Lee v. Vacuum Oil Co.

• Decision Date: 02 June 1891
• Citation: 126 N.Y. 579,27 N.E. 1018
• Parties: LEE et al. v. VACUUM OIL CO.
• Court: New York Court of Appeals Court of Appeals

126 N.Y. 579

27 N.E. 1018

LEE et al.

v.VACUUM OIL CO.

Court of Appeals of New York.

June 2, 1891.

Appeal from supreme court, general term, fifth department.

Theodore Bacon, for appellant.

John Van Voorhis, for respondents.

RUGER, C. J.

This is an appeal from an order of the general term, substantially affirming an order of the special term, which vacated the satisfaction of a judgment given upon a settlement of the cause of action in a suit to recover damages for the negligent killing of the plaintiff's intestate by the defendant. The motion was originally made on behalf of the plaintiff, and also her attorneys, and the satisfaction of the judgment was vacated by the special term absolutely, so far as the attorneys were concerned, and as to the plaintiff upon the condition that she should, within 10 days, repay to the defendant the sum of $1,000 received by her on the settlement of the action, and release all claims for the further sum of $3,500 which had been deposited with the Rochester Safe & Deposit Company to her credit as security for the costs and claims of her attorneys. Both the defendant and the plaintiff appealed from this order,-the defendant from that part which vacated the judgment absolutely so far as the plaintiff's attorneys were concerned; and the plaintiff from so much thereof as imposed a condition upon her right to have the judgment vacated absolutely as to herself. The general term affirmed the order upon defendant's appeal, and modified that part of it which required the plaintiff to restore, within 10 days, the sum of $1,000 to defendant, by providing, in lieu thereof, that such sum should be deducted from the existing judgment, or any final judgment which should be recovered in the action. From this order the defendant appeals to this court.

The undisputed facts show that the action was prosecuted by the plaintiff, as administratrix, to recover damages for the death of her husband, occasioned by the alleged negligence of the defendant, and resulted in a judgment for the plaintiff, in June, 1887, of about $6,000, damages and costs. This judgment, on appeal to the general term, was affirmed in that court, and the defendant appealed from that affirmance to this court. In August, 1890, while this latter appeal was pending, the plaintiff applied to the defendant for a settlement of the action, and, after some negotiation, an agreement was reached between the parties whereby the defendant agreed to pay the plaintiff the sum of $4,500, $1,000 in cash, and the further sum of $3,500 to be deposited to the plaintiff's credit in the Rochester Safe & Deposit Company, to be drawn by her after procuring and delivering to the defendant a release by her attorneys of all claims against such judgment, or the cause of action represented thereby. Immediate notice of this settlement was given to the plaintiff's attorneys by the defendant, and they were also notified to present a statement of their claims on such judgment and cause of action to defendant. After several months' delay such a statement was made and presented, whereby it appeared that such attorneys made claims for costs, counsel fees, and money loaned, aggregating about $3,000. Under the instructions of the plaintiff, the defendant declined to pay this sum, but offered to pay any advances made by them, together with $1,500 in addition thereto, and their disbursements. This offer was declined, whereupon this motion was made. It was founded upon an affidavit by one of plaintiff's attorneys, giving a statement of the proceedings in the action, and a history of his firm's transactions with the plaintiff; and an affidavit of the plaintiff, dated December 9, 1890, imputing fraud and misrepresentation to the defendant in effecting the settlement, and giving what purported to be a history of the negotiation for such settlement. Proof was also made of the service of notice by plaintiff's attorneys on defendant on January, 1889, of the existence of a lien in their favor on several causes of action against the defendant, including that of the plaintiff's, and upon any verdicts, reports, decisions, or judgments rendered, or to be rendered, therein, for their services as attorneys for the plaintiffs therein, and forbidding any settlement of such actions, or any payments thereon, except to said attorneys or to their order. A copy of a stipulation, signed by the plaintiff, entitled in the action, and dated June 13, 1888, was also read on the hearing, to the effect that her attorneys were entitled to have one-third of the recovery in such action, over and above the taxable costs and disbursements, and that no settlement should be made without their consent. No offer to return to the defendant the money received by the plaintiff on the settlement was ever made by the plaintiff or her attorneys, nor was any willingness expressed by them to release the money deposited with the trust and deposit company, as security for the claims of plaintiff's attorneys, from the conditions upon which it was held by such company. On the contrary, the proofs show that the plaintiff has expended all of the moneys received by her, and has no property from which she can raise money to restore the amount paid to her by the defendant on the contract of settlement. The defendant produced a number of affidavits made by its president, secretary, attorneys, and others, containing proof tending to show that its conduct, in respect to the settlement of the action, was fair and honorable, and offering to rescind the settlement, and to cancel the discharge of the judgment, upon the return of the money paid by them to the plaintiff. An affidavit made by the plaintiff on December 31, 1890, retracting all statements contained in her...