then be deprived of the right of trial by a jury of that question. This question did not arise before the trial or verdict here, independently of what took place on the trial and as a part thereof. The defendant had made this settlement -two days before the trial began, and concealed the same from plaintiff’s attorneys. When the trial was called defendant’s attorneys made no objection to the trial proceeding, and a jury was called and trial was commenced. And then, first, the stipulation was produced and offered in evidence, and the court was asked for an order in accordance therewith, discontinuing the.action. It was not admissible as evidence in the case under the pleadings, and the court so stated and suggested a supplemental answer, setting up the settlement and a postponement of the trial, if necessary, to , enable that to be done. The defendant’s attorneys did not see fit to take, that course, but persisted in- their position through the whole trial, have ever since and still do.
So. far, therefore, as the trial itself was concerned, the settlement papers were incompetent and inadmissible, as the court held there was no such issue in the case and none for the juiy, and the verdict could not be affected thereby.
The defendant’s' attorneys may have acted in good faith in remaining in court and taking part in the trial after this ruling by the court, and in keeping this settlement matter before the jury, but it would seem that the only object they could haVe had was to so . affect the jury as to reduce the amount of the verdict. They had raised the question early in the trial and had taken the ruling of the court and interposed' an exception to such ruling, and might then have safely taken up their' papers and quietly departed, but they kept up. their opposition to the very end of the trial, taking exceptions to the charge and making requests to charge.
The position they really assumed and adhered to" was, not that they had a right to try this issue in the action under the pleadings and'without a supplemental answer setting up the settlement, but
It is quite apparent, therefore, that no error was committed by the court, in proceeding with the trial or refusing to hear any motion for discontinuance, or make any order therefor down to the time the verdict was rendered. After the verdict was rendered a motion was regularly made and properly brought on under the order to show cause why the verdict should not be set aside and an order of discontinuance be granted by reason of the alleged settlement upon payment of the compensation of plaintifE’s attorneys by defendant. And the only question remaining is whether this motion was properly disposed of. The decision was not made upon the merits, that is, by reason of any decision thac the settlement was procured by fraud and, therefore, invalid. That question "was not passed upon, as we have already stated from the stenographer’s minutes of the presentation and decision of the motion. It was decided by reference to what the court had held on the trial.'
Though the plaintiff’s affidavits had been presented and objected to the court had paid no attention to their contents, and it was after the decision had been made that the plaintiff’s attorneys asked leave to file the affidavits. This was granted, the defendant’s attorneys again objecting to the same. They had no affidavits and only asked leave to prepare and file some, if they desired. This was refused. The court had no idea of considering or passing upon the question of fact. If it had, it would undoubtedly have permitted the answering affidavits to be filed, and would then have ordered a reference and permitted evidence to be taken and reported before deciding the. question.
The position of the court was that the proper way to settle this question was by a supplemental answer and the trial of the question before a jury, and that it was too late to do that after verdict.
We might- well affirm the judgment and order, but a majority of the -court are of the opinion that the defendant should still have an opportunity to try the question as to the settlement, and, therefore, as a favor to defendant, it may have the order and judgment vacated, the verdict set aside and the right to serve a supplemental answer, and have a new trial upon the payment of all costs in the-action since service of the original answer, including costs of' this appe'al. ; ■
McLennan, P. J., and Stover, J., concurred; dissenting opinion by Spring, J., for absolute reversal and the granting of a new trial, in which Hisoook, J., concurred in separate memorandum. (
Dissenting Opinion
The plaintiff was permanently injured October 29, 1903, while a passenger on one of the cars of 'the defendant in a collision with another of defendant’s cars. The trial of the action to recover the injuries thus sustained was commehced April 14, 1904,- and early in its progress, the counsel for the defendant informed the court that'
They insisted that it was necessary for the defendant to plead the settlement as it operated the same as a release or payment while the counsel for the defendant urged that he was entitled to such an order on the stipulation ending the litigation. The counsel for the plaintiff claimed that they had a lien on the cause of action and a right to continue the same for the purpose of establishing the amount to which their lien attached. The application of defendant’s counsel for an order of discontinuance was denied and the trial proceeded.
The plaintiff was not present the first day of the trial and his counsel had no opportunity to consult with him in reference to the settlement until after the adjournment. On the succeeding day the plaintiff was in court and his counsel claimed that the stipulation and settlement were accomplished by fraudulent statements and representations to their client and insisted that he had a right to have that question passed upon before the order of discontinuance was entered.
No motion was made by the counsel for defendant for an adjournment to enable it to procure an order discontinuing the action or for any other purpose. The defendant’s counsel remained through the trial devoting their energies, however, mainly to a fruitless attempt to get in evidence the stipulation 'and agreement of settlement.
The counsel for the defendant at the close of the evidence offered to pay the plaintiff’s attorneys the amount of their lien and tendered them $1,500, which they declined to receive, insisting that their client’s interest had been jeopardized by a collusive settlement. The jury rendered a verdict for $7,500.
After the verdict, and on the eighteenth day of April, an order was granted requiring the plaintiff to show cause why an order should not be entered setting aside' the verdict on the ground that the action had .been settled and its discontinuance stipulated by the parties. This order was based upon affidavits showing the alleged adjustment and the execution of the stipulation and settlement agreement by the parties. The order was returnable On the nineteenth, and the plaintiff’s counsel appeared and tendered back $500 which had been paid to the plaintiff pursuant to the terms-of the compromise agreement, which the defendant' declined to accept. Thereupon, against the protest of the defendant, the plaintiff’s counsel read in opposition to the motion affidavits setting forth how the adjustment was-accomplished, and from which they claimed their client had been imposed upon and induced to settle his cause of action by reason of'fraudulent representations and’ Under a misapprehension. The' defendant’s. counsel requested the privilege of filing answering affidavits, 'which was refused.
There are two or three principles which we think are deducible from this series of events. - In the first place the parties had' a right to compromise the action. (Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492 ; Smith v. Acker Process Co., 102 App. Div. 170.)
If the settlement was honestly and fairly made, the rights of the attorneys are not paramount to those of-their client, and they cannot be heard to repudiate the'settlement. They may have a lien 'on the cause of action, and if necessary to enable them to secure- the compensation to which they -are entitled, the adjustment will not be •operative against them. The Cause, of action, however, belonged to -tlie client, and if the latter is able to meet his obligation to his attor-, ' neys, the action will not be continued for the purpose of enforcing their lien, which is a mere incident to the litigation. Primarily the settlement of the'parties ends the law suit. In Fischer-Hansen v. Brooklyn Heights R. R. Co. (173 N. Y. 492, supra) the court used this language (at p. 500): “ A cause of action is not the property of the attorney, but of the client. The attorney owns no part of it, for a lien does not give a right to property, but a. charge upon
If, however, the settlement was collusively made and with the purpose of depriving the attorneys of their compensation, the court will withhold its sanction of the adjustment, although ordinarily anxious to ratify an honest settlement of a pending action. (National Exhibition Co. v. Crane, 167 N. Y. 505.)
A settlement made at the instigation of attorneys for the defendant without the knowledge of the attorneys for the plaintiff, and without making suitable and sure provision for their compensation, ought not to be encouraged and is viewed with suspicion. As was said in Peri v. New York Central R. R. Co. (152 N. Y. 521, 528) : “ The settlement of a litigation ought, in fairness, to be made with full knowledge of plaintiff’s attorney, and under conditions protecting his lawful lien. If he seeks to take an unfair advantage of a desire to settle, he is, as an officer of the court, under its constant scrutiny 'and control, and will be confined in. his lien to his taxable costs and such additional amount as he may be able to duly establish by agreement, express or implied.”
Where an adjustment is made without consulting with the plaintiff’s attorney, it would seem as if the orderly procedure is to require a motion or order to show cause upon notice to the attorney, at Special Term, for the discontinuance of the action. (Code Civ. Proc. § 55.) This course enables the attorney to assert his lien if any exist, and determine the mode to ascertain and provide for its payment. If no action of this kind is taken, the attorney may bring the matter to the attention of the court by petition, when the lien may be determined and enforced. (Code Civ. Proc. § 66 ; Matter
The mere fact that the'settlement has been made without the knowledge or assent of plaintiff’s attorneys does not establish that' it'was collusively made. If honest between the parties, the lien of the attorneys attaches to the fund paid to their client as a result of the adjustment, and if that is not available the client must' reimburse his attorneys. If the attorneys are not able to obtain their compensation the action may be continued, not as a right of action between the parties, but for the benefit of the attorneys. (Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492, 499.) The continuance of the action for the purpose of insuring the payment of the attorneys’ lien is the last resort, for “ it authorizes the trial of a dead lawsuit in the interest of one who never owned the claim upon which it was founded.” (173 N. Y. 499, supra.)
In the light of these principles we will consider the appeal before us. The plaintiff’s counsel upon the trial insisted, as already noted,, upon the right to prosecute the action to fix their lien. They were not at that time entitled to' that relief. There was nothing indicating the’ extent of their lien, or that the settlement was fraudulently made or that the avails of the compromise were inadequate to extin■guish the lien, or that their client was unable to pay. Upon consultation with the plaintiff they then claimed the settlement was a fraud. This question the plaintiff had a right to have determined in some way. There was no request by either party for an adjournment to have the effect of the settlement determined, and as the matter was presented to the trial court it may be he was justified in continuing the trial, as each counsel was evidently bent on overreaching his opponent.
Passing that, however, after the verdict had been rendered and after a motion for a new trial on the grounds specified in section 999 of the Code of Civil Procedure had been made and denied, the defendant endeavored to obtain the formal order of discontinuance upon the stipulation and upon notice. The plaintiff accepted this challenge and presented affidavits tending in a measure to show that the alleged settlement was collusive, and that the plaintiff did not comprehend its purport. The plaintiff, therefore, elected to try the genuineness and validity of the compromise upon affidavits at
I do not assent to the claim that it was necessary for the defendant to set up this agreement and stipulation by supplemental answer. The plaintiff had the right to settle his casé, and did so.' He formally consented that either party might procure an order of discontinuance without notice. Upon this stipulation the defendant was entitled to its order, except that the rights of the plaintiff’s attorneys must be protected if necessary to do so. The question of the attorneys’ rights, however, are not here, for they are not asserting any lien. The object of a settlement is to get rid of litigation, not to raise a new issue for the jury to pass upon, and if the attorneys in this case had joined in the stipulation no one would claim that it was necessary for the defendant to set it lip as a defense to obtain the benefit ^accruing from it. Its execution by the attorneys does not add to its validity as between the parties themselves. The mere oral statement of the attorneys or the client that it was procured collusively does not impair the effect of the stipulation. Presumptively it was signed honestly and it remains a valid instrument until impeached in a lawful way. If attacked by either party the burden is upon him to show its invalidity. If the plaintiff has been overreached he must prove that fact. The instrument is good- until proven inoperative.
Upon a rehearing the court by a reference or in its own way could determine the validity of this settlement. If the determination is reached that it- is fairly and honorably made that ends the
The order should be reversed, with ten dollars costs and disburseménts to the appellant, and the matter remitted to the Special Term tó be heard and disposed of.
Hiscock, J., concurred.
Peri v. New York Central R. R. Co. (152 N. Y. 521).— [Rep.
Dissenting Opinion
I concur in the opinion of Mr. Justice Spring that the order - appealed from should be reversed.
Subject to the protection of the rights of plaintiff’s attorneys, the defendant had an absolute, unqualified right to effect a settlement and'discontinuance of the action in question, When this was done . and a stipulation of discontinuance -taken, the'action was, subject to the rights of said attorneys, discontinued and ended, and there was no action left in which it was necessary or proper to set up-by supplemental pleading the stipulation of discontinuance. If defendant had done something which merely amounted to a payment or settle-merit without á formal stipulation ending the action, it would have been different. If the stipulation had been signed by the attorneys . for the plaintiff the defendant would have been entitled to file' it' and have a formal order of discontinuance without further notice or, proceedings. As long as the stipulation was not signed by the attorneys it was-very likely necessary for the defendant to procure such formal order upon notice to the attorneys in order that their rights might be protected.
While defendant’s attorneys have- probably blundered in their practice upon this stipulation in attempting to. use it as evidence upon a trial rather'than in obtaining an order upon it, I still think that they should not be deprived of a stipulation and settlement
Judgment and order denying motion for new trial on the minutes affirmed, with costs, unless the defendant elects to serve a supplemental answer and have a new trial upon the conditions specified in the opinion of Mr. Justice Williams herein, in which event the judgment and order are vacated and set aside and a; new trial granted upon the compliance with such conditions.
