Case Name: Annie Uhl, Respondent, v. Charlotte Kohlmann and Others, Defendants. August P. Wagener, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1900-06
Citations: 52 A.D. 455
Docket Number: 
Parties: Annie Uhl, Respondent, v. Charlotte Kohlmann and Others, Defendants. August P. Wagener, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 52
Pages: 455–459

Head Matter:
Annie Uhl, Respondent, v. Charlotte Kohlmann and Others, Defendants. August P. Wagener, Appellant.
Payment of money out of court — notice required of an application therefor — the attorney personally charged with its restoration — rule 69 is inapplicable to money . deposited in a partition suit.
The practice of directing the payment of money out of court, without notice to ' all persons interested in the disposition of the money, and to all who have appeared in the action in which the money was deposited, and without taking proof before á cóvirt or referee of the facts upon which the application is based, condemned. - - . •
Circumstances considered under which an attorney, who procures the payment to a client out of court of a greater sum than that to which the client is entitled, may be personally charged with the restoration of the overpayment.
Rule 69 of the General Rules of Practice,' providing that orders for the payment of money out of court shall he made payable to the party entitled thereto or to his attorney, has no application where the express provisions of the Code of Civil Procedure require that the judgment, as in an action of partition, snail, direct payment directly to the party.
Appeal by August P. Wagener from an- order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk ot the county of New York on the 16th day of March, 1900, vacating and setting aside an order which directed the-chamberlain of the city of New York to pay over certain moneys, to one Annie Heiser or her attorney; and which further directed, that said Annie Heiser or her attorney, August P. Wagener, forthwith pay to the chamberlain of the city or New York $1,576.47,. with interest thereon at the rate of six per cent per annum from the 27th day of August, 1898, together with ten dollars costs- and disbursements.
August P. Wagener, for the appellant.
William O. Cambell for the respondent.

Opinion:
Hatch, J.:
No case which has been called to our attention more strikingly illustrates, than does the presept one, the absolute necessity of notice to all interested in the disposition of money in court and to all 'who-have appeared in the action in which such money was deposited, and ordering a reference to take proof of the facts upon an application to the court for the payment of money which it holds in custody. In no case should an order for the payment of money be made Unless the court takes proof of all the facts which the application presents,, or otherwise informs itself by the rbport of á referee. Had either course been adopted in this case, in all human probability the money paid out would have been saved to the persons entitled thereto. Neither courts, attorneys nor custodians, when dealing with funds belonging to the wards of the court, have any excuse to make an application for final disposition of such funds unless the basis of such application and disposition has been in every respect in compliance with the law and founded upon facts which have been proved with all possible certainty. When this' rule shall obtain, as the law requires it shall, cases of the character, now before us will become almost impossible. The most that this court can do in this case is to hold each person responsible, so far as the law permits, for the-fund which has been impfovidently paid out.
The facts of the present case show that an action of partition had been commenced, which proceeded to final judgment on April 26, 1897. The premises which were the subject of the partition having been sold, it was found that one Minnie Heiser was entitled to one-third of the proceeds of the property. She, being dead, was not a party defendant to the action. This share, amounting to $4,729.46, was, by. final judgment, directed to be paid to the chamberlain of the city of New York to the credit of the action. Annie Heiser, whose maiden name was Simon, was a party defendant in the action, she being entitled to take together with others as heirs of Minnie Heiser. She was then an infant. Herman Heiser, another defendant in the action, was appointed her guardian ad litem, and the attorney Wagener in this proceeding appeared as the attorney for Herman Heiser, as such guardian, and interposed the usual infant's answer' in partition. Of the estate of Minnie Heiser, Sebina Simon, Harry Simon and Annie Heiser, neé Simón, took three-twenty-sevenths of such fqnd in equal shares. Annie Uhl and Charlotte Kohlmann took twelve twenty-sevenths each of such fund.'. An administrator was appointed of the estate of Minnie Heiser, and under the law, after such appointment, the fund could not be distributed for a period of three years, except in a particular case. (Code Civ. Proc. § 1538.) This time did not expire until the 9th day of December, 1899. Annie Heiser became twenty-one years of' age on May 19, 1898. On the eleventh day of August of that year Wagener, as attorney for Annie, presented to the Supreme Court an affidavit of the said Annie Heiser, his own and a certificate of the chamberlain showing the amount of this fund to the credit of Annie Heiser to be $1,576.47. In fact, her interest was but $520.15. Upon these affidavits and the certificate, the attorney Wagener moved for and obtained an order directing the chamberlain to pay to him or to Annie Heiser such sum, $1,576.47, and upon the presentation of such order, duly countersigned, a check for the amount, was delivered to the attorney for Annie. A more improvident order could scarcely be applied for by an attorney. By the express pro vision of the Code the judgment required that the money should only be paid to a party entitled thereto. While it is quite true that rule 69 of the General Rules of Practice authorizes payment to the person or persons entitled thereto, or to- his or to their 'attorney, yet such rule has no application where the' express provision of the Code requires that the judgment shall direct payment directly to the party entitled as in the present case, and where the judgment presumably complies with. such provision. The language of the" Code of Civil Procedure, section 2751, does not change such rule,,as it creates no limitation whatever upon the express requirement of section 1538.
Of this fact the attorney was not only presumptively charged with knowledge, which' is sufficient, but it must be assumed that he had actual knowledge of the terms of the judgment, as he was attorney representing the guardian of Annie Heiser in the action of partition ; and if he' did not know of the terms of the judgment and the requirements of the act, he was guilty of dereliction of duty, in that regard, and if he did, as we must presume, he knew that he had no right to receive this money and that the court no authority to direct its payment to him. .
But in addition to this, we have already observed that three years must elapse, after the appointment of the • administrator, before application can be legally made, and then it is hedged about with such conditions as to make it impossible-to defraud any person if such provision be observed with fidelity. Before the application can be made, there must be a certificate of the surrogate of the county where the decedent died, showing that the three years have elapsed since the issuing of letters of administration upon the estate, and that no proceeding for the. mortgage, lease or sale of. the real property of-the decedent, after the payment of the debts and funeral expenses, is pending. There must also be a certificate of the county clerk where the real property was sold by - virtue of the interlocutory judgment, showing that the notice for which provision is made in section 2751 of. the Code of Civil Procedure has been filed in his office. After making proof of these facts and compliance, being had with the other provisions of law showing that the person is otherwise entitled to the order, the -court is.authorized to make the same. If at anytime application is made prior to this time, notice must be given to the executor or administrator of the decedent, but any order directing the payment over of the money under such circumstances is not to be given until a bond is furnished for the repayment of the money in case it is required. It is not even pretended that compliance was had with any of these'provisions of law; on the contrary, the attorney marched into court, merely marshaling his two affidavits and the certificate of the chamberlain. The result is, that Annie Heiser now has $1,056.32 to which she has not even the shadow of a claim; and this result has been reached by an affidavit false in fact, presented by an attorney who not only had knowledge of the facts, but was chargeable with knowledge of the law.
It is, therefore, clear that .such acts operated to perpetrate a fraud upon the court, and that the money was in every sense fraudulently obtained. When the time arrived when the other persons interested in the fund could make application for its payment over, they discovered that the rape of the fund had been accomplished by illegal means. Nothing more is needed to be said to show that the orders below properly charged the attorney as well as Annie Heiser with the restoration of this money. But the case itself should serve as a warning, and as attention is thus sharply called to it, it is to be hoped .that such improvident disposition of trust funds may in the future be prevented. It follows that the order should be affirmed, with ten dollars costs and disbursements.
Van Brunt, P. J., Rumsey and Ingraham, JJ., concurred.
Order affirmed, with ten dollars costs and. disbursements.