Court Opinion

ID: 5187399
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:30:41.901888+00
Date Added: 2024-06-11T08:26:48.060499
License: Public Domain

Hirschberg, J.:
The papers on this appeal disclose the following facts: On the 6th day of November, 1899, the action was commenced-by the service of a summons and complaint, to recover damages for personal injuries, alleged to be due to defendant’s negligence. On the same day the plaintiff made a written agreement with his attorneys by which he agreed that they should receive for their services one-third of any sum for which the case might be adjusted, and that neither *23party should settle the case without the consent of the other. Accompanying the summons and complaint was a notice to the defendant, signed by the plaintiff’s attorneys, notifying the former that “ we claim as and for our services rendered and to be rendered, as per written agreement in the above-entitled action, a lien upon any verdict, judgment, compromise or settlement that may be had or obtained herein to the extent of one-third thereof.” On the 7th day of December, 1899, the plaintiff received from the defendant the sum of $2,600, and in consideration thereof executed and delivered to the latter a general release, and at the same time received from the defendant, as a part of the settlement, a written agreement dated that day, entitled in the action, and signed on behalf of the defendant by the individual who made the settlement and paid the money, of which the following is a copy: “ The plaintiff and defendant having amicably adjusted their differences, and the plaintiff having executed and delivered to the defendant a release for all claims arising out of the above-entitled action, and the plaintiff having made arrangements with his attorneys, Messrs. Elliott, Jones & Escher, giving them a certain lien upon his ca\ise of action and also for costs,
“ The Brooklyn Heights Railroad Company hereby agrees to adjust any claim .for costs or for any lien upon the cause of action, which the said attorneys may be able lawfully to establish.”
The plaintiff’s attorneys thereafter on several occasions demanded of the defendant, through the defendant’s attorneys of record in the action, adjustment and payment of their lien at the sum of one-third of $2,600, and costs, exhibiting the original agreement fixing the lien as executed by the plaintiff. In default of payment an order was then obtained in the action, based on affidavits of the facts as stated, requiring the defendant to show cause why an order should not be made determining and establishing the amount of the lien and directing the defendant to pay to the plaintiff’s attorneys one-third of the sum of $2,600, in addition to the costs of the action, and why such other and further relief should not be granted as may be just. The defendant read no papers in opposition upon the return of this order, but appeared by counsel who was duly heard upon the motion; and thereupon the court granted the order appealed from, by which it was “ ordered, adjudged and decreed *24that the lien of the plaintiff’s attorneys herein, as determined and established by this court, is for one-half of the net amount received by the plaintiff from the defendant, being one-third of the whole amount for which said action is finally adjusted; and it - is further ordered that the defendant, within five days from the service of a certified copy of this order upon its attorneys herein, pay to the plaintiff for the use and benefit of his attorneys herein, Messrs. Elliott, Jones & Escher, or to said attorneys personally, the sum of one thousand three hundred dollars, together with ten dollars costs-of this motion.”
The record does not show that any arrangement was made for a-formal discontinuance of the action, nor does it show whether the settlement made by the parties was with the knowledge and assent of the [Plaintiff’s attorneys. The pecuniary circumstanc ' of the plaintiff are not disclosed, nor does it appear whether the defendant served an answer in the action, or has, or claims to have, a defense upon the merits. It does, indeed, appear that the defendant is represented by attorneys of record and that the settlement was made more than twenty days after the service of the summons and complaint, but these facts do not, under the circumstances, raise any presumption that the action was at issue. They are equally consistent with the service of a notice of appearance and the extension of time to answer, or even with the existence of a default, and where a defendant is ready and willing to pay a large sum to settle an action, as fair an inference lies in one direction as in the other.
The question of an attorney’s lien, and the mode of its enforcement, has frequently been before the courts, but no recorded case to which our attention has been directed presents the features of this one. In the cases in the books the settlement has been either in fraud of the attorney’s rights, or, being made in good faith, was without any express provision for his benefit. Here the settlement appears to have been made in good faith, without fraud or collusion, and the defendant has assumed and agreed to adjust the attorneys’ lien. The question would, therefore, seem to resolve itself solely into one of practice, and to require only the determination of the mode in which to enforce the defendant’s agreement made in the action.
In this view the agreement of settlement is construed as an *25express promise on the part of the defendant to pay the plaintiff’s attorneys the amount of their lien based on the sum of $2,600 as the-value of the cause of action. The appellant insists that the amount of the settlement was not conclusive upon the defendant as to the value of the cause of action, and that the agreement is not an admission that the attorneys were entitled to any fixed amount, but that the arrangement simply bound the defendant to pay whatever sum the attorneys could establish by a continuance of the action, and by proof of defendant’s negligence and consequent liability to the plaintiff. The agreement should be construed in the light of the purpose intended to be accomplished by the parties. Its object was to settle the lawsuit, not to make provision for its continuance. That it has failed in its purpose of terminating the suit is the result solely of the defendant’s failure to consummate the bargain. The plaintiff was and still is under a valid obligation to pay his attorneys one-third of whatever sum he secures or has secured in the litigation, and the defendant’s agreement means nothing unless it means that the defendant should assume the plaintiff’s liability, and so assume it as to finally release and discharge the plaintiff. In other words,, the parties intended that the plaintiff should have $2,600 freed from the attorneys’ lien. By making the settlement, the plaintiff said to the defendant in effect: “ I am willing to accept $2,600 and release-you, but if I take that sum I am under obligation, as you well know, to pay my lawyers $866.66. If you agr-Qe to make that payment to them in addition, and, by so doing, release me from any liability to them for that amount, I will settle the suit.” The defendant must be deemed to have agreed to make such payment or the settlement would fail of its evident purpose; for, as the plaintiff would otherwise still remain liable to his attorneys for the sum of $866.66, it cannot be assumed that the defendant intended only to agree to pay or adjust such lien as the latter should be able to establish against it by a continuance of the litigation or otherwise. The lien which the defendant agreed to adjust was the attorneys’ lien as against the plaintiff on the basis of a compromise of the suit for $2,600. It follows that the order appealed from requires the pay'ment to the attorneys of more than they have claimed or are entitled to receive, and that it is erroneous in any view to that extent..
*26The apellant’s counsel further insists that there is no power in the court to enforce the performance of the agreement by summary order, and in this respect we think he is correct. In Harris v. Elliott (19 App. Div. 60) the precise question was decided, and it was held that a compromise stipulation cannot be enforced by a summary order. In that case the plaintiff agreed to pay to the moving party something over $8,000 by way of settlement. He paid $5,000 and refused to pay the balance, alleging that he was entitled to certain offsets or counter-demands against it. The court said: “ Concerning the merits of his claim in that regard we have now nothing to say. It is plain that he cannot be proceeded against on the stipulation as an independent basis for summary action by the court to compel him to complete its terms with the consequence of being adjudged in contempt for not doing so. This is not in any respect a proceeding against an attorney as such. All the relations existing between him and the moving parties are contract relations. He brought his suit to have them defined and adjusted. The moving parties have seen fit to treat with him in that action; have recognized .it and agreed to settle and compromise it, and that compromise has been carried out in part. The moving parties have a full remedy. Either the suit can proceed, and they may secure their rights by judgment, or an action lies on the stipulation.” (See, also, Taylor v. Long Island R. R. Co., 38 App. Div. 595, and Matter of Cattus, 42 id. 134.) No authority has been cited in support of the proposition that performance of a stipulation to.settle and adjust a lawsuit can be enforced by order, disobedience of which can be punished as for a contempt. The fact that the subject-matter of the application is the claim or lien of the attorney of one of the parties to the action does not affect the right in "any respect. It is not a proceeding between attorney and client, and certainly not a proceeding against an attorney, who by virtue of his position as an officer of the court is subject to its control and discipline, but it is a proceeding against the defendant to compel the performance of a contract made in the action with a view of adjusting it, and which it now refuses to carry out. If the arrangement had been to pay the plaintiff and his attorneys each a specified sum, and the defendant had made the payment to the attorneys but had refused to pay the plaintiff, it would hardly be claimed that payment to the plaintiff could be compelled by *27order, and no difference exists in principle merely because the money is to be paid in discharge of an attorney’s lien. So far as the defendant is concerned it is merely a payment to buy its peace in the suit, or to discharge a liability arising from its negligence.
The amendment of 1899 to section 66 of the Code of Civil Procedure does not affect the question. Among other amendments relating to the lien of attorneys, this sentence has been added: “ The court upon the petition of the client or attorney may determine and enforce the lien.” It is not necessary now to ■ consider and decide the full scope and purport of this amendment, nor how far it may have extended the power of the court to apply summary remedies in aid or settlement of the dealings and transactions between attorney and client. It is sufficient to say that it does not confer power to determine and enforce a stipulation in the action, not between attorney and client, although relating to the former’s lien. In Bailey v. Murphy (136 N. Y. 50) the Court of Appeals held that where a judgment was satisfied by the client for less than its amount, without the knowledge of his attorney and without provision for his payment, the court might set aside the satisfaction as against ■the attorney’s claim, but had no power by order to determine the amount of compensation due the attorney. Judge Finch said (p. 51): “ On this motion the court was not at liberty to determine the amount of condensation due to the attorney, if any, over and above the amount of the taxed costs. The latter were presumptively the measure of the attorney’s right, and if he was entitled to more by virtue of some express or implied agreement, that amount must be first liquidated in some proper action between the attorney and his client, and cannot be arbitrarily determined upon a motion to vacate the satisfaction entered. The client has the same right to ■defend against such an asserted liability as belongs to him when any ■other claim ■ is alleged, the existence or amount of which he disputes.” The right of a client to his day in court and before a jury •on the question of his attorney’s compensation for services rendered under contract is scarcely to be disputed, and if the amendment of 1899 was intended to deprive him of that right its constitutionality may well be doubted. But the question is not presented here. In this case the attempt is to enforce payment of an attorney’s claim against one who is not his client, but who has assumed the client’s *28obligation, and the party so sought to be charged is entitled to assert, any defenses he may have in the usual form and in the usual forum, and even to assert that he has actually made payment in accordance with the terms of his obligation, and to have the issues tried by jury. It may be conceded that the defendant paid the plaintiff in this case with full knowledge of the attorneys’, lien, subject to the-lien, and assuming and agreeing to discharge the lien ; and yet there; can be found in section 66 of the Code, as amended, nothing which .justifies a summary order as against it, even if that section is to be construed as authorizing such an order as against the plaintiff to reach the money in his hands.
The jilaintiff’s attorneys are fully protected. They have their claim against their client, who has a fund of $2,600, on which they have a lien for their compensation, and in addition they have the; defendant’s written agreement, made for a valuable consideration,, binding it to pay and discharge this claim and lien, and which is. enforcible by action; or they have the undoubted right, supported by numerous and uniform decisions, to proceed to judgment in this-action for the protection and enforcement of their lien, either by default in case no answer has been served, or in the usual way if the-action is at issue. (Peri v. New York Central R. R. Co., 152 N. Y. 521.)
The order should be modified by reducing the amount of the-attorneys’, lien from $1,300 to $866.66, and by providing that unless that sum and the $10 costs of the motion are paid by the defendant within twenty days, the plaintiff’s attorneys have leave to continue-the action for the enforcement and collection of their lien.
All concurred. ■
Order modified in accordance with opinion of Hirschberg, J.? without costs of this appeal to either party.