Matter of Application of Theodore B. Gates.

These

Theodore B. Gates for attorney's liens for costs. particular judgments were sold to one Bladen on November 23, 1899, for $90, a sum smaller than the amount of the attorney's lien. In February, 1900, the attorney moved that the said assignee or the said Bladen pay to him the proceeds of the sale of said judgments. The learned special term ordered that such proceeds be paid by the assignee to the attorney, and this appeal brings up that order for review.

This proceeding deals with the taxed costs only. The attorney's lien attached upon the rendition of the judgment (Bevins v. Albro, 86 Hun, 590; Pulver v. Harris, 52 N. Y., 73) and is superior to any title of this assignee (Ward v. Craig, 87 N. Y., 550; Bishop on Insolvent Debtors, sec. 340; Russell v. Somerville, 10 Abb. N. C., 395 note; Schnitzler v. Andrews, 16 N. Y. Weekly Digest, 74; Matter of Bailey, 31 Hun, 608; Merchant v. Sessions, 5 N. Y. Civ. Proc., 24). The judgment itself was sufficient notice of such lien (McGregor v. Comstock, 28 N. Y., 237; Marshall v. Meech, 51 N. Y., 140; Delaney v. Miller, 84 Hun, 244). The question here prescnted is practically between the attorney and his client.

Section 66 of the Code of Civil Procedure now provides that "the compensation of an attorney or counselor for his services is governed by agreement, express or implied, which is not restrained by law. From the commencement of an action or special proceeding, or the service of an answer containing a counterclaim, 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." In Peri v. New York Central RR. (152 N. Y., 521) the

Matter of Application of Theodore B. Gates.

court, in commenting upon this section, say: "This language is very comprehensive, and creates a lien in favor of the attorney on his client's cause of action, in whatever form it may assume in the course of the litigation, and enables him to follow the proceeds into the hands of third parties, without regard to any settlement before or after judgment."

I think that this money in the hands of the assignee must be fairly regarded as the "proceeds" of the judgment. The word "proceeds" is equivellent with harvest or product. It is generally defined and understood as "the amount proceeding from some possession or transaction, especially the amount derived from the sale of goods" (Cent. Dict.). It is "the useful or material results of the action or course" (Stand. Dict.). And such are substantially the definitions of the law lexicographers (Black, Bouvier, Kinney, Papelye). It is a word of great gener ality (Amer. and Eng. Ency. of Law, "Proceeds;" Phelps v. Harris, 101 U. S., 380), and of equivocal import (Thompson's Appeal, 89 Pa. St., 46). The money in the hands of the assignee was obtained through a sale of the judgment, and, therefore, proceeded from its possession as fully as if it had followed execution by the sheriff. And so the language of the statute need not be strained in order to make it as broad as the principle upon which it is based; for this charging lien, as it is called, was a device of the courts, lest knavish clients should reap recoveries and not require the labor that brought the harvest (Goodrich v. McDonald, 112 N. Y., 157, 163; In re Knapp, 85 N. Y., 284). Now, the manner of gathering the fruits of the judgment would not affect a principle that would protect the labor and skill that gained that judgment. And so the test question was, whether the fund produced was the fruit of the judgment or decree. In Ormerod v. Tate (1 East, 464), where the money was obtained by arbitration, Lord Kenyon, Ch.J., said: "The convenience, good sense and justice of the

an

Matter of Application of Theodore B. Gates.

theory require that an attorney should have the same lien on damages awarded as if they were recovered by the judgment of the court in the ordinary course of the cause." See, too, Davies v. Lownes (3 C.B., 808), where the fund was received by compromise. Many cases are collected in Wharton on Agency (sec. 626). See, too, Turwin v. Gibson (3 Atk., 720); Mitchell v. Oldfield (4 T. R., 123); Read v. Dupper (6 T. R., 361); Randall v. Fuller (ibid., 456); Skinner v. Sweet (3 Madd., 131); In re Knapp (supra); Ward v. Craig (supra); Weeks on Attorneys, 369. This theory of the common law has always been recognized, but the statutes declarative thereof have, of course, by their terms restricted its application. Our statute, Section 66 (supra), was greatly broadened by the amendment of 1879, and again by that of 1899. This is to be kept in mind in reading the decisions in affirmance of the principle (Peri v. New York Central RR., (supra); Bevins v. Albro (supra).

The appellant contends that the word "proceeds"" means only the money collected from the judgment debtor by execution or process of law, or received in liquidation. But this limitation is warranted, either by the letter or by the spirit of the present statute. It is true that when a judgment has been satisfied or released, the court will restore it for the protection of the attorney, but it must be shown that fraud will work against the attorney or to his prejudice (Poole v. Belcha, 131 N. Y., 200; Bailey v. Murphy, 136 N. Y., 50). Hence this is not done, as the appellant would have it, for the reason that the sole remedy of the attorney is to follow the judgment. Nothing in Marvin v. Marvin (46 St. Rep., 259), or Spors v. Shulthesis (28 N. Y. St. Rep., 50) cited by the learned counsel for the appellant, establishes his proposition; while in Goodrich v. McDonald (20 N. Y. St. Rep., 509; s. c., 112 N. Y., 157), also cited, Earl, J., is careful to point out that the judgment there was perfected two years before the amendment of Section 66, "enlarging the scope of that

Matter of Application of Theodore B. Gates.

section, so that now an attorney who appears for a party has a lien upon his client's cause of action, which attaches 'to a verdict, report, decision or judgment in his client's favor and the proceeds thereof, in whosesoever hands they may come;"" and that as the section as amended was prospective, it was not, applicable to the case at bar. The appellant further contends that inasmuch as the assignee sold the judgment subject to the lien of the attorney, therefore not only the lien survives, but he has perforce relieved himself from any liability. He was bound, however, to sell them subject to the lien, in the absence of any consent on the part of the lienor. The argument of the appellant would suggest an easy method to avoid the statute, and so to relegate the lienor to perhaps a fruitless remedy, while the client, the principal debtor with the tangible proceeds of the judgment in his hands, goes free. The courts neither revive nor keep alive judgments to make the payment of the debt doubtful, but to assure it. The authorities cited by the appellant are, for the most part, decisions under the statute prior to the drastic Amendment of 1879, and his argument would in effect nullify that amendment.

Nor can the appellant be heard to say that the $90 was not gained by supplemental proceedings as contemplated by the order of April 18th, for he himself has put the condition beyond performance by his sale of the judgments. The stipulation relied upon by the appellant to the effect that the attorney must point out the judgment debtors and request proceedings was not signed by the attorney nor is there sufficient proof of his acquiescence therein. Upon the record the sole stipulation between the parties is that made in open court at a later date and embodied in the order of April 18th. The amount of the costs was a definite sum. The practice of the attorney was warranted (Peri v. New York Central RR., supra, sec.

Doliver v. The American Swan Boat Co.

66, Code of Civil Procedure, as amended by chap. 61 of the Laws of 1899).

We think that the order of the learned Special Term should be affirmed, with costs.

All concur.

ALBERT H. DOLLIVER. THE AMERICAN SWAN BOAT CO.

NEW YORK SUPREME COURT-SPECIAL TERM-KINGS COUNTY, July, 1900. § 66.

Attorney's lien.-Settlement of action by parties.

The right of parties to settle an action is not subject to an attorney's lien, but such lien is subjected to it. Section 66 of the Code of Civil Procedure does not prevent the parties from making a complete settlement of the action without the consent of their attorneys.

But where the parties make a collusive or fraudulent settlement for the purpose of cheating an attorney out of his compensation, the court will set aside the satisfaction of the judgment, or permit the attorney to enter judgment or continue the action for his own benefit.

Remedy of attorney under circumstances disclosed by case at bar, Held to be by suit to foreclose his lien, making the plaintiff and defendant in the present action parties defendant. (Decided, July, 1900.)

Petition by H. Huffman Browne, attorney for the plaintiff, for permission to continue this action for his own benefit as such attorney, the same having been settled by the parties.

H. H. Browne, for the petition.

Hirsh & Rasquin, opposed.

GAYNOR, J.-This was an action to recover $3,000 for alleged services rendered. The answer put the claim in