Case ID: ad_151/html/0785-01.html
Source: Caselaw Access Project
Author: {"author": "Kellogg, J.: Smith, P. J. (concurring): Houghton, J, (dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Judicial Settlement of the Accounts of Susie Merrill and Diar Baker, as Administrators, etc., of Orson A. Van Alstine, Deceased, Respondents. William L. Lewis, as Special Guardian of Clara Van Alstine and Lulu Van Alstine, Infants, Appellant.
    Third Department,
    June 27, 1912.
    Surrogate — unauthorized employment as counsel — return of moneys received.
    Where a surrogate, in direct violation of section 2495 of the Code of Civil Procedure, acts as counsel in the prosecution of a claim for an estate upon which he has granted letters and receives $600 for such services, he will be required to return the amount to the estate.
    Houghton, J., dissented, with opinion.
    Appeal by William L. Lewis, as special guardian of Clara Van Alstine and Lulu Van Alstine, infants, from a decree of the Surrogate’s Court of the county of Broome, entered in said Surrogate’s Court on the 20th day of December, 1911, judicially settling and allowing the accounts of- Susie Merrill and" Diar Baker, as administrators, etc., of Orson A. Van Alstine, deceased, with notice of an intention to bring up for review an intermediate order bearing date the 25th day of September, 1911, denying the appellant’s application for a supplemental citation.
    
      James K. Nichols, for the appellant.
    
      William F. Van Cleve, for the respondents.
   Kellogg, J.:

The surrogate acted as counsel in the prosecution of the claim which the estate had for the killing of the intestate and has received therefor $600. This was in direct violation of section 2495 of the Code of Civil Procedure, which prohibits a surrogate from acting as counsel in any action for or against an estate over whom or whose accounts he could have any jurisdiction by law. The surrogate granted the original letters of administration which enabled the estate to bring the action, but when the accounts of the administrators came before him for settlement, he had disqualified himself to act by reason of his haxing acted as counsel for the estate and the accounts were, therefore, settled before the district attorney,, acting as surrogate. Of course, the surrogate has received $600 which he had no legal right to receive, and the inference arises that if he had not received it, it would have remained with the estate. It is unnecessary to characterize the transaction. It speaks for itself, and., in a sense, there is a shadow upon the case made by the administrator attempting to sustain his accounts.

After the intestate’s death Baker called upon the surrogate and obtained letters of administration. He recited the circumstances of the death and asked the judgment of the surrogate, who suggested that a certain attorney across the hall be employed. The administrator had known the surrogate for years but did not know the attorney. The surrogate took the administrator across the hall, introduced him to the attorney and they stated the facts and circumstances of the case. It is not quite clear that the surrogate was present at all this conference, or how much part he took in it. At sometime before suit brought it was agreed between Baker and the attorney that he should have for his compensation one-third of the recovery if settled, one-half if litigated. Evidently the administrator talked with the surrogate about the case at different times and he could not tell when the surrogate came into the case, but knew that he was in the case at his request.

The amount of the recovery was $4,413.21, which sum was paid to the attorney in satisfaction of the judgment, and he deposited it in his bank account and from the proceeds paid the disbursements, $260.47; paid to the administrator $2,076.37 less $150, which he had advanced him as a loan; paid the surrogate $600 and retained the balance. The action was tried three times, appealed to the Appellate Division three times and to the Court of Appeals once.

The facts are so peculiar, the action of the surrogate so extraordinary, that it leaves ground for the impression that he was interested in the litigation from the beginning or that the agreement as to the compensation of the attorney was made in some way in part for his benefit. If the administrator wanted the surrogate to act as counsel in the case it is not natural that the attorney should be willing to pay him out of his half, unless the fact that the surrogate furnished the case to the attorney, or that there was some tacit or implied understanding that the surrogate was not to lose by the retainer of the attorney. The attorney claims no part of this $600 and he retained half of the recovery, less $600. If there was an agreement originally that he was to have one-half and the surrogate was not directly or indirectly to be benefited by that agreement, we may assume that later the agreement was modified and that the parties received for the services in the end the sum the understanding of the parties contemplated they should have.

We may infer that perhaps the attorney and the administrator did not at the time know that they were parties to an illegal transaction. They, nevertheless, were such parties and we must view their evidence accordingly and assume that each has given the most favorable version of the transaction that could be given.

We are not required to draw inferences or find excuses for the parties; justice requires that the facts rather than the mouths of the participants in this illegal action should spealc. The facts show that $600 received from the recovery has been paid illegally to the surrogate for the- services rendered to the administrator. Justice and due administration of law require that the money should be returned to the estate.

I, therefore, favor a reversal of the decree, so far as it gives the administrators credit for said $600, and the account should be charged'with that amount and interest.

Betts, J., concurred; Smith, P. J., concurred in result in memorandum; Houghton, J., dissented in memorandum; Lyon, J., not sitting.

Smith, P. J. (concurring):

By section 2586 of the Code of Civil Procedure this court is authorized upon this appeal to decide any question of fact which the Surrogate’s Court might have decided. The arrangement between the administrator, Van Cleve, and Parsons, by which Parsons was brought into the case as counsel, modified the agreement theretofore made between the administrator and Van Cleve to the extent that the administrator would have become responsible to Parsons for the payment of a fair compensation as counsel, had his employment been lawful. Acting in violation of the statute, however, Parsons had no legal claim against the administrator and the payment to him by Van Cleve as the agent of the administrator can be recovered back by reason of the confidential relations existing between the administrator and Parsons. Upon this ground I concur in the conclusion reached.

Houghton, J, (dissenting):

In dissenting from the decision about to be made I do not do so because I think the surrogate of Broome county was properly-paid the sum of $600 as a counsel fee in the action in which the respondents, the administrators of the.estate of Orson A. Van Alstine, deceased, were plaintiffs. On the contrary, he had no right to - act as counsel or to be paid any sum, and he violated the law and his oath of office in consenting to act as counsel and in receiving any pay for his services. If the money had been paid to him by the administrators I agree' that it would have been an illegal payment and that their account should be Surcharged with the amount, remitting them to their remedy of recovering it back from him, which they would have a right to do. The trouble about surcharging the administrators with the amount is th at they did not make the payment. It clearly was made from the one-half of the recovery which the attorney Van Oleve retained, and which under agreement with the administrators he had a right to retain. The agreement that the attorney should have one-half the recovery for his services under the circumstances disclosed, was not unconscionable, and there is no dispute that such was the agreement. Nor is there any dispute that he paid their one-half to the administrators and that they have properly accounted for it, or that the attorney Van Oleve paid the $600 to the surrogate from his own half of the recovery. Van Oleve had the right to do what he liked with his half. He could give a part or all of it to the surrogate or throw it away if he chose.

There is no proof in the record that when the administrators asked for counsel and it was suggested that the surrogate act as such, to which Van Oleve assented, there was any new bargain made about Van Oleve’s compensation, to the effect that he was to take out of his half the amount demanded by counsel and turn it over to the administrators, who were to pay counsel therewith. Nor are there any circumstances which show that such was the modified bargain.

It was simply a case of clients desiring counsel and the attorney assenting to paying him out of his contingent fee. Such a situation frequently arises.

It is true that one of the administrators suggested or insisted upon the surrogate being the counsel, doubtless not knowing that he was disqualified from acting, but that fact does not make him or his coadministrator liable to pay back into the estate the amount of the counsel fee which the surrogate was paid by Van Oleve.

It seems to me the facts do not justify a reversal of that part of the decree appealed from or the granting of any relief to the appellant. I, therefore, vote for an affirmance.

Decree so far as appealed from reversed on law and facts, without costs, and the accounts of the administrator surcharged with $600 and interest.