Ward v. Orsini

• Decision Date: 08 June 1926
• Citation: 152 N.E. 696,243 N.Y. 123
• Parties: WARD v. ORSINI et al.
• Court: New York Court of Appeals Court of Appeals

243 N.Y. 123

152 N.E. 696

WARD

v.ORSINI et al.

Court of Appeals of New York.

June 8, 1926.

Action by Hamilton Ward against Nick Orsini and the New York Central Railroad Company. Appeal by permission from a judgment of the Appellate Division, Fourth Department (215 App. Div. 795, 213 N. Y. S. 932), affirming a judgment of Special Term (125 Misc. Rep. 407, 211 N. Y. S. 249), in favor of plaintiff.

Modified, and, as modified, affirmed.Appeal from Superior Court, Appellate Division, Fourth department.

Dana L. Spring, Hamilton Ward and Julius A. Schreiber, all of Buffalo, for appellant.

Howard R. Sturtevant, of Buffalo, for respondents.

POUND, J.

The action is brought to enforce an attorney's lien in an action brought by defendant Orsini against the defendant New York Central Railroad Company. Plaintiff, relying on the Judiciary Law, section 474 (Cons. Laws, c. 30), which provides, ‘The compensation of an attorney or counsellor for his services is governed by agreement, express or implied, which is not restrained by law,’ made a contract with Orsini which reads as follows:

‘This agreement, made this 5th day of April, 1923, by and between Nick Orsini, hereinafter referred to as client, of the city of _____, party of the first part, and Hamilton Ward, of the city of Buffalo, N. Y., party of the second part, witnesseth:

‘Whereas, the said Nick Orsini was injured March 12, 1923, while repairing a car containing corn meal at the V. I. repair yard tracks of the N. Y. C. R. Co., and desires to employ an attorney to prosecute claim and cause of action against any person who may be responsible therefor:

‘Now, therefore, the said client agrees to and hereby does retain the said Hamilton Ward to act as his attorney to prosecute his claim and cause of action, and agrees to pay the said Hamilton Ward twenty-five per cent. (25%) in case settlement is effected before any testimony is taken or before the case goes upon the ready calendar; thirty-five per cent. (35%) in case said cause of action is settled after any testimony is taken or after it goes upon the ready calendar or is tried; and forty-five per cent. (45%) in case an appeal is taken, or a new trial had by either party, of the amount received or recovered in such settlement or litigation, in addition to the taxable costs and disbursements.

‘And it is further agreed that in case said cause of action is settled by the first party without the consent of the second party, then and in that case the said first party agrees to pay said second party fifty per cent. (50%) of the amount of such settlement, and if by the terms of such settlement it is agreed by the party making the same that they will pay for the services of said attorney, then it is agreed that such percentage shall be computed on the amount of the money paid first party and the amount to be paid second party added together and that the sum to be paid second party shall be equal to the sum paid first party, and that second party shall have in addition thereto his taxable costs and disbursements; and it is further agreed that if the said cause of action is settled by the first party after the verdict is rendered without the consent of said second party, then the compensation of the second party shall be computed as if the verdict had been collected in full, in accordance with the provisions of this contract.

‘And it is further agreed: And the said Hamilton Ward agrees to act as attorney for client and cause to be performed all services necessary to prosecute said claim and cause of action, without any other charge for said service than as above set forth, no charge being made unless a recovery or settlement is had.

‘In witness whereof, the parties hereto have hereunto set their hands and seals the day and year first above written.

‘Nick Orsini. [L. S.]

‘Hamilton Ward. [L. S.]

‘Hicks.’

The railroad company on the day the summons was served made a settlement with Orsini without the knowledge or consent of the attorney, whereby it paid him $300 and agreed to pay Mr. Ward whatever sum it might be legally liable to him by reason of the settlement, with full knowledge of the terms of the contract. It then offered to pay the attorney 25 per cent. of the amount received by the client, together with the taxable costs. Mr. Ward asserted that under the terms of the contract he was entitled to $300, or an amount equal to the amount paid Orsini, together with $26.50 taxable costs, and brought this action to enforce his lien for that amount.

The question is whether the agreement to pay that amount in the event of a settlement with the client without the consent of the attorney is legal as applied to this settlement. The trial court held that, as an agreement between attorney and client which prohibited a settlement of the litigation without the consent of the attorney is void as against public policy (Matter of Snyder, 190 N. Y. 66, 82 N. E. 742,14 L. R. A. [N. S.] 1101, 123 Am. St. Rep. 533,13 Ann. Cas. 441), so this agreement was void because it imposed a penalty upon the client in case he exercised his right to settle the action without the consent of his attorney, and thereby, in effect,...