Court Opinion

ID: 5694740
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:32:15.97679+00
Date Added: 2024-06-11T08:40:12.974015
License: Public Domain

Breitel, J.
(dissenting). I dissent and vote to affirm the judgment dismissing the complaint.
I am not without doubt whether the statutory charging lien of an attorney extends to the proceeds in the hands of a purchaser for value of an unlitigated claim, in the absence of actual notice of lien, as distinguished from mere knowledge that an attorney has rendered services in connection with procuring payment of the claim. Thus, in Fischer-Hansen v. Brooklyn Heights R. R. Co. (173 N. Y. 492, 501-502) it was said that££ It [the lien] clings to any property or money into which the subject can be traced, until it reaches the hands of a bona fide purchaser.” (Cf., also, 7 C. J. S., Attorney and Client, § 230; 5 Am. Jur., Attorneys at Law, §§ 225, 227, 230; Anno. 93 A. L. R. 685 et seq.; but see, Matter of Lexow v. Tremaine, 252 App. Div. 307, affd. 277 N. Y. 657.) But I do not find it necessary to reach that question.
The relationship among the three parties in this case was simple indeed. The attorney was handling claims on a written contingency arrangement for his client Iron Works. Iron Works *547was factoring its accounts by assigning them to the factor Mutual Factors. The attorney knew at all times that Iron Works was factoring accounts. The factor at all times knew that the attorney was handling the claims for Iron Works before the Federal agency. The attorney, however, did not know whether any particular claim was assigned or not under the factoring-agreement. The factor, on the other hand, did not know how the attorney was being paid for his services. The attorney never told the factor that he was not being paid and was relying for compensation on his contingency arrangement.
Only with respect to the third claim for $9,088.90, which was paid to the factor on January 15 or 20, 1954, is the attorney’s lien sustained by this court. The lien on this claim is then sustained, evidently, on the basis that the attorney did not waive his lien because his demand for payment of his fees from the factor was made no appreciable lapse of time after the factor took the assignment or received payment. This third claim results from an invoice which was settled with the Federal agency on December 29, 1953. The claim covered an invoice dated December 22, 1953 and was assigned on that date to the factor. The factor received payment, as pointed out earlier, on January 15 or 20,1954. The attorney made his demand for his fees from the factor on January 22, 1954. But, if the attorney waived his liens on the earlier claims, by his silence, while permitting the factor, with whom he was in contact, to take assignments of the claims, surely the effect of his conduct projected itself into the future, unless and until he should give notice to the factor that it was taking assignments of claims prosecuted by him at its peril.
From at least January, or March, 1953, the attorney knew that payments were being- made on the earlier claims and he was not receiving his share of the proceeds from the client or anyone else. Instead of giving notice or suing, although in contact with the factor, he remained silent, because he wished, as he said, in effect, to maintain his relations with his client. He changed his attitude only after the client, Iron Works, faced bankruptcy. In the meantime, however, the factor had parted with cash given to Iron Works in purchase of the claims, and had not even retained its 20% reserve under the factoring arrangement.
This course of conduct is the very stuff of waiver and estoppel (31 O. J. S., Estoppel, § 87 et seq.), and its effect would not be changed until the attorney brought home to the factor what were *548the circumstances, and what were the attorney’s claimed rights. This was not done until the factor’s position had been hopelessly changed. (Cf. Matter of McCrory Stores Corp., 19 F. Supp. 691; cf., also, West v. Bacon, 164 N. Y. 425.)
All of this is in the evidence of the case —virtually undisputed— and the trial court properly found that the attorney’s conduct constituted a waiver and an estoppel as against the assignee, whatever it might be as between attorney and client.
Peck, P. J., Botein and Valent®, JJ., concur with Bergan, J.; Breitel, J., dissents and votes to affirm the judgment dismissing the complaint in opinion.
Judgment modified so as to enforce plaintiff’s lien for services on $9,088 paid to defendant January 15, 1954 and, as so modified, affirmed, with costs to the appellant. Settle order on notice.