Case ID: ny-super-ct_54/html/0483-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Freedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SAMUEL H. RANDALL, Appellant, v. JACOB VAN WAGENEN, Impleaded, &c., Respondent.
    
      Attorney, action by for damages for the collusive settlement of action in which he was plaintiff's attorney when not maintained.
    
    The complaint in the action, brought by an attorney against the plaintiffs and defendant in an action wherein he was attorney for the plaintiffs, for damages on account of the settlement and discontinuance of that action by agreement between them, alleged that the claim sued on in that action had been assigned to the attorney; that notice of such assignment had been given to the defendant to that action, and that after such notice the plaintiffs and defendant in that action fraudulently conspired together to defraud plaintiff by settling the action, and in pursuance of that conspiracy did settle the action and caused an order to be entered discontinuing it in fraud of plaintiff’s right, and thereby the plaintiff lost the amount of his interest in the claim and the benefit of his collateral security.
    
      Held, that the allegations in the complaint were insufficient to constitute a cause of action, and that the complaint was properly dismissed at the trial.
    Before Freedman and O’Gorman, JJ.
    
      Decided May 18, 1887.
    Appeal from judgment entered on a dismissal of the complaint at the trial.
    
      The facts sufficiently appear in the opinion.
    
      Samuel H. Randall, attorney, and Hon. Hooper C. Van Vorst, of counsel for appellant, argued:
    I. The complaint set forth facts sufficient to constitute a cause of action. It was an action on the case for conspiracy, or for acts in the nature of a conspiracy, or for fraud, for a concert of action by the defendants to cheat and defraud the plaintiff, which actually resulted in damage and an intent by defendants to cheat and damage the plaintiff. There was a wrongful and unlawful combination by defendants to do what the law forbade their doing, and which was a fraud upon the plaintiff’s rights. By his demurrer, the defendant admitted all the allegations of the complaint, as to the acts constituting the alleged fraud, or which were done in pursuance of such combination to cheat and defraud plaintiff. There was matter to go to the jury for them to find the facts for or against the defendants, of a fraudulent purpose, carried out by combination, by concealment of the false character of the consent upon which the order of discontinuance of the action was made from the court; which consent the defendants were prohibited by law and the rules and practice of the court from signing or using, and which could have been used only by omission to call the court’s attention to its true character, and was a deceit and fraud upon the court, as well as fraud upon the plaintiff, as assignee, or holder of the claim in suit as collateral security as alleged. Defendants made use of legal proceedings by using said illegal consent to procure a fraudulent and irregular discontinuance of the action, and damage resulted to plaintiff by such use, being “ hindered, delayed and defeated in the recovery of the claim ” in the action then pending of the Neills against Van Wagenen, and sustained damage to the amount of about $10,000. “ Such fraudulent practices are actionable as the cases cited show.” “In such action the evidence of a technical conspiracy is not essential. The damage is the cause of action and the conspiracy mere matter of aggravation.” “ It is enough to sustain such an action that the unlawful acts of defendants occasion trouble, inconvenience or expense to the plaintiff.” Verplanck v. Van Buren, 76 N. Y. 247 ; Quimby v. Strauss, 90 Ib. 664; Swan v. Saddlemaire, 8 Wend. 676; Place v. Minster, 65 N. Y. 89; Tappan v. Powers, 2 Hall, 287-298 ; Goldberg v. Dougherty, 7 J. & S. 189; People v. Tweed, 5 Hun, 382.
    II. The conspiracy or combination alleged was to accomplish the doing of an illegal act, which deprived plaintiff of legal rights and whereby plaintiff sustained legal damage. Code, § 55 ; Keenan v. Campbell, 1 Law Bul. 18 ; Pilger v. Gore, 12 Abb. 244; Chadwick v. Snedeker, 26 How. 360 ; Nebb v. Dill, 18 Abb. 264; Halsey v. Carter, 6 Rob. 535; Peck v. York, 75 N. Y. 421; Coughlin v. R. R. Co., 7 Ib. 449; Wheeler v. Wheeler, 9 Cow. 34; Crockett v. Smith, 14 Abb. 62.
    III. Plaintiff had a legal right to bring such an action as was brought by him, and was not limited to relief by motion. Hackley v. Draper, 60 N. Y. 88; Hill v Hiemans, 59 Ib. 396 ; Truman v. Leland, 6 Hill, 237; Booth v. Bank, 50 N. Y. 396 ; McLean v. Tompkins, 18 Abb. 24.
    
      Charles M. Marsh, attorney and of counsel for respondent, argued :
    I. In order to lay the foundation of any civil action of damage for a conspiracy the acts complained of must have been illegal. In Buff. Lubricating Oil Co. v. Everest, 30 Hun, 588, it was held that an allegation that the defendants entered into a conspiracy to rain plaintiff’s business, by beginning and causing causeless suits to be begun, gave no cause of action, even if true. If it be no ground of action to begin a causeless suit, it certainly is none to discontinue a well founded one. The plaintiff Neill had a perfect right to settle his claim and discontinue the action, so far as he was concerned. Compton v. Whitehouse, 48 Super. Ct. 207; Pulver v. Harris, 52 N. Y. 76 ; Coughlin v. N. Y. C. & H. R. R. R., 71 Ib. 448.
    n. While under the authorities this settlement was a valid and legal exercise by the plaintiff of his rights as master of the suit, its own validity was between the parties. The attorney had the right to continue the litigation, for the purpose of enforcing his lien. This settlement was no injury to it. Coughlin v. N. Y. C. & H. R. R. Co. 71 N. Y., 448. The proper course would have been for the plaintiff to have applied in the original action to continue the suit, to enforce the lien. This suit cannot be brought. Tullis v. Bushnell, 65 How. 465; McCabe v. Fogg, 2 Mon. L. B. 7; Foreman v. Edwards, 14 Week. Dig. 408.
    HI. But in this case the plaintiff was not even compelled to make this motion. He alleges that the Neills had made an assignment of all their claims to him. The moment the order of discontinuance was entered, he could have commenced a new suit against Van Wagenen, in his own name, and Van Wagenen would have had no defense, except such as he had to the original cause of action.
   By the Court.—Freedman, J.

At the trial, the complaint of the plaintiff was dismissed on the ground that it did not state facts sufficient to constitute a cause of action. The action was brought against thrée defendants who theretofore constituted the parties to an action which the plaintiff, as the attorney for. Charles H. Neill and Henry C. Neill, had brought against Van Wagenen in 1875.

The complaint in the case at bar in substance is as follows, viz.:

1. That the defendants, Neill, had a cause of action on contract against the defendant, Van Wagenen, for $10,000. 2. That the action on this claim was in suit, and plaintiff was the Neills’, attorney in that action. 3. That by parol agreement the Neills agreed to pay or give Eandall one half of their claim or of the money therein, for his services, and also to give him a lien for other services, and for advances made and to be made, amounting in all to about $2,500,. and that they made a parol assignment of their claim to plaintiff. 4. That notice of this claim and this assignment was given to defendant, Van Wagenen. 5. That after this notice, the defendants, Van Wagenen and Neill, fraudulently conspired together to defraud the plaintiff by settling the claim; and that in September, 1877, in consideration of $800 paid by Van Wagenen, said Neills gave a writing acknowledging the settlement of the claim, and a consent that the action be discontinued without costs, and that thereafter an order of discontinuance was entered, and the action thereby discontinued in fraud of plaintiff’s rights. 6. That thereby he lost the amount of his one half interest in the claim, and the benefit of his collateral security.

Upon these allegations, the plaintiff claims damages in the sum of $10,000.

The difficulty with this complaint is that the damages claimed did not flow from the facts alleged. The settlement and discontinuance were good between the parties only. As against the plaintiff, they were irregular, and he might have applied to have them set aside. True, under the law as it stood in 1877, he had no lien upon the cause of action by virtue of his relation as attorney. Nevertheless, if he had moved promptly, the court would have set aside the order of discontinuance, and permitted him to go on with the action on the ground that the settlement and the discontinuance were fraudulent as against him as attorney of record.

Moreover, the plaintiff held an absolute assignment of the cause of action, and Van Wagenen had notice of it. As such assignee, the plaintiff might have brought a new action against Van Wagenen in his own name, and Van Wagenen would have had no defense to it except such as he had to the original action. The discontinuance determined nothing against the plaintiff.

For the considerations stated, the damages alleged cannot be deemed to have resulted from the settlement and the discontinuance, and there is no allegation that they resulted from any other cause. There is not even an allegation of damage resulting from the delay caused by the discontinuance. The complaint is therefore clearly insufficient.

The views so far expressed render it unnecessary to determine the further question whether the action as brought is maintainable as one for conspiracy and fraud.

The complaint was properly dismissed, and the judgment should be affirmed with costs.

O’Gobman, J., concurred.