Case Name: Moses Wolfe, Appellant, v. James F. Mack, Respondent
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1913-06
Citations: 81 Misc. 185
Docket Number: 
Parties: Moses Wolfe, Appellant, v. James F. Mack, Respondent.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 81
Pages: 185–195

Head Matter:
Moses Wolfe, Appellant, v. James F. Mack, Respondent.
(Supreme Court, Appellate Term, First Department,
June, 1913.)
Attorneys — attorney , and client — money belonging to client — compelled by summary proceedings to pay over.
Accord and satisfaction — receipt given on payment of retainer —■ acceptance and demand — action to recover balance.
The relation between attorney and client, in regard to money collected, is that of principal and agent, not that of debtor and creditor; the money belongs to the client and the attorney may be compelled by summary proceedings to pay it over.
Where a receipt given to plaintiff, on paying a retainer to defendant to bring an action on a claim under a policy of insurance, stated that it was understood that defendant should have in addition to the sum paid twenty per cent, of any recovery in the case, which resulted in plaintiff’s favor, and defendant, claiming that it was the understanding of the parties that such percentage was to be for any adjustment of the claim or collection thereof without action, sends to plaintiff a check for the amount recovered less thirty-three and one-third per cent, upon which was written “ in full settlement ” and plaintiff, retaining the check, immediately wrote to defendant that he would not accept it in full settlement and demanded the balance which defendant refused to pay, a judgment in defendant’s favor in an action to recover said balance, given on the ground that plaintiff’s acceptance of the check operated as an accord and satisfaction, will be reversed and a new trial granted.
Guy, J., dissented.
Appeal from a judgment of the Municipal Court of the city of New York, borough of Manhattan, fifth district, in. favor of defendant entered upon a trial by the court without a jury.
Williams & Thomas, for appellant.
J ames F. Mack, respondent in person.

Opinion:
Page, J.
This action is brought by a client ag'ainst his attorney to recover a balance of money had and received. The plaintiff had a claim against the Jewellers' Safety Fund Society under a policy of insurance that he had unsuccessfully attempted to adjust. He retained the defendant, an action was brought and a recovery had in plaintiff's favor. A dispute then arose as to the amount of defendant's compensation, the plaintiff claiming that defendant had agreed to accept twenty per cent, of the recovery for his services and the defendant claiming to be entitled to thirty-three and one-third per cent, thereof. The defendant sent plaintiff a check for $1,025.35 upon which was written "Wolfe vs. Jewellers S. F. S. in full settlement. ' ' The letter accompanying the check stated ' ' In accordance with our agreement of last' evening I enclose my certified check for $1,025.35 in full settlement. Kindly sign the enclosed receipt in full as agreed." The plaintiff retained the check but immediately wrote to the defendant that he would not accept it in full settlement and demanded the balance. Defendant thereupon wrote to the plaintiff " You can not keep that check in view of the statement that it was in full settlement in both letter and check, and claim a balance due you, because this is contrary to our agreement, contrary to the terms under which the check was sent and will be in accord and satisfaction." Some three weeks later a letter wag written to defendant on behalf of plaintiff stating that he still had the check and declining to accept upon the terms stated in the letter. Defendant did not answer this letter and refused to pay the balance on demand. The plaintiff deposited the check and brought this action. Judgment has been given in favor of the defendant. At the time plaintiff retained defendant he paid him twenty-five dollars and received the following:
" June 24th, 1911.
" Eeceived of Mr. Wolfe $25- in the case of Wolfe vs. Jewellers' Safety Fund Society, it being understood that I am to have in addition to said $25, 20% of any recovery in said case.
'James F. Mack."
The defendant claims that it was the understanding of the parties that this twénty per cent, was to be for any adjustment of the claim or collection thereof without action. If this were the fact he used very inept language to express the idea. The word " recovery," in law, means " the restoration or vindication of a right existing in a person, by the formal judgment or decree of a competent court, at his instance and suit, or the obtaining by such judgment of some right or property which has been taken and withheld from him." Black L. Diet. Therefore an attorney should not be allowed to urge that when he used the words " recovery in said case " he did not intend thereby that he should prosecute or even bring an action, but that he intended to only agree to collect by amicable negotiation without suit. The attorney claims that at about the time the complaint "was verified he told the plaintiff that he should claim a' reasonable fee, and again he testified that after he had collected the judgment he informed the client that he demanded one- third of the recovery as a fair and reasonable fee, and that after some discussion the plaintiff agreed to his making such deduction from the recovery. Both of these statements were flatly denied by the plaintiff, and if the learned trial justice had resolved these contested questions of fact in defendant's favor and given judgment on that ground I would not be inclined to inter-' fere with his "decision. He has, however, expressly given judgment for the defendant upon the ground that " The acceptance of the check, after notice to plaintiff by defendant in writing operated as an accord and satisfaction. ' ' With this conclusion I cannot agree. The relation between attorney and client with regard to money collected, is not that of debtor and creditor, but the fiduciary one of principal and agent. The money belongs absolutely to the client, and he can compel the attorney to pay it over by summary proceedings. If in such proceeding'the attorney asserts a lien his lien will be adjusted and he will be required to pay over the balance. But if he pays over the balance, over and above the amount which he claims for services, his lien on the ¿mount paid over is gone and only attaches to the amount held by him which is still subject to adjustment by the court either in a summary proceeding or in an action. This identical question has been, recently passed upon by the Appellate Division, fourth department, in General Fireproof Construction Co. v. Butterfield, 143 App. Div. 708. The court said: " The money collected by the defendant belonged to the plaintiff. The defendant at most had a lien upon it for his services, and could retain what he was legally entitled to for such services. When the defendant sent the check for a part of the inoney, he limited his right to compensation to the amount retained by him and conceded that the amount sent belonged to the plaintiff. Under these circumstances the plaintiff was not bound to return its own money to defendant, under penalty of acknowledging defendant's right to the balance retained. Plaintiff had a right to retain the money paid to it and to sue for and recover any portion of the balance to which it was entitled. It was not a case for the application of the rule of accord and satisfaction. It would not be quite fair for the defendant to say: I send you an amount which I concede is yours, but if you take it you must acknowledge you are not entitled to any part of the moneys I have retained. (Eames Vacuum Brake Co. v. Presser, 157 N. Y. 289, 291.)" The case of Dunn v. Whalen, 120 App. Div. 729, relied upon by the respondent is not an authority in support of the case at bar. In that case the attorney accepted a check in full settlement of his bill for services rendered. The liability of the client to the attorney for. services rendered is that of debtor and creditor, and of course if there is a dispute as to the value of the services and the client sends a check for a less amount than the attorney claims in full settlement thereof and he accepts and retains it an accord and satisfaction arises.
The judgment should be reversed and a new trial ordered, with costs to appellant to abide the event.
G-ebabd, J., concurs.