Case ID: ad_112/html/0791-01.html
Source: Caselaw Access Project
Author: {"author": "Parker, P. J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The People of the State of New York, Plaintiff, v. The Bank of Staten Island, Defendant. Joseph B. Mayer, as Receiver of the Bank of Staten Island, Appellant; Harry S. Patten, Respondent.
    Third Department,
    May 2, 1906.
    Attorney and client — receiver of corporation not entitled to substitute attorneys as matter of right — substitution is in discretion of court ■— facts controlling such discretion.
    The right, of the , receive)? of an -insolvent ‘corporation to substitute another attorney in the place of one already employed, is not absolute as in the case of other clients. The court may inquire into the reasons for the proposed change and determine how it will affect the interests of the beneficiaries for whom the receiver is acting. But .the court must inquire’into the facts, and should grant a. substitution of attorneys at the request of the receiver;, unless it is satisfied.upon evidence before it that the interests of the- trust will be preju- " diced by the change, The change ,cannot be refused upon the-ground that tlie attorney cannot be.removed without his consent under rule, 10 of the General Rules of Practice unless sufficient cause for removal be shown.
    Appeal by' Joseph B. Mayer, as receiver of The Bank of- Staten Island, from an order of the - Supreme Court, made at. the Albany Special Term and entered in the office of the clerk of the county of A-lbariy on the 18th day of December, 1905, denying the appellant’s motion to substitute Montague -Lessler as his attorney in the place land stead of Harry S. Patten, and to require said Patten' to- surrender up to said Lessler all papers, etc., connected with the matters of the said receiver.- ■ '-
    
      Montague Lessler, for the appellant.
    
      James E. Puross, for the respondent.
    
      Julius M. Mayer, Attorney-General, Arthur A. Miohell, special -counsel.
   Parker, P. J.:

Ordinarily a client has the right to change liis attorney at his own. volition, subject only to the payment or securing of the fees and charges that' are owing him. ■ ft must -be done, however, if'..the attorney does not consent, by an order of the court or a.judge thereof, and such order will always provide for such payment or security. And rule 10 of the-General Rulés of Practice has been always sb construed. (Trust v. Repoor, 15 How. Pr. 570 ; Matter of Prospect Avenue, 85 Hun, 257, 259.) But when the client is the" receiver of an insolvent corporation-and;is acting-for-the.benefit of its creditors, the right of such receiver to make such a- change does not- rest Entirely -upon his volition. . The court then has the right to examine the reasons for the contemplated change, and determine how it will affect the interests', of .the beneficiaries for whom the receiver is acting. (Hirshfeld v. Bopp, 5 App. Div. 202.)

This distinction between receivers and ordinary clients rests upon the fact' that the receiver is in fact at all times subject to the direc¡tion of the court- in the performance of his duties as such, and it may even control the selection of his counsel should it become proper to do so.

Although there was no question over the_ payment of or securing the fees of Hr. Patten in this case, the Special Term from which this appeal is taken had the right to inquire further into the effect which the substitution of a new attorney would have upon the interests of those for whom this receiver was acting, and be controlled by the conclusion which it should reach upon that question. If the Special Term had made such inquiry, or had before it evidence from which it could determine that question, its decision might be sustained upon that ground; but it would appear from the memorandum filed^by such court that its decision was put upon a construction of rule 10 of the Oeneral Rules of Practice, and tha,t in the opinion of the justice who held such term, an attorney could not, under such rule, be removed without his consent, unless the client should show good and sufficient reason, other than his own desire, for such removal, and inasmuch as he did not find in this record the statement of any reason that amounts to more than a m'ere desire on .the receiver’s part to make the exchange, he seems to have concluded that he had no authority under the rule to grant the motion. In this respect I think he was in error. Unless he was satisfied from the proper evidence before him, that the interests of the trust would be prejudiced by the change, it was the plain right of the receiver to select his own attorney, and his motion for the substitution should have been granted.

For this reason the order must be reversed, with ten dollars costs, and without prejudice to the receiver to renew the motion at some other Special" Term.

All concurred.

Order reversed, with ten dollars costs and disbursements, without prejudice to receiver to renew motion at some other .Sp'ecial Term.