Foster v. Bookwalter

• Citation: 152 N.Y. 166,46 N.E. 299
• Parties: FOSTER et al. v. BOOKWALTER.
• Decision Date: 02 March 1897
• Court: New York Court of Appeals

152 N.Y. 166

46 N.E. 299

FOSTER et al.

v.BOOKWALTER.

Court of Appeals of New York.

March 2, 1897.

Appeal from supreme court, general term, First department.

Action by Charles E. Foster and Frank L. Freeman, partners as Foster & Freeman, to recover for services as attorneys. A judgment of the trial term for plaintiffs was reversed by the general term (29 N. Y. Supp. 116), and from the order of reversal and granting a new trial plaintiffs appeal. Affirmed.

Esek Cowen and F. H. Wilson, for appellants.

Hoadly, Lauterbach & Johnson, for respondent.

MARTIN, J.

This action was brought to recover of the defendant the value of professional services rendered by the plaintiffs, as attorneys, in procuring and defending certain patents which were issued to the defendant and others who were associated with him. As to a portion of the services there is no dispute, the defendant having paid or tendered the amount due therefor. The patents as to which most of the plaintiffs' services were rendered related to certain improvements in the art of manufacturing iron, steel, and castings. Some of these improvements were invented by the defendant, and he acquired an interest in others by assignment. All the patents as to such improvements were at first the property of the defendant, or of the defendant and several persons who were associated with him. Subsequently they organized a corporation under the laws of the state of New Jersey, known as the Bookwalter Steel & Iron Company. The defendant and his associates, including the plaintiffs, who had become part owners thereof, transferred all their rights and interest in and under such patents to that corporation, and received its stock in payment therefor. A large portion of the services performed by the plaintiffs, for which they recovered in the trial courts, was in procuring and defending the rights of such corporation under the patents then belonging to it. The only controversy between the parties relates to the services which were performed by the plaintiffs while the corporation was the owner of the property in regard to which they were rendered. The learned referee before whom this action was tried held that the defendant was liable as well for the services performed for the benefit of the corporation as those rendered for the defendant's benefit, or in pursuance of his express employment, and directed a judgment against him for the full amount of the plaintiffs' bill, which included all their services for which they had not been paid. Upon an appeal from that judgment the general term reversed the judgment of the trial court and granted a new trial. The case comes into this court upon an appeal from that order, accompanied by a stipulation that, if the order is affirmed, judgment absolute shall be rendered against the plaintiffs. The judgment of the trial court was reversed for errors of law and of fact. I seems from the record that it was reversed upon the ground that the decision of the referee was against the weight of the evidence; that he also erred in finding that William E. Lown, who was a stockholder of the corporation and the manager of its business, was the agent of the defendant, and that the latter was liable for the services performed in pursuance of his direction.

It is well settled by this court that in reviewing the determination of a trial court on questions of fact, when the evidence is conflicting, an appellate court is not warranted in reversing upon the sole ground that, in its opinion, the trial court should have reached a different conclusion, but that to sustain a reversal on the facts by an intermediate court it must appear that the decision of the trial court is against the weight of evidence, or that the proof so clearly preponderates in favor of a contrary result that it can be said with a reasonable degree of certainty that the trial court erred in its conclusions. Baird v. Mayor, etc., 96 N. Y. 567;Lowery v. Erskine, 113 N. Y. 52, 55,20 N. E. 588;Weber v. Bridgman, 113 N. Y. 600, 607,21 N. E. 985;Bernheimer v. Rindskopf, 116 N. Y. 428, 436,22 N. E. 1074;Aldridge v. Aldridge, 120 N. Y. 614, 617,24 N. E. 1022;Devlin v. Bank, 125 N. Y. 756, 26 N. E. 744;Phoenix Iron Co. v. The Hopatcong, 127 N. Y. 206, 212,27 N. E. 841; Railroad Co. v. Forrest, 128 N. Y. 83, 93,28 N. E. 137;Barnard v. Gantz, 140 N. Y. 249, 253,35 N. E. 430;Cook v. Railroad Co., 144 N. Y. 115, 117,39 N. E. 2. It is equally well settled that upon an appeal to this court from an order granting a new trial the appellant takes the risk of every exception appearing upon the record, and the respondent may sustain the order by showing any legal error upon the part of the trial court. Mackey v. Lewis, 73 N. Y. 382;Noyes v. Wyckoff, 114 N. Y. 204, 206,21 N. E. 158;Roberts v. Baumgarten, 126 N. Y. 336, 27 N. E. 470;Rose v. Hawley, 133 N. Y. 315, 321,31 N. E. 236;Reed v. McConnell, 133 N. Y. 425, 435,31 N. E. 22.

The first question to be considered is whether, under the rule stated, the general term was justified in holding that the decision of the referee was against the weight of evidence. In examining this question, it will be impracticable, within the proper limits of this opinion, to examine or refer to all the evidence bearing upon it. Consequently, the most we shall attempt to do is to refer briefly to some of the salient facts in the case upon which the learned general term based its decision. The plaintiffs were fully aware of the fact that, so far as the services in controversy are concerned, they were performed for the benefit of the corporation, and not for the benefit of the defendant. That they well understood this fact is shown by the correspondence between the parties and between the plaintiffs and Lown, who managed the affairs of the corporation. Besides, the plaintiff were stockholders and also prepared the papers by which the defendant and his associates transferred to the corporation all their rights and interest in the patents in regard to which such services were rendered. While it is true that before such transfer the relation of attorney and client existed between the plaintiffs and defendant, still, when the transfer was made, the plaintiffs knew that the defendant had no interest in the subject-matter to which their services related, except as a stockholder in the corporation. Under the circumstances, we think the transfer to the corporation dissolved the relation of attorney and client between the parties as to the subject-matter which was thus transferred. It seems to be an established rule of the law relating to principal and agent and attorney and client that, when the interest of the principal or client in, and his power over, the subject-matter to which the agency relates are extinguished, it dissolves the relation between the parties. Story, Ag. (8th Ed.) § 499; Hoppock v. Moses, 43 How. Prac. 201, 214;Callanan v. Van Vleck, 36 Barb. 324, affirmed, 41 N. Y. 619;Kirby v. Hewitt, 26 Barb. 607;Robinson v. Breman, 90 N. Y. 208. In Robinson v. Breman the plaintiff in another action recovered a judgment, and with the knowledge of his attorney assigned it to the plaintiff, Robinson, which was also known to the sheriff to whom executions had been issued upon the judgments so assigned. Afterwards, the attorney for the plaintiff in the first judgment gave directions to the sheriff as to the manner in which he should apply the money in his hands arising from a sale of the property of the defendant on such executions, and this court held that, if the judgments had not been assigned, the attorney in the original action would have had authority to...