Court Opinion

ID: 5414204
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:14:25.132946+00
Date Added: 2024-06-11T08:30:56.186842
License: Public Domain

Guy, J. (dissenting).
I cannot concur either in the conclusion arrived at by my learned colleagues or in the reasons ■ advanced by them in support thereof. Their decision is predicated on the erroneous assumption that the relations between plaintiff and defendant herein were merely fiduciary, and not contractual. The evidence shows just the contrary. Both plaintiff and defendant testified to the making of an express contract whereby plaintiff employed defendant to col-*190loot a certain claim of insurance for plaintiff, and agreed to pay Mm either a contingent fee of twenty per cent, or a reasonable fee for his services. Plaintiff and defendant agree that a contract of this general character was made, though they differ as to the terms of the contract, plaintiff claiming that defendant was limited thereby to a twenty per cent, fee, and denying any subsequent modification of the contract, and defendant claiming that the twenty- per cent, provision was only applicable to collection without litigation, and that there was a subsequent modification of the agreement providing that he should receive in addition to the twenty per cent, a reasonable fee for his services in the event of litigation. The effort to collect without litigation failed; an action was brought, the case tried before a jury and judgment recovered in favor of plaintiff; the case was appealed and on appeal the judgment affirmed, and the amount of the judgment, $1,440.-53, collected by the defendant herein. A dispute then arose between client and attorney as to the proper amount of the attorney’s fees. Plaintiff and defendant had one or more conferences on the subject, and defendant testified that on May 15', 1912, plaintiff stated to him that if he, the defendant, would send him a certified check the following morning for two-thirds of the amount collected, retaining one-third of the amount collected as his fee, plaintiff would send him a receipt in full settlement of the matter. Plaintiff denies making such a statement, but the documentary evidence introduced supports defendant’s contention. On May 16, 1912, the morning following the alleged conference, defendant sent plaintiff a certified check, across the face of which was written “ Wolfe vs. Jewelers S. F. S. in full settlement,” accompanied by a letter worded as follows: “In accordance with our agreement of last evening, I enclose you my certified *191check for $1,025.35 in full settlement. Kindly sign the enclosed receipt in full as agreed.”
On the following day, the defendant received from plaintiff a letter stating that plaintiff would not accept the said check in full settlement, but only on account, whereupon defendant wrote plaintiff as follows: ‘1 My letter to you of the 15th inst., enclosing said check was in full settlement, and requested you to send a receipt in full as agreed. My said check also bore on its face that it was in full settlement of the above case. Ton cannot keep that check, in view of the statement in my letter and the statement that it was in full settlement in both letter and check, and claim a balance due you, because this is contrary to any agreement, contrary to-the terms under which the check was sent, and it will be in accord and satisfaction.” This letter was dated May 17,1912, and plaintiff returned no answer thereto until June 8, 1912, twenty-four days later, when a letter was written by plaintiff’s direction to defendant, stating: “ Mr. Wolfe still has this check and declines to accept it upon the terms stated in your letter. ’’ Defendant did not answer this letter or a subsequent letter written by plaintiff to him. In my opinion, no further answer could be required from defendant after his letter of May seventeenth.
While conceding that this state of facts would make out a complete accord and satisfaction as between ordinary debtors and creditors, my learned colleagues have concluded, on the authority of General Fireproof Construction Co. v. Butterfield, 143 App. Div. 708, that the principle of accord and satisfaction does not apply as between attorney and client where the attorney has collected money on behalf of the client; that where an attorney collects money for a client, the money belongs to the client, and the attorney is only entitled to retain what he claims for his services; that in sending *192a check to the client, he concedes that the amount sent belongs to the client, and, under such circumstances, the client is not bound to return.the money to the attorney under penalty of acknowledging the attorney’s right to the balance retained, but has a right to retain the money paid and sue for and recover any portion of the balance to which the client is entitled. In the case cited the learned Appellate Division bases its decision upon what I deem to be an utter misconception of the principle laid down in Eames Vacuum Brake Co. v. Prosser, 157 N. Y. 289-301. The ground of the decision in the latter case is that, in view of a rescission agreement entered into between plaintiff and defendant, there was no basis for defendant’s claim for commissions, and the court, referring to the decisions in Fuller v. Kemp, 138 N. Y. 231 and Nassoiy v. Tomlinson, 148 id. 326, says: “In those cases there were disputed claims, and the checks were deemed to have been offered in each instance as a settlement * * *. In the case under consideration we have no such tender of checks as a settlement between the parties. ’ ’
In the case at bar we have not only a tender óf the check in full settlement, as shown by the endorsement on the face of the check, and the contents of the letter accompanying it, but a subsequent reiteration by the defendant that, if used, the check must be accepted in full settlement of the controversy. The decision of the learned Appellate Division, fourth department, in General Fireproof Construction Co. v. Butterfield, supra, is furthermore in direct contravention of the rule laid down in every recent decision of our highest court of review and of the Appellate Division of the first department, which it is our duty to follow.
In Dunn v. Whalen, 120 App. Div. 729, the principle of accord and satisfaction is applied where the at*193torney has received and retained a check sent by the client in full settlement of the attorney’s claim. It is naively suggested in the majority opinion herein that this only furnishes authority for applying the principle of accord and satisfaction to the attorney, not for applying it to the client; but it is a novel and most unjust proposition that where parties have entered into contractual obligations, a universally recognized principle of law may be invoked by one of the contracting parties, but must be denied to the other. If the matter in dispute is properly the subject of accord and satisfaction, either party to the dispute is entitled to invoke that principle. I deem it equally fallacious to contend that defendant’s lien for services only applied to so much of the money collected as represented his fees. The rule is well established that, where an action at law has been begun, the attorney’s lien for services applies to the entire subject matter of the controversy and the proceeds thereof. Code Civ. Pro., § 66; Matter of Regan, 167 N. Y. 338-343. In this case the money collected after judgment was deposited in the attorney’s bank account; it did not belong, as suggested, to the plaintiff alone, but was the joint property of plaintiff and defendant in proportion to their respective interests therein. It was not separable or distinguishable, after deposit, from the other moneys in defendant’s account; but plaintiff was entitled to recover from the defendant, on an accounting between them, the amount so collected less the proper fee of the defendant as attorney. The amount of his claim was matter of dispute, which the trial judge, acting without a jury, may be assumed to have decided in favor of the defendant, even though in his opinion he states that the acceptance and retention of the check constituted in itself an accord and satisfaction. In the light of all the evidence in the case, the acceptance and *194retention of the cheek did establish an accord and satisfaction. To hold that the principle of accord and satisfaction cannot apply to the adjustment of a dispute of this character is to hold, in effect, that the principle does not exist; for in every conceivable case where the doctrine is sought to be applied the person paying the money admits that the person receiving it is entitled to at least that amount, and that the person making the payment is only entitled to what he retains. The principle underlying accord and satisfaction is not merely the admission of the person paying money that a certain amount belong’s to the recipient thereof, but also the implied admission of the person receiving the money, which arises from his retention thereof, where it is unequivocally tendered as in full settlement. The decisions of the Court of Appeals on this point are too numerous to leave room for doubt. When money is tendered in full settlement of a matter as to which there has been a genuine dispute: ‘1 The law permits of but two alternatives, either reject or accept in accordance with the condition.” Logan v. Davidson, 18 App. Div. 356, 357. See also Jackson v. Volkening, 81 App. Div. 36; affd., 178 N. Y. 562; Fuller v. Kemp, supra.
“ Where a debtor offers a certain sum of money in full satisfaction of an unliquidated demand, and the creditor accepts and retains the money, his claim is cancelled, and no protest, declaration or denial on his part, so long as the condition is insisted upon by the debtor, can vary the result.” Fuller v. Kemp, supra.
“ If a demand is unliquidated, the acceptance of a part and án agreement to cancel the entire debt furnishes a new consideration, found in the compromise, which will support an accord and satisfaction. A demand is not liquidated, even if it appears that something is due, unless it appears how much is due; and when it is admitted that one of two specific sums is du,e, *195but there is a genuine dispute as to which is the proper amount, the demand is regarded as unliquidated, within the meaning of that term as applied to the subject of accord and satisfaction. • If, when the amount of an indebtedness is in dispute, the debtor sends the creditor a check for the sum conceded by the debtor to be due, with an unsigned receiptá in full ’ and a letter requesting the signing and return of the voucher, the offer of payment is to be deemed made upon the condition of its acceptance in satisfaction of the debt; and if the creditor retains the papers,- and, after claiming a larger sum, and the refusal of the debtor to pay anything more, indorses and collects the check, such acceptance of the check imports an election to be bound by the condition on which it was offered and constitutes an accord and satisfaction which will not be affected by the creditor’s subsequently sending the debtor a receipt * on account, ’ unless such receipt is acquiesced in by the debtor.” Nassoiy v. Tomlinson, supra.
Proper deference for the views of our highest court of review and for the decisions of the Appellate Division of this first department requires an affirmance of the judgment in this case.
Judgment reversed and new trial ordered, with costs to appellant to abide event.