Case ID: abb-ct-app_3/html/0330-01.html
Source: Caselaw Access Project
Author: {"author": "Baecom, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MULFORD v. MULLER.
    September, 1863.
    The rule forbidding an attorney to disclose as a witness the communications of his client, without the consent of the latter, does not apply to preclude him from testifying that in collecting a claim his client had assigned, he acted on behalf of such client, and that the latter forbade him to pay over the proceeds to the assignee.
    
    An assignment of a sum due on a j udgment, stipulating that when collected it is to be applied by the assignee on a bond and mortgage of . even date with the assignment, held by the assignee against the assignor, with a covenant by the assignor not to collect the sum assigned, is, on its face, an assignment as collateral.
    After the sum has been collected by an attorney, acting under the instructions of the assignor, given in violation of his covenant, the latter is estopped from claiming that a part not paid over to the assignee enured as payment of the bond and mortgage.
    Joanna Mulford and others brought this action, in the supreme court, against John Cassidy (for whom, on his death pending the suit, James Muller and others, his executors, were substituted), to foreclose a mortgage of land made by Cassidy to secure nine thousand four hundred and fifty dollars with interest. The bond to which the mortgage was collateral stipulated, “ it being understood that said Cassidy shall assign and transfer to said obligees five thousand five hundred dollars of a certain judgment,” describing it, which, “when paid by the city of Brooklyn, shall be received by the said obligees in full for the sum aforesaid.” Cassidy also in the bond guaranteed that the judgment should be paid by a day named. By an assignment bearing even date with the bond and mortgage, Cassidy recited the recovery of the judgment, and assigned five thousand five hundred dollars of it to plaintiffs, adding, “ which sum, when collected, shall be applied by the obligees upon the aforesaid bond.” Cassidy, in the assignment, also covenanted that he would not collect or receive the five thousand five hundred dollars, or interest, nor discharge the judgment, &c. The defense was, that the judgment had been paid, and that the five thousand five hundred dollars extinguished the amount due on the mortgage.
    It appeared on the trial that the judgment had been enforced against the city of Brooklyn (formerly Williamsburgh), by an action brought by one Stevenson, an attorney retained by Cassidy. Stevenson was examined as a witness, and testified that he had no authority from the present plaintiffs, but acted under directions of Cassidy in collecting and satisfying the judgment; that Cassidy directed him not to pay the money over to plaintiffs, and threatened to sue him if he did; and directed him to pay a part to a third person.
    It was also proved that Stevenson had paid three thousand dollars of the money he had collected to plaintiffs, but refused to pay any more, claiming the residue under an alleged agreement with Cassidy for his services.
    Parol evidence that the assignment was intended to be as collateral to the bond and mortgage, and the above statements as to communications between Cassidy and Stevenson, were admitted under defendants’ exception. After judgment for plaintiffs, defendants appealed.
    
      
      D. P. Barnard, for defendants, appellants;
    Insisted that payment to Stevenson was not payment to Cassidy, hut to plaintiffs, who by receiving part of the proceeds from him recognized him as their own attorney.
    
      W. P. Buffett, for plaintiffs, respondents.
    
      
       Compare Williams v. Fitch, 18 N. Y. 546; see, also, Whiting v. Barney, 30 Id. 330.
    
   By the Court.

Baecom, J.

The appellants’ counsel contends that the referee erred in allowing the plaintiffs to prove by Stevenson that he acted under the directions of Cassidy, in collecting the judgment from the city of Brooklyn; and that the referee also erred in permitting Stevenson to testify that Cassidy directed him not to pay the money he received upon that judgment from the comptroller of said city, to the plaintiffs, and threatened to sue him if- he should pay such money to them. His position is, that if Stevenson was the attorney of Cassidy, any directions the latter gave the former, and all conversations between them, touching the collection of the judgment and the disposition of the money received thereon, were covered by the seal of professional confidence.

The decisions of the referee in admitting this evidence were so palpably correct, that I need only say the facts testified to by Stevenson were not of the character which an attorney is prohibited from disclosing as a witness without the consent of his client. 1 Greenl. on Ev. § 245.

It is not necessary to determine whether the referee erred in receiving parol evidence of what was said between Cassidy and the plaintiffs’ agent, before the assignment of five thousand five hundred dollars of the judgment against the city of Williamsburgh was made to the plaintiffs, to show that the assignment was taken by the plaintiffs as collateral security for a like portion of the money mentioned in the bond and mortgage; for the assignment and bond, themselves, clearly establish that fact. Those instruments show that the plaintiffs were not to apply the five thousand five hundred dollars, and interest thereon, upon the bond and mortgage, until the same should he collected or received by them, or some agent or attorney for them by their authority.

The question is not whether the plaintiffs could have compelled the city of Brooklyn to pay the five thousand five hundred dollars, and interest, again to them, after the comptroller had paid the same to Stevenson, or whether they could have collected that money of Stevenson after he received it; but whether Cassidy, after Stevenson had collected the money, as his attorney and under his directions, from the city of Brooklyn, and by his directions had refused to pay two thousand five hundred dollars of the same, and the interest, over to the plaintiff's, could compel the plaintiff's to apply the portion not paid over to them, upon the bond and mortgage.

Cassidy covenanted in the assignment of the five thousand five hundred dollars and interest, that he would not collect or receive the same, or any part thereof, nor release nor discharge the judgment; yet Stevenson did all of these things, and retained two thousand five hundred dollars of the money, besides interest, by his directions; and according to the bond as well as the assignment, rhe plaintiffs were not to apply any portion of the five thousand five hundred dollars, and interest, upon the bond and mortgage, until the same should be collected — which means, collected by them or their agent or attorney, and not by Stevenson, whom they did not employ, and who never professed to act as their agent or attorney.

These facts clearly estopped Cassidy from claiming that Stevenson was the attorney of the plaintiffs in collecting or receiving any portion of the judgment; and also estopped him from insisting that Stevenson did not collect the whole judgment and retain two thousand five hundred dollars of it, besides interest, as his attorney.

The case, therefore, was correctly determined by the referee, and the judgment of the supreme court in conformity therewith should be affirmed, with costs.

All the judges concurred, except Davies and Rosekraks, JJ., who were absent.

Judgment affirmed, with costs and three per cent, damages, 
      
       That the evidence was admissible, see Britton v. Lorenz, 45 N. Y. 51; affirming 3 Daly, 23.