Lehigh & NER Co. v. Finnerty

• Decision Date: 09 September 1932
• Docket Number: No. 4822.,4822.
• Parties: LEHIGH & N. E. R. CO. v. FINNERTY.
• Court: U.S. Court of Appeals — Third Circuit

61 F.2d 289 (1932)

LEHIGH & N. E. R. CO. v. FINNERTY.

No. 4822.

Circuit Court of Appeals, Third Circuit.

September 9, 1932.

George Gildea and Katzenbach, Gildea & Rudner, all of Trenton, N. J., for appellant.

E. Burke Finnerty, of Jersey City, N. J. (Samuel Tartalsky and Charles Hershenstein, both of Jersey City, N. J., of counsel), for appellee.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

DAVIS, Circuit Judge.

This is an appeal from an order imposing a lien on the cause of action of Harry B. Hayes v. Lehigh & New England Railroad Company of $4,250, constituting counsel fees and taxed costs, and directing the defendant to pay the same.

On February 27, 1930, Harry B. Hayes was employed by the appellant company as a general inspector, and while he was under a locomotive, making an inspection, it is charged that the locomotive "suddenly and without any notice or warning, was negligently and carelessly moved by the said defendant, through its agent or agents, causing, allowing and permitting the wheels of said locomotive to pass over the plaintiff, causing the immediate amputation of both of plaintiff's legs."

Mr. Hayes employed E. Burke Finnerty, Esq., the appellee, as attorney to represent him and on June 5, 1930, entered into a written agreement to pay him a fee of 25 per cent. of any amount collected by settlement without trial, or 40 per cent. of the amount collected if the case went to trial. The agreement follows:

"I, Harry B. Hayes, of Centre Valley, Lehigh County, Pennsylvania, do hereby retain E. Burke Finnerty, of 921 Bergen Avenue, Jersey City, New Jersey, to collect damages from Lehigh & New England Railroad Company for injuries sustained by me on February 27, 1930, at Tadmore, North Hampton, Pennsylvania, and I agree to pay him for his services an amount equal to 25 percent of any amount collected by settlement without trial, or 40 percent, if the case actually goes to trial. It being understood and agreed that if the case turns out to be only a case of compensation under the compensation law of Pennsylvania, then no part of my compensation money is to be paid to my said attorney.

"Harry B. Hayes. "Witness: Henry L. Snyder."

Mr. Finnerty brought suit against the appellant on June 27, 1930. While the case was pending and before trial was had, a claim agent of the company, on or about September 19, 1930, without the consent or knowledge of counsel for either party, settled the case directly with Mr. Hayes by paying him $17,000.

Thereupon the appellee filed and gave notice of a motion in the District Court to have a lien for his compensation enforced upon his client's cause of action in accordance with the Attorney's Lien Act of New Jersey (P. L. 1914, c. 201, p. 410 Comp. St. Supp. § 116-76), which provides as follows: "After the service of a summons and complaint in any action at law, or the filing of a bill of complaint or petition in the Court of Chancery, or the service of an answer containing a counterclaim in any action at law, the attorney, solicitor or counselor-at-law, who shall appear in said cause for such party instituting the action at law, or suit, or filing the petition, or counterclaim, shall have a lien for compensation, upon his client's cause of action, suit, claim or counterclaim, which shall contain and attach to a verdict, report, decision, decree, award, judgment or final order in his client's favor, and the proceeds thereof in whosesoever hands they may come; and the lien shall not be affected by any settlement between the parties before or after judgment or final order of decree. The court in which such action, suit or other proceeding is pending, upon the petition of the attorney, solicitor or counselor-at-law, may determine and enforce the lien."

After due consideration of the motion, the court held that the appellee was entitled to enforce a lien of $4,250, 25 per cent. of the $17,000, upon the cause of action, together with taxed costs, and directed the same to be paid by the railroad company, which appealed to this court and urges that the order should be reversed for several reasons, but principally for the reason that the parties to the contract of employment were residents of Pennsylvania where the contract was signed and where an attorney does not have a lien upon his client's cause of action.

The lien here is a right created by the statute and not by the contract. After action was commenced, the plaintiff was a party in interest in the litigation. The contract fixed the amount and not the existence of the lien. The amount of the lien as fixed by the contract must be enforced by the court unless it be inequitable; and after suit was begun, defendant settled with the plaintiff, without the knowledge of his attorney, at his peril. Machcinski v. Lehigh Valley Railroad Co. (C. C. A.) 272 F. 920; Gulf States Steel Co. v. Justice, 204 Ala. 577, 87 So. 211; Standidge v. Chicago Railways Co., 254 Ill. 524, 98 N. E. 963, 40 L. R. A. (N. S.) 529, Ann. Cas. 1913C, 65; Miner v. Payne, 150 Minn. 103, 184 N. W. 673; Cawley v. Burke, 43 R. I. 188, 110 A. 609.

The contract does not expressly state where the parties intended that suit should be brought, but the employment of an attorney of New Jersey and the bringing of suit in New Jersey indicate that the parties intended from the first that suit...