Syme v. Terry & Tench Co.

Woodward, J.: The plaintiff brought this action to foreclose his lien as an attorney under the provisions of section 66 of the Code of Civil Procedure. A judgment in his favor has been entered and the defendant company appeals. On or about the 16th day of January, 1907, the plaintiff herein was retained by one Frederick E. Kethman to represent him as his attorney in prosecuting a claim against the defendant company for personal injuries, due to negligence. Four days after the joining of issues said defendant made a settlement with Kethman, ignoring the rights of the plaintiff, and it is not to be doubted, under the authority of Fischer Hansen v. Brooklyn Heights R. R. Co. (173 N. Y. 492), that the plaintiff is entitled to look to the defendant for his-compensation, unless there is some valid defense for its action. The only matter seriously urged upon this appeal is that the contract between the plaintiff and his client, in which the latter had agreed that the former should receive forty per cent of the recovery, is void as against public policy, on the ground that this contract contained a clause in which the client agreed not to settle the cause of action without the written consent of the plaintiff. The appellant relies upon Matter of Snyder (190 N. Y. 66), and if the effect of that case is as the defendant construes it, then this judgment must he reversed. In the case now before us the contract provides in its second article, so far as it relates to this question, that “ the said party of the first part as and for his compensation for his services in the presentation and prosecution of said claim, shall be entitled to receive and retain 40 per cent of any compromise or settlement before judgment; or after judgment, 40 per cent of any verdict or award, and all costs and disbursements allowed by law or the Court, upon entry of the judgment or upon any appeal from said judgment.” And then the third article pro [612] vides that “ the said party of the second part agrees not to settle or compromise said claim with any person or corporation, without the consent, in writing, of the party of the first part, and that if such a settlement or compromise is made without the consent, in "writing, of the party of the first part, the party of the second part agrees to pay to the party of the first part such share of said settlement or compromise as is hereinbefore agreed shall be the share of the party of the first part as and for his compensation for the services rendered by him in this matter.” The plaintiff’s engagement was that he would present, “ and, if necessary, prosecute by action in the Courts a claim by the party of the second part” against the defendant company; the contract did not necessarily contemplate litigation — the beginning of an action where the plaintiff’s lien would attach •—• and the agreement of the client was not as in the ease cited, that he would not settle the litigation, but that he would not “settle or compromise said claim” without the consent of the plaintiff, but it is added that if “ such a settlement or compromise is made without the consent, in writing, of the party of the first part, the party of the second part agrees to pay to the party of the first part such share of said settlement or compromise as is hereinbefore agreed shall be the share of the party of the first part as and for his compensation,” etc. The effect of this agreement is that the client will not settle or compromise his claim against the defendant without the consent of the plaintiff in such a manner as to defeat the rights of the latter. The agreement is not absolute ; it merely prescribes the conditions which shall govern in the event of the client settling the claim before the lien of the attorney attaches under the provisions of the Code. In the interval between the making of the contract and the presentation of the claim, or in the interval between the presentation of the claim and the actual commencing of the action, the attorney would be at the mercy of the client — the latter could settle at any time and, being irresponsible, the attorney would lose all the services he had rendered, and this clause of the contract may be deemed to relate to this period, and to provide only for the compensation of the plaintiff in the event of a settlement without his consent during the period which might properly be devoted to negotiations for a settlement. The client could settle at any time. He merely agreed that if he [613] did settle before the claim had been sued he would pay the plaintiff the same compensation that he had already agreed to pay him for the presentation and prosecution of the claim. This clause was distinct from the one which provided the compensation which was agreed upon for the presentation, and prosecution of the claim, and it might be entirely dropped out .of the contract as void, and it would not affect the remainder of the contract; would not affect the contract as it relates to the defendant, for the claim had been presented and the action already begun, issue even being joined when the settlement was made, and the provisions of the second article of the contract, concededly valid, governed in such an event. In Matter of Snyder (supra), while the court held that the provision that the parties would not settle the litigation without the consent of all the others was void as against public policy, it was held that the attorneys were entitled to recover the value of tlieir services actually rendered, and merely that the provision fixing the compensation fell with the void clause with which it was inseparably connected. We think that case is not this case in principle or in its facts, and that it does not stand in the way of the plaintiff’s recovery. The judgment appealed from should be affirmed, with costs. Jenks, Hooker, Gaynor and Miller, JJ., concurred. Judgment affirmed, with costs.