Oliwill v. Verdenhalven — 26 N.Y. St. Rep. 115

Majority

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Mary Oliwill, Resp’t, v. Daniel Verdenhalven, App’lt.

(City Court of New York, General Term,

Filed October 3, 1889.)

Headnote

1. Practice — Submission to jury — Attorney’s lien.

In an action for personal injuries, the defendant set up a compromise by supplemental answer, and plaintiff replied that the release was procured • by fraud and imposition. No fraud or imposition was proved. The judge submitted to the jury the question whether plaintiff’s attorney had a lien on the cause of action. Held, error; that there was no issue as to such lien.

2. Attorney — No lien on cause of action for personal injuries.

A cause of action for personal injuries is not assignable, and the plaintiff cannot, by agreement with his attorney, give him a lien upon, or interest in, any part thereof as against the defendant. The attorney’s lien thereon prior to judgment is limited to the taxable costs.

The plaintiff brought an action to recover $5,000 damages for personal injuries received through the negligence of the defendant and his employees in the management of a tenement house owned by the defendant. The defendant interposed an answer denying the negligence charged. Thereafter "the plaintiff and defendant came together and settled the litigation for $200, and the plaintiff executed the following instrument:

“Received from D. Yerdenhalven the sum of $200, in full of all demands to date, including the charges of the plaintiff’s attorney in the suit of Mary Oliwill against D. Yerdenhalven, which charges are to be paid by inc.

“ New York, January 14, 1889. MARY OLIWILL.”

The plaintiff then applied for an order that the action be declared discontinued in consequence of the settlement

The motion was denied, with ten dollars costs.

The defendant then moved for leave to plead the compromise by way of supplemental answer. The application was granted, on payment of all the costs o’f the action up to that time, including the ten dollars costs aforesaid. The costs were paid and the supplemental plea interposed. The plaintiff served a reply to the supplemental plea, alleging that the release had been obtained by fraud and imposition, but there was no return or offer to return the consideration paid to and accepted by the plaintiff. Upon the trial, the plaintiff proved her cause of action, and the defendant the truth of his supplemental plea. There was no evidence of fraud or imposition in obtaining it, and the trial judge held that the release was effectual as against the plaintiff, but permitted the case to go to the jury on the question whether the plaintiff’s attorney-had a lien by agreement with his client, to the extent of one-half

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•of the recovery that might be had, and whether the defendant prior to the settlement had notice thereof, the theory being that if there was no lien by notice, the verdict was to be for the defendant.

The jury found a general verdict in favor of the plaintiff for :$650 damages, and a special finding to the effect that the plaintiff’s attorney had given the defendant notice of his lien prior to the settlement. Upon the conclusion of the evidence, the defendant’s counsel moved to dismiss the complaint, on the ground that the defense of release had been proved, and that no lien upon the cause of action had been established. The trial judge denied the motion, under exception, and sent the case to the jury, with the result before stated. From the judgment entered on the verdict the defendant appeals.

George M. Mackellar, for app’lt; Samuel H. Randall, for resp’t.

The only issue before the court at the time of the trial was whether the plaintiff had a cause of action, and whether it had been legally discharged by release. Indeed, the main question was as to the release, and no fraud or imposition having been established, it was conclusive against the plaintiff, .and her complaint ought to have been dismissed; whether or not the plaintiff’s attorney had a lien, or its nature or amount were not before the court for adjudication. The issue was one of accord .and satisfaction. If the plaintiff’s attorney, for the preservation of his lien, desired to avoid this defence, he should, immediately after the plea of settlement" was interposed, have applied for leave to prosecute the action for his own benefit, and at his own risk and cost. Dimick v. Cooley, 3 Civ. Pro., 141; Quinlan v. Birge, 43 Hun, 483 ; 7 N. Y. State Rep., 147; Smith v. Baum, 67 How. Pr., 267 ; Tullis v. Bushnell, 65 id., 465; Murray v. Jibson, 22 Hun, 386 ; Stahl v. Wadsworth, 13 Civ. Pro., 32; and see 5 id., 147; 8 id., 256; 7 id., 385; 10 Abb. N. C., 395 , note; 14 Abb. Pr., 229 ; 29 Hun, 527 ; 10 Abb. N. C., 393 , note; 87 N. Y., 467 . The order might have provided for a supplemental complaint, giving the nature and amount of the lien claimed and the defendant, by his plea, might have created an intelligent issue for the trial judge to determine, with or without the aid of a jury, as the parties might determine. But no such application was made, no leave was obtained to prosecute in aid of the lien, no issue in respect thereto was created, and the trial judge had no right to enter upon the trial of any such claim. But, in addition to this, the plaintiff’s attorney had no lien at the time of the trial, and it was useless to undertake to ascertain the nature or amount of a thing having no legal existence. The cause of action was for personal injuries and was not assignable, so that the plaintiff could not, by any arrangement with her lawyer, transfer any part of the cause of action to him as against the defendant. Coughlin v. N. Y. Central R. R. Co., 71 N. Y., 443 . In the event of a recovery and subsequent satisfaction, the agreement however might have been good as between the attorney and client for the purpose of fixing as between_ them the amount of the attorney’s compensation, Code, § 66, but as

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against the defendant, prior to judgment, the arrangement, even followed by notice, imposed upon him no legal obligation.

If the cause of action had been of an assignable character, this ¡rule would not have been applicable.

Upon the motion for leave to interpose the supplemental answer pleading the release in bar, the plaintiff’s attorney received all of his taxable costs up to that time, and this upon an unassignable cause of action was all he was entitled to recover against the defendant prior to judgment, when the cause of action for the first time assumes the form of a contract of record.

Section 66 of the Code protects the legal lien of the attorney upon the cause of action. This presumptively is measured by the amount of his taxable costs. If he claims a lien for a greater amount, he must protect it by notice.

If the cause of action is unassignable, the notice that part of it has been assigned must be held to amount to this, that the attorney holds an agreement which, as against the defendant, gives him no rights and imposes on the latter no liabilities. The law does not discourage settlements in negligence cases or in those involving personal controversies. Cahill v. Cahill, 9 Civ. Pro., 241. Whether a legal obligation exists, as well as its nature and amount, are all matters of uncertainty, and if a defendant can buy his peace for a reasonable amount, he should not be prevented from doing so.

In such cases, the plaintiff and defendant may come together and make terms, and the only risk the defendant runs is being obliged to pay the taxable costs, a duty he is generally willing to perform. If the plaintiff breaks faith with his attorney he, like other people, must seek redress from the defaulting party to the obligation.

He should not be allowed to stand between two litigants, and tell them to fight, when they have settled their grievance and do not want to fight. For the reasons stated, it follows that the judgment rendered cannot stand, and that the order made by the trial judge after the verdict, for ascertaining the amount of the attorney’s lien, does not assist us in sustaining the recovery. The judgment appealed from will, therefore, be reversed and a new trial ordered, with costs to the appellant to abide the event.

McAdam, C. J.; Nehrbas and McGown, JJ., concur.