Seligman v. Franco-American Trading Co.

The judgment was confessed on the 5th of October, 1888, for an indebtedness stated to be owing to the plaintiffs for professional services as the defendants’ attorneys and counsel, and on the twenty-sixth of December of the same year, the plaintiff was appointed receiver of the property of the defendant at the suit of a judgment-creditor, whose execution had been returned unsatisfied.

The statement for the judgment was drawn with very great brevity, barely complying, if indeed it did comply, with what has been directed to be stated in it, to render it legal and regular, by subdivision 2, section 1274 of the Code of Civil Procederé. That subdivision requires that the statement must show that the sum confessed is justly due, or to become due, while the statement itself contains no more than that the plaintiffs, as defendants’ attorneys and counsel, had general charge and conduct of its legal affairs, and rendered services from the 1st of January, 1884, to the 1st of October, 1885, of the reasonable value of $2,500. The receiver considering that the statement was too deficient to comply with this direction of the law, or that the amount allowed was greater than the value of the services rendered, applied to vacate or set aside the judgment, after endeavoring to obtain a further statement disclosing the justice of the amount allowed by the judgment.

To defeat the application, the plaintiffs have taken the position that the receiver was not authorized to make it, and the case of Whittelsey v. Delaney ( 73 N. Y., 571 ), has been brought to the attention of the court, as an authority sustaining this position. But that case is entitled to no such weight or effect. For there the action was brought to vacate a judgment on the ground that it had been fraudulently recovered, and the court held that an action by the receiver was there necessary to secure that relief. In this respect it followed the decision made in Tracy v. First National Bank, etc. ( 37 N. Y., 523 ), which decided that a receiver could not" move to vacate an attachment, as the law then existed, without first making himself a party to the action.

But the judgment, against which the receiver in this case endeavored to obtain relief, was entered on confession, and it has been the practice of the courts at all times to interfere in the way of vacating, modifying, or reducing such judgments, by way of motion, and at the instance of other parties whose interests or rights may be shown to require protection against the judgment; and accordingly a subso

The receiver appointed in this case represented a judgment creditor, and being vested with his rights, was authorized, under these authorities, to make this application; and from the'very brief, if not materially defective, statement made for the moving to vacate it plaintiffs’ judgment, he was justified in or to secure such an investigation concerning the amount mentioned in it as would prove the plaintiffs to be entitled to its allowance. And this rulo applies with peculiar force to transactions between attorneys and clients. The relation is of a confidential character, and liable to be used by the attorneys for their advantage, to the prejudice of! the parties employing them, as well as of other creditors. And to sustain transactions between the attorney and client,i actual proof of good faith and fair dealing has been required by the law; and to promote that, the receiver was entitled to a statement supported, at least, by the evidence of tile attorneys, showing that the amount allowed by the judgment was a just and legal claim against the defendant. That they failed to furnish, and as the judgment contains! no statements of facts from which the justice of the plaintiffs’ demand can be seen, a reference should be ordered, upon which proof should be required to be given by them, or in their behalf, to establish their right, as against the defendant, to this sum of money, or to some portion of it, and if the amount has been overcharged, then the judgment should be correspondingly reduced.

The order from which the appeal has been taken should be reversed, with ten dollars’ costs and the disbursements, and an order entered directing this reference.

Van Brunt, Clj. J., concurs; Brady, J., concurs in result. ! _