Misc.] Supreme Court, July, 1900. formerly) the attorney had no lien until judgment. He had a lien by common law on the judgment only, and for his costs only, which were regulated by the fee bill and taxed. If the parties collusively settled just before judgment (i. e. before his lien came into existence) for the fraudulent purpose of preventing the plaintiff's attorney from getting a lien for his costs by means of a judgment, and of cheating him out of them, the plaintiff being irresponsible, then the court would permit the attorney to enter judgment so as to frustrate the fraud (Swain v. Senate, 5 Bos. & Pul., 99; Chapman v. Haw, 1 Taunt., 341; Cole v. Bennett, 6 Price, 15). But if the settlement was bona fide, and not fraudulent and collusive against the attorney, his application to enter judgment was denied (Welsh v. Hole, 1 Doug., 237; Marr v. Smith, 4 B. & Ald., 466). The rule was extended with us to embrace the compensation agreed upon by attorney and client, after such agreements were permitted by our first Code of Procedure. The rule is stated in the Coughlin case (supra), i. e. that "since the time of Lord Mansfield, it has been the practice of courts to intervene to protect attorneys against settlements made to cheat them out of their costs. If an attorney has commenced an action, and his client settles it with the opposite party before judgment, collusively, to deprive him of his costs, the court will permit the attorney to go on with the suit for the purpose of collecting his costs" (p. 447). And the Court of Appeals has always been careful to state the rule as being applicable to such fraudulent and collusive settlements only, and not to honest settlements; and in the Peri case (supra) it explicitly said that the attorney's lien on the cause of action (which has existed by statute since 1879) cannot stand in the way of settlements by the parties, i. e. of "honest" settlements. Fraud of course taints everything, and to frustrate it all ordinary rules give way. I am cited to the case of Pilkington v. Brooklyn H. R. R. Co., (49 App. Div. 22), but there is nothing in it contrary to the foregoing decisions of our highest court, as seems to be supposed. There, as part of the settlement between the parties, the defendant agreed in writing with the plaintiff to pay the plaintiff's attorney any claim for costs and compensation for which he might have a lien. The court at Special Term on motion of the attorney summarily fixed the amount due the attorney, and ordered that it be paid by the defendant. The Appellate Division held that this could not be done; that the defendant was en Supreme Court, July, 1900. [Vol. 32. titled to a trial of the matter; that the summary method provided for by the last sentence in section 66 of the Code applied only between attorney and client; and that the attorney should have brought a suit instead of a motion. If it also held that the attorney could continue the original action for his own benefit, it no doubt did so on the theory that the settlement was collusive and fraudulent, to cheat him, and that the fund paid to his client was insufficient to satisfy his lien, or could not be reached for that purpose, and that such client was insolvent; for such is the established rule, the defendant standing only in the position of surety toward the plaintiff's attorney in respect of his compensation and his lien therefor (Lee v. Vacuum O. Co., 126 N. Y. 579; Poole v. Belcha, 131 N. Y. 200; Peri v. N. Y. C. & H. R. R. R., 152 N. Y. 521). The remedy of the plaintiff's attorney here is to begin a suit to foreclose his lien, just as though it were a mechanic's lien, or any other lien; making the plaintiff and the defendant parties defendant (Zimmer v. Metropolitan St. R. Co., ante, p. 262). Their settlement did not destroy his lien. It continued upon the amount or value of the settlement. That is the meaning of the provision in section 66 of the Code already quoted, that such lien "cannot be affected by any settlement between the parties before or after judgment or final order." And it was not necessary that he should have served any notice of his lien; the statute is in and of itself such notice (Peri case, supra). In such suit he will get an absolute judgment against his client for the amount he is entitled to, and an alternative judgment against the other defendant that it pay the amount covered by the lien if such amount be not collectible out of the client. Nor is there any practical difficulty beyond what is encountered in other suits every day, about fixing such amount covered by the lien. The attorney had a lien on the cause of action; the cause of action was honestly settled by the parties; by such settlement the cause of action merged or terminated in the amount or value of the consideration agreed upon in settlement, and thus became determined and fixed; and to that amount or value the lien now attaches. If there were no such amount or value, but a settlement for nothing, the lien would be extinct. The application is denied. Misc.] Supreme Court, July, 1900. THE ERSTE SOKOLOWER CONGREGATION ANSHE YOSHER, Plaintiff, V. THE FIRST UNITED ROYATINER SOKOLOWER VEREIN, Defendant. (Supreme Court, Kings Special Term, July, 1900.) 1. Corporations - Consolidation invalid unless under statute. As domestic corporations cannot consolidate except under legislative authority, an oral agreement upon the part of two of them to unite is void and does not transfer the property of a constituent corporation to an unincorporated association designed to take the place of the two corporations. 2. Equity Inadequate remedy at law. Semble, that a corporation which has paid money on an executory contract for the purchase of lots, but which has no title or right of possession in them, may bring an action in equity to enjoin an unincorporated association, with which it is claimed to have been orally consolidated, from interfering with said lots as it cannot be said that the plaintiff has a remedy at law adequate to its rights in the matter. ACTION by plaintiff to have an attempted consolidation by it and defendant declared illegal; to enjoin defendant and its members from interfering with certain lots claimed to be owned by it in a burial-ground; to declare plaintiff the owner of such lots, also the owner of certain personal property, etc. Abraham B. Schleimer, for plaintiff. David W. Rockmore (Louis J. Vorhaus, of counsel), for defendant. CHESTER, J. The plaintiff seeks by this action to have an attempted consolidation between the plaintiff and the defendant declared illegal; to enjoin the defendant and its members from interfering with certain lots claimed to be owned by the plaintiff in a burial ground; to declare the plaintiff to be the owner and entitled to the possession of such lots, and also the owner of cer Supreme Court, July, 1900. [Vol. 52. tain personal property, consisting of scrolls, altar and other articles necessary to conduct religious ceremonies according to the Jewish faith, as well as of the sum of $283, deposited in a savings bank in the name of Erste Vereingte Royatiner Sokolower Kranken Unterstutzen Verein, which was the name taken by the society after the attempted consolidation. The plaintiff is a domestic corporation, organized in 1883, for benevolent and charitable purposes, under the act of 1848. The defendant is also a domestic corporation organized in 1897, under the Membership Corporations Law, for the purposes of worship and mutual benefit. The new or consolidated society is claimed to be an unincorporated association formed for similar objects. It is urged by the defendant that the plaintiff has an adequate remedy at law and, therefore, cannot maintain this action in equity. In answer to this suggestion the plaintiff insists that the defendant has not pleaded that as a defense and cites the well-known rule that unless so pleaded a defendant cannot, when sued in equity, avail himself of that defense. Lough v. Outerbridge, 143 N. Y. 271. But the rule does not apply here, for the reason that the plaintiff has alleged in its complaint that it has no adequate remedy at law and that fact is denied in the answer. The defendant has, therefore, by its denial, raised the question and pleaded that defense in its answer. With respect to the scrolls and other personal property and the deposit in the savings bank, it is clear under the proofs that adequate remedies exist at law and that these are being pursued. It appears that the plaintiff has already brought an action in the Municipal Court to replevin the scrolls and personal effects, and has in that action secured and now has the possession of the property. The title thereto can be adjudicated in that action and there is no necessity here for any other adjudication in respect to it. It also appears that the new society in whose name the deposit of $283 was made has brought an action against the savings bank to recover the deposit, and that the plaintiff has been interpleaded therein and that the money is now deposited with the city chamberlain to abide the order of the court in that action, which is still pending undecided. My recollection of the testimony is that in this deposit are included the assessments and dues paid by the members after the time of the attempted consolidation and, there fore, includes moneys not belonging to the plaintiff at that time. There is no sufficient proof as to how much has been paid in since then. The right to this fund can better be determined in the interpleader suit than here, and the remedy there is adequate. As to the lots in the burial ground, it is not clear that the plaintiff has an adequate remedy at law. It appears that the plaintiff in 1896 entered into a written contract with the Chevra B'nai Sholom, a cemetery association, for the purchase of these lots for the sum of $840, to be paid in installments, a deed to be given when all payments were made, and that prior to the attempted consolidation the plaintiff had paid two installments, amounting to $150, upon this contract. There was nothing in the contract giving the plaintiff any right to the possession or use of the lots in question, but the proof shows that there had been an oral permission on the part of the cemetery association to the plaintiff to make interments of its deceased members in these lots and several such burials had in fact been made. Neither the legal title nor the right to possession was in the plaintiff under its contract of purchase. It was not in a position, therefore, to maintain an action of ejectment. It apparently has no remedy at law to enforce any rights it may have with respect to these lots. The oral permission or license to make interments is one that may be revoked at any moment, but the plaintiff has an equity in the lots to the extent of the money it has paid on its contract and a right to have a deed of them upon complying with the conditions of the contract and making the payments as therein required. Here another phase of the controversy presents itself. In July, 1897, the plaintiff's contract was delivered to the cemetery association, having indorsed thereon an assignment of it to the new society, the Erste Royatiner Sokolower Kranken Unterstutzen Verein, purporting to have been executed by Mr. Schlauger, as president, and Mr. Karp, as secretary, of the plaintiff. It is denied, however, that they were officers of the plaintiff at that time. In November following, a new contract for the same lots for the same purchase price and upon substantially the same terms was made. between the cemetery association and the new society, upon which the amount paid by plaintiff is credited. Since that contract a number of the members of the defendant and of the new society have been buried in the lots, and the defendant or the new society has |