130 N.Y.S. 284 | N.Y. Sup. Ct. | 1911
It appears from the referee’s report and the evidence returned by him that, on or about the 23d day of September, 1902, the plaintiffs, by the claimants, O. H. & W. E. Hopkins, their attorneys, commenced an action in this court against Coridon S. Thomson and others, for the foreclosure of a certain mortgage, as alleged in the petition, and an answer was interposed, and the issue framed by the pleadings was tried and resulted in a judgment of foreclosure and sale; that an appeal was taken by the defendants, or some of them from that judgment, to the Appellate Division of this court, for the Fourth Department; that the said appeal was argued, and the Appellate Division affirmed the judgment of the trial court; and that, thereafter, an appeal was taken
It further appears that the petitioners, O. H. & W. E. Hopkins, as such attorneys, conducted all the proceedings in said action for the plaintiffs, including the preparation of respondents’ briefs in the appellate courts; that they ceased to be attorneys of record on September 22, 1909, at which time Messrs. Bartlett & Chamberlain, by an order duly granted, were substituted as attorneys for the plaintiffs in said action; that the stipulation and consent upon which the order making such substitution was entered expressly reserved to said O. H. & W. E. Hopkins their lien upon the subject-matter of the cause of action involved in said litigation, for services rendered, and recognized the assignment of the judgment made to said O. H. & W. E. Hopkins, as-collateral security for their costs and disbursements in said action; that, on the 11th day of June, 1908, upon the remittitur of the Court of Appeals, a judgment of affirmance was entered, and thereafter, and on January 2, 1909, the plaintiff Sarah A. Thomson, by an instrument in writing duly acknowledged on that day, assigned to said O.H. & W. E. Hopkins, the judgment. in said action, reciting, among other things, her indebtedness to them for their services and expenses, amounting to $950, which assignment was executed and delivered to said O. H. & W. E. Hopkins as security for the payment to them of said sum of $950, and upon their covenant and agreement that, upon the payment to them of said sum, with interest thereon from the 2d day of January, 1909, they would reassign to
It further appeared that Henry D. Fargo, Robert Fargo 'and Lorenzo D. Fargo, brothers of said Sarah A. Thomson, on the 3d day of October, 1907, loaned to said Sarah A. Thomson the sum of $800, and on the same day she executed and delivered to them, as security for said loan, an agreement in writing, dated that day, whereby she covenanted that she would repay said sum of $800 and interest thereon, which agreement is in words and figures following:
“ Dated Attica, N. Y., October 3d, 1901.
“(Signed) Sabah A. Thomson [l. s.].”
It further appeared that the said agreement was prepared by the petitioners, 0. II. & W. E. Hopkins, and they did not, when they prepared such agreement, notify the said Fargos, or any of them, of any lien which they now assert against the proceeds of said sale; but that .the fact that Sarah A. Thomson was indebted to the said O. H. & W. E. Hopkins for services rendered and expenses incurred in the conduct of said foreclosure action was the subject of discussion between them and the said Fargos, or some of them; that said plaintiff Sarah A. Thomson did not bid in the property on said
“ Whereas, for and upon a good and valuable consideration the receipt of which is hereby acknowledged, I, the undersigned, have made and delivered to Frank M. Richards, of Alexander, N. Y., my promissory note for the sum of three hundred eighty-five dollars and twenty-five cents, payable with interest; now therefore I covenant and agree to and with said Richards, that upon the sale of the real estate of Coridon S. Thomson of Attica, N. Y., in a foreclosure action brought by me, I will out of the proceeds of such sale pay said note and interest, or if said property shall be bid in by me, I will thereafter sell the same upon being offered a fair price therefor, and out of the proceeds of such sale will pay said note and interest.
“ Dated Attica, N. Y., October 1st, 1907.
“ (Signed) Sarah A. Thomson.”
The referee reported, in substance, that out of the funds in the hands of the referee the claim of the said Ralph S. Pettibone, as administrator, etc., and Willis A. Pettibone, should be first paid; that the claim of the said petitioners, O. H. & W. E. Hopkins, is a lien on said proceeds and should be next paid. He further reports that, after the payment of said sums hereinbefore mentioned, the plaintiff Sarah A. Thomson, her .heirs, representatives and assigns, are entitled to receive whatever surplus there may be, remaining in the hands of the referee.
It is contended by counsel for the said Fargos and said Frank M. Richards that their clients have equitable liens
It is contended that the said 0. II. & W. E. Hopkins owed the duty to the said Fargos and the said Richards of informing them of the extent of their claims and lien for legal services, and, having failed to disclose the nature and extent of airy such claims, that they are now estopped from asserting any lien on the fund superior to that of the said Fargos for moneys advanced, or to the said indebtedness represented by the said note of the said Richards.
In Richards’ case, the note mentioned and given him represented an old indebtedness formerly owing by Mr. Thomson to him, and not by the plaintiff Sarah A. Thomson.
The petitioners, 0. H. & W. E. Hopkins, deny that these parties were not fully advised of the fact that the money was owing and due them as attorneys for services and expenses in this litigation," and assert that such indebtedness was the subject of discussion between them and the Fargos, or rather one of the Fargos, with whom they had talks.
The court has read the testimony carefully, and can reach no other conclusion than that, the Fargos, or such of their number as had any dealings with the petitioners, 0. H. & W. E. Hopkins, as a matter of fact knew and fully understood that the services of the petitioners in the foreclosure suit remained unpaid and owing. If they were not informed of the fact in express words, the nature and circumstances of the case were such that they had every reason to suppose and believe that such must have been the fact. They knew the
It is asserted and argued that the petitioners, the Messrs. Hopkins, omitted to assert in words that they had or would claim a lien as attorneys upon this fund. . It was said, however, in the case of Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 498, referring to the provisions of the Code giving attorneys liens on their clients’ cause of action: This act was construed by us in a recent case where the cause of action had become merged in a judgment, and we held that the cause of action created * a lien in favor of the attorney on his client’s cause of action, in whatever form it may assume in the course of the litigation, and enables him to follow the proceeds into the hands of third parties without regard to any settlement before or after judgment;’ that all the world must take notice of the lien, and that it was unnecessary for the attorney to give notice of his claim to
We do not think that the Messrs. Hopkins were required to advise the Fargos that they had an attorneys’ lien, in words, hut that the Fargos should have taken notice of their rights and have been put upon their inquiry from the very circumstances of the case, and cannot now claim to have been misled as to the rights of the petitioners.
It is claimed by counsel for the Fargos and for Mr. Eichards, that the instrument given the Fargos, dated October 3, 1907, in terms provided they should have a lien upon the final surplus superior to that'of the attorneys. We do not so read this instrument. It is true that in it no specific mention is made of the claim for services, but the Fargos were to be paid “ the said sum of eight hundred dollars out of the surplus belonging to me,” that is, belonging to Mrs. Thomson. What surplus belonged to Mrs. Thomson ? Clearly it was only that sum which remained after the expenses of the action, including those incident to the sale, had been paid and deducted from the total sum realized. The very word “ surplus ” implies what is left after all proper and legitimate deductions have been made.
The claim of Eichards is to be paidout of the proceeds of the sale.”
It seems to us that there was nothing in either instrument whereby either the Fargos or Mr. Eichards had the right to claim the amount agreed to be paid by Mrs. Thomson to them or either of them should be paid prior to the payment to O. H. & W. E. Hopkins for their legitimate expenses and services as attorneys.
Therefore we are of the opinion that the referee’s report, so far as it relates to the claim of the petitioners O. H. & W. E. Hopkins as attorneys, establishing the same superior to the claims of the Fargos and Mr. Eichards, should be affirmed by this court.
The referee has, by his report, found and reported that the agreement between the Fargos and Sarah A. Thomson, dated October 3, 1907, did not operate as a legal or equitable assignment of the proceeds arising from the sale under the
The same finding is made as to the claim of Frank M. Richards.. The referee, therefore, directs the moneys arising from the sale, after the payment of the claims of the Pettibones and of the petitioners, O. H. & W. E. Hopkins, to be paid to Sarah A. Thomson.
It is unquestionably the law that an agreement by parol or in writing to pay a debt out of a designated fund does not give an equitable lien upon -the fund or operate as an equitable assignment thereof. Williams v. Ingersoll, 89 N. Y. 508; Thomas v. N. Y. & G. L. R. Co., 139 id. 179.
In Trist v. Child, 21 Wall. 441, the court, referring to this subj ect, said: “ But a mere agreement to pay out of such funds is not sufficient. Something' more is necessary. There must be an application of the fund pro tanto, either by giving an order or by transferring it otherwise in such a manner that the holder is authorized to pay the amount directly to the creditor, without the further intervention of the debtor.” See also, the cases of Holmes v. Bell, 139 App. Div. 462; Donovan v. Middlebrook, 95 App. Div. 365; Wemple v. Hauenstein, 19 id. 555.
As was said in the case of Fairbanks v. Sargent, 117 N. Y. 320: “ The test is (even of an equitable assignment) an inquiry whether the debtor would be justified in paying the debt or the portion contracted about, to the person claiming to be assignee.”
We have diligently searched the record in this proceeding to discover something which would justify this court in directing the payment of the claims of the Fargos and of Mr. Richards out of the balance remaining in the referee’s hands. We have been unable to discover any such fact.
Nothing but the express consent or order of Mrs. Thomson to such a ]3ayment would justify a direction of this kind, and that appears to be lacking in this proceeding.
We are of the opinion, therefore, the referee’s report must he confirmed in its entirety.
It only remains for this court to give directions as to the payment of the costs of this proceeding. The referee’s fees
Ordered accordingly.