Williams v. Bischoff (In re Williams)

• Citation: 187 N.Y. 286,79 N.E. 1019
• Parties: In re WILLIAMS. WILLIAMS v. BISCHOFF et al.
• Decision Date: 29 January 1907
• Court: New York Court of Appeals Court of Appeals

187 N.Y. 286

79 N.E. 1019

In re WILLIAMS.WILLIAMS

v.BISCHOFF et al.

Court of Appeals of New York.

Jan. 29. 1907.

Appeal from Supreme Court, Appellate Division, First Department.

Petition by I. Newton Williams against Henry Bischoff, Jr., and another, as trustees under the will of Henry Bischoff, deceased, for the determination of the amount due plaintiff as an attorney in a proceeding instituted by him on behalf of Franklin J. Bischoff and others against defendants, and for the enforcement of an alleged lien on certain funds belonging to petitioner's clients. From an order of the Appellate Division (95 N. Y. Supp. 1166) affirming an order of the Circuit Court denying petitioners application, he appeals. Reversed, and case remanded to Surrogate's Court.

Cullen, C. J., and Edward T. Bartlett and Werner, JJ., dissenting.

I. Newton Williams, in pro. per.

John A. Straley, for respondents.

HAIGHT, J.

The moving papers tend to show that Henry Bischoff died, leaving a last will and testament, which had been duly admitted to probate, in which he created a trust of a portion of his estate for the benefit of his son Franklin J. Bischoff, his wife, and children, and in which the respondents were appointed executors and trustees, with directions to invest and reinvest the same and ‘to pay to my said son Franklin J. Bischoff, or to his wife, for his benefit or of his family, for his support and the support of his wife and children during his life, the net income thereof.’ Under this provision the trustees had paid over to Franklin the sum of $125 a month for the support of himself and family out of the income of the trust estate, reserving in their hands the surplus income over and above the monthly payment, which amounted to about the sum of $2,500. In October, 1904, Williams, the applicant, who was an attorney at law, was retained by Franklin J. Bischoff and his wife to obtain an intermediate accounting by the executors and trustees of his father's will, and to compel the payment over to them of the income arising from the trust estate which had accumulated in their hands. Thereupon proceedings were instituted by him to obtain such relief, which finally resulted in a decree entered by the surrogate, upon the consent of the parties, by which the $2,500 income accumulated in the hands of the trustees was directed to be paid over to Franklin J. Bischoff and wife for their support and maintenance. Thereupon Williams served upon the trustees and their attorney a notice of his lien for services rendered, which he, by this proceeding, seeks to have established and paid. The surrogate denied his application and dismissed the proceedings, upon the ground, as stated in his opinion, that the beneficiary of the trust had no power to create a lien upon the income, and therefore the attorney did not obtain a lien thereon by virtue of his retainer.

The income derived from the trust estate, in so far as it was necessary for the support and education of Franklin, his wife and children, was inalienable, unassignable, and not subject to process on behalf of creditors. But under our statute ‘where a trust is created to recive the rents and profits of lands and no valid direction for the accumulation is given the surplus of such rents and profits beyond the sum that may be necessary for the education and support of the person for whose benefit the trust is created, shall be liable in equity to the claims of the creditors of such person in the same manner as other personal property which cannot be reached by an execution at law.’ This provision of the statute has been held to apply to trusts created of personal property. Dittmar v. Gould, 60 App. Div. 94,69 N. Y. Supp. 708. In view of this provision of the statute it has been suggested that the Surrogate's Court had no jurisdiction to determine the claim of Williams, for the reason that the surplus income over and above that which was necessary for the support and education of Franklin and his family could only be reached in equity. This would, doubtless, be the case if the attorney, as a general creditor, was endeavoring to reach such surplus, but such is not his position here. In the proceeding instituted by him it has been adjudged and determined that the $2,500 accumulated in the hands of the trustees was necessary for Franklin's support and that of his family, and, therefore, there is no surplus which the creditors could reach in equity. The only question, therefore, presented is as to whether the income from the trust estate, which was necessary for the support and education of Franklin and his family, which is exempt as to the claims of creditors, is also exempt as to the claims of Williams.

The Code of Civil Procedure, § 66, which, so far as is important to be now considered, provides as follows: ‘From the commencement of an action or special proceeding * * * the attorney who appears for a party has a lien upon his client's cause of action, claim or counterclaim, which attaches to a verdict, report, decision, judgment or final order in his client's favor and the proceeds thereof in whosoever hands they may come; and the lien cannot be affected by any settlement between the parties before or after judgment or final order. The court upon the petition of the client or attorney may determine and enforce the lien.’ This provision of the Code pertaining to special proceedings applies to proceedings in Surrogates' Courts, and gives an attorney a lien upon his client's claim for services rendered in compelling an accounting by executors and administrators. Matter of Fitzsimons, 174 N. Y. 15, 66 N. E. 554, and Matter of Regan, 167 N. Y. 338, 60 N. E. 658. Does it also give a lien for services rendered in collecting the income derived from a trust estate, is the additional question now presented.

In Estate of Hoyt, 12 Civ. Proc. R. 208, Rollins, Surrogate, in substance, held that an attorney's lien for services rendered upon a contest over the admission to probate of a will did not attach to the income of a trust estate created for the benefit of a...