Randall v. Van Wagenen

• Decision Date: 08 October 1889
• Citation: 22 N.E. 361,115 N.Y. 527
• Parties: RANDALL v. VAN WAGENEN et al.
• Court: New York Court of Appeals Court of Appeals

115 N.Y. 527

22 N.E. 361

RANDALL

v.VAN WAGENEN et al.¹

Court of Appeals of New York.

Oct. 8, 1889.

Appeal from superior court of New York city, general term.

E. Countryman, for appellant.

C. M. Marsh, for respondents.

ANDREWS, J.

The suit of O'Neil and others against the defendant Van Wagenen was settled and discontinued in 1877, by agreement between the parties, without the consent of the attorney for the plaintiffs. The attorney subsequently brought this action against the parties to the former action, alleging the existence of a cause of action on contract in favor of the plaintiffs in the former action against the defendant therein for $10,799.35, and the bringing of an action thereon by him as attorney for the plaintiffs; an agreement between the plaintiffs in that action and their attorney to give him one-half interest in the claim and in any recovery, as compensation for his services, and an ownership therein to that amount for such compensation; and a further agreement that the attorney should hold the entire claim as collateral security for his compensation, and for other indebtedness owing by the plaintiffs to the attorney; and that the plaintiffs made a parol assignment to the attorney of the entire claim for these purposes. The complaint further alleges that the defendant Van Wagenen had notice in 1875 of the said agreement, and that the parties to the action fraudulently and collusively, and without the knowledge or consent of the attorney, settled and discontinued the action, to cheat and defraud the attorney of his interest and rights under the agreement. It is alleged that the claim was good and collectible, and that the attorney, by reason of such fraud, has lost the one-half interest in the claim, and also the sum of $2,350, owing by the O'Neils to him for professional services on other matters and proceedings; and the plaintiff demands judgment against the defendants for $10,000. The complaint was dismissed, and we think properly.

So far as the claim of the plaintiff is founded upon the lien which the law gives attorneys for their services, there is no foundation for the action. By the common law, an attorney, by commencing a suit, acquires no lien on the cause of action. The lien only arises after judgment, and is a right to have the judgment held for the debt, together with any security for the judgment, such as bail, until the lien is discharged, and, to the extent of the lien, payment by the defendant in the judgment to the plaintiff after notice, to the prejudice of the attorney, will be no discharge. Pulver v. Harris, 52 N. Y. 73;Platt v. Jerome, 19 How. 384;Martin v. Hawks, 15 Johns. 405;People v. New York C. P. 13 Wend. 652. From the principle that there is no lien until judgment it follows that it is competent for the parties acting bona fide to settle and discontinue a suit before judgment, without the consent of the attorney, and he is remitted to his remedy against his client for his compensation. Pulver v. Harris, supra, and cases cited. But where such settlement is made collusively for the purpose of defrauding the attorney out of his costs, courts have been accustomed to intervene, and to protect the attorney by permitting him to proceed with the suit, and, if he is able to establish a right to recover on the cause of...