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In re Tracy

1 A.D. 113 Court N.Y. App. Div. English

Delivered by Barrett, J.:

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p. 113
In the Matter of Rollin Tracy, an Attorney, Appellant. Livingston Jaques, Respondent.

Headnote

Attorney and client—summary power of the court to make an attorney pay over moneys collected—proof required of a counterclaim on his part—moneys must be paid over as collected.
Where a person secures the services of a lawyer, and the latter gives him a receipt admitting the receipt of a certain sum on account of disbursements “in this case” and stipulating for a certain percentage of the “recovery,” the relation between the parties is that of attorney and client and is not that of a principal and a mere collecting agent.
In order to prevent the exercise of the summary power of the court over an attorney who fails to pay over to his client moneys which he has collected for him, the attorney must do something more than make assertions by way of counterclaim. His assertions must be supported to such an extent as to j ustify a formal investigation as to their truth.
Where an attorney collects a claim in installments, or from time to time as he is able to collect it, the client is not compelled to wait for payment to him by the attorney until the attorney has collected as much of the claim as possible, but may compel the attorney to settle from time to time as he collects money.
Appeal by Rollin Tracy from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 3d day of June, 1895, requiring the appellant to pay to Livingston Jaques, within two days from the service of said order, the sum of $838, together with $10 costs of the application.
On April 6, 1893, the petitioner, Livingston Jaques, placed with Rollin Tracy, the appellant, a claim against one Hollins for collec
p. 114
tion. At this time he paid the appellant fifty dollars on account of prospective disbursements. The receipt therefor reads as follows :
“ April 6, 1893.
“ In re Livingston Jaques vs. Hollins:
“ Received on account of disbursements, $50 in this case, and Mr. Jaques is to advance funds necessary for disbursements as same may be needed, and aid with his advice and knowledge of facts, and in the case of recovery I am to have 20 per cent of the recovery, and in case of no recovery, no pay.
“ ROLLUST TRACY.”
The appellant, on April 13, 1893, obtained from Hollins in settlement a cash payment and the delivery of four notes secured by collateral. In February, 1895, after numerous demands for information, the petitioner obtained from the appellant an admission that :$1,547.28 had been collected. The order appealed from directs payment to the petitioner of eighty per cent of this amount, less $400 already paid to him.
The appellant claims that the relation of client and attorney at law did not exist between himself and the petitioner; also that he was entitled to retain the money collected as security for his commission on the unpaid balance of the claim; also that the amount in his hands was subject to a counterclaim for _ prior services and disbursements in another matter.
Charles Duane Baker, for the appellant.
William, H. Sage, for the respondent.

It is clear that the relation between tlie parties was that of attorney and client. Mr. Jaques sought the services of a lawyer and not of a mere collecting agent. The receipt plainly indicates the understanding, and all the facts point to the professional relation.

It is equally clear that the attorney was entitled to his percentage only upon the amount collected, and the petitioner was entitled to a settlement on that basis from time to time as collections were made. Otherwise he might have been compelled to wait years for his money, as long, in fact, as the attorney should insist that there was a chance of collecting anything more. It is true that, before the

p. 115
commencement of this proceeding, the attorney voluntarily turned over to the petitioner the notes and collateral, hut this in no way alters the latter’s right to payment. Conceding that the former had a lien thereon, surrendering it does not affect the petitioner’s right to eighty per cent of the sums previously collected, nor does it affect the attorney’s right to twenty per cent of sucli sums as may hereafter lie collected by the respondent.

As to the counterclaim, we think the attorney has wholly failed to make out a case. This counterclaim rests upon the unsupported statement of the attorney. We cannot, in this connection, overlook the fact that the attorney’s course with regard to the subject of the application was anything but straightforward. His credibility is thus weakened. When, therefore, we find that this counterclaim was not made at a time when, if just, it would have been natural to assert it, that its existence is fully denied, and that such denial is not only credible in inself, but is corroborated in various particulars by disinterested witnesses, wre cannot but conclude that it is an afterthought ; that it is without merit; and that it is put forward merely to delay and obstruct the respondent in his effort to secure payment of wnat is clearly due him.

The petitioner was bound to make out a clear case against the attorney (Matter of Knapp, 85 N. Y. 284 ), and he has done so. To prevent the exercise of the court’s summary power in dealing with such a case, the attorney was required to do something more than make assertions by way of counterclaim. These assertions should at least have been sufficiently supported to call for more formal investigation. The client should not be required, under such circumstances as these, to spend time and money in collecting from the attorney that to which upon his side of the case he is plainly entitled (Bowling Green Savings Bank, v. Todd, 52 N. Y. 489 ; Waterbury v. Eldridge, 5 N. Y. Supp. 324 ), and against which there is no well-founded or substantial offset.

The order appealed from should be affirmed, with ten dollars costs and the disbursements of the appeal.

Van Brunt, P. J., Williams, Patterson and O’Brien, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.

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