Smith v. Chenoweth — 18 Abb. N. Cas. 349

Majority

p. 349

SMITH v. CHENOWETH.

Headnote

[Reversing ante, p. 20.]

N. Y. Common Pleas, General Term ;

January, 1887.

1. Set-off of judgments in same action ; attorney's lien.} Costs do not primarily belong to the attorney; and although he has a lien upon them for his compensation, and to that extent is regarded as au equitable assignee of the judgment, yet when the costs arc recovered in one action, the equities of the parties are superior to the lien of the attorney, and a set-off may be ordered; the lien only attaching to the balance remaining in favor of the client.^[1]

2. The same.} Hence, where defendant recovers judgment for costs upon affirmance on appeal of a judgment sustaining his demurrer to one of three causes of action set up in the complaint, and plaintiff recovers judgment upon the remaining two causes of action, the plaintiff is entitled on motion to have the judgment for costs against him set off in reduction of the judgment in his favor.

3. Appeal from, order denying set-off.} An order of the general term of the city court of Hew York, reversing an order granting a motion to set off the judgments, is appealable to the court of common pleas.

Appeal by the plaintiff from an order of the General Term of the City Court of New York, which reversed an order of the Special Term granting plaintiff’s motion to set off judgments.

The plaintiff’s complaint set up three causes of action. The defendant demurred. The demurrer as to the first and second causes of action was overruled, and was sustained as to the third cause of action. Issue was joined upon the first and second causes of action, and the plaintiff recovered judgment on May 28, 1886, for the sum of $307.72, including $101.26 costs. Judgment was entered in defendant’s favor, on demurrer to the third cause of action, on March 2, 1886. From this judgment an appeal was taken to the

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general term of the city court, and the judgment below was affirmed with costs on June 28, 1886. Judgment was entered on this affirmance on July 6, 1886, awarding the defendant $76.02 costs. Subsequently, the court at special term ordered the judgment of $76.02 costs on appeal in favor of defendant and against the plaintiff, to be set off in reduction of the plaintiff’s judgment of $307.72. This order was appealed from, and was reversed by the general term of the city court, and plaintiff appealed to this court.

Raphael J. Moses, Jr., for the plaintiff, appellant.

John G. O'Connor, Jr., for the defendant, respondent.

The set-off sought here is of costs incurred in the same suit. It is well established that a judgment in one action cannot be set off against a judgment in another action, to the injury of the attorney. This is not what is asked for in this case.

The costs which accrue in an action, whatever their character may be, are not the property of the attorney; they belong to the party. The attorney has a lien upon them for his compensation. Whether an attorney’s lieu for costs is superior in equity to the rights of a party to set off one judgment of costs against,another in the same action, is the question presented. There is a conflict of authorities upon the subject. We are controlled by the decision of the general term of this court, upon the precise question involved in this case.

In Hoyt v. Godfrey ( 11 Daly, 278 ) it was held that interlocutory costs allowed to ’the defendant, might be set off against a judgment rendered in favor of the plaintiffs in the same action, notwithstanding a promise by the party to whom the costs were awarded, that they should belong to his attorney. This rule is well supported in Sanders v. Gillett, 8 Daly, 183 ; Warden v. Post, 35 Hun, 141 , and Catlin v. Adirondack Co., 22 Hun, 493 . And it is also in accord

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anee with the English rule, as stated in Chitty's Archibald, Vol. 1, page 110. “It (the lien) extends only to the balance which is ultimately to be paid over to the client upon the general and final result of the cause. Whatever costs may be due to the opposite party in this particular case, whether they are costs of special issues formed for him, or of interlocutory proceedings, he has a right to deduct them without regard to the amount which may be due from the client to the attorney.” See Scott v. Richebourg ( 11 C. B. 447 ). We think this is the fair rule, and the one calculated to produce the least injustice.

The rule in a case like the one under consideration may be safely stated to be this. The costs do not primarily belong to the attorney ; he has a lien upon them for his compensation and to that extent he is regarded as an equitable assignee of the judgment. But when the costs are recovered in one action, the equities of the parties are superior to the lien of the attorney, and a set-oil may be ordered ; the lien only attaching to the balance remaining in favor of the client.

In the case of Tunstall v. Winton ( 31 Hun, 219 ), it was held that the costs of a successful appeal legally belonged, without any assignment, to the defendant’s attorney, and that they could not be set-off against the general costs awarded to the plaintiff; although in Garner v. Gladwin (12 Weekly Dig. 10), the same court held that when damages and costs were recovered in the same action, the plaintiff was entitled to insist upon the set-off of one against the other, unless an assignment had been previously been made to the attorney, transferring to him a paramount right to demand and collect such costs.

The case of Tunstall v. Winton, is referred to in the court below as controlling, on the ground that the decision had been affirmed by the court of appeals in 96 N. Y. 660 . It is also quoted elsewhere as having been affirmed in the court of last resort. From the statement of the attorney for the unsuccessful party in the appeal annexed to the

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appellant’s brief, and from an examination of the printed cases on appeal, in the cases of Tunstall v. Winton, reported in 96 N. Y 660 , it appears that the decision in that case, reported in 31 Hun, at p. 219, was never taken to the court of appeals, and that the cases in 96 N. Y. 660 , arc the cases of Tunstall v. Winton, reported in 31 Hun, at pages 222 and 231.

We are of the opinion the order is appealable to this court. Code Civ. Pro. § 3191, subd. 3.

Wo think the order of the general term appealed from, should be reversed; and the order of the special term affirmed, with costs of appeal.