Corbit v. Watson

Patterson, J.: This is an appeal from an order denying an application of George H. Fisher, an attorney at law, made on behalf of himself and of the firm of which he is a member, to set aside the satisfaction of a-judgment obtained by the plaintiff against the defendants and for the appointment of a referee to ascertain and determine the reasonable value of his services and those of the firm of Fisher & Yoltz in this action. The vacatur was sought for the purpose of enforcing an attorney’s lien of Mr. Fisher and of his 'firm, who were [468] retained by the plaintiff to act for her in the matter of a claim which claim was prosecuted against the estate of her deceased husband eventuating in the recovery of a judgment in her favor. After the recovery of the judgment and without the knowledge of Mr. Fisher or his partner, the judgment debtors settled with the plaintiff, paid her the amount of the judgment, and she executed and delivered to them a satisfaction piece thereof. The application is also founded on the allegation that the plaintiff, Mary E. Corbit, resides in the State of New Jersey, and that she has no property in this State or elsewhere, except as received from the estate of her deceased husband. In answer to the application it was shown that the plaintiff, through Fisher & Voltz, her attorneys, made a claim upon the estate of her deceased husband for money-loaned by her to him in his lifetime. The claim was referred under section 2718 of the Code of Civil Procedure relating to disputed claims against decedents’ estates. The referee reported in her favor and judgment was entered upon such report for $10,423.55 on July 26, 1902. The judgment was paid in full on January 8, 1903. On February 19, 1903, Messrs. Fisher & Yoltz sent to the plaintiff a bill for $3,474.51, which she refused to . pay on the ground that it was unreasonable, her claim against the estate having been admitted by one of the executors, before the referee, there having been but one hearing- on the reference, and the demand of the attorneys appearing to her to be exorbitant. The plaintiff also in her answering affidavit recites that she is willing and ready and able to pay the reasonable charges of her attorneys, and she swear's that she is worth, in property situated in the city of New York and elsewhere, more than the sum of $30,000, and she specifies what that property is and where it is located, and that she is perfectly solvent and responsible. The court at Special Term denied the motion in toto. That the firm of Fisher & Yoltz have a lien on this judgment is not controverted, but it is evident that their client, the plaintiff, is in good faith disputing only the value of their service, which would, of course, measure the extent of their lien. Where a client is solvent, the attorney’s lien operates only as a security for his legal claim; and where there is a dispute between him and his client as to the value of the services, the client,' being solvent, may collect the claim without interference'by the attorney. In Lee v. Vacuum [469] Oil Company (126 N. Y. 579, 587), which case arose upon an order granting a motion vacating and setting aside a settlement of an action and the satisfaction of a judgment by a client, without the knowledge and consent of the attorney and in disregard of a stipulation between the attorney and client that no settlement should be made of the action without the attorney’s consent, it is stated as the opinion of the court that the existence of a lien in favor of the attorneys “ does not confer a right on them to stand in the way of a settlement of an action which is'desired by the parties, and which does not prejudice any right of the attorneys. * * * The client still remains the lawful owner of the cause of action and is not bound to continue the litigation for the benefit of his attorneys when he judges it prudent to stop, provided he is willing and able to satisfy his attorneys’ just claims. In fact the lien * * * was intended for and operates only as a security for the attorneys’ legal claims, and unless those are prejudiced by the client’s contract, she has unrestricted control of the subject of the action, and the terms upon which a settlement shall be effected. (Pulver v. Harris, 52 N. Y. 73; Coughlin v. N. Y. C. <& H R. R. R. Co., 71 N. Y. 448.) ” In Poole v. Belcha (131 N. Y. 200) it is said that an attorney’s lien created by section 66 of the Code of Oivil Procedure does not prevent the owner of a judgment from receiving the amount thereof and executing a discharge. “ When it is shown that such payment or discharge will operate to deprive the attorney of his costs, the court has power to protect him, but it cannot be assumed that á settlement is in fraud of his rights.” In Young v. Howell (64 App. Div. 246) it is said that “ the client still has the unrestricted control of the subject of the action and the terms upon which the settlement may be made, and such a settlement is not affected by such section unless it operate to the prejudice of the attorney’s claim. * * * Inasmuch as plaintiff is not only liable but clearly able to pay them, the enforcement of their lien is not necessary. They are in no way prejudiced without it.” In Fischer-Hansen v. Brooklyn Heights R. R. Co. (173 N. Y. 500) it is said that the lien of the attorney is subject to the right of the client to settle in good faith. In Peri v. N. Y. C. R. R. Co. (152 N. Y. 527) the court says:. “ The existence of the lien does not permit the plaintiff’s attorney to stand in the way of a settlement. The client is still competent to decide [470] whether he will continue the litigation. * * * The lien operates -as security, and if the settlement entered into by the: parties is in disregard of it and to the prejudice of plaintiffs attorney, by reason of the insolvency of his client, or for other sufficient cause, the court will interfere and protect its officer.” In the present case there was no sufficient ground shown for interference with the settlement made between the defendants and the plaintiff, or to set aside or vacate the satisfaction of the judgment. It is said in Peri v. N. Y. C. R. R. Co. (supra) that the .attorney’s lien' given by section 66 of the Code of Civil Procedure is a statutory lien “ of which all the world must take notice and anyone settling with a plaintiff without the knowledge of his attorney, does so at his own risk. (Coster v. Greenpoint Ferry Co., 5 Civ. Pro. Rep. 146; affirmed, without opinion, 98 N. Y. 660.) ” The satisfaction of the judgment does not, therefore, displace the lién of Pisher & Yoltz. Hence, it is unnecessary to set that satisfaction aside unless it may be hereafter required to enable the attorneys to realize the amount to which they may be justly entitled from their client. But they may proceed to have the amount of their claim liquidated by the special proceeding which is now authorized by section 66 of the Code of Civil Procedure, and one branch of this motion was authorized by that section. Hnder it, either the client or the attorney may petition the 'court to determine the amount of the lien and to enforce it. In Matter of King (168 N. Y. 53) it was held that the court not only has jurisdiction, but it must, either itself, Or by a reference in its discretion, determine the amount of a client’s indebtedness to his attorney in a proceeding properly instituted, since by an amendment to that section a new remedy is provided for an existing right which is not unconstitutional and the parties' are not entitled to a jury trial. By that section the lien of the attorney attaches to a verdict, report, decision, judgment or final order in his client's favor, and the proceeds thereof, in whosoever hands they may come, and the lien cannot be affected by any settlement between the parties before or after judgment or final order. The amendment of 1899 consists in the establishment of a new and summary method of ascertaining the amount and of • enforcing the attorney’s lien, which new remedy is available both to client and attorney and ds in these words: “ The court, upon the petition of the client or [471] attorney, may determine and enforce the lien.” This amendment was not in force when Matter of Lexington Avenue, No. 1 (30 App. Div. 602) was decided. In the present case a lien exists. The client admits that the attorneys are entitled to something. The law gives the lien for the unliquidated amount. The amendment of 1899 to section 66 furnishes the method of ascertainment of the amount of the lien. That portion of the motion which looked to the appointment of a referee to ascertain and determine the value of' the services of Fisher & Yoltz should have been granted, but there was no necessity, at the time the motion was made — nor is there at this time — to set aside and vacate the satisfaction of the judgment. The order appealed from should, therefore, be modified so that it shall provide fór a denial of the motion so far as it relates to vacating the satisfaction of the judgment; and for granting the motion so far as it relates to a reference to ascertain and determine the amount of the attorneys’ lien. It should further provide that if the attorneys are unable to collect from the client the amount which may be found due them from her, the motion to vacate and set aside the satisfaction piece may be renewed. Ho costs of this appeal to either party. ■ Yan Bbunt, P. J., Ingraham, Hatch and Lahghlin, JJ., concurred. Order modified as indicated in opinion, and as modified affirmed, without costs of this appeal to either party.