Clare v. Lockard — 31 N.Y. St. Rep. 69

Majority

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Robert M. Clare, App’lt, v. Samuel Lockard, Resp’t.^[1]

(Court of Appeals,

Filed May 9, 1890.)

Headnote

Estoppel—When attobney estopped fbom claiming- lien.

One Halpin was attorney for defendant Lockard, against whom judgment had gone by default in favor of the plaintiff. Halpin, on behalf of Lockard, moved to open the default, which plaintiff opposed on the ground that Lockard would dispose of a judgment of $1,096, which he had against one Stegman. Halpin suggested that plaintiff might have a lien upon the judgment for his" security, but did not disclose that he, Halpin, had a judgment against Lockard for §1,000, for which the judgment against Stegman was already bound. Held, that it was Halpin’s duty to disclose this fact; that his silence was a fraud upon the court and the plaintiff, and that he .was now estopped from setting up his claim to the injury of plaintiff.

Appeal from judgment of the general term of the city court of Brooklyn, reversing in part a judgment in favor of plaintiff.

John Henry Hull, for app’lt; Martin H. Halpin, for resp’t

Whether the defendant Halpin was estopped as against the plaintiff from asserting his lien upon the judgment which he had obtained as the attorney of Lockard is the question upon which the courts below have differed and which this appeal requires us to answer. The situation must be considered. Judgment had gone against Lockard by default in favor of the present plaintiff. The former desired to come in and defend and appeared before the court asking that favor, and of course subject to any conditions which the court might think it just to impose. Lockard was represented on the motion by Halpin as his attorney. The plaintiff had reason to suspect that the financial condition of Lockard was precarious, and that opening the default would endanger the ultimate recovery if, in the end, it should be awarded. A specific fact was stated to the court in justification of the doubt expressed. It was said that Lockard had a judgment against Stegman for $1,096, which, if the default

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was opened, might easily be transferred or collected and put beyond plaintiff's reach, and it was intimated that such was the very purpose sought by opening the default and delaying a recovery. Some answer to this objection was necessary to influence the action of the court. That answer was the suggestion that the moving party was willing to stipulate that the plaintiff might have a lien upon the judgment for his security.

The proof does not make it certain who originated the suggestion, but leaves it certain that Halpin, representing Lockard, availed himself of it as an answer to the objection urged against opening the default, and consented that such lien should be given. Of course the suggestion implied full power in Lockard to give the lien, and that when given it would prove an adequate and effective security. If at that time the truth had been told by Halpin that he himself had a debt against Lockard for $1,000, for which the judgment against Stegman was already bound; and that, therefore, it could furnish no security to the plaintiff for his ultimate recovery, the court might have refused the favor, and the plaintiff insisted upon his judgment. Both court and counsel were misled by the silence of Halpin, and his concealment of his lien. He knew that they were being misled by his silence, for he perfectly understood that the court supposed its condition to be adequate and effective for the plaintiff’s protection, and was acting upon and being influenced by that supposition; and also that the plaintiff was assenting to the proposed order on the same basis. It thus became Halpin’s duty to speak. Silence operated as a fraud both upon the court and the plaintiff, misled them to the latter’s injury, and was intended to mislead them, by leaving them to rely upon the appearance of security which Halpin himself controlled, and meant to absorb. Beyond his silence he was, as the attorney of Lockard, availing himself of that silence and the resultant deception to secure success on his motion, and a favorable result for his client.

It is not a satisfactory answer to this view of the situation that the court and the plaintiff were self-deceived, and themselves constructed the trap into which they blindly strayed. That answer is based upon the fact that the plaintiff and his counsel knew that Halpin had been the attorney of Lockard all through the litigation with Stegman, and were bound to know that as such attorney he had under the law a lien upon the judgment for the value of his services. But the plaintiff did not know, nor the court understand, that Halpin was unpaid, and so had a lien which he was at liberty to enforce. Least of all did they know the amount of Halpin’s unpaid claim, and that it was large enough to swamp the whole judgment, and turn the court’s condition into something little better than a farce.

The truth should have been told; the emergency made it Hal-pip’s duty to tell it; and his silence, by force of which he misled those who relied upon it, and accomplished his purpose of opening the default, cannot now be broken to the injury of the other party. That silence, and the use he made of it, justified the plaintiff and the court in assuming that he had been paid for his

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services and had no lien, or that if unpaid he was otherwise secured, or that to secure a trial for his client he was willing to subject his lien to the chances of that trial and waive it as against the plaintiff. Indeed, we are inclined to think that at the time Hal pin did mean to waive his lien as against plaintiff, and did intend to allow the judgment to stand as the effective security it seemed to be, and so was not consciously and purposely misleading and deceiving both the court and the adverse party. Very likely he thought it safe to do so because he expected to defend successfully when the default was opened and was willing to take that risk. Something like that he is represented to have said, but while he denies having made the statement, the fact itself, of his intent when the order was granted seems, at least, the most charitable supposition. But if that be not so his silence justified the action founded upon it and works an equitable estoppel against his present claim.

The judgment of the general term should be reversed, with costs in that court and in this, and the judgment of the special term be affirmed.

All concur.