In re Smyley

It is not necessary to state in detail the facts established by the voluminous record presented upon this appeal. We think it to be established that the relation of attorney and client existed between the appellant and the respondents, and the only question which is open for discussion is as to whether under the circumstances developed the appellant, who is the attorney for the respondents, should be compelled to pay over the money in his hands which is claimed by them.

It appears that in February, 1868, one Captain W. H. Smyley, for twenty years American consul to the coast of Patagonia, and United States commercial agent to the Falkland Islands, departed this life at Monte Video, in South America, leaving an estate in

Letters of administration on the estate were thereafter issued by the surrogate of the county of Queens and State of New York to his widow, and subsequently one George M. Deane was appointed ancillary administrator by the colonial court in the Falkland Islands, and pursuant to such letters took possession of the real and personal estate of said deceased. The respondents subsequently retained attorneys to collect from said Deane the amount realized from the estate of said deceased, and finally the appellant was so retained.

It is not necessary here to discuss the facts which lead to the conclusion that the relation of attorney and client existed between the appellant and respondents.

The said Deane, having made certain remittances on account of the estate which were duly paid over to the parties interested, came to this country, and while here attempted to make a final settlement with the heirs of Smyley for the moneys of said estate which had been collected by him; the persons interested claiming a larger amount from said Deane than he was willing to pay. Finally, on the 11th of November, 1887, the said Deane mailed to the appellant a draft on London for the sum of £429.0.11 sterling, being, as stated by him, the balance due the estate of the late W. H. Smyley in the Falkland Islands, which amount he directed the appellant to hold in trust for the heirs of such estate, but not to pay it to them until they had duly and properly signed a release. Before the receipt of this letter the respondents brought actions, by the service of summons, against Mr. Deane for over $10,000 alleged to be due them from Deane as administrator. Deane subsequently saw the appellant and retained the firm of which the appellant was a member to defend said actions, authorizing them, as is claimed by the appellant, to defray the expenses of said action out of the draft which had been mailed to them; and the appellant’s firm shortly afterwards appeared for said Deane.

Frequent demands were made by the respondents upon the apjrcllant for their share of the money which had been placed in the appellant’s hands by Deane; but the appellant refused to pay except upon withdrawal of the suits and the full settlement of the whole controversy between Deane and themselves. Two of the shares (namely, that of Mrs. Shuttleworth and of W. H. Smyley, Jr.,) were paid to them upon their execution of releases. And it appears by the letter of the appellant’s firm to the respondent Winter, dated January 6, 1888, that the respondent Catharine Smyley had signified her desire to discontinue the action begun by her against Deane and accept the money held by the appellant, and she is asked whether she too wished “ to discontinue the action and accept the money now here in full settlement.”

The only question which it is necessary tó discuss in the disposition of this appeal is whether the appellant was bound to pay over this money without obtaining the releases which were demanded by Deane as a condition of its payment. It is to be observed that as to two of the shares, upon the receipt of the release the money was paid; and that there was a refusal upon the part of the respondents to discontinue their actions and accept the money in full settlement as required by Deane until after his death. And in fact it does not appear in the record that there • ever was any tender of releases or offers to discontinue the actions-brought by the respondents against Deane.

It is urged upon the part of the respondents that Deane had no-right to require the execution of any releases as a condition precedent to the payment and distribution of said fund by the appellant among the heirs. In this proposition we cannot agree with the counsel for the respondents. Deane was not bound to pay this money except as the result of a judicial decree; and if he chose to pay the same without that formality he had a right to- ‘ exact any instrument which he might think necessary for his protection, as a condition of payment. This being his position, he had the right to place the money which he was willing to pay in settlement of the claims made against him as administrator in any person’s hands and to restrain the payment of that money until the acceptance of such conditions as he chose to impose. And if the person receiving the money paid the same over in violation of those conditions, he would make himself liable to Deane for any damage resulting to him by reason of such a breach of trust. Therefore when Deane placed the fund in the hands of the appellant with the injunction that the same should not be paid out until releases were executed, the appellant had no right to dispose-of the money except in pursuance of the authority conferred-upon him by Deane.

It appears, as already stated, that to two of the parties who were-willing to execute releases as required by Deane, their shares were paid; but to the respondents who, as far as this record shows, never offered the required releases, no payment was ever made; and it is-to reach this money that this application was made and granted:

" We think this was clearly erroneous. If the respondents desired the money in question, they were bound to tender the releases as a compliance with the condition precedent which Deane had placed upon its payment.

It is true that it is claimed by the respondents that they were-willing, so sore was their need, to relinquish all their claims against the estate on the receipt of this money, but an examination of the case fails to show any such willingness or offer prior to the death of Deane, or, for that matter, after his death ; and the letter of January 6, 1888, shows that no such offer had been made. It is true it would appear from such letter that the respondent Smyley may possibly have been willing to recede from the position taken in order to receive her share of the fund, but

We think, under the circumstances, the court had ho power to direct the payment of the money in question. We do not think that in claims of the character developed by the papers in this proceeding the court should attempt to dispose of the rights of parties in this summary manner, and that it is only where a party shows that he has a clear, absolute, unincumbered right to the immediate possession of money received by his attorney, on his behalf, that such proceedings should be entertained.

The order appealed from should, therefore, be reversed and motion denied, but without costs, because the point upon which the appeal is decided was not specifically raised either before the referee, or in the court below.

Barrett, J., concurs.