Case ID: ad_21/html/0062-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Cullen, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Abram H. Dailey and James D. Bell, Composing the Firm of Dailey & Bell, Respondents, v. John Devlin, Appellant.
    
      An attorney who is to be compensated by being made a partner with his client, may, in case of a breach, recover on quantum meruit — where a contract for services is entire, the Statute of Limitations does not begin to run until the services are completed— otherwise, where the services are simply continuous.
    
    Whore a client agrees to compensate his attorney for carrying on a litigation, by making the attorney, in the event of the successful termination of the litigation,. an equal partner with him in the enterprise with which the litigation is concerned, the attorney may, upon the breach of the contract by the client, recover for his services upon quantum meruit.
    
    Where a contract of employment is single and entire and the services are continuous, the Statute of Limitations does not begin to run until after the completion of the services.
    
      Semble, that a continuous employment would not, alone, take the earlier services out. of the Statute of Limitations.'
    Appeal by the defendant, John Devlin, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Kings on the 9th day of January, 1897, upon the report of a referee.
    
      Horace Graves, for the appellant.
    
      James D. Bell [A. H. Dailey and Albert E. Lamb with him on the brief], for the respondents.
   Cullen, J.:

This appeal presents little else than questions of fact, the questions of law involved being of a very unsubstantial character. The plaintiffs seek to recover for legal services rendered to the defendant in maintaining and defending the charter and franchises of the Equity Gas Light Company for the eastern district of the city of ■ Brooklyn. ■ The company was incorporated in 1814 under the general statute for the formation of gas light companies, with a nominal capital of $1,000,000. The whole stock was issued to one Wren in payment of certain patent rights, but one-half of the amount was afterwards returned by Wren to the company. By chapter 144 of the Laws of 1814 the company was authorized to lay its mains, conductors and pipes in certain wards of the city of Brooklyn, thus rendering it unnecessary for the company to obtain that privilege from the common council of the city, as was required by the general statute. This statute provided that the charter should be forfeited if operations were not begun within three months after its passage. In 1883 the defendant, through the plaintiff Dailey,' purchased the whole outstanding stock for the sum of $4,000. At this time the company appears to have had no physical property whatever, and seems to have set but little store on its license under the patent. It had, however, obtained under the- act of 1814 a complete franchise to lay mains and do business. If this franchise could be maintained and its forfeiture avoided it was a valuable property to sell, either to persons desiring to invest in the manufacture and supply of gas, or to the other gas companies, of which the Equity Company would be a competitor. These latter companies had actions, instituted by the Attorney-General to forfeit the charter of the Equity Company for failure to comply with the condition of the statute and for nonuser. Thus ensued a litigation lasting over some six years. This litigation was finally terminated by the withdrawal of the actions. Subsequently the defendant entered into a contract with a construction company for the erection of works, and received $250,000 in bonds and $500,000 in stock. The plaintiffs claimed that the plaintiff Dailey wag employed in this litigation, and also in other matters relative to the gas company, by the defendant under his promise that if the litigation was successful and the speculation profitable he would “ make the said Daily his equal partner in interest * * * and. would, make him rich thereby ; ” that on the termination of the litigation- and the execution of the contract with the construction company the defendant repudiated his promise. Thereafter the plaintiffs brought this action for the value of their services in the matter narrated, and also for certain other' services to which .it is unnecessary to refer. The defendant answered denying the employment, the rendition of the services, Or the alleged promise, and alleging .payment in full for such services as had been rendered, and the Statute of Limitations. He also counterclaimed for breach of'the agreement of the plaintiff Dailey to transfer to him all the stock of the gas company. The learned referee awarded the plaintiffs $13,530 for tire services described.

The decision of the referee that the plaintiff Dailey was employed by the defendant is not only supported by the evidence, but in accordance with its clear weight. The case principally rested on the testimony of the plaintiff Dailey, and whatever Dailey testified to, the defendant, when on the stand, denied. But it is certain that Dailey, while not attorney of record, did appear in the litigations and take part in the proceedings. The defendant subsequently entered into negotiation to.sell the company to one Addicks. It is testified, both by the broker and the lawyer for Addicks, that during these negotiations the defendant stated that the plaintiffs had a large claim for their services in defending the franchise of' the com-' pany. The defendant seems to place himself in contradiction to every witness for the plaintiffs, many of them witnesses who were wholly disinterested. The referee was, therefore, justified in crediting the statement of the plaintiff Dailey. The amount allowed for the services is large, but, considering that the compensation was contingent,' and dependent on the result of the speculation, we cannot say that it is excessive. Mor is it against the weight of the expert evidence. The cross-examination of the' experts showed that the hypothesis upon 'which they had fixed their valuations did hot embrace all the facts of the case, or at least the referee might have so found. The questions of law raised by the appellant may be summarily disposed of. As already stated, the action is-not for an accounting, but on a qucwMm meruit. The. plaintiffs do not claim that they became partners of the defendant in the transaction, nor do they seek a specific performance of the agreement that they should become partners. That on the defendant’s refusal to carryout his agreement the plaintiffs might bring an action for their services on a quantum meruit is unquestionable. Therefore, the evidence of the plaintiffs established the cause of action set forth in the complaint, and there was no case of failure of proof or even of variance. The question whether the services were rendered, on the employment of the defendant or that ■ of the ■ company, was purely one of fact and not of law. The defendant practically was the company, and, therefore, there is no improbability that he pledged his personal credit. In fact,-to carry out his speculation it would be necessary for him either to clear the company from debt -or to pro-, vide with the purchaser for its payment. So in his contract with the construction company, the defendant covenanted that the gas company should- be free from debt. The counterclaim for the alleged failure of the plaintiff Dailey to turn over to the defendant all the stock of the gas company is without the slightest merit. It refers to the §500,000 of stock in the treasury of the company at the time of the sale to defendant. The defendant obtained all the stock that was outstanding. The ownership of that stock made him sole owner of the assets of the company. It was not of the slightest imjDortance whether the nominal amount of the stock was §500,000, or ten times that amount, as by the purchase of the outstanding stock .the defendant acquired the only valuable asset, a franchise. Whenever he might succeed in effecting a sale of the company, .a purchaser would give him neither more nor less because of the nominal amount of stock outstanding. The referee has .found that the services rendered by the plaintiffs were under a continuous. employment. This alone would not take the earlier services out of the Statute of Limitations, but the evidence shows that the .services were not only continuous, but that the contract of enrployment was single and entire. In such case the statute does not commence to run until after the completion of the services. (Bathgate v. Haskins, 59 N. Y. 533.)

The judgment appealed from should be affirmed, with costs.

All concurred.

Judgment affirmed, with costs. '