Vrooman v. Pickering , 54 N.Y.S. 389 ( 1898 )

Clearwater, J.

The plaintiff brought suit to recover damages for personal injuries alleged to have been inflicted upon her by the defendant. The latter did not appear or plead, and under a writ of inquiry, a sheriff’s jury awarded the plaintiff $300 damages, a judgment for that amount and $129.29 costs was docketed in the office of the clerk of the county of Delaware on the 31st day of January, 1898, and an execution issued and delivered to the sheriff of that county, who returned the same unsatisfied. An execution was thereupon issued against the person of the defendant and is. now in the hands of the sheriff. After it was issued, and without notice to the plaintiff’s attorney, the defendant settled with the plaintiff and procured from her a satisfaction of the judgment, which was filed, and the judgment satisfied of record.

The plaintiff is destitute, and before the beginning of the action, executed an agreement in writing with her attorney, by which she, retained him to prosecute her case, agreeing that in consideration of his paying all the witnesses’ fees and disbursements, and for his services and the trial of the case, he should have one-half of any sum that might be finally recovered or obtained by a settlement of the case before trial, in addition to his taxable costs. He •knew nothing of the settlement until after the judgment had been satisfied.

It is contended on behalf of the defendant, that the settlement was made for an adequate consideration, and that he had no notice that the plaintiff’s attorney claimed a lien upon the judgment.

The Code of Civil Procedure, as it now stands, provides that the compensation of an attorney or counsellor for his services, is governed by agreement, express or implied, which is not restrained by law. From the commencement of an action or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client’s cause of action or counterclaim, which attaches to a verdict, report, decision, or judgment in his client’s favor, and the proceeds thereof in whosoever hands they may come; and cannot be affected by any settlement between the parties before or after judgment. Code of Civil Procedure, § 66.

The second sentence was added by chapter 542 of the Laws of 1879, and whatever may have been the rule prior to that amendment, it is now well settled that it is not necessary for an attorney to give notice of his claim to the other party, or his attorney, in order to protect the lien for his fees or disbursements upon a judgment in his client’s favor.

An attorney’s lien is now a statutory lien of which all the world must take notice, and any one settling with a plaintiff without the knowledge of his attorney, does so at his own risk. The lien operates as security, and if a settlement is entered into by the parties in disregard of -it and to the prejudice of the plaintiff’s attorney, by reason of the insolvency of his client, or for other sufficient cause, the court will interfere, and protect its officer, by vacating the satisfaction of the judgment, and permit execution to issue for the enforcement of the judgment to the extent of the lien, or by following the proceeds in the hands of third parties, who received them before or after judgment impressed with the lien. Peri v. New York Central & H. R. R. R. Co., 152 N. Y. 521.

It is urged by the counsel for the defendant, as was urged in the defendant’s behalf in the case just cited, that his construction of this section of the Code is against public policy, as the law favors settlements, and that it is not just to permit the plaintiff’s attorney to compel parties to litigate, who desire to compromise their differences, but as stated by the learned judge who delivered the opinion-in that case, this criticism overlooks the fact that the existence of the lien does not permit the plaintiffs attorney to stand in the way of a settlement. The client is still competent to decide whether he will continue the litigation or agree with his adversary in the way. The settlement of a litigation ought in all fairness, to be made with full knowledge of the plaintiffs attorney, and under conditions'protecting his lawful lien. If he seeks to take an unfair advantage of a desire to settle, he is, as an officer of the court, under its constant scrutiny and control, and will be confined in his lien to his taxable costs, and such additional amount as he may be able to duly establish by agreement, express or implied.

But the court, while preventing oppression upon his part, will protect him in the enforcement of the lien given him by the statute. Poole v. Belcha, 131 N. Y. 200; Bailey v. Murphy, 136 id. 50; Lee v. V. O. Company, 126 id. See opinion, page 587.

In the cause at bar, the undisputed facts show that the settlement was made without the knowledge of the plaintiffs attorney, and in entire disregard of his lien. As to him, the settlement is void, and should be set aside, the satisfaction vacated, and as there is no dispute as to the amount it was agreed he should receive in addition to his taxable costs, he should be permitted to proceed by execution for the enforcement of his lien to the amount of one-half of the recovery, the taxable costs and $10 costs of this motion.

Ordered accordingly.