Minto v. Baur — 25 N.Y. St. Rep. 559

Majority

p. 559

Robert F. Minto et al., Resp’ts, v. August Baur et al., Impleaded, App’lts.

(Supreme Court, General Term, First Department,

Filed July 9, 1889.)

Headnote

1. Partnership—Settlement of claim—Power of one partner-to bind firm.

A settlement of a claim made by one partner in consideration of the payment of three-quarters of the claim, and the abandonment of a counterclaim, is binding upon the firm, though made without notice to the other partners.

2. Attorney and client—When attorney may continue action to collect costs—Code Civ. Pro. , § 66.

Where, however, the settlement is made without notice to or the consent of the attorney in the action, it is in fraud of his rights under Code Civil Procedure, section 66, giving him a lien for his costs, and he may vacate a satisfaction piece entered upon such settlement and proceed with the suit for the purpose of collecting them; but, not for an “agreed compensation” where no notice of his claim or lien on that head has been given prior to the settlement.

3. Same—When attorney cannot.

An attorney of a defendant who has set up no rights, and against whom o demands had been made, having no lien, the suit could not be proceeded with for his benefit.

AHlliam F. Brown, for defendants Baur and Byrnes, app’lts; James C. De La Mare, for pl’ffs-resp’ts; Thomas B. Browning, for resp’t-def’t, Austin.

This is an appeal by the defendants Baur and 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 and 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 eighth of March last; and by an arrangement between counsel, judgment was authorized, but was not to be entered for one week.

On the thirteenth 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 plaintiff’s attorny were aware of this settlement. They learned of it on the fourteenth of March, and on the sixteenth the findings and decree were signed. The motion to vacate the satisfaction-piece followed and resulted in the order from which the pz'esent appeal is taken. The court erred in directing the sale of Baur and Byrnes’ interest in the premises, for the pur j lose of payizig the balance due the plaintiffs. McDozzald had a perfect right to settle the partnership ■claim, azid he did settle it for a good and valuable consideration, namely, the payment of three-quarters of the claim and the abazzdonznezzt of a counterclaim.

There had beezi zzo dissolutiozi and each partner had

p. 560

power to bind the firm as McDonald did. If Min to 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 666 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 the suit for the purpose of collecting these costs, and, 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 (Forstman v. Schulting, 35 Hun, 505 ; Wilber v. Baker, 24 Hun, 24 ; Pickard v. Yencer, 10 Week. 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 plaintiff’s 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 and 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 judgement goes beyond the findings and was clearly 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 each 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 interest from March 16, 188Í) (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.

No costs of this appeal to either party.

Van Brunt, Oh. J., and Brady, J., concur