Rooney v. . Second Avenue Railroad Company

It had been agreed between the plaintiff and his attorney, that the latter should commence and prosecute this action to its final termination, without fee and at his own risk, and upon his final success he should receive for his services one-half the recovery, and if the amount should not exceed $600 he was also to have the taxable costs. The judgment recovered, including costs, was $1,179.17. Of this amount, according to the terms of the agreement, the attorney became entitled to $589.58. The plaintiff gave the attorney an irrevocable power of attorney to receive the amount of the recovery. Of these facts the defendants had sufficient notice. Under these circumstances the defendants negotiated with the plaintiff for a compromise, at their peril. Before the Code, nothing was better settled than that the attorney had *Page 369 a lien upon the judgment recovered by him for his services. The legal measure of those services was the taxable costs, so that it always happened that the extent of the lien was equal to the costs recovered in the action. To that extent the attorney was regarded as the equitable assignee of the judgment. It was said by Lord KENYON, in Read v. Dupper (6 Term R., 361), that it had been settled long ago, that a party should not run away with the fruits of the cause without satisfying the legal demands of his attorney, by whose industry and expense those fruits were obtained. (Martin v. Hawks, 15 John., 405, and cases therecited; Wilkins v. Batterman, 4 Barb., 47; Sweet v.Bartlett, 4 Sand., 661; 2 Kent's Com., 641.) "I am inclined to hold," says Lord MANSFIELD, in Welsh v. Hole (1 Doug., 238), "that if the attorney give notice to the defendant not to pay till his bill shall be discharged, a payment by the defendant after such notice would be in his own wrong, and like paying a debt which has been assigned after notice." The question now to be determined is, whether, by anything that the legislature has done, in enacting the Code, this equitable right of the attorney, so long recognized and protected, has been destroyed. The principle upon which the right has been sustained is certainly unaffected by the Code. As in other cases of lien, the attorney is protected, because it is by his labor and skill that the judgment has been recovered. The judgment being under the control of the court, and the parties within its jurisdiction, it will see that no injustice is done to its own officers. There is no less reason for the exercise of this power now than before the adoption of the Code. Under any system of proceedings the recovery of costs is a statutory right. By way of indemnity for his expenses, it has been thought fit to allow the prevailing party to recover, in addition to his debt or damages, certain prescribed allowances. These are as much a part of the recovery as the verdict itself. They become a part of the *Page 370 judgment. It is one entire thing. But, because the judgment has only been recovered through the instrumentality of the attorney, and his money and labor and talents have been expended for that purpose, courts have declared that he shall have a lien upon it to the extent of his claim against his client. The lien is not more upon one part of the judgment than another. It is upon the whole judgment. True, it was equal to the costs embraced in the judgment, but this was only because the legislature had thought fit to fix this amount as the limit of the compensation to which the attorney should be entitled. All that the Code has done in this respect is, to remove this restriction. The party recovers costs as before, but the amount of compensation which the attorney shall receive is no longer limited. The principle upon which his lien upon the judgment has been maintained is still the same. He still conducts the suit as before. His labor and skill and money still enter into the judgment as before. But now he may agree with his client, as he could not before, how much he shall receive for his services. In other words, the attorney and his employer may fix beforehand the amount for which he shall have a lien upon the judgment when recovered. Why, when this is honestly and legally done, should the defendant in the judgment be allowed to intervene, and by a settlement with the party, with full knowledge of the claim of the attorney, aid him in depriving the attorney of what is justly due him? This subject is discussed with very great ability by the present presiding judge of the New York Common Pleas, in Ward v. Syme (9 How. Pr. R., 16). I concur entirely in the views he has there so well expressed. The only operation of the Code, in respect to costs is, to substitute a new fee bill in the place of that which had before existed, and to leave the attorney free to agree with his client for a greater or less amount than that which he may recover, according to circumstances. The lien of the attorney, upon the judgment he recovers, *Page 371 is unaffected by the change. That right stands now as it did before. It is a valid and established right to receive, out of the moneys to be collected upon the judgment, the amount due him from his client for his services and expenses in obtaining it. In the absence of any agreement on the subject, I suppose the sum recovered by the party as an indemnity for his expenses would be the measure of compensation allowed to the attorney. This, then, would be the extent of his lien. But where there has been an agreement for more or less than that sum, the amount which, by agreement, he is entitled to receive will determine the extent of his lien. It is still true, that the attorney is to be regarded as the equitable assignee of the judgment to the extent of his claim for services in the action. (Sherwood v. The Buffalo andNew York City Railroad Company, 12 How., 136; Haight v.Holcomb, 16 id., 160, 173.) The order from which this appeal is taken provides for the payment of $379.17 only. This is the amount of the costs included in the judgment. The attorney should have been allowed to collect the whole amount due him for his services in obtaining the judgment; but as the appeal is by the defendant, the order, in this respect, cannot be modified. It should therefore be affirmed, with costs.