Case ID: ad_114/html/0467-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Application of The Edward Ney Company, Respondent, for the Recovery of Certain Moneys and Property from Rudolph Loreck, an Attorney, Appellant.
    First Department,
    July 12, 1906.
    Attorney and client — summary jurisdiction to determine and enforce attorney’s lien — when same not exercised — power of referee — costs.
    Although apart from an attorney’s statutory lien on his client’s cause of action he has also a common-law lien upon papers, securities or other property delivered to him by his client irrespective of any action pending, and the court may determine and enforce either the statutory or common-law lien on the motion of either attorney or client, yet it seems that this summary remedy will be exercised only when the relation of an attorney to his client is professional in character, and not when the attorney is acting as a mere business agent for another. In such case a claim against the attorney should be enforced by action.
    When the court does assume such summary jurisdiction, a referee to whom the matter is sent should not be empowered to “ hear and determine," but only to take the evidence and report the same, with his opinion.
    A client should not be required to give an undertaking to pay the costs of such reference.
    Appeal by Rudolph Loreck, an attorney, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 7th day of May, 1906, referring “ this proceeding and all the issues therein ” to a referee “ to hear and determine. * * * And if an accounting be necessary, the said referee shall proceed to take and state the same, and may compel the production of the necessary books and papers as fully as the court might do.”
    
      
      Rudolph Loreck, appellant, in person.
    
      Philip V. Fennelly, for the respondent.
   Laughlin, J.:

According to the points filed by the respondent this proceeding was instituted against the appellant not merely for the purpose of obtaining certain papers belonging to the respondent in the possession of the appellant, as its attorney, but to require the appellant to account for the sum of $11,000, which it is claimed he received from the respondent under an agreement by which he was to “ attend to the financial end of their business,” and collect and disburse its moneys with a view to tiding it over impending financial embarrassment, in which undertaking it is claimed he utterly failed. If this claim were borne out by the record it is doubtful whether this proceeding could be maintained, for the inference would be that the money was received by the appellant, not in his professional capacity, but in the course of an employment as an agent in rendering non-professional services to the company in its financial-management.

By virtue of the provisions of section 66 of the Code of Civil Procedure an attorney is given a lien upon his client’s cause of action, claim or counterclaim, from the commencement of the action or special proceeding, or service of the counterclaim; and the amount of this lien may be determined and enforced by the court upon the petition of either the attorney or client.

Apart from the statute and in addition to this statutory lien an attorney and counselor also has a common-lavv lien upon any papers, securities or other property delivered to him by his client where no action or proceeding is commenced or pending, and upon the application of the client the court has inherent authority to determine the amount of the lien, and upon payment thereof or security given require the attorney to return the property to the client. (Matter of Sweeney, 86 App. Div. 547; Matter of H—, an Attorney, 87 N. Y. 521; Matter of Knapp, 85 id. 284; Maxwell v. Cottle, 72 Hun, 529; McKibbin v. Nafis, 76 id. 344; Matter of Taylor Iron & Steel Co. v. Higgins, 49 N. Y. St. Repr. 645.) It does not follow, however, that in all cases this remedy should be adopted. This summary authority over attorneys given by the common law and con-ferret! by statute is limited to their professional relations with, clients, and does not extend to transactions of a business nature, such as might be performed by an agent who is not an attorney or counselor ; and although the client asserts that the controversy has arisen in the course of professional employment, yet when this is denied by the attorney, the court, if the fact he found as asserted by the attorney, may proceed no further summarily, arid the petitioner must be left to his remedy by action. (Matter of Dakin, 4 Hill, 42; Matter of Sardy, 47 N. Y. St. Repr. 308; Matter of H—, an Attorney, 87 N. Y. 521.)

The moving papers, however, do not bear out the claim made in the respondent’s points with respect to the character of the services rendered. It is alleged that the appellant was employed professionally, and that all of the services rendered were of a professional character; that under this employment he collected about $11,000 for the company, for which he has not accounted, and that in the course of the professional services he received a bank passbook, check book and other papers of the company, consisting of its by-laws, minutes of meetings of stockholders, letters mailed and received by the company, bills and accounts and evidence thereof, six promissory notes, and other papers of the company used and executed at an annual meeting of the stockholders,”'being the books and papers, the return of which is sought to be compelled by this proceeding. The moving papers also show that the appellant has refused to account for the moneys received and refused to return the books and papers; that the value of the professional services rendered by him does not exceed $500, and that the appellant has not paid, out of the $11,000 received, to exceed $1,000.

The appellant does not deny that he was employed by the respondent professionally, or that he has in his possession certain papers and documents belonging to it; but he does deny that he has any moneys belonging to the respondent for which he has not accounted, and he claims a lien upon the books and papers in his possession for legal services. The appellant insists that his rights cannot he adjudged summarily, arid that the court is without authority to refer the matter, including an accounting, to a referee to hear and determine.

As already observed, there is no doubt but that the court has authority, on the application of a client, to determine summarily the amount of an attorney’s lien and to direct the delivery of the client’s papers upon the payment thereof. We are of opinion, however, that the provision of the order authorizing the referee to hear and determine is unwarranted. Whether the lien of an attorney he a statutory lien or one depending upon the common law, the power to determine it summarily rests with the court, and while the court may refer the matter to a referee to take evidence, eleven an account, and report the same with his opinion to assist the court in deciding the questions arising, it cannot delegate the entire matter to the referee for final determination, as was done by the order from which the ajipeal was taken. We do not think that the client should be required to give an undertaking to pay the expenses of the reference.

The order should, therefore, he modified by substituting for the words to hear and determine ” the following, “ to take evidence and report the same to the court with his opinion thereof,” and as thus modified affirmed, without costs.

O’Brien, P. J., McLaughlin, Clarke and Houghton, JJ., concurred.

Order modified as indicated in opinion, and as modified affirmed, without costs. Order filed.