Case ID: barb_65/html/0493-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court, E. Dabwiw Smith, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wagener vs. Finch & Angel.
    When evidence, offered before a referee, is objected to, he should decide the question as to its admissibility at the time the evidence is offered. He cannot reserve that question, and decide it on the final disposition of the cause.
    The parties are entitled to have such questions passed upon at the time they are raised, so that they can govern themselves, in the further trial of the cause, in the light of, and in reference to, such decision.
    In an action to recover moneys received by the defendants as attorneys for the plaintiff, which they claimed the right to retain for services rendered in the prosecution of actions in which she was the party in interest, the referee found and reported that in supplementary proceedings in this court wherein the plaintiff was a party, it was determined and adjudged that the sendees of the defendants, in the prosecution of said actions, were of the value of $90b, which sum the clerk was directed to pay. And he found and held, as matter of law, that such proceedings and order of the court were an adjudication as to the value of said defendants’ services, and could not be contradicted or varied by paroi evidence tending to show that an arrangement was made between the plaintiff and her attorneys in relation to any extra allowances that should be made for services in said actions, and her share thereof. Held that such decision was erroneous. That the plaintiff was not such a party to the supplementary proceedings as to be concluded by the adjudication therein, as between her and her attorneys. And the question whether any .part of such allowance of $900, made to the defendants for their services, belonged to the plaintiff, as between her and her attorneys, was not litigated, considered or decided, in the supplementary proceedings.
    
      Meld, also, that the referee having expressly held that such adjudication was final and conclusive upon the parties, and could not be contradicted or varied by paroi, the court, on appeal, could not presume and hold that he disre garded his own decision on that point, and gave force and effect to the paroi proof received.
    1HIS is an appeal from a judgment on the report of a referee. 1 The action was brought to recover, moneys received by the defendants as attorneys for the plaintiff, and which they claimed the right to retain for services rendered in the prosecution of two actions in this court, in which one Stanley Martin was plaintiff and George S. Martin and Russel Martin were defendants. The present plaintiff was the party in interest in those suits, the causes of action having been assigned to her. And the defendants set np as a defence, to this action, an order made in supplementary proceedings against the said George S. and Russell Martin, upon petitions filed by the present plaintiff, Rebecca R. Wagener, and the receiver of the said Martins, each claiming moneys then in the hands of the sheriff of Cattaraugus county, by which order, made upon the report of the referee appointed to hear and determine to whom "the moneys belonged, it was determined “that said Rebecca R. Wagener was justly entitled to the whole of said fund, and that the said receiver was not entitled to any portion thereof, and that said Angel & Finch have a lien thereon, to the amount of $900. ’ ’ The defendants (Angel & Finch) claimed that said order was an adjudication as to the value of them services, and could not be contradicted or varied by paroi evidence.
    The cause being at issue was referred to a referee, and tried by him. The referee finds that the defendants, as the attorneys and counsellors of the plaintiff, received from the clerk of Cattaraugus county, upon the order of this court, being moneys recovered in said actions as set forth in the complaint, the sum of $2,792.71, and subsequently received of the sheriff of said county, upon executions issued in said actions, the further sum of $432.12, making in all $3,230.83. That before the commencement of this suit the defendant Finch paid to the plaintiff, out of such moneys, the sum of $1,900, leaving $1,330.83 in the hands of the defendants.
    He further reports, that before the commencement of this suit, in a proceeding in this court wherein the plaintiff was a party, it was determined and adjudged that the services of the said defendants in the prosecution of the said actions were of the value of $900, and by order of this court the clerk of said county Was ordered and directed to pay to said defendants said sum of $900, in payment and satisfaction thereof. The referee further finds and reports that such services, including expenses and disbursements therein, were of the value of $900. That before the commencement of this suit the defendants had rendered professional services for said plaintiff, at her request, in divers actions and proceedings, and that •such services were worth the sum of $635 ; that no part of the same had been paid, except $75, and that $560, the balance of said sum of $635 was due and owing to said defendants from the plaintiff.
    And the referee finds, as matter of law, that the defendant Finch, who alone answered, is entitled to recoup and set oft said sum of $560 against the plaintiff as a defence thereto, and that the said defendant recover the costs of his defence in said action.
    
      J. N. Stebbins, for the appellant.
    I. The referee erred in holding that the order and proceedings were conclusive upon the parties to this action. 1. The' proof of an agreement between the appellant and respondents, for a different rate of compensation for their services than their value, as shown in the supplemental proceedings, could in nowise contradict or vary the order made in the proceedings referred to. Such agreement is outside and independent of said order, and between different parties. 2. The agreement made was a valid one, and binding upon the parties to it, and no technical allowance obtained by order through the acquiescence of the appellant induced by them, can avail the respondents, as against the appellant. They cannot thus take advantage of their own wrong. The doctrine of estoppel does not apply. (Maybee v. Sniffen, 2 E. D. Smith, 1. 10 N. Y. Leg. Obs. 18.) 3. This was an agreement between attorney and client. The client’s acquiescence in the proof and order was procured at the solicitation of her attorneys; she trusted them, relied upon them properly to conduct her case. The effort, if any, to defraud creditors was on. their part, not her’s. And the rule as to the illegality of contracts to defraud creditors has no application. (1 Story’s Eq. Jur. §§ 308-310. Ford v. Harrington, 16 N. Y. 285.)
    II. When there is no special agreement, prima facie, the taxable costs are the measure of the attorney’s compensation. The burden of proof is upon him to show a greater or other rate of compensation agreed upon between the parties. (Richardson v. B. C. & N. R. R. Co., 15 Abb. 342. S. C., 24 How. 321. Keenan v. Dorfinger, 19 id. 153. S. C., 12 Abb. 327.)
    III. There is no proof of the value of services rendered by the respondents for the appellant, nor that they rendered any service, and no proof of any special agreement between them as to compensation for their services. By the decision of the referee the case is stripped of all proof on the subject, except what is furnished by the order introduced. This was error, for reasons above given.
    
      J. B. Finch, respondent in person.
    - The only question presented by the exception is : Did the referee allow the defendants, for services, a greater sum!-than they were entitled to \
    
    I. The value of the services of the defendants amounted to a sum in excess of the money retained by them, and the referee properly so found. 1. It appears that the value of their services in the two actions producing the principal fund was .... $900 00 And their services for the plaintiff
    in other actions were of the value
    of.......... 635 00
    Making value of services . . . $1,535 00
    That the moneys retained were, of the principal fund referred to, 892 71
    Of other moneys,...... 439 12
    And she had paid defendants, • . 75 00 1,406 83
    Leaving a balance due the defendants of........ $128 17
    2. The exceptions were not well taken to the conclusion of the referee, that the defendants as attorneys and counsel were entitled to be allowed the value of their services rendered, and were not limited to the amount of costs allowed by statute between parties to actions. The agreement implied between client and attorney and counsel is to pay value. (Code, § 303. Stow v. Hamlin, 11 How. 452. Moore v. Westervelt, 3 Sandf. 762. Sandfordv. Ruckman, 24 How. 521. Cregier v. Cheesbrough, 25 id. 200, 203. Garr v. Mairet, 1 Hilt. 498.) This court, in Garfield v. Kirk, 
      
       has settled this question; deciding, in effect, that attorneys are entitled 'to recover the value of their services. The decisions holding that the taxable costs of the prevailing party are prima faeie the amount for which his attorney has a lien, have no application to a case between attorney and client when the actual value is established. The case is then relieved of that presumption of value, if it ever existed.
    II. The plaintiff’s exception is not well taken to the conclusion of the referee that the prior adjudication was conclusive upon the question of value of the defendants’ services in the two actions first above mentioned. 1. So question is raised by this exception, because, {a.) The plaintiff did not offer any proof on the question of .value of the services, and no evidence was therefore excluded. (5.) The defendant did give evidence of the value of the services. And the referee found the value accordingly, (c.) This ruling of the referee was made only in the final determination of the case, as an abstract proposition, and did not operate to exclude any evidence upon the question of value, and the referee upon the evidence of actual value before him, was not at liberty to find otherwise than he did, without reference to the adjudication. 2. The adjudication referred to was conclusive in respect to the question of value. On the first hearing upon the petition of the receiver, the claims of the plaintiff and of the defendants were presented, and the order of reference directed the referee to take proofs in relation to their respective claims upon the fund. The referee heard the parties, and reported’ upon their respective rights and that the defendants had a lien to the amount of $900. And the court, afterward, upon hearing the parties, confirmed that report and directed the.payment of that sum to the defendants, and the residue to the plaintiff, which was done. This was a full and complete determination of those rights between the parties, and must be deemed res adjudicata in effect. (Demarest v, Darg, 11 Add. 9. 8. C., 32 N. Y. 281. 
      White v. Coatsworth, 2 Seld. 143. Dwight v. St. John, 25 N. Y 203. In, the matter of Livingston, 32 How. 20. S. C., 34 N. Y. 577.) 3. At all events this determination could not be attacked except by a direct proceeding by appeal or motion. It was conclusive until reversed or set aside.
    III. The defendant was at least entitled, upon the merits, to all he received by the determination of the referee; and the plaintiff has no cause to complain.
    
      
      
         Since reported, ante, 464.
    
   By the Court, E. Dabwiw Smith, J.

This case comes before us on a bill of exceptions, with the report of the referee.

On the trial it appeared that the plaintiff offered evidence tending to show that pending the proceedings before the referee,- instituted by the receiver upon the supplemental proceedings to reach the moneys in the hands of the sheriff of Cattaraugus, the plaintiff was advised by her attorney, one of the defendants, not to object, as he was going to put in as large.a bill as he could, on the hearing before Morris, the referee, described in his answer, and that she must not object to their proving an allowance for as great a sum for their services as they could; that all extra allowance should be for her benefit, and they would only charge her such sum as the services were actually worth, and pay her the overplus; as, in case they did not get a report for the whole sum, they wanted to save her in this manner as much as they could, as they were certain to get counsel fees allowed by the refereej out of the fund; and that she consented to such arrangement. That when such evidence.was offered, it was objected to by the defendant Finch, upon the ground that the order" made in the proceedings described in his answer was and is an adjudication as to the value of the defendant’s services, and could not be contradicted by paroi evidence. The referee intimated his opinion to be that the objection was well taken, but ruled that he would receive the evidence, and reserve the decision of the" question until the final decision of the cause ; and that said referee finally-decided that said proceedings and order of this court, as above stated, were an adjudication as to the value of the defendant’s services, and could not be contradicted or varied by the evidence given in the action; to which decision the plaintiff duly excepted.

This exception we think well taken. The referee should have decided the question when the evidence was offered. It has been ruled, in several cases, that a referee, in such a case, cannot reserve the question as to the admissibility of evidence offered and decide it on the final disposition of the cause. The parties are entitled to have such questions passed upon at the time they are raised, so that they can govern themselves, in the further trial of the cause, in the light of, and in reference to, such decision. It is true the referee received the evidence offered, and it also appears in his report that he found the value of the defendant’s services to have been $900 ; but in his report he expressly found and held, as matter of law, that such proceedings and order of this court referred to were and are an adjudication as to the value of said defendant’s services, and could not be contradicted or varied by paroi evidence given in the case.

We think this decision erroneous.. The plaintiff was not such a party to the proceeding referred to as to be concluded by that adjudication, as between her and the defendants. They were acting on such reference as her attorneys in that proceeding, and not in an adversary relation. The question whether any part of such allowance óf $900, made by the referee in that proceeding, to the defendants for. their services, belonged to the plaintiff, as between her and her attorneys, was not decided or litigated before the referee, Morris, in that proceeding, and no question of that kind was considered by him or decided. We think the decision of the referee on the trial, and in Ms report, on this question, was erroneous. If the referee had distinctly stated, in his report, that the same was based exclusively upon proof before him of the value of the defendant’s services, and that he had not, in any respect, based his decision upon the said adjudication then held to be erroneous, we might perhaps sustain his report and judgment, on the ground that the plaintiff, was not injured by the error. But this does not appear, and we cannot determine that such error did not control or affect the decision of the cause. It is apparently based upon such decision in the report of the referee, and we do not see that the error is in any way cured.

[Fourth Department, General Term, at Buffalo,

June 3, 1873.

Mullin, Talcott and M. D, Smith, Justices.]

The referee having expressly held that such adjudication was final and conclusive upon the parties, and could not be contradicted or varied by paroi, we cannot presume and hold that he disregarded his own decision on this point, and .gave force and effect to the paroi proof received.

The judgment should therefore be reversed, and a new trial granted, with costs to abide the event.