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App. Div.]

First Department, November, 1916.

moneys by improper investment the client cannot proceed against him summarily by motion to compel him to pay over, even though he may be subject to disciplinary proceedings by the court. The client must enforce her rights by action.

APPEAL by the attorney, W. H. K. Davey, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 1st day of July, 1916, requiring him in a summary proceeding to turn over to his client certain moneys which he had collected in his official relation, but which were afterwards invested by him improvidently for said client.

C. E. Sutherland, for the appellant.

James J. Wilson, for the respondent. SMITH, J.:

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The petition recites that in the month of December, 1911, the said Davey received from your petitioner, to hold, invest and care for in her behalf and to pay to her on demand, a certain sum of money, to wit, $2,953.90;" that thereafter certain sums were paid to her, and she demanded an accounting and return to her of all moneys over and above the amount due him for his services. These moneys, it seems, were collected by Davey as attorney for her in certain proceedings in Surrogates' Courts, so that he clearly received the money in his professional capacity as attorney. His affidavit, however, which is not here disputed, states that he was requested by her to invest the money in his hands so received; that he has invested the moneys in various ways, and loaned to one Alton the sum of $1,200. Payments were made upon that loan which have been turned over to his client, and it has been found that there is still due on said loan which has not been paid over to her the sum of $305. There is in fact about $700 remaining unpaid on the loan, but the attorney himself has advanced to her moneys, so as to leave the balance due $305. This $305 the Special Term has directed the attorney to pay over to her in this proceeding. The attorney appeals.

The sole question would seem to be whether moneys collected as attorney and thereafter invested by the attorney at the

First Department, November, 1916.

[Vol. 175.

client's request can be reached in this proceeding against the attorney. It seems to have been held in several cases that moneys given to an attorney to invest simply are not given to him as an attorney but as a business agent, and they cannot be collected from the attorney through this summary proceeding. (Matter of Langslow, 167 N. Y. 320.) In the case at bar the moneys were not loaned to the attorney, but the attorney authorized to invest actually invested the money improvidently. I cannot see that it matters whether or not the money came into his hands as an attorney, if he was authorized to invest it for her thereafter. It would seem to me that he was investing it for her not as an attorney but as a business agent, and while he of course is liable for any negligence or improvident investment which was the result of negligence, he is not, I think, liable in this summary proceeding, although he may be subject to disciplinary proceedings. "For wrongs done by an attorney in his professional character he may be summarily proceeded against, but for acts done by him merely as a man of business, the person aggrieved by his misconduct is left to the remedy by action, although the court, in order to protect the public, maintain the integrity of the legal profession, and protect it from the influence of a vicious member, may discipline or disbar the offender." (Matter of Langslow, supra.) His affidavit to the effect that he was authorized to invest for her would seem to be corroborated by her own petition, in which she states that he received these moneys to invest for her.

The order appealed from should, therefore, be reversed, with ten dollars costs and disbursements, and the application denied, without costs.

CLARKE, P. J., SCOTT, DOWLING and PAGE, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, without costs.

App. Div.]

Second Department, November, 1916.

In the Matter of the Application of DUSHAN D. SILASKI,
Respondent, for an Order Setting Aside and Declaring Void
and of No Effect the Election of Officers or Directors of the
SERB FEDERATION "SLOGA," a Domestic Corporation.
SERB FEDERATION "SLOGA," MICHAEL I. PUPIN and PAVLE H.
PAVLOVICH, Appellants.

Second Department, November 10, 1916.

Corporation proceeding to examine into validity of election

from order appointing referee.

- appeal

No appeal to the Appellate Division lies from an interlocutory order of the court, in a proceeding to review the validity of a corporate election of directors under section 32 of the General Corporation Law, which appoints a referee to take the testimony of witnesses and report the same to the court with his opinion.

It seems, that in such proceeding the appointment of a referee to take testimony and report with opinion is proper.

APPEAL by Serb Federation "Sloga" and others from an order of the Supreme Court, made at the Rockland Special Term and entered in the office of the clerk of the county of Westchester on the 19th day of July, 1916, granting the application of the petitioner.

Arnold L. Davis [John S. Parker and N. Raymond Heater with him on the brief], for the appellants.

Winfield L. Morse [William G. Given with him on the brief], for the respondent.

MILLS, J.:

This is an appeal by the "Serb Federation 'Sloga,'" a domestic fraternal benefit society, and by its president and vice-president, from an order made at the Rockland Special Term, July 15, 1916.

The proceeding was brought under section 32 of the General Corporation Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28) by the petition of a beneficiary member of the said society to have a summary inquiry made into the validity of an alleged election of officers of said society. The ground of the

Second Department, November, 1916.

[Vol. 175. invalidity of such election alleged in the petition is in brief that the special convention at which such election was made was illegally called and held. Such alleged officers, in their own name and in the name of the society, opposed the application, and presented to the Special Term various affidavits in opposition. Upon the hearing of the application at Special Term such defendants moved to dismiss the proceeding because of the insufficiency of the petition, and the court denied such motion, and, apparently upon its own motion or suggestion, appointed a referee "as an aid to the court herein," to take the testimony of witnesses in respect to the validity of the call for the said special convention and of the said application, and to report the same with all convenient speed with his opinion.

The petitioner and respondent, in his notice of argument here, gave notice that he would move to dismiss the said appeal as being unauthorized, and at the call here of the case for argument did make such motion.

It seems to me that the respondent's such contention is well made, and that the order so attempted to be appealed from is not appealable, and that, therefore, such motion to dismiss the appeal should be granted. Such order was merely an interlocutory or intermediate step in the proceedings, like an order denying a motion to dismiss the complaint, made at the opening of the trial. This court, in Loughlin v. Wocker (152 App. Div. 466, 468, Mr. Justice THOMAS writing), has recently held that such an order is not appealable; and in People ex rel. Trowbridge v. McNamara (18 App. Div. 17, 22) it, Mr. Justice CULLEN writing, held that in a certiorari proceeding to review an alleged excessive assessment, an order made at Special Term directing a reference to take proof "is of such an interlocutory character as not to be appealable to this division;" and the Appellate Division in the First Department, in People ex rel. Keator v. Moss (6 App. Div. 414, 419), held the same as to an order of reference in a habeas corpus proceeding.

I conclude, therefore, that upon these authorities we should hold that the order here attempted to be appealed from is not appealable, and, therefore, should grant the respondent's motion

App. Div.]

Third Department, November, 1916.

to dismiss the appeal upon that ground, without considering the merits of the proceeding. It would seem, however, that the practice of the Special Term in appointing a referee to take testimony and report with his opinion was proper. (Matter of Pleasant Valley Society, 105 App. Div. 617.)

I recommend, therefore, that the respondent's motion to dismiss the appeal be granted, with ten dollars costs and disbursements.

CARR, STAPLETON, RICH and PUTNAM, JJ., concurred.

Respondent's motion to dismiss appeal granted, with ten dollars costs and disbursements.

In the Matter of the Application of JAMES CARNEY, Appellant, to Compel an Accounting by THOMAS F. POWERS, an Attorney, for Moneys, Securities and Property Received by Said THOMAS F. POWERS as Such Attorney, Respondent.

Third Department, November 15, 1916.

Attorney and client-petition by client for construction of contract of retainer and for ascertainment of value of services — when invalidity of contract of retainer no defense to payment of attorney.

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Where a client on a motion to the court alleges that he had agreed with his attorney to pay him fifty per cent of the amount realized from a certain matter for his services and disbursements; that "he was overreached in the matter;" that the half of the amount realized was greatly in excess of the value of the services, and asks among other things that the attorney be required to account and pay the petitioner the amount found due him "after deducting from the amount collected a fair and reasonable sum as compensation for the services and disbursements * * * in said matter," and the order of reference required the referee to make inquiry as to the legality of said agreement, ascertain the value of the services rendered by the attorney and report to the court, and also directed that the attorney pay over the amount found due "in excess of the amount found reasonably and properly payable to him,” and the referee found that the agreement was void because it contenplated that advances were to be made by the attorney to the client, but also found upon the uncontradicted evidence of reputable attorneys that the services of the attorney were of the reasonable value of one-half of

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