Williams v. Barkley

The facts in this protracted controversy between attorneys and client have been stated so often that it is unnecessary to again repeat them. (Barkley v. N. Y. C. & H. R. R. R. Co., 35 App. Div. 167 ; Matter of Barldey, 42 App. Div. 597 ; 161 N. Y. 647 : Williams v. Barkley, 52 App. Div. 631 .)

The question we are now called upon to determine was certified to us by the court below in the following form, viz.: “ Does the former adjudication of this court, upon the motion to confirm the report of the referee in the case of Barkley v. New York Central & Hudson River Railroad Company and upon the order of this court vacating an injunction in this action (see 42 App. Div. 597 ) determine the rights to or liens of the parties upon the fund' in question, and if so, is it binding upon the plaintiffs, or either of them, in this action ? ”

The appeal underlying said question is from an order of the Appellate Division reversing an order of the Special Term, which denied a motion made by Mr. Barkley, the respondent, to require the county treasurer of Monroe county to pay him the sum of $6,240.08, deposited pursuant to an order directing the railroad company, as judgment debtor of Barkley, to pay him one-half of his judgment, and to pay the other half into court by depositing it with the county treasurer. The object of the court in requiring such deposit, was to preserve all possible rights pending an appeal to this court from the

The “ former adjudication,” referred to in the question certified, was through an order of the Appellate Division substituting Frank C. Sargent, Esq., as attorney for Mr. Barkley in the action brought by him against the railroad company, in the place of the Messrs. Williams, who were removed. That order confirmed the report of a referee appointed “ to take evidence and report the same to the Special Term with his opinion as to the terms upon which a substitution of attorneys ” should “ be ordered.”

The referee, after hearing the parties, made his report wherein he laid down the rule that “ upon an application by a party for a substitution of another attorney of record, ordinarily the court will see that the attorney is protected as to his fees ; yet where the attorney’s conduct has been improper and neglectful, the court will deny this protection and direct an unconditional substitution, leaving the attorney to his action for his fees.” He found that “ the conduct of the plaintiff’s attorneys has been improper and neglectful, in unreasonably and unwarrantably delaying the prosecution of this action since the rendition of the verdict. * "* * While this delay of nearly eleven years in proceeding to enforce the verdict was attributable in part to circumstances beyond the control of the plaintiff’s attorneys, it was in the main the result of their deliberate purpose,” and was without “ reasonable excuse.”

Shortly after the referee made his report, the Messrs. Williams, the attorneys of record, and George and Thomas Raines, known as the Raines Brothers, who acted as counsel in the trial of the action against the railroad company, commenced

A former adjudication is binding upon parties and their privies and prevents them from litigating over again such matters as were previously at issue between them and were finally decided by a competent court'. If the record of the former proceeding, although made upon a motion, but after an investigation through witnesses examined and cross-examined, shows that the decision could not have been made without deciding the particular matter now in controversy, the latter must be regarded as settled by the previous action of the court, for to litigate the fact anew would impeach the first decision. (Dwight v. St. John, 25 N. Y. 203 ; Demarest v. Darg, 32 N. Y. 281 ; Brown v. Mayor, etc., 66 N. Y. 385 ; Smith v. Zalinski, 94 N. Y. 519 ; Culross v. Gibbons, 130 N. Y. 447 ; -Wells Res Adjudicala, § 2 ; Freeman on Judgments, § 325.) This is especially true when the controversy involves the conduct of an attorney, as such, because as an offi

The proceeding, now asserted as a bar, was for a substitution of attorneys, and. the order of reference was to take evidence and fix the terms upon which a substitution might be had. . The contracts between the parties relative to compensar tion were put in evidence, and the question of the attorney's negligence was litigated at length with the result stated. The Supreme Court could have made the order of substitution subject to the claim of the Messrs. Williams upon the verdict, in accordance with their contract, but it did not do so. On the contrary, it directed a substitution substantially without terms, upon the ground that the Messrs. Williams had, by their negligence, forfeited the right to enforce their contract. (Holmes v. Evans, 129 N. Y. 140 .) It adjudged that they had been negligent in prosecuting the action against the railroad company and that by reason of such negligence they had forfeited their right to compensation according to their contract, and were left to recover such compensation by action as they could establish upon a quantum meruit. It was not adjudged that they were entitled to no compensation whatever, but that on account of their negligence they could not enforce their contract, which fixed the amount and gave a lien therefor. At the same time it was also adjudged that they were entitled to such amount as, in a proper action, they could prove their services were reasonably worth.

Whether they had been negligent or not was an issue that was necessarily determined in order to decide as to the terms upon which the order of substitution should be made. That subject and its consequences were directly involved in the controversy. If the contract had been performed by the attorneys no valid order of substitution could have been made without recognizing it. If it had been found that they were not guilty of negligence the court would have had no power to remove them without preserving their rights under it. It was only because they were found guilty of inexcusable neglect that the court ordered a substitution virtually without

The Baines Brothers were not parties to the proceeding which resulted in the order of substitution, and, although they knew it was pending, and one of them was sworn as a witness therein, they are not bound by it unless they were in privity with the Messrs. Williams. So far as we are informed, there ■ has been no claim asserted nor adjudication made throughout this controversy, in the various forms which it has assumed, that the Baines Brothers were guilty of negligence or of other improper conduct; still, if, according to the contracts, they were privies to the Messrs. Williams, they are bound by the misconduct of their principals, although in nowise personally responsible for it.

The first contract entered into, between Barkley and the Messrs. Williams provided that they were to have an equal third part of all damages recovered by him in the action against the railroad company in lieu of any other compensation for their services as attorneys therein. Subsequently this agreement was modified so as to provide for the employment of the Baines Brothers as counsel by increasing the amount going to the Messrs. Williams to one-half of the sum that might be recovered from the company. The recital in this contract indicates that Barkley was to employ the Baines Brothers, but the actual agreement was that Barkley was to pay the Messrs. Williams one-half instead of one-third of the recovery for their services as well as for the services of' the Baines Brothers, and the former were to employ the latter and

Where the recital in an agreement is so inconsistent with the covenant or promise that they cannot be harmonized, the latter, if unambiguous, must prevail, because it is the most important. The promise is what the parties agreed to do, and hence is the operative part of the instrument, while the recital states what led up to the promise and gives the inducement for making it. When the explanation of the reason for the promise is at variance with the promise itself, the «latter, if clear and unambiguous, must prevail, as it is the transaction between the parties. The rule governing the subject is well stated in a late English case as follows : “ If the recitals are clear and the operative part is ambiguous, the recitals govern the construction. If the recitals are ambiguous and the operative part is clear, the operative part must prevail. If both the recitals and the operative part are clear, but they are inconsistent with each other, the operative part is to be preferred.” (Ex parte Dawes, L. R. [17 Q. B. Div.] 275, 286. See, also, Young v. Smith, L. R. [1 Eq. Cas.] 180, 183; Bailey v. Iloyd, 5 Russ. 330, 344.)

Whatever may be said of the recitals in the contract under consideration, the operative part is clear and must, therefore, prevail under the rule adopted. There was a distinct agreement by Mr, Barkley to pay the Messrs. Williams onc-half of the recovery for their services and for the services of the Baines Brothers in the action, and the Messrs. Williams agreed to employ the latter and pay them from their half. They did employ them accordingly, not in the name of Barkley, but in their own names, and agreed to pay in their own names and from their own share. The Baines Brothers had no contract with Barkley, for their only contract was with the Messrs. Williams, and they acquired no right except through and

The question certified was framed in disregard of our suggestion that each question should be separately stated so that it may be categorically answered. (Devlin v. Hinman, 161 N. Y. 115 )

We think that the former adjudication determined the rights of all concerned to the fund in court, and that it is binding upon all the parties to this action.

The order appealed from should be affirmed, with costs, and the question certified answered as above stated.

(dissenting). The title of the action indicates that this is a controversy between attorneys and client,

The question pressing for solution is whether Frank C. Sargent, who was substituted as attorney for Barkley after the entry of judgment and its affirmance, shall have the entire fund, or whether he shall be compelled to relinquish his grasp upon some part of it for the benefit of Raines Brothers, who, as counsel for Barkley’s attorneys of record, tried the case at the Circuit, prepared the brief .and argued the case at the Appellate Division.

Sargent is not entitled to any special sympathy in his effort to secure the half of the moneys that the jury adjudged due for the injuries of Barkley, for he contributed nothing towards getting the judgment, and his demand, therefore, to share equally with Barkley in the. amount awarded to him, as compensation for his injuries, has its only justification in the letter of his contract.

On the other hand, Raines Brothers, as counsel, not only conducted the trial, but performed the services on appeal which resulted in an affirmance of the judgment. It would seem equitable, to say the least, that having done all the effective work, they should share with Sargent in some measure in the fund, unless guilty of some misconduct that should be properly visited with forfeiture of compensation; and no claim of that nature is made. It is true that Barkley’s attorneys, for whom the Raines Brothers acted as counsel on the trial of the action and on the appeal from the judgment, have been

The answer to that question depends upon the construction to he given to certain contracts entered into between Barkley and his attorneys and between the attorneys and Baines Brothers. If they constituted an employment of the Baines Brothers by Barkley, then the Baines Brothers are entitled to share with Sargent in this fund. If, on the other hand, they amounted to a hiring of the Baines Brothers by the plaintiff’s attorneys, Barkley is not responsible to them, the Baines Brothers, and they must suffer because of the adjudication that the plaintiff’s attorneys wore negligent, and, therefore, not entitled to the agreed compensation.

Barkley made a contract with his attorneys to pay to them o i e-third of the recovery for their services in the action, but before the action came on for trial Barkley and his attorneys seem to have had some consultation as to the desirability of employing George Baines of Bochester to assist in the trial of the action, and of his brother Thomas Baines for the preparation of the ease for trial, and the result was an agreement on Barkley’s part that this should be done, and in order to accomplish it he agreed that one-half of the recovery, instead of one-third, should be appropriated to the payment of attorneys and counsel. The agreement signed by Barkley, among other things, contained the following:

“ Whereas, my said attorneys propose to employ other counsel to help try the case, and it is proposed by them and agreed to by me that I employ lion. George Raines of Rochester for that purpose, to be assisted, if necessary, in the preparation of the case by his brother at Bochester.”

The agreement further provided that Barkley should pay

Thereupon Barkley’s attorneys entered into an agreement with Baines Brothers by which it was provided, among other things, that,

“ Said Baines Brothers agree to render their services and assist in retrying said case if a new trial is granted therein and as often as a new trial is had therein.”

They also agreed to argue the case on appeal if requested to do so by the plaintiff’s attorney.

Now it will be observed that Barkley did not make a written contract with the Baines Brothers, but did make one with his attorneys, who in turn made one with the Baines Brothers, and, therefore, there is some color for the claim that the Baines Brothers were not employed by Barkley, but if we examine the contracts closely for the purpose of ascertaining what the parties intended, it would seem as if the conclusion must be reached that all of the parties to the agreement intended that Barkley should employ the Baines Brothers, but inasmuch as he did not propose to take any personal risk in the matter, he desired that it should be provided that neither attorneys nor counsel should have compensation except out of the recovery, and so he arranged to increase the proportion of the recovery to be paid for the services of attorneys and counsel in order to secure the services of Baines Brothers, while the latter desired such an agreement as should give them the right to a lien on, and share in, that portion of the recovery which Barkley was willing should go to his attorneys and counsel.

The parties evidently deemed the form of the agreements adopted as best calculated to effect that result, but that the understanding was that Barkley was employing the counsel is shown not only by the fact that he agreed that a larger proportion of the recovery should be devoted to the payment of counsel in the event that the Baines Brothers should agree to take

The agreement further provided the method by which the compensation, if any, should be secured and the attorneys were to he merely the conduit through which the increase in compensation should, in the event only of success, reach the Baines Brothers, thus securing Barkley against the possibility of other and further demands; hut these were incidents to the general scheme of the employment of Baines Brothers by Barkley, intended for his protection as well as that of Baines Brothers, and should not be permitted to overcome the recital that “ It is * * * agreed to by me that I employ Hon. George Baines of Bochester for that purpose,” which clearly manifests the understanding of the parties.

If we give to this recital that full force and effect which its terms plainly warrant, we must reach the conclusion that it was the intent of the parties that Barkley should employ the Baines Brothers as counsel and that they should be paid through his attorneys, to whom he agreed to give an increased compensation for that purpose and for no other. Indeed the agreement was to be void unless Baines Brothers should accept the employment. If the contracts be so construed, it will be in accord with the manifest intention of the parties and work out a just result in this case, inasmuch as it allows counsel who did the work to share with an attorney who did not, in the fund now in the hands of the county treasurer.

But it is said in the prevailing opinion that the statement in the contract to the effect that it was agreed that Barkley should employ the Messrs. Williams is a mere recital, and being in conflict with the operative part of the agreement, the former must give way. Without discussing either the principle or the authorities relied upon in support of the argument that the plain words of recital in the Barkley contract should he utterly disregarded, it may not he out of place to say that the principle of construction invoked is subordinate to that which has often been designated by this court as the polar

Applying this rule so recently laid down by this court to these contracts, we take up what has been spoken of as the operative part of the contract, remembering that in the recital it is plainly stated that Barkley was to employ Baines Brothers as counsel in the case. In effect its provisions are that Barkley agrees to deliver to Messrs. Williams one-half of the amount received of the railroad company for two purposes, one, to compensate them for their services as attorneys, and, two, that they should deliver the remainder to Baines Brothers in compensation for their services as counsel and in place of any other payment to them. It then provides that the Messrs. Williams are to agree with Baines Brothers to compensate them from the one-half that should be turned over to them for services, and that in the event that Baines Brothers should not be employed, that the agreement should be void. It seems to be apparent from this statement that the fundamental purpose of this contract was to procure the services of Baines Brothers for the benefit of Barkley and to provide for their compensation out of a recovery from the railroad company. By this

The intent of the parties, as gleaned from the operative portions of the contracts,, is, therefore, in harmony with the assertion of the parties as expressed in the recital of the first contract to the effect that it was proposed by the Messrs. Williams and agreed to by Barkley that the latter should employ the Raines Brothers as counsel in the case. And the contract should be given the effect which the parties to it intended.

I advise a reversal of the order of the Appellate Division and an affirmance of that of the Special Term.

Gray, Bartlett and Cullen, JJ., concur with Vann, J., for affirmance; Martin and Werner, JJ., concur with Parker, Ch. J., for reversal.

Order affirmed, etc.