152 N.Y.S. 470 | N.Y. App. Div. | 1915
The plaintiff corporation made contracts with third persons to undertake legal proceedings on their behalf, and retained the defendant as an attorney and counselor at law to conduct the litigations. The plaintiff advanced moneys to the defendant for incidental expenses of the litigations, and the defendant also collected moneys as the fruit of some of these legal proceedings. The plaintiff and the defendant fell out, and so the plaintiff sues to terminate the agreement between them and for an accounting. The Special Term gave judgment for the plaintiff and the defendant appeals.
The defendant’s plea at trial, and contention here, is that the said contracts of the plaintiff and the third persons were illegal inasmuch as the plaintiff is a corporation (Penal Law, § 280), and, therefore, the plaintiff was not entitled to judgment. The defendant at the trial admitted frankly that save for this plea he should account to the plaintiff. Although I think that the said contracts were illegal (Penal Law, § 280), yet I think
And first, what is the nature of the offending of the plaintiff ? It practiced law as a corporation. In Matter of Co-operative Law Co. (198 N. Y. 419, 484), when the court considered this statute, it determined that its purpose and effect are to preserve an ancient and honorable profession “of the highest usefulness and standing,” one which “ involves the highest trust and confidence,” from the inroads of a legal entity that could neither qualify for practice nor discharge such personal obligations of trust and confidence, and which, either acting as a middleman, so to speak, between client and attorney, might destroy the relation of client and attorney, or, with its aggregated power, might affect the individual independence of the bar.
That which the plaintiff did involved nothing immoral nor of turpitude:— the doings were mala prohibita, not mala in se. Nor can we assert that the plaintiff set about brazenly to violate the statute or to evade it, for it pleads with some plausibility and in apparent good faith the special provisions of chapter 919 of the Laws of 1896, incorporating a prior guaranty and indemnity company, to which the plaintiff succeeded by merger.
On the other hand, let us consider the position of the defendant if his plea prevail. Incident to a vindication of the statute invoked by him he escapes an accounting for the moneys which in justice and in equity belong to the plaintiff, moneys which he received as a member of an ancient and an honorable profession and one that involves the highest personal trust and confidence. (Matter of Co-operative Law Co., supra; Matter of Dunn, 205 N. Y. 401.) True, the statute is not aimed at him directly, for he is an individual permitted to practice law. But in that practice he accepted a retainer from the plaintiff to perform the illegal contracts which the plaintiff had made with third persons. And in so far as he performed, he rendered himself particeps criminis. (Arnot v. Pittston & Elmira Coal Co., 68 N. Y. 558, 567; Penal Law, § 27.) And but for the protection of his plea, the outcome of such conduct might be larceny. (Penal Law, § 1290.) I intend nothing personal; my comments would be applicable to any other member of the bar who had pleaded likewise. And I add that there is no criticism to be made upon the professional performance of his retainer. Aside from the incidental benefits to the litigants, judgment in this case makes more for the preservation of the profession from degradation, for the retention of public confidence in it, for the determent of other members of it.
It is said by the Supreme Court of the United States in Brooks v. Martin (2 Wall. 70) that it was hard to see how the statute enacted for the benefit of the soldier was rendered any more effective by leaving all of the moneys in the hands of Brooks instead of requiring him to execute justice by an accounting, and so in this case it is equally hard to see how the statute in this case is rendered more effective by permitting an attorney and counselor of the court, who aided and abetted in violation of the statute, to go scot free with the moneys of the plaintiff in his professional pocket.
I am mindful that public policy rests upon the laws; that we
The plaintiff, for aught decided in this case, remains liable to the exclusive punishment prescribed by the statute. We affirm a judgment, not enforcing the prohibited contracts, but upon taking notice of the circumstances ” and in the belief that ‘ ‘ jus
It must not be forgotten that the illegal contracts were those made between the plaintiff and third persons, that the plaintiff does not seek the enforcement of those contracts, nor can it be said that our disposition of this case even indirectly countenances contracts that are mala in se. And in the language of Miller, J., in Brooks v. Martin (supra); “ The transactions which were illegal have become accomplished facts, and cannot be affected by any action of the court in this case.” Further authority upon this point is found in Planters’ Bank v. Union Bank (16 Wall. 483, 500) and cases cited.
There is a further ground upon which we may rest affirmance. The rule as to dealings between client and attorney is that which obtains between principal and agent. (Brock v. Barnes, 40 Barb. 521, 528, citing Story Eq. Juris. [8th ed.] §§ 311, 315; Sims v. Brown, 6 T. & C. 5; affd., 64 N. Y. 660.) In Penn Mut. Life Ins. Co. v. Bradley (21 N. Y. Supp. 876) it was decided that the defendants, having received money as the agents of the plaintiff, could not plead that the plaintiff was not authorized to do business within this State. This judgment was affirmed on the opinion below (142 N. Y. 660). (See, too, Murray v. Vanderbilt, 39 Barb. 140, 152; Brooks v. Martin, supra; Pointer v. Smith, 7 Heisk. [Tenn.] 137.)
The interlocutory judgment is affirmed, with costs.
Carr and Putnam, JJ., concurred; Thomas and Stapleton, JJ., concurred upon the first ground stated in the opinion.
Interlocutory judgment affirmed, with costs.