Ransom v. Cutting

McLaughlin, J.: In January, 1894, one Robert L. Cutting died leaving a will by which he gave all of his, property, with the exception of an annuity — 151 — to his widow, to otie of his sons, James De Wolfe Cutting. The other son,, Robert L. Cutting, the appellant, feeling that he had been unjustly treated and that the instrument offered for probate' did not correctly express his father’s wish, retained the plaintiffs, a firm of lawyers, to oppose the probate of the will. -He was unable financially to pay the plaintiffs, and for the purpose of securing them for the services to be rendered in his behalf, he entered into an agreement with them on the 1st -of February, 1894, by the terms of. which he agreécj, “in consideration of legal services heretofore' and hereafter to bd renderéd,”.to assign, transfer and set over to them “ forty per cent (40$) of any and all recovery ’’ which he should-receive — which per cent, however, was to be reduced to thirty-three and one-third per cent, provided the contemplated litigation was ended by the decision of the surrogate, and to ten per- cent in the event of a -settlement realizing $50,000 or more. The agreement further provided that the plaintiffs should not “ call upon the said Robert L. Cutting * * *. for any sum or sums of money to pay the necessary disbursements required in the said.proceedings,” The plaintiffs, under their retainer and the agreement referred to, rendered services as attorneys for the appellant in proceedings to compel an accounting of his grandfather’s estate, as well' as in the Surrogate’s Court to prevent the probate of his father’s will. Their efforts were successful, because they obtained a settlement and compromise by which he was paid $30,000 in cash, and to be thereafter paid an annuity of $4,000 — payment of which was secured by a deposit with the defendant trust company of $95,000. The appellant, appreciating the value of the services rendered for him' by the plaintiffs and the validity of the agreement which he had entered into with them, when he received the $30,000 in cashpaid them the ten per cent stipulated, and thereafter for a certain time paid' them ten per cent of the annuity received from the trust company. Subsequently, however, he refused to pay the plaintiffs the ten per cent stipulated on the annuity and repudiated the agreement, whereupon this action was brought against him and the trust company to enforce the same. The plaintiffs were' successful, the trial court holding that they had a lien to the extent of, ten per cent on the annuity as the same matured, which it directed should be paid by the trust' company, and Cutting alone has appealed. • ■ — 152 — The judgment is attacked principally upon the ground that the agreement to pay the ten per cent is unconscionable, for which reason it ought not to be enforced by a court of equity, and that it is also champertoüs and, therefore, void and <?annot be enforced. Under the findings of the trial court — and there is an abundance to sustain' them — the agreement cannot be said to be unconscionable. In Matter of Fitzsimons (174 N. Y. 15) it was held that the mere fact that an attorney Was to receive one-half of the recovery did not render an agreement unconscionable, in the absence of proof that it was jnduced by fraud, or that the compensation provided for was so excessive as to evince a purpose to obtain an improper or undue advantage. There is not a suggestion in this record that there was any fraud practiced upon the appellant in obtaining the agreement, or that he did not when he executed it fully appreciate its legal effect; on the contrary, it appears that he did appreciate it and subsequently recognized it as binding upon him by paying ten per cent of the $30,000 received when the settlement was made, and for several years thereafter paying ten per cent of the $4,000 annuity. An attorney or counselor at law, by express provision of statute, can agree with his client as to the .amount to be paid for services to be rendered (Code Giv. Proe. § 66), and an agreement made for that purpose, in the absence of evidence showing that a fraud has been perpetrated on the client, or that lie did -not fully understand the purport of the agreement, must be enforced, like other contracts, according to its terms. The statute gives the right to an attorney and client to make a contract as to the former’s compensation,, and it is a matter of no importance, when the contract is brought under review, what the compensation agreed to be paid is, providing the contract is legal in other respects. The court cannot make contracts for parties, and only has power to construe them as made. If the contract as made were the result of a 'fraud practiced upoii the client, or if it appeared that the compensation were so excessive, in view of the services rendered, as to indicate that an improper or undue advantage had been taken of the client,' then relief would be afforded. But that is not this case. Here was a large estate in which' the appellant, if his father’s will were probated, had. no interest whatever. He thought he had been wronged and that the instrument sought to be- probated was not his — 153 — father’s will, and to prevent its probate he applied to the plaintiffs, and that the services rendered by them were very valuable to him is evidenced by the fact that a compromise was effected by which he received, not only $30,000 in cash, but an annuity of $4,000 so long as he should live. It cannot be said,, therefore, especially in view of the findings and conclusions of the trial court to the contrary, that the amount agreed to be paid to the .plaintiffs, was so excessive as to indicate a purpose to obtain improper or undue advantage of the appellant. , Hor do I think it can be said the agreement was champertous. The entire claim of the appellant in this respect is based upon that part of the agreement which provided that the plaintiffs would not call upon the appellant to pay the disbursements incident to or necessarily incurred by the prosecution of the proposed litigation. It is true an attorney cannot, directly or indirectly, either before or after an action or proceeding is instituted, promise or give a valuable consideration to any person as an inducement to placing or in consideration of having placed in his hands a demand of any kind for the purpose of bringing an action thereon.' (Code Civ. Proc. § 14.) But the plaintiffs did not seek the'defendant. He Voluntarily went to them, and, for the purpose of securing their services, made the agreement. The fact that they were not to call upon him to pay the expenses of the proceeding did not, upon .its face, make the agreement bad. There is no express provision in it that the attorneys were to pay the expenses, and even if that is fairly to be inferred, it does not pi'event the agreement being enforced, because, if that be held, then .the legal effect of it is that they were to have the ten per cent after deducting therefrom the expenses incurred; and in this respect the case in principle is precisely like Fowler v. Callan (102 N. Y. 395). There the attorney expressly agreed to conduct for his client certain legal proceedings and pay all the costs and expenses of the same, receiving as compensation a one-half interest in .certain land, a deed of which was given, which was the subject-matter of the litigation. The attorney, having been successful in 'the litigation, thereafter brought an action of ejectment under the deed thus given to him. The defense was that the agreement was champertous. The trial court so held, and the same was affirmed by the late General Term of the Court of Common Pleas (12 Daly, 263). The judgment, however, — 154 — was reversed, the Court of Appeals holding that the contract was not in violation of the statutory provision, but was an agreement purely for compensation and therefore, valid. This case was cited with approval and followed in Matter of Fitzsimons (supra), where Judge Mabtin, in delivering the opinion — and his language is quite as applicable to this case as it was to that — said“ The appellant neither sought the retainer, nor did anything to induce it. So far as appears it- was not occasioned by any offer or solicitation of his, but originated in the free and unprejudiced choice of the client. The agreement appears to have been purely one for compensation. The arrangement contemplated success, in which event one-half the recovery would pay both attorneys. The compensation for the services of both would be discharged out of the portion of the property which would come into the hands of the attorney for that precise purpose. The contract in no respect induced ór protracted the litigation. The appellant stirred up no strife, induced no litigation, but merely agreed to take for the compensation of himself and his. associate, who was present at the time of the agreement and presumptively consented to it, one-half of the recovery to be divided between them as they should agree. The contention that this agreement was within the prohibition of section 74 and, therefore, void, cannot, we think, be upheld.” The agreement here under consideration, when construe'd in the light of the evidence and the findings of the trial court, was simply to the effect that the plaintiffs were to receive, as compensation for the services to be rendered, a certain percentage payable out of the recovery. This did not make the agreement champertous under the provision of the statute before referred to. In reaching this conclusion, the cases of Stedwell v. Hartmann (74 App. Div. 126; affd., 173 N. Y. 624) and Begly v. Weddigen (86 App. Div. 629), and others cited by appellants counsel, have not been overlooked. The action was properly brought in equity. The trust company declined to recognize the validity of the agreement, and the appellant repudiated it. Therefore, there was nothing for the plaintiffs to do but enforce the lien which the) had upon the annuity agreed to be paid. (Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 492.) — 155 — I am of the opinion that the judgment is right and should be affirmed, with costs to the respondents. O’Brien P. J., Patterson, Laughlin and Houghton, JJ., concurred.