Townsend v. Meyers

Laughlin, J.:

This action is brought to compel the defendant to account to the ■ plaintiff for an undivided one-half interest in moneys received by the defendant on the settlement of a claim or cause of action in favor of Bertha E. Strange against the New York, New Haven and Hartford Railroad Company and the New York Central and Hudson River Railroad,. Company for personal injuries, in which she was represented by-the defendant as attorney of record.

Either in the latter part of December, 1901, or in the month of January, 1902, tiré plaintiff and defendant made a verbal agreement to become copartners in the practice of law. The copartnership was dissolved by mutual consent on the 5th day of June, 1902, and a formal dissolution agreement was executed adjusting their copartnership , affairs. The client, Bertha E. Strange, met with the accident on which her claim against the railroad companies was based on the 8th day of January, 1902, and on the next' day she gave the defendant a retainer in writing. He brought the action, which was settled on the 22d day of May, 1902, by the payment by the rail- ' road companies of the sum of $10,000 on account of. damages and $500' for counsel fee. The defendant gave the client $3,500 and retained the balance under a claim based on the agreement between him and his client for services and expenses. He did not account to the plaintiff for any part of the amount so retained, and the action is brought on the theory that the copartnership was formed before the defendant received this retainer and that plaintiff was entitled to share in the amount received on account of these services, and was not aware of the existence of the. retainer or of the pendency of the action, or of the settlement at the time of the dissolution of the copartnership, nor until long thereafter.

The claim of the defendant was that the copartnership was not to take effect until the 1st day of February, 1902, and that the item in question was not- a copartnership matter. The trial court found that the copartnership was formed prior to the time the defendant was retained to enforce the claim against the railroad companies, and that by the. terms of the copartnership agreement the parties were to share equally in the proceeds of all professional services rendered by either party during the continuance .thereof, but it did not include the salary received by the. plaintiff as an assistant district attorney. ■

We have examined the evidence on the main points of difference between the parties and are convinced that it preponderates in favor of the plaintiff. We are .of opinion, however, that the defendant should have been allowed an item of disbursements aggregating • $400, which has been disallowed. In the month of May, 1906, a proceeding was instituted by the client, Bertha E. Btrange, against the defendant to require.him to pay over the balance of the proceeds of the settlement of her action against the, railroad companies Jess his proper charges for services and disbursements. This proceeding resulted in an order requiring him to pay oVqr to her the further sum of $4,300, leaving a balance of $2,J00\ which the defendant had received and retained for-services and disbursements. On the special proceeding bv the client to compel the defendant to account for the balance of the amount which he retained, he employed Mr. Fox as counsel, and before the matter was adjusted an appeal was taken by him to this court from an order made at Special Term, and lie incurred disbursements for printing aggregating $100. The trial court allowed this disbursement for printing and $450 paid to counsel so retained in the special proceeding, aggregating .$550. This'left a balance of $2,150 received and retained by the defendant for services, and the plaintiff has been awarded against him for one-half of that sum, together with interest thereon from the date of the dissolution of the firm.

The learned counsel for the defendant contends that he should have been allowed the further sum of $1,000 which he paid to one Bitterman, whom he employed as counsel when he received the Strange retainer, for services rendered as counsel. This claim was, we think, properly disallowed on the ground that it was the duty of the defendant to consult his partner, and he was not justified as against his partner in incurring that liability.

It does appear, however, that the defendant employed and paid his client’s doctor and other medical experts whose services would have been necessary on the trial of his client’s cause of action and were valuable in bringing about the settlement. According to his testimony, which is uncontradicted, he expended in all for medical services to his client and for the services of the experts, and perhaps some other small items of necessary disbursements, the sum of $400. He testified that he had a balance on hand of $750 of the total amount of $10,500 received from the railroad companies, and that he had expended the rest of’ the money in payments to his client, to his counsel in the proceeding instituted by his client .against him,, for printing papers on appeal in that proceeding,, and to Bitterman and to the doctors. The amounts exclusive of the payments to the doctors aggregate $9,350, which shows that the amount paid to the doctors was $400, for he gives the total amount disbursed by him.as $9,750. He testified that he paid $156 to Dr. King, who attended his client, but the record does not show the items of the other disbursements, although it would seem that he handed a statement thereof to the court. On the trial the court requested the defendant to write out the items of disbursements which lie claimed and to whom they were paid, and the record shows that, pursuant to this direction, he handed a paper to the court, at the same time stating in effect that there was exactly the sum of $750 left in his hands after the disbursements. After the defendant handed the paper to the court, the record shows that the court proceeded to state its contents, saying : “ Mr. Meyers makes this statement of his disbursements, $3,500 paid to Miss' Strange originally, $4,300 paid to Miss Strange subsequently—” At this point counsel for the plaintiff said, “ That we admit.” The court then proceeding said : “ About $500 paid to doctors and some other minor disbursements.” To this counsel for the plaintiff responded, “ Those matters we should like an account of.” It does not appear whether or not counsel for plaintiff subsequently saw 'the itemized statement which defendant handed to the court.. The court subsequently, evidently referring to the items of disbursements handed up by the defendant, stated that they totaled $9,750, leaving a balance of $750 in the defendant’s hands. There was no further request for a statement of these disbursements, and the matter does not appear to have arisen again on the trial. Assuming, as the court found, that the firm was entitled to the proceeds of the services rendered by the defendant for Miss Strange, the disbursements incurred by the defendant for medical experts was a proper firm charge, and the amount thereof should have been deducted from the balance of the settlement retained by the defendant.

The judgment should, therefore, be modified by deducting the sum of $200, together with interest thereon from the 5th day of June, 1902, and as' thus modified affirmed, without costs.

Ingraham, P. J., Clarke, Scott and Miller, JJ., concurred.

Judgment modified as directed in opinion, and as modified affirmed, without costs. Settle order on notice.