Eisemann v. Hazard
| Decision Date | 09 May 1916 |
| Citation | 112 N.E. 722,218 N.Y. 155 |
| Parties | EISEMANN v. HAZARD. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from Supreme Court, Appellate Division, First Department.
Action by Frederick F. Eisemann against Florence A. Hazard. From a judgment of the Appellate Division (161 App. Div. 703,146 N. Y. Supp. 685) reversing a judgment of the Trial Term and dismissing the complaint, the plaintiff appeals. Reversed.
Jerome Eisner, of New York City, for appellant.
James A. Gray, of New York City, for respondent.
The plainiff in this action is an attorney and counselor at law, and he sues to recover for professional services performed by him for the defendant at her request. The answer in the action is a general denial. In the trial court the plaintiff recovered a judgment. The Appellate Division reversed the judgment, and dismissed the plaintiff's complaint.
It appears from the plaintiff's testimony that he was employed by the defendant in the month of August, 1907, in respect to the wholesale grocery firm of E. C. Hazard & Co. The defendant's husband, who had been the principal partner in the firm, had died, and his affairs were going on badly. The surviving partners refused to give the defendant any information as to the firm's business, and they were at the same time calling on her for contributions of money to carry on the business.
She employed the plaintiff to straighten out the partnership matters, and to secure for her the control of the firm. The plaintiff accepted the employment, and at once began an investigation, informing the surviving partners that he was acting as the attorney for the defendant. He reported to the defendant the result of his investigation, and advised her that the firm should be put into bankruptcy, and a settlement made with the creditors. He informed her that his clients, William Lanahan & Son, were large creditors of E. C. Hazard & Co., and that he would ask them to join in a bankruptcy petition, of which course the defendant approved.
The plaintiff informed William Lanahan & Son of his relations, as attorney, with the defendant, and on his request they joined with two other creditors in an inyoluntary petition in bankruptcy, which was filed on August 21, 1907. After the appointment of the receiver in bankruptcy the plaintiff called a meeting of creditors, at which he urged them to consent to a composition, and he was one of a committee of five to examine into the condition of the business and report to the creditors. The plaintiff informed the members of the committee that he was the attorney for Mrs. Hazard, and he reported to her and kept her informed as to the result of his endeavors.
There was considerable opposition to the composition among the creditors, but after a time the committee recommended that payments in cash of 10 cents on the $1.50 in five notes, payable at intervals of two months, should be accepted. The notes were to be the notes of two corporations formed to carry on the business of the bankrupt's firm, and the stock of the corporations was to be collateral to the notes. This composition was finally accepted by the creditors, and the plaintiff was appointed trustee in bankruptcy to carry on the business of the bankrupt concern pending the completion of the composition agreement.
The plaintiff next proceeded to get control for the defendant of the corporations that were to succeed to the business of the old firm. This he did by procuring a distribution of the stock of the two corporations so that the defendant would become practically the owner of two-thirds thereof. He coerced the bankrupts who were the surviving partners of the old firm into allowing the defendant this percentage of the stock by threatening to oppose the composition settlement. The plaintiff 12, 1907, and he carried on the November 12, 1907, and he carried on the business with remarkable success until the 12th day of February, 1908. At about that time he turned the business over to the bankrupts and the defendant. Subsequently all the composition notes were paid.
In January, 1908, while the plaintiff was still acting as trustee, he and the defendant discussed the matter of his compensation. It was agreed that his charges should be $10,000, on which was to be credited $3,000, his compensation as trustee, and $500, his charges against the petitioning creditors in the bankruptcy proceeding, and the balance, $6,500, it was agreed should be paid by the defendant. At that time she gave her note for $1,500 on account of the balance due, which was subsequently paid, and this action is brought to recover the remainder of the plaintiff's charge, $5,000.
The jury gave the plaintiff a verdict of $2,300, and interest. The Appellate Division reversed the judgment entered on the verdict, and at the same time dismissed the plaintiff's complaint on the ground that the plaintiff had undertaken to represent conflicting interests while acting as attorney for the defendant. The Appellate Division said:
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Booth v. Continental Ins. Co.
...378, 296 N.Y.S.2d 937, 244 N.E.2d 456. An attorney may represent adverse interests only in "exceptional" cases. Eisemann v. Hazard, 218 N.Y. 155, 159, 112 N.E. 722 (1916). That is not this case. While the Court will not apply the Code in didactic fashion, it is clear that it is not "obvious......
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Kelly v. Greason (State Report Title: Matter of Kelly)
...even inadvertently, affect, or give the appearance of affecting, the obligations of the professional relationship (Eisemann v. Hazard, 218 N.Y. 155, 159, 112 N.E. 722, 723; Matter of Tevlin, 250 App.Div. 685, 687--688, 295 N.Y.S. 394, 396--398; 7 C.J.S. Attorney and Client § 47; see Matter ......
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