In re King

• Decision Date: 10 July 1901
• Citation: 168 N.Y. 53,60 N.E. 1054
• Parties: In re KING et al.
• Court: New York Court of Appeals Court of Appeals

168 N.Y. 53

60 N.E. 1054

In re KING et al.

Court of Appeals of New York.

July 10, 1901.

Appeal from supreme court, appellate division, First department.

Petition of David Bennett King and another to enforce an attorney's lien for services rendered Theodore C. English, substituted trustee under the will of Benjamin Williamson, deceased. From an order of the appellate Division (70 N. Y. Supp. 356), reversing an order of the special term (69 N. Y. Supp. 399) appointing a referee to hear and report the compensation to be allowed petitioners, they appeal. Modified.

David Bennett King and Henry W. Jessup, for appellants.

W. Arrowsmith, for respondent.

HAIGHT, J.

The facts are without substantial dispute. It appears that Benjamin Williamson, a resident of the state of New Jersey, died, leaving a last will and testament, which was duly admitted to probate in that state, which will, by its terms, created a trust, and appointed Isaac H. Williamson as trustee. The assets of the trust consisted chiefly of railroad stocks and bonds, and were subsequently removed from the jurisdiction of the court in New Jersey to the state of New York, where they were wrongfully hypothecated by the trustee with a firm of brokers as security for margins on speculations in which he was engaged. Subsequently the trustee was removed by an order of the court of New Jersey, and the respondent, Theodore C. English, was appointed in his place and stead to carry out the uncompleted trust. The new trustee so appointed came to the city of New York and employed the petitioners, who are attorneys at law, to recover the securities wrongfully appropriated by the former trustee. The petitioners thereupon brought an action in the supreme court of this state against the brokers with whom the securities had been hypothecated, and after a long litigation, extending over a period of about four years, succeeded in recovering securities of the value of upward of $70,000. Pending this litigation the securities were brought into court and turned over to the Central Trust Company, to hold subject to the further order of the court. After the completion of their services the petitioners presented their bill to the trustee and demanded its payment, but the trustee, regarding it as exorbitant, refused to pay. They thereupon instituted these proceedings under section 66 of the Code of Civil Procedure in order to have the amount of their lien as attorneys determined and enforced. The special term appointed a referee to ascertain and report the value of the petitioners' services, but the appellate division reversed the order and denied the petitioners' application.

The appellate division appears to have been of the opinion that the petitioners had a lien upon the securities recovered for the amount of their services and disbursements, but that they had waived it, and for that reason their petition should be denied. The acts out of which the court found a waiver of the lien consist-First, in the attorneys drawing and entering an order in the supreme court at the conclusion of the litigation directing the trust company to deliver the securities over to the new trustee; and, secondly, in inclosing their bill for services and disbursements to the trustee, accompanied by a letter in which they stated that they had no desire to impress a lien upon the fund, but desired him to send a check for the amount. With reference to the order entered by the attorneys, it appears to be the usual order entered in cases of this character. The litigation was over the title to the securities which had been brought into court and placed in the custody of the trust company to await the result of the litigation which would determine the parties to whom the securities belonged. The litigation having resulted in favor of the trustee, and it having been adjudged that he was entitled to the securities, the order was proper, and, to our minds, contains no element of waiver of the attorneys' lien, or of an intention to waive on their part. As to the letter, they evidently supposed that the trustee would send them a check paying their bill, and therefore they did not care to impress a lien upon the fund; but upon the refusal of the trustee to pay their bill they then elected to establish their lien while the securities were yet in the hands of the trust company, and this, we think, they had the right to do. The case of Goodrich v. McDonald, 112 N. Y. 157, 19 N. E. 649, was very different. In that case the attorney had died, and his son had been appointed administrator of his estate. When the money was about to be paid over on the judgment, he was notified of the fact, and asked to be present and receive his portion of the money. Thereupon he wrote a letter to the person having the satisfaction of the judgment in charge, saying ‘While my father's estate is interested in the judgment, I am willing to look to Mrs, Graves alone for the share of the judgment coming to us; and she may, therefore, discharge the judgment, and receive all proceeds after settling with you, so far as the claims of the estate are concerned.’ Thereupon the money was paid over to her, and she subsequently invested the money in the purchase of a bond and mortgage, and thereupon made an agreement with her mother by which she was to have the proceeds of the mortgage upon furnishing her with certain funds and necessary support. In that case the court held that the attorney, through his administrator, had waived his lien. But in this case we have no rights of third parties intervening. The securities had never been delivered over by the trust company, and no letter had ever been written to the trust company directing such delivery without satisfying the attorney's lien.

The claim is further made by a minority of the appellate division that section 66 of the Code does not give the court jurisdiction to determine the amount of the indebtedness of the client to his attorney. But with...