Fischer-Hansen v. Brooklyn Heights R. Co.

• Decision Date: 17 February 1903
• Citation: 66 N.E. 395,173 N.Y. 492
• Parties: FISCHER-HANSEN v. BROOKLYN HEIGHTS R. CO. et al.
• Court: New York Court of Appeals Court of Appeals

173 N.Y. 492

66 N.E. 395

FISCHER-HANSEN

v.BROOKLYN HEIGHTS R. CO. et al.

Court of Appeals of New York.

Feb. 17, 1903.

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Carl Fischer-Hansen against the Brooklyn Heights Railroad Company and another. From a judgment of the Appellate Division (71 N. Y. Supp. 513) affirming a judgment sustaining a demurrer to the complaint, plaintiff appeals. Reversed.

It is alleged in the complaint, in substance, that on the 5th of January, 1900, the plaintiff, an attorney and counselor at law, was retained by the defendant Louis Olsen to commence and prosecute an action against the Brooklyn Heights Railroad Company to recover $50,000 damages for personal injuries received by said Olsen through the negligence of said company, whereby he lost his right leg. A written agreement was entered into between Olsen and the plaintiff, whereby the former agreed that the latter, in consideration of his professional services to be rendered and the disbursements to be made in the said action, should have 50 per cent. of the verdict recovered therein. The action was commenced and prompt notice in writing was given to the defendant that the plaintiff claimed a lien upon the papers and subject-matter of the action for his services therein, and requesting it to make no settlement with said Olsen, or with any person other than himself. After the defendant had served its answer, and the case, duly noticed for tral by both parties, had been placed upon the calendar for trial, the defendant, without notice to the plaintiff herein, settled with the plaintiff therein, and agreed to pay him the sum of $1,500. Upon receiving from him a written release of all claims by reason of said cause of action, it paid him that amount, but no provision was made for the satisfaction of the plaintiff's lien. The settlement was made in secret, and on the next day Olsen, who was financially irresponsible, returned to Norway, his native country, where he has since remained. The plaintiff alleged that by virtue of these facts he was justly entitled to the sum of $750, one-half of the amount paid in settlement as aforesaid, but that no part thereof had been paid by either of the defendants, although payment had been duly demanded. His demand for judgment was that his lien in said action as attorney for said Olsen ‘be ascertained and foreclosed against said defendants, and each of them; that this court settle and determine the equities of the parties hereto in relation to plaintiff's said lien in the action hereinbefore referred to’; that by reason of the premises the defendants, or either of them, be adjudged to pay them the amount claimed, ‘based upon’ said settlement; and for such other relief ‘in the premises as shall be just and equitable.’ The defendant railroad company demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained both by the Special Term and the Appellate Division, and after the entry of final judgment the plaintiff appealed therefrom to this court.

John R. Dos Passos, Donald F. Ayres, and Carl Fischer-Hansen, for appellant.

Henry Melville and John L. Wells, for respondent.

VANN, J. (after stating the facts).

The law has made great progress in protecting members of the bar since Blackstone wrote that ‘a counsel can maintain no action for his fees, which are given not as locatio vel conductio, but as quiddam honorarium; not as a salary or hire, but as a mere gratuity, which a counselor cannot demand without doing wrong to his requtation.’ Chase's Blackstone [3d Ed.] 630. It seems strange to the lawyer of this generation to read the report of a case decided as recently as 1841, in which those eminent lawyers, Samuel Stevens and Peter Cagger, as copartners, had sued their client to recover the sum of $300 for arguing two cases in the Court of Errors. Stevens v. Adams, 23 Wend. 57; affirmed, sub nom. Adams v. Stevens, 26 Wend. 451. It was gravely argued for the defendant ‘that at common law a counselor cannot maintain an action for his fees'; that ‘such is undeniably the law of England, and in this state it has not been held otherwise, the question never having been directly brought up for adjudication.’ It was held, however, without a dissenting vote either in the Supreme Court or the Court of Errors, that the action would lie, although there was no reported precedent in this state to justify it. Chancellor Wolcott, writing for the Court of Errors, declared that he had no doubt ‘that by the law of this state, as it has always existed from the time of its first settlement, the lawyer, as well as the physician, was entitled to recover a compensation for his services, and that such services were never considered here as gratuitous and honorary, merely.’ Judge Cowen, for the Supreme Court, said that, as he understood, ‘there has been a case-perhaps several cases-in this court wherein counsel have been allowed to recover of their clients argument fees in a quantum meruit.’ Thus within the memory of lawyers now living the right of counsel to recover compensation from their clients, outside of the fee bill, was challenged at the bar, and elaborately discussed by the bench; three opinions having been written in the court of last resort to show that the right existed. There has been a marked advance since then, mainly through the legislature, which has been generous to members of the legal profession, not only in costs and allowances, but also in providing a lien upon the subject of the action to secure their compensation.

When the Code of Procedure was enacted, in 1848, the fee bill was abolished, all restrictions upon ‘the right of a party to agree with an attorney, solicitor or counsel, for his compensation’ were repealed, and the measure of such compensation was thereafter ‘left to the agreement, express or implied, of the parties.’ Laws 1848, c. 379, § 258. In 1876, when the first part of the Code of Civil Procedure was passed, the only regulation upon the subject was the following: ‘The compensation of an attorney or counsellor for his services, is governed by agreement, express or implied, which is not restrained by law.’ Laws 1876, c. 448, § 66. While this statute was in force, a case arose wherein the plaintiff sued a railroad company for damages owing to personal injuries caused by its negligence. He made a written agreement with his attorney to give him one-half of the recovery for prosecuting the action and paying the expenses. After the commencement of the action, the defendant, with notice of the facts, settled with the plaintiff by paying him $1,000; and it was held by this court that, as the cause of action was not, in its nature, assignable, the party could not, by any agreement before verdict or judgment, give his afftorney an interest therein, and that the settlement was a bar to the action, notwithstanding the agreement that the attorney was to receive a share of the recovery. Coughlin v. N. Y. C. & H. R. R. R. Co., 71, N. Y. 443, 27 Am. Rep. 75. After this decision, and doubtless owing to it, said section was amended by adding at the end thereof the following: ‘From the commencement of an action or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client's cause of action or counterclaim, which attaches to a verdict, report, decision, or judgment in his client's favor, and the proceeds thereof in whosesoever hands they may come; and cannot be affected by any settlement between the parties before or after judgment.’ Laws 1879, c. 542, p. 617, § 66. In 1899 the section was further amended by making it apply to a special proceeding, extending the lien to a claim as well as a cause of action and a counterclaim, and providing a remedy to determine and enforce the lien upon the petition of either attorney or client, so that the section, in its present form, and as it stood when this controversy arose, is as follows: ‘The compensation of an attorney or counsellor for his services is governed by agreement, express or implied, which is not restrained by law. From the commencement of an action or special proceeding, or the service of an answer containing a counterclaim, the attorney 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. The court upon the petition of the client or attorney may determine and...