Case Name: Wilmot L. Morehouse, Plaintiff, v. The Brooklyn Heights R. R. Co. and Jonas Nathan, Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1904-04
Citations: 43 Misc. 414
Docket Number: 
Parties: Wilmot L. Morehouse, Plaintiff, v. The Brooklyn Heights R. R. Co. and Jonas Nathan, Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 43
Pages: 414–416

Head Matter:
Wilmot L. Morehouse, Plaintiff, v. The Brooklyn Heights R. R. Co. and Jonas Nathan, Defendants.
(Supreme Court, Kings Special Term for Trials,
April, 1904.)
Settlement of action without the consent of plaintiff’s attorney — If the plaintiff is insolvent, the attorney may enforce his lien against the defendant upon the amount paid in settlement — The defendant cannot urge that the attorney’s agreement for compensation was unconscionable.
A plaintiff has an absolute right to settle the action at any time and if such settlement is not collusive, the attorney is bound thereby; his lien for compensation, however, attaches to the • amount paid in settlement.
"Where the settlement is effected without the knowledge of the" plaintiff’s t attorney and the plaintiff spends the money received upon the settlement and becomes insolvent, the attorney may maintain an action against the defendant to foreclose his lien for compensation on the amount paid upon the settlement.
In such an action the defendant cannot raise the question whether an agreement between the plaintiff and the attorney, by which the latter was to receive for his services one-half of whatever sum might be obtained upon a recovery or by a settlement, was unconscionable.
Suit to foreclose an attorney’s lien. The defendant Nathan brought an action for damages against the defendant railroad company. This plaintiff was his attorney, and they had an agreement that the attorney was to receive for his services one half of whatever sum might be obtained by recovery or by a settlement. Nathan settled the case with the company after it was placed on the calendar for trial for $2,000, and that sum was paid to him. His attorney, this plaintiff, was not consulted and knew nothing of the settlement. Nathan did not pay this plaintiff anything, has spent the money, and is insolvent.
E. V. Brewster for plaintiff.
Charles L. Woody for defendant.

Opinion:
GayuoPu, J.:
An attorney for the plaintiff formerly had a lien on the judgment only, but now he is given by statute a lien on the cause of action itself (Code Civ. Pro. § 66). But his lien whether on the cause of action or on the judgment is necessarily subject to his client's right to settle. The right of a client to settle always was, and it is, absolute. He cannot be compelled to go on with the action by his attorney; and if he obtain a judgment and the judgment debtor be insolvent, or if there be an appeal, he has the right to settle. He can no more be compelled by his attorney to take the risk of an appeal than to take the risk of a trial. In a word, and to repeat, the lien of the attorney, whether on the cause of action or on the judgment, is subject to the absolute right of the client to settle, and the attorney cannot go on with the action after it is settled, unless the settlement be collusive and fraudulent against the attorney, in which case he will be permitted to prosecute the ac tion to judgment in order to foreclose his lien, if that course be necessary to frustrate the fraud, for in the case of fraud all ordinary rules give way. It is useless to pick phrases out of opinions on the subject. The matter is too plain for argument. The lawyer is hot the principal and the client, his subject or subordinate, but the reverse is the case. The litigation of this state has not been turned over to our profession as common barrators and strife makers. Lawyers are subject to the instructions and wishes of their clients (Fenwick v. Mitchell, 34 Misc. Rep. 617)., Forgetfulness of this one thing has caused much confusion.
Formerly, when the attorney's lien was on the judgment only, if the parties collusively prevented a judgment, so as to prevent the attorney's lien, and his client was worthless, the court would allow him to enter judgment, so that he could frustrate the fraud and collusion of the parties by means of his lien.
But now that the lien is on the cause of action, the attorney is in no need of a judgment in the action. If the cause of action is settled by the plaintiff, the attorney is bound by the settlement, and his lien necessarily continues on to the amount agreed upon in settlement, and the defendant cannot defeat the lien by paying the money to the party. H he so pays it without the attorney's consent he does so in his own wrong. The attorney may still foreclose his lien on the agreed sum (Fenwick v. Mitchell, supra; Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492).
The claim of the defendant here is, however, that fifty per cent, is unconscionable, and that this court will not enforce the lien for that amount. If the defendant company still had the $2,000 in its possession it could not raise such a question; it would have no interest in it; it would be a matter between the attorney and his client only. I do not think the company is in any better position after having paid the money in its own wrong.
Judgment for the plaintiff against the defendants for $1,000; execution first to issue against the defendant Nathan, and if it be returned unsatisfied, then against the defendant company.