Minto v. Baur — 6 N.Y.S. 444

Majority

p. 444

Minto et al. v. Baur et al.

(Supreme Court, General Term, First Department.

July 9, 1889.)

Headnote

1. Attorney and Client—Lien—Settlement in Fraud.

A firm commenced an action to foreclose a mechanic’s lien to which both the lessor and lessees were made parties. By agreement judgment was authorized, but not to be entered for one week. During the week one of the firm settled the case with the lessees by accepting payment of a certain sum, and giving a satisfaction of the lien, with a consent of discontinuance, without the knowledge or consent of plaintiffs’ attorney. Held, under Code Civil Proc. § 66, giving the attorney a lien for costs, that the settlement was in fraud of his rights, and that it was proper to permit him to vacate the satisfaction and proceed with the suit for the purpose of collecting his taxed costs, but not for the agreed compensation, as no notice of his claim or lien on that head had been given prior to the settlement.

3. Same.

As the lessor set up no rights and made no demands against the lessees, the suit could not be proceeded with for the collection of the costs of his attorney, though the judgment authorized the lessor to recover Ms taxed costs, as the attorney had no lien.

S. Settlement—Partnership—Authority of Partner.

A settlement made by one of the partners in consideration of the payment of three-quarters of the claim, and the abandonment of the counter-claim, was binding on the other partner, though made without his knowledge, and it was error to permit the suit to be proceeded with for his benefit for the collection of the balance.

Appeal from special term, Hew York county.

Action by Robert E. Minto and Roderick J. McDonald, partners as Minto & McDonald, against August Baur and Thomas J. Byrnes, partners as Baur & Byrnes, and William Austin, to foreclose a mechanic’s lien upon premises of which Baur & Byrnes were lessees and Austin the owner. The court rendered judgment of foreclosure and ordered the property sold, and the proceeds paid to plaintiff to the extent of the judgment, and that Austin recover of the

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other defendants his costs, and that his interest should not be sold unless the interest of the lessees was insufficient to pay the judgment. An entry of satisfaction and from an order it Baur & appeal.

Argued before Van Brunt, P. J., and Beady and Barrett, JJ. ■

Wüliam F. Browne, for appellants. James O. de la Mare, for Minto & McDonald. Thomas B. Browning, for Austin.

This is an appeal by the defendants Baur & Byrnes from an order granting the plaintiffs’ motion to set aside the satisfaction of a mechanic’s lien, and giving the plaintiffs leave to proceed under a judgment foreclosing such lien, and directing a sale of the premises. Baur & Byrnes are the lessees of the premises, and the persons substantially interested in the suit. The defendant Austin is the owner of the fee. The cause came on for trial on the 8th of March, last, and, by an arrangement between counsel, judgment was authorized, but was not to be entered for one week. On the 13th of March the case was settled, Baur and Byrnes paying $750 to the plaintiff McDonald, and receiving from him a satisfaction of the lien, with a consent of discontinuance. Neither the plaintiff Minto nor the plaintiffs’ attorney were aware of this settlement. They learned of it on the 14th of March, and on the 16tli the findings and decree were signed. The motion to vacate the satisfaction piece followed, and resulted in the order from which the present appeal is taken.

The court erred in directing the sale of Baur & Byrnes’ interest in the premises for the purpose of paying the balance due the plaintiffs. McDonald had a perfect right to settle the partnership claim, and he did settle it for a good and valuable consideration; namely, the payment of three-quarters of the claim, and the abandonment of a counter-claim. There had been no dissolution, and each partner had power to bind the firm as McDonald did. If Minto has been injuriously affected by this settlement, he must look to McDonald for his redress. The settlement, however, was in fraud of the attorney’s rights. He had a lien, under section 66 of the Code of Civil Procedure, for his costs. Independent of that section the parties could not collude together to cheat him out of his costs. It was proper, therefore, to permit the attorney to go on with tlie suit for the purpose of collecting these costs, ttnd, in aid of that proceeding, to vacate the satisfaction piece; and the attorney was at liberty to proceed with the suit, as he did,without leave being first obtained, (Forst man v. Schulting, 35 Hun, 505 ; Wilber v. Baker, 24 Hun, 24 ; Pickard v. Yencer, 10 Wkly. Dig. 271 ;) especially as judgment had actually been ordered before the settlement, and nothing remained to be done save the formality of signing the findings and decree. But the court erred in allowing the attorney the “agreed compensation” in addition to the costs and allowance specified in the judgment; also in allowing costs to the defendant Austin. The plaintiffs’ attorney could not proceed for the agreed compensation, because no notice of his claim or lien on that head had been given prior to the settlement. Jenkins v. Adams, 22 Hun, 600 . Austin’s attorney had no lien at all. He was simply a co-defendant with Baur & Byrnes. Nor did the decision of the judge, as embodied in the findings, give him costs. The conclusion of law refers to Austin only as a defendant foreclosed of his equity of redemption. The judgment goes beyond the findings, and was clea'rly void in this particular. At all events, the suit could not be continued for any such purpose, as between co-defendants who had set up no rights, and made no demand of judgment as against eacli other. The order appealed from should, therefore, be reversed so far as it authorizes the plaintiffs and the referee to execute the judgment for the purpose of paying any further sum to the plaintiffs, or for the purpose of paying costs to the attorney for the defendant Austin. It should be modified as to the plaintiff’s attorney, so far as to permit the execution of the judgment solely for the purpose of paying him $202.07, with in

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terest from March 16, 1889, that being the amount of his taxed costs and allowance as specified in such judgment; and, in aid of the latter direction, the vacatur of the satisfaction piece may stand. Upon the payment, however, of said sum of $202.07 and interest, the satisfaction piece may be restored, and the suit discontinued. Ho costs of this appeal to either party. All concur;