In re Hines — 21 N.Y. St. Rep. 343

Majority

p. 343

In the Matter of Mary E. Hines, as General Guardian, etc.

(Supreme Court, General Term, First Department,

Filed January 28, 1889.)

Headnote

1. Attorney and client—Agreement between.

Where an agreement was made between a general guardian of infants and an attorney, fixing the rate of compensation the latter was to receive for services to be rendered in the interest of and for the benefit of the estate: Held. that before the attorney cjuld claim anything upon such agreement, he mu st show that it was a reasonable one, and that ha had taken no undue advantage of his client.

S. Same—Reasonableness of agreement.

In determining as to the reasonableness of the agreement, the value of the property is a necessary fact to consider, and the amount of the indebtedness is necessarily determined by the value of the property recovered to tile estate.

Appeal from order of special term, reducing Mr. Brow-er’s compensation.

T. H. Baldwin, for J. L. Brower, app’lt; David McClure, for the special guardian; Simpson & Werner, for resp’t, receiver.

Actions to establish the legitimacy of the infant sons of W. R. Hines, and to recover his real estate for them, were commenced by Mr. Brower, under an agreement between Mrs. Hines, the mother and general' guardian of said infants and himself, whereby, in consideration of his services, his compensation was to be a sum of money equal to one,-third of the value of all said property recovered and restored to her and her children.

After a long litigation these actions were successful and real estate of large value was recovered. On the 1st of April, 1884, Mrs. Hines, having presented her petition for leave to sell certain real estate in order to pay debts, art order was made referring it to a referee to inquire into the merits of the application and the truth of the allegations of the petition, and to hear the allegations and proofs of all persons interested in the property, or in the application,, and report, with his opinion, thereon, particularly as to the alleged indebtedness of the infants, together with the testimony, with all convenient speed

In June,' 1884, the referee made a report, reporting among other things, as a debt of the said infants, the amount of one-third of the net value of the property recovered under the agreement above mentioned, and then proceeded to assess the value of the property and reported that over $19,000 was due from each of the infants, to Mr. Brower, upon the valuation, found by him. Upon the coming in of the report, confirmation was denied upon the ground that there was not sufficient evidence as to the reasonableness of the agreement between Mrs. Hines and Mr. Brower, and it was referred back to the referee to enable the parties to produce additional proof upon this point.

After proceedings before the referee upon this new order of reference, a supplemental report was made to this court in September, 1885 On the 8th of June, 1886, an order was entered confirming said report and adjudging, upon ■the basis of the estimated value of this property, that the indebtedness from these infants and Mrs. Hines, under the agreement made for the prosecution- of the suits, was over $40,000. The special guardian was authorized to sell and was directed to pay to Brower out of the proceeds of the real estate the sums adjudged to be due.

Some portion of the property was sold almost immediately thereafter, and the sale of other parts of the property was deferred for some time and resulted in a price less than the estimated value in 1884, at the time of the reference in question. Thereupon the special guardian petitioned this court to reduce the alleged indebtedness to Brower to one-third of the net amount of the proceeds of the sale, deduct

p. 345

ing taxes, etc., down to the time of passing title to the purchaser, which motion was granted by the court below, and from the order thereupon entered this appeal is taken. - The proceeding out of which this controversy arises was a proceeding upon the part of a general guardian to sell real estate belonging to infants, in order to pay the indebtedness of the infants incurred by the general guardian on their behalf. The agreement between the general guardian and Mr. Brower being made between attorney and client, before he could claim anything upon that agreement, he was bound to show that it was reasonable and he had thereby taken no undue advantage of his client; because it is a familiar rule that in all agreements between attorney and client, the presumption is against the attorney, and he must show that the agreement made with his client for compensation is not an extortionate one, but is reasonable.

It was this question which was referred to the referee, and this alone as far as the claim of Mr. Brower was concerned. However in the consideration of this question the referee was compelled to take proof of the value of the property in order to show the amount which would be received by Mr. Brower as the result of these litigations in pursuance of his agreement with the general guardian. This question of amount was a very essential one to be considered in determining the question as to the reasonableness of the agreement.

If the report of the referee had stopped there, and the action of the court had stopped there, and the court had ¡simply determined that the agreement was reasonable and that Brower was entitled to receive one-third in value of the premises recovered in these litigations, the contention upon the part of the respondents would have been established, namely, that- the question of the amount of the indebtedness was not in litigation or in controversy in that proceeding, and as a conclusion there would have been no adjudication which would be binding upon the infants or their representatives.

But the referee went further and determined the amount of the indebtedness which was due to Brower from these infants, and the court in confirming his report adjudged that a certain amount was due from these infants to Brower.

It is to be observed that Brower’s "compensation was not to depend upon the sale of the premises recovered. His agreement was that he should receive a sum of money equal to the one-third of the value of said property recovered and restored to Mrs. Hines and her children. Therefore, in determining as to the reasonableness of this agreement, the value of the property was a necessary fact to consider, and in determining the amount of the indebtedness, such indebtedness was necessarily determined by the value of the

p. 346

property recovered, and thereupon upon the coming in of the report, the court adjudged the indebtedness to be thus and so; and from this order an appeal was taken to the court of appeals, the order was affirmed, and therefore became the final order of this court. In this proceeding, the court having undertaken to ascertain the amount of the indebtedness of the infants, and the creditors having proved their claims, and the court having adjudged certain amounts to be due to those creditors, it is difficult to see how this adjudication can be interfered with.

If the terms of the agreement between Mrs. Hines and Mr. Brower fixing the latter’s compensation, had contemplated that such compensatioti should be determined by the-sale of the property recovered, then perhaps there might be some foundation for the position taken upon the part of the respondents. But, as already said, Bowers’ right to compensation nowhere depended upon a sale, but he was to be entitled to recover a sum of money equal to one-third of the value of the property recovered. This debt the general guardian sought to pay by a sale of the infant’s estate, and this debt Brower established before the referee, and the court adjudged to be due to him, which adjudication was affirmed by the court of appeals. It seems to us that now. it is too late to say that the property was not of the value which it was found to be in the proceedings before the referee.

We have not referred in the foregoing opinion to the question in regard to the compensation of counsel, because that is not at all necessary. The claim that the special term had power to correct, amend, modify or alter its previous order is not well founded, in view of the fact that such order was an adjudication upon the rights over which it. had jurisdiction, and was not simply an order, but a judgment.

The order should be reversed, with ten dollars costs and disbursements., !

Daniels and Bartlett, JJ., concur.