114 N.Y.S. 489 | N.Y. App. Div. | 1909
This is an action in equity to set off awards in separate statutory arbitrations. The plaintiffs have been successful below, and the appeal comes to us upon the judgment roll alone, none of the evidence taken before the court being returned. There is no dispute as to the facts. In the year 1904 Susan Day Parker and her husband, Dr. Chas. T. Parker., entered into three arbitration agreements with the plaintiffs, a firm of stockbrokers, as follows:
Second.. Between Mrs. Parker and plaintiffs respecting an account known as the “Dr. C. T. Parker, Special Account,” concerning which it was contended by Mrs. Parker that she was the real party in interest and that certain transactions appealing therein had not. been authorized by her or Dr. Parker. The balance standing to the-credit of this account had been transferred to the general account of Dr. jParker, and it was contended by Mrs. Parker that this transfer had been made without lier knowledge or consent,-and contrary to the direction given by Dr. C. T. Parker, whereby, she claimed that she had been wrongfully deprived of such balance, and was entitled to be repaid the same. The plaintiffs controverted these claims.
Third. Between Dr. Ohas. T. Parker and the'plaintiffs respecting an account Carried by the latter, known as the “ Dri O. T. Parker, General Account,” as to which Dr. Parker disputed his liability for certain transactions set out in the, account. It was to this account that certain credit balances had been transferred, claimed to belong to Mrs. Parker, and -which constituted the subjects of the two arbitrations to which she was a party. The only questions submitted to the arbitrator respecting this account were (a) which, if any, of the disputed transactions were binding upon Dr.- Parker, and (b) whether the plaintiffs had negligently and improperly failed to carry out any orders given to them by Dr. Parker.
An examination and comparison of the several submissions shows that there appeared to- the credit of Dr. Parker, in his so-called general account, certain sums which were claimed by Mrs. Parker, and which, as she contended, should not liave been placed to Dr. Parker’s credit, and should be repaid to her; while, on the other hand, the general account of Dr. Parker, including these transfers to the credit side, was accepted as accurate, excepting as to certain
“ (d) Any final determination by the Arbitrator in favor of Webb & Prall against Dr. Parker shall constitute an offset, pro tanto, in their favor against any determination in favor of Mrs. Parker against Webb & Prall; and on the assignment by Webb & Prall of any sum finally determined in their favor against Dr. Parker to Mrs. Parker, or to such person as Mrs. Parker may name, she will satisfy, pro tanto, any sum determined in her favor against Webb & Prall. The intention of this clause being, that Mrs. Parker shall have the right to enforce against Webb & Prall the amount of any
It will ’ be perceived that of the two clauses above quoted, that one designated as (c) was intended to control tire action of the arbitrator, and to add to his power by permitting him to determine whether the credits transferred to Dr. Parker’s general account from the accounts belonging to Mrs. Parker had been so transferred without fraud or wrongdoing on the part of plaintiffs or Mr. Speir, and if so, to deduct such credits from Dr. Parker’s general account: The clause designated as (d) had no bearing upon the acts of the arbitrator, but was an independent agreement, outside of the arbitration as to what should be done between the parties after the arbitrator had made his award. In other words, the arbitrator had nothing to do with any offsets. He was to determine what was due as between plaintiffs and Mrs. Parker and plaintiffs and Dr. Parker. When that had been determined the parties to the arbitration agreed between themselves how and under what conditions the awards should be offset. The arbitrator fulfilled with exactness the duties devolved upon him, as well by the original submissions as by the supplementary agreement from which we have quoted. He made three awards, one upon each submission. They were all made upon the same day and should be read together and in the light of the above-quoted clause (c) of the supplementary agreement. He founds in" Mrs. Parker’s favor upon the submission respecting the so-called “Trust Account” and the “Dr. 0. T. Parker Special Account,” awarding her, as against the plaintiffs, the sum of $45,750, with interest, with regard to'the trust account, and $175,914.96, with interest, with regard to the “Dr. G. T. Parker Special-Account,” and as to each of these sums he finds that they had been transferred to the credit of Dr. G. T.-Parker in his so-called general account, and that such transfers were made “ without fraud or wrongdoing on the part of Webb & Prall or of Mr. Speir, or either of them.’’
With respect to the submission concerning the “ Dr. O. T. Parker General Account/’ he found that there had been erroneously credited to that account by Webb & Prall, “but without fraud or
It would serve no good purpose to follow the counsel for the appellant Parker through the argument by which it is sought to convince us that the arbitrator misapprehended his duties under the submission. As has already been said, he followed the terms of the submission with careful exactitude. It was not committed to him to offset the claims in favor of Mrs. Parker" against those -against Dr. Parker. To have done so would have exceeded Ins authority and have vitiated his award. His duty was to ascertain certain facts and- award as to them. Having done this, the duty of offsetting fell upon Mrs. Parker, who had agreed to do it. • That duty it is within the powers of a court of equity to enforce. We find a difficulty, however, arising from the lien of the defendant Horton, who was:the attorneyforjffrs. Parker. The court belowhasfound as matter of fact: “ That the defendant Eliot Horton has a lien.for his fees as attorney on the awards made in favor of his client, the defendant Pan kei‘j to the amount of twenty-five per cent thereof, but any arrangement in respect thereto between himself and his client was, known to him at the time the agreements of arbitration were made between the plaintiffs and the defendant Susan Day Parker, and there is no pro:of or evidence that the plaintiffs knew of said arrangement in
The above finding of fact has not been excepted 'to by any one, but the above-quoted conclusion of law has-been excepted to by the defendant Horton. Section 66 of the Code of Civil Procedure provides that “ From the commencement of an action or special proceeding or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon liis client’s cause of action, claim or counterclaim, which attaches to a verdict, report, decision, judgment or final order in his client’s favor, and the proceeds thereof in whosesoever hands they may come, and the lien can not be affected by any settlement between the parties before or after judgment or final order.” Statutory arbitrations, such as these were, are special proceedings, being provided for in title 8 of chapter 17 of the Code of Civil Procedure which chapter has for its title “ Certain S pecial Proceedings instituted without Writ.” They, therefore, fall within the purview of section 66 of the Code. The setoff contemplated by the supplemental agreement of June 19, 1905, would effectually defeat the attorney’s lien, in the present case because it would prevent the entry of any judgment in Mrs. Parker’s favor to which the lien could attach. It is not found as a fact and does not appear on the face of the instrument itself that the attorney was a party to or consented to'the agreement of June 19, 1905, which provided for a setoff of awards or that he has in any way -waived his lien or consented to subordinate it to the offset agreement. It is.well settled that an attorney’s lien is superior to the right of the parties to set off judgments recovered by them respectively against each other (Smith, v. Cayuga Lake Cement Co.,107 App. Div. 524; Agricultural Ins. Co. v. Smith, 112 id. 840), the reason being that the setoff will destroy the judgment to which the lien has attached.
Páttebson, P. J., Ingbaham, Lahghlin and Clakke, JJ., concurred.
Judgment modified as directed in opinion. Settle order on notice.
See Laws of 1876, chap. 448, § 66, as amd. by Laws, of 1879, chap. 542, and Laws of 1899, chap. 61.— [Rep.