Matter of Rowland.

MATTER OF ROWLAND et al.

[55 App. Div. 66; 100 St. Rep. 1121; 66 Supp. 1121.]

(Supreme Court, Appellate Division, Second Department. November 23, 1900.)

1. ATTORNEY'S LIEN-SERVICES IN SURROGATE'S COURT.

Under Code Civ. Pro. § 66, as amended by laws of 1899, c. 61, providing "that an attorney shall have a lien on 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," an attorney is entitled to a lien for services rendered in proceedings in the surrogate's court.*

2. SAME SERVICES TO EXECUTORS-LIEN ON MONEY OF ESTATE.

Code Civ. Pro. § 66, as amended by laws of 1899, c. 61, provides that an attorney shall have a lien on his client's cause of action, claim, or counterclaim, which attaches to a verdict, report, decision, judg ment, or final order in his client's favor, and the proceeds thereof. Held, that an attorney has no lien on the money of an estate deposited in a bank in the name of the testator, for a claim allowed the attorney by the surrogate's court for legal services rendered testator's executors.

8. SAME ORDER TO DEPOSIT MONEY IN BANK-RIGHTS OF ATTORNEY. Code Civ. Pro. § 66, gives an attorney a lien on his client's cause of action and the proceeds thereof, and laws of 1899, c. 61, authorizes the court, on petition of the client or attorney, to determine and enforce such lien. Held that, where an attorney had retained the money of an estate for services rendered the executors, the surrogate's court, as ancillary to its power to determine the lien, had authority to enter an order requiring the attorney to deposit such money in a bank to the credit of the executors until final determination of his right to a lien.

Appeal from surrogate's court, Kings county.

In the matter of the judicial settlement of the account of

*For note on "Attorney's Lien in Surrogate's Court." see 7 Ann. Cas. 165-167.

Sidney L. Rowland and Robert P. Everett, as executors of Thomas R. Everett, deceased. From an order of the surrogate directing Robert J. Shadbolt to redeposit money in the bank, belonging to the estate, he appeals. Affirmed.

Argued before GOODRICH, P. J., and BARTLETT, WOODWARD, HIRSCHBERG, and JENKS, JJ.

Robert J. Shadbolt, in person (Joseph A. Burr, counsel), for appellant.

Francis S. Williams, for respondent.

HIRSCHBERG, J. The appellant acted as attorney for the executors of the deceased, and claims to be entitled to compensation for his services. Among the assets of the estate was a deposit in the name of the testator in the Williamsburg Savings Bank, amounting to $1,344.30, which had come into the appellant's possession in the course of the preparation of the executors' accounts for the purpose of settlement. On the 8th of May, 1900, the appellant drew the money from the bank, and retained it in his possession under and by virtue of a claim to a lien thereon for his services. The money was drawn on an order signed by one of the executors, who accompanied the appellant to the bank, and who makes affidavit that the appellant stood close to the bank teller's window, and took possession of the money before he (the executor) was able to secure it. The order appealed from, as resettled, requires the appellant to deposit the money to the credit of the executors. The appellant has no lien upon the money. By the amendment to section 66 of the Code of Civil Procedure, effected by chapter 61 of the Laws of 1899, it may be assumed that proceedings in surrogate's courts were included within the provisions of the section. As so amended, the section provides that the attorney 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. The money in

dispute is not within the description cited, nor does it proceed from any cause of action, claim, or counterclaim, or any resultant verdict, order, decision, etc. The section does not purport to give a general lien upon all moneys belonging to the client. Moreover, the amendment did not take effect until September 1, 1899, while the appellant's services appear to have been rendered in great part, if not wholly, before that date. The amendment is purely prospective in its operation. Goodrich v. McDonald, 112 N. Y. 157; 19 N. E. 649.

Whether the appellant has or has not a lien upon the money, the order appealed from in no respect impairs his rights. It only provides for the safe custody of the estate of the deceased until his claim and rights, with those of others, can be judicially investigated and determined. This was the view taken by the former general term of this department in the very similar case of In re De Oraindi, 31 St. Rep. 744; 9 Supp. 873. and in which it was held that an order directing an attorney to deposit moneys which he had collected for an estate pending an inquiry into a claim by the attorney to hold them for serv ices rendered to the estate is within the discretion of the surrogate.

The order may also be upheld, irrespective of the validity of the appellant's claim of a lien, as ancillary to the power of the court to determine and enforce the lien under section 66 of the Code by virtue of the additional amendment made by chapter 61 of the Laws of 1899, to the effect that the court, upon the petition of the client or attorney, may determine and enforce the lien. This amendment relates to the remedy only, and would seem quite applicable to a case like this, where the attorney has possession of a fund belonging to the client considerably in excess of his claim for services, and asserts the right to retain it by virtue of a lien. The order should be affirmed.

Order of the surrogate's court of Kings county affirmed, with $10 costs and disbursements. All concur.

Appellate Division.

[Nov.

OLPHERTS v. SMITH.

[54 App. Div. 514; 100 St. Rep. 976; 66 Supp. 976.]

(Supreme Court, Appellate Division, First Department. November 23, 1900.)

RECEIVERS PURCHASE OF GOODS-PERSONAL LIABILITY.

Where the decree appointing a receiver of a corporation directed him to carry on the business of the corporation for the purpose of collecting all sums due or to become due the corporation, and he purchased goods for use in carrying on the corporation's business, the seller knowing that they were purchased by the receiver as such, he is not personally liable therefor.*

Van Brunt, P. J., dissenting.

Appeal from trial term, New York county.

Action by Richard Olpherts against Frank Sullivan Smith.

*For note on "Personal Liability of Receivers on their Contracts," see 7 Ann Cas. 58-65.

The following additional cases are also apposite.

The mere description "receiver" following the signature to an indemnity bond, given to procure a surety company to furnish security for costs in an action by a receiver, will not relieve the indemnitor from personal liability nor cast the liability on the assets of the estate.

American Surety Co. v. McDermott, 9 Misc. 132; 59 St. Rep. 725; 29 Supp. 76.

In the case last cited the court said, "We fully concur with the learned judge who tried the case that the defendant, as receiver, had no power, without an order of the court, to bind the assets of the estate of which he was receiver by an executory contract."

A statutory receiver with power to preserve the property of a corporation, when 30 authorized by order of the court, can complete contracts of the corporation without personal liability, if his purchases and dealings in doing so are expressly in his representative capacity.

Nason Mfg. Co. v. Garden, 52 App. Div. 363; 99 St. Rep. 147; 65 Supp. 147.

From a judgment in favor of defendant (.. Misc. ...; 96 St. Rep. 409; 62 Supp. 409) plaintiff appeals. Affirmed.

Argued before Van Brunt, P. J., and RUMSEY, McLaughLIN, PATTERSON, and O'BRIEN, JJ.

Benjamin & Loeser (W. E. Benjamin, counsel), for appel

lant.

C. Walter Artz (F. W. Frost, counsel), for respondent.

MCLAUGHLIN, J. On the 30th of June, 1897, the defendant was appointed receiver of the Worcester Cycle Company by the United States circuit court for the district of Connecticut, and as such receiver took possession of its factory and plant, and entered upon the discharge of his duties. The order appointing him, among other things, provided that:

"The said receiver is hereby fully authorized and directed to take immediate possession of all and singular the property above described, wherever situated or found, and to collect all accounts and sums due or to become due to the Worcester Cycle Manufacturing Company, and for that purpose to carry on and continue the business of said defendant company as the same is now carried on and so far as may be necessary to preserve its rights under the contracts, acting in all things under the order and direction of this court. . . Said receiver is hereby fully authorized to continue to operate and carry on the business of the defendant cycle company in such manner as the same is now conducted, or in such manner as will, in his judgment, produce the most satisfactory results, so far as may be necessary for the preservation from loss of the outstanding contracts of said defendant cycle company. . . . Said receiver shall, from time to time, out of the funds coming into his hands from the operation of the property and otherwise, pay the expenses of operating same, and executing his trust, and all taxes and assessments upon the said property, or any part thereof."

In the discharge of his duties under the order, he purchased certain merchandise from the Wilmot & Hobbs Manufacturing Company, amounting at the agreed price to $72.85, and for