Rasquin v. Knickerbocker Stage Co. — 12 Abb. Pr. 324

Majority

p. 324

RASQUIN a. THE KNICKERBOCKER STAGE COMPANY.

New York Common Pleas;

General Term, July, 1861.

Headnote

Discontinuance.—Attorney’s Lien for Costs.

Where a settlement of a pending suit is privately effected between the parties, with the design of preventing the attorney from obtaining his costs, the court will, notwithstanding the settlement, allow the attorney to go on and collect the costs in the action, that he may thereby secure himself.

The rule is the same though such settlement is made before verdict or judgment.

Where there is collusion between the parties to defeat the attorney’s right, the

p. 325

fact that the action, is for the recovery of unliquidated damages can make no difference.^[2]

Appeal from an order denying leave to discontinue without costs.

The action was brought by plaintiff to recover damages for injuries alleged to have been sustained by son of plaintiff by being

p. 326

nm over on 17th of July, 1858, by one of defendants’ stages. The answer denied every allegation in the complaint relating to the injury, and averred that if it happened it was through the negligence of the plaintiff’s son. On the 29th of September, 1859, defendants made a settlement with the plaintiff, and delivered to him a check for $350, which was subsequently paid, and obtained from him a release in full—it being expressly stipulated that the defendants were not to pay any more costs, &c. Ho notice of a claim or lien for costs on the part of the plaintiff’s attorneys, was shown to have been given to defendants.

A. R. Lawrence, Jr., for the appellants.

I. It is not contended on the part of the appellants that the attorneys for. a plaintiff are not entitled to a lien both upon a judgment which may have been recovered, and upon damages which have been liquidated, either by the verdict of a jury or the finding of a judge or referee; but the ground which they take is—that an attorney never had a lien either in England or in this State for his costs, until he had either obtained a verdict or judgment for his client; or, in other words, until he had succeeded in establishing by a judicial decision the alleged rights of his client. As to the English law, it is laid down by Cross, in his work on the Law of Lien (18 Law Library, 149, marg. 230), as follows : “ This salutary and expedient interposition of the courts in support of the lien of an attorney depends necessarily on the actual right of his client to judgment.” And at page 155, marginal page 230: “ The court will not interpose to assist an attorney in cases of purely unliquidated damages, when no fraud appears. And that until such damages are liquidated, even a notice from the plaintiff’s attorney to the defendant’s attorney not to compromise the suit, would be insufficient to entitle the former to the interposition of the court, unless the existence of actual fraud were shown.” (See also Exparte Hart, 1 B. and Ald., 660; 1 Darling’s P. C., 324, S.C.; Read a. Dupper, 6 Term R., 361.) As to the law of this State—1. The cases in this State, prior to the adoption of the Code relating to an attorney’s lien, all proceeded upon the principle that by the labor, talents, or shill of the attorney the client had either obtained a judgment or a verdict in his favor. Such was the

p. 327

reason always given for the rule, and of course the rendition of the judgment or verdict preceded the lien.. (Martin a. Hawks, 15 Johns., 405 ; citing Read a. Dupper, 6 Term R., 361; and see Wilkins a. Batterman, 4 Barb., 47 ; and cases cited in Rooney a. Second Avenue R. R. Co., 18 N. Y., 368 ; Pinder a. Morris, 3 Cai., 165 ; Ten Broeck a. Dewitt, 10 Wend., 617 ; Porter a. Lane, 8 Johns., 357 .) Such is also the rule in other States. (Getchell a. Clark, 5 Mass., 389 ; Foot a. Tewksbury, 2 Verm., 97 ; and Potter a. Meyer, 3 Greenl., 34.) 2. In Sweet a. Bartlett ( 4 Sandf., 661 ), a case which was commenced in 1847 and decided in 1851, the general term of the Superior Court hold this language: “ An attorney has no lien for his costs until a judgment is entered, or at least not till after verdict; and until the lien attaches, the parties can settle the suit regardless of his claim for costs. But after his right to costs is fixed by a verdict or judgment, then the parties are no longer at liberty to settle, disregarding his interest in the matter.” 3. Since the adoption of the Code, the cases of Haight a. Holcomb ( 16 How. Pr., 160 ; 7 Abbotts’ Pr., 210), Ward a. Wordsworth (1 E. D. Smith, 598), and the case of Rooney a. Second Avenue R. R. Co. ( 18 N. Y., 368 ), hold that an attorney has a lien upon the judgment for his costs, and that the lien is not abolished by the Code. The reasoning of these cases proceeds upon the same ground as that of the cases previous to the adoption of the Code—that the verdict or judgment having been obtained by the attorney’s exertions, he should not be deprived of his reward. (Rooney a. Second Avenue R. R. Co., 18 N. Y., 368 .) 4. The cases upon which the learned judge based his decision at the special term, are, Wood a. Trustees Horthwest Pres. Church (7 Abbotts’ Pr., 210); Owen a. Mason ( 18 How. Pr., 156 ); Keenan a. Durfinger (MS.,^[2] Dec., 1859).

p. 328

These cases, it is conceived, are not applicable, for these reasons :—In Wood a. Northwest Pres. Church, the settlement was made before the day of trial; and it was evident from the facts that the settlement was intended as a fraud upon the rights of the attorney. Here no such fact appears. In Owen a. Mason ( 18 How. Pr., 156 ), the settlement was made after a notice of lien for costs had been served by the plaintiff’s attorney upon the defendant, and forbidding a settlement. The case was therefore only within the rule laid down in Pinder a. Morris ( 3 Cai., 165 ). This case presents no such feature. In the case of Keenan a. Durfinger,'it distinctly appeared that the referee had reported in favor of the plaintiff for $500, which brought the case precisely within the rule laid down in Read a. Dupper (6 Term R., 361). It is true that Judge Clerke is reported to have decided that the attorney had a lien on the claim from the commencement of the action, but he cites no authority to sustain the position, and as it was not necessary to pass on the point, the decision was obiter.

II. The code has not extended the lien of the attorney to cases in which it would not have existed prior to the adoption of the Code.

—This was a motion on the part of the defendant for an .order discontinuing the suit, on the ground that it had been settled between the plaintiff and the defendant. The action was brought by the plaintiff, to recover

p. 329

for the loss of services, and the expense he had been put to in consequence of an injury sustained by his son, arising from the negligence of the defendants’ servants, in which the plaintiff laid his damages at two thousand dollars. The cause had been at issue for eleven months,, during which period it had been twice reached and was ready for trial on the part of the plaintiff, but was put off on the defendants’ motion. 'A settlement was then effected between the president of the stage company and the plaintiff, without the knowledge of the plaintiff’s attorney, by the defendants paying to the plaintiff three hundred and fifty dollars, and the plaintiff executing and delivering to the defendants a written instrument, by which he discharged them from all claim or claims growing out of the accident, declaring that it was the express understanding that they were not to pay any more costs and charges of any kind than were embraced in the above-named sum. The next day after this settlement was effected, the plaintiff’s attorney wrote to his client, informing him that the cause would be on the day-calendar for trial on the following Monday, and requesting him to call for subpoenas for his witnesses, to which the plaintiff answered by letter, that his means did not, allow him to continue the suit, and directing his attorney to let it rest. Though the plaintiff’s attorney did not notify the defendants that they had a claim for costs, and that they were not to settle or compromise with the plaintiff, Mr. Clegg, one of the attorneys, swears, that he was informed, and believes, that the defendants knew of the right of the attorney to the costs of the action, and that they combined with the plaintiff to defraud them out of their costs; that they knew that the plaintiff was totally irresponsible, and that they made the first overtures to him, and induced him to act without the knowledge of the attorney, and in fraud of their right; and as this is not denied on the part of the defendants, nor on the part of the president by whom the settlement was made, it must be taken to be true.

Where a settlement is privately effected between the parties, with the design of preventing the attorney from obtaining his costs, the court will, notwithstanding the settlement, allow the attorney to go on and collect the costs in the action, that he may thereby secure himself. (The People a. Hardenbergh, 8 Johns., 335 ; Pinder a. Morris, 1 Cai., 165 ; Read a. Dupper, 6 T. R.,

p. 330

361; Chapman a. How, 1 Taunt., 341.) That there was such a combination in the case, is, as I have said, not denied; but the defendants insist that before verdict or judgment the attorney can have no lien, except upon money paid into court, that there must be something to which his lien will attach, and that that does not exist until the liability of the defendant or of the plaintiff is ascertained by verdict, or by the entry of judgment.

They claim the rule to be, that if, after verdict rendered or judgment entered, the parties settle in fraud of the attorney’s lien, the court will allow him to enforce the judgment to the extent of the costs included in it, and even then only where he has given notice to the defendant of his lien. The case of Swain a. Senate (5 Bos. & Pul., 99) is expressly to the contrary. In that case there was a collusive settlement before judgment, and the attorney had given no notice of his claim for costs, yet he was allowed to enter judgment, and to issue a scire facias against the bail; the court said that it was a fraudulent attempt to deprive the attorney of his costs, and that therefore the’plaintiff’s-attorney ought to be at liberty to proceed for his costs, and to recover nominal damages.

We are referred to the case of Exparte Hart (1 Barn. & Adolph., 660), to show that where the action is for unliquidated damages, the parties may settle, even though the attorney has given notice to the defendants not to compromise or settle the suit without his consent, and in which the court refused to aid the attorney. The court did notice that feature as distinguishing it from the preceding cases, which were for the recovery of a liquidated amount; but they also put their decision upon the ground that there was no collusion in that case: where there is collusion, it can make no difference whether the damages are liquidated or not. The power of the court is not limited to cases where the action is brought for a liquidated sum, but it interposes upon the general principle that it is equitable and right to protect the attorney against a dishonest combination between the parties to deprive him of the fruits of his labor and services. The plaintiff’s attorney had a right to go on and enter up judgment for the costs, and the motion of the defendants for an order discontinuing the action was properly denied.

Footnotes

* Present, Daly, F. J., Brady and Hilton, JJ.