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Supreme Court, July, 1900.

[Vol. 3

for the International Food Company in the County Court and in the Appellate Division also clearly appears from the papers and public records before me. Not only do these facts clearly and indisputably appear before me, but they were conceded in open court herein. So far as the answers raise any issue of facts, they are clearly and concededly untrue. The facts being conceded, I hold that defendants are liable on the undertaking, and the answers should be wholly stricken out as frivolous and sham.

Ordered accordingly.

CECELIA J. ZIMMER, an infant, by CHARLES V. ZIMMER, her guardian ad litem, Plaintiff, v. THE METROPOLITAN STREET RAILWAY Co. and THE THIRD AVENUE RAILROAD Co., Defendants.

(Supreme Court, Kings Special Term, July, 1900.)

Attorney's lien - How enforced where there is a fund.

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Where a judgment recovered by an infant plaintiff is, upon due notice to her and to her attorney and after a hearing, directed to be paid and is paid by the defendants to her general guardian, who satisfied the same and has the money in his hands, the attorney of the plaintiff is not entitled to have the satisfaction vacated to the end that he may enforce his statutory lien as against the defendants, by means of the judgment. The defendants stand only as sureties to the plaintiff in respect of the lien of the plaintiff's attorney, and there being a sufficient fund out of which such lien can be satisfied, the defendants cannot be proceeded against under such lien.

PETITION of Ernest M. Welch, the attorney for the plaintiff, to set aside the satisfaction of a judgment for plaintiff herein for $10,650.76, given by the guardian ad litem and general guardian of the plaintiff; for the security and enforcement of the said attorney's lien for his compensation herein.

Kellogg & Rose for petition.

Henry A. Robinson opposed.

GAYNOR, J.: The plaintiff, an infant, obtained through the services of this petitioner as her attorney and counsel, judgment

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Supreme Court, July, 1900.

against both defendants for $10,000 and costs. On petition of the defendants, an order was made herein on due notice to the plaintiff and her said attorney, and after a hearing, that the said judgment be paid to the general guardian of the plaintiff if one should be appointed within a time limited, and if not that it be paid to the Franklin Trust Co. for the plaintiff. The guardian ad litem, her father, was thereupon appointed and qualified as such general guardian, and the judgment was paid to him, he giving a satisfaction thereof. The general guardian still has the bulk of the said judgment, viz., $10,103. The attorney has mistaken his remedy. There is no reason why the judgment should be restored, or why he should look to the defendants in the enforcement of his lien. It seems to be quite lost sight of now-adays that a plaintiff's attorney can hold the defendant liable under his lien on the cause of action or on the judgment only when his client is irresponsible, and he cannot get the amount due to him. A defendant stands only as a surety in relation to the plaintiff's attorney under his lien. When his client is sufficiently solvent to be able to pay him, or when, if there be a fund as a result of the litigation, and he can enforce his compensation therefrom, the plaintiff's attorney cannot maintain an action or proceeding against the defendant to make him liable under his lien. It is only where the action is settled before judgment and the consideration agreed upon is paid to the client without the attorney's consent, or where the judgment, if there be one, is paid to the client without such consent, and the money is got away with and cannot be impounded, and the client is irresponsible, that the attorney may proceed to enforce his lien against the defendant (Schriever v. Brooklyn Heights R. R. Co., 30 Misc. Rep. 145; Lee v. V. O. Co., 126 N. Y. 579; Poole v. Belcha, 131 N. Y. 200; Peri v. N. Y. C. R. R., 152 N. Y. 521). And even then he must on well settled principles and rules of practice in analogous cases proceed by a suit in equity, making both the plaintiff and the defendant parties defendant, and get a judgment against such plaintiff for the amount owing, and in default of it being collected of him, against the defendant, for such amount, or such part thereof as is found to be secured by the lien. The case is no different to the foreclosure of a mechanic's lien and other liens. In reported cases where the lien was foreclosed on motion or petition, the parties consented to that method. The summary method for the court on petition to fix the amount and en

Supreme Court, July, 1900.

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force the lien provided by the last sentence of section 66 of the Code of Civil Procedure, is between the attorney and his client. That provision has no reference to the opposite party to the action. He is entitled to a trial. But it is not a case where there is a constitutional right to a jury trial, for in equity there never was and is not a right to a jury trial except as given by statute.

The application is denied.

ALBERT H. DOLLIVER, Plaintiff, v. THE AMERICAN SWAN BOAT CO. Defendant.

(Supreme Court, Kings Special Term, July, 1900.)

1. Attorney - Right of client to make an honest settlement of the action, independent of the attorney-Code C. P., § 66.

Notwithstanding the provisions of section 66 of the Code of Civil Procedure giving plaintiff's attorney a lien on his client's cause of action, the latter may, before trial and without regard to his attorney, settle the action with the opposite party, and, provided the settlement is not collusive or fraudulent as to the attorney, that is to say, not intended by the parties to prevent him from getting his compensation, but is honest, the attorney's lien on the cause of action thereby ceases, and he may not continue the action for his own benefit, and to foreclose his lien.

2. Same Foreclosure of his lien.

His lien thereupon attaches to the sum or value agreed upon in settlement, and he should foreclose it thereon by a suit in equity, making his client and the defendant parties, and may obtain an absolute judgment against his client for the amount of his compensation, with an alternative provision that the defendant shall pay the amount found due under the lien, if it cannot be collected of the client.

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An attorney need not give the other side notice of his lien, as said section 66 is, in and of itself, notice.

PETITION by H. Huffman Browne, attorney for the plaintiff, for permission to continue this action for his own benefit as such attorney, the same having been settled by the parties.

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GAYNOR, J.: This was an action to recover $3,000 for alleged services rendered. The answer put the claim in issue. The parties settled the action before trial without regard to their attorneys, and the plaintiff gave a release. The terms of the settlement were that the defendant should employ the plaintiff for eighteen months at $17 a week. And now the plaintiff's attorney repudiates the settlement, and asks for leave to go on with the action in order to get judgment against the defendant on the cause of action to the extent of his compensation.

The settlement was not a collusive and fraudulent one by the parties against the attorney for the plaintiff, i. e. to prevent him from getting his compensation out of the cause of action; nor is it claimed to have been. On the contrary, it was an honest settlement. It follows that the application must be denied. The parties to an action have the absolute right to settle the action without regard to the advice or wishes of their attorneys. And the lien of the attorney is subject to this right. Such lien does not permit him to prevent the parties from honestly settling their dispute. Such right of the parties to settle is not subject to the attorney's lien, but such lien is subject to it. It will not be questioned that the parties always had this right of settlement. "It is certainly a general rule that parties to an action may settle the same without the intervention of the attorneys" (Coughlin v. N. Y. C. & H. R. R. R., 71 N. Y. 447). But it seems to be questioned whether this is now so, because of the amendment of the year 1879 to section 66 of the Code of Civil Procedure giving attorneys a lien on the cause of action, viz:

"From the commencement of an action or special proceeding, or the service of an answer containing a counterclaim, the attor ney who appears for a party has a lien upon his client's cause of action, claim or counterclaim, which attaches to a verdict, report, decision, judgment or final order in his client's favor, and the proceeds thereof in whosesoever hands they may come; and the lien cannot be affected by any settlement between the parties before or after judgment or final order."

This statute giving the attorney a lien on the cause of action

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Supreme Court, July, 1900.

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itself (which he never had before), and providing that such lien cannot be affected by any settlement between the parties before or after judgment ", has not the effect claimed, i. e. it does not prevent the parties from making a complete settlement of the action without the consent of their attorneys. This has been recently decided by the Court of Appeals in Peri v. N. Y. C. & H. R. R. R. Co. (152 N. Y. 521), where in answer to such contrary suggestion the court explicitly said: "This criticism overlooks the fact that the existence of the lien does not permit the plaintiff's 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." To say that the client may settle, and that "the lien does not permit the plaintiff's attorney to stand in the way of a settlement" by the client, and then to say that the attorney may repudiate the settlement, and go on harassing the defendant with the action as a speculation for his own benefit, would be a contradiction both in substance and in terms; and would besides seem to reduce the profession to the condition of common barrators. The rule is now, as it always has been under the dictate of a wise public policy, i. e. that the parties to an action not only have the absolute right to make an "honest" settlement of the action without regard to their attorneys, but are encouraged by the law to do so. The lien on the cause of action does not prevent a settlement. But it still continues in force and is not affected as a lien, and is carried along by the settlement to the sum or value agreed upon in settlement, the same as it is carried to the judgment if there be one. This is all that is meant by the provision that the lien cannot be affected by a settlement.

Whatever misunderstanding there be on this subject seems to grow out of the other rule, that if the parties make a collusive or fraudulent settlement for the purpose of cheating an attorney out of his costs or compensation, then the court will, if the attorney cannot get justice otherwise, set aside the satisfaction of the judgment, or permit the attorney to enter judgment, or (under the present extension of the rule in this state) continue the action for his own benefit, if a judgment, or the time for entering judgment, has not been reached. Let it be noted again that this rule exists only in cases of such "collusive and fraudulent" settlements against attorneys. It has no existence in respect of "honest" settlements. We got the rule from England and enlarged it. There (as here

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