Opinion
September Term, 1863
C. Bainbridge Smith, for the appellant.
H.A. Cram, for the respondents.
If the plaintiff is not entitled to the set-off claimed, upon the facts found, it is of no importance, so far as the defendants Sherwood are concerned, to consider the other questions raised, namely, whether the plaintiff has or has not a valid judgment against Cooke, and whether the discharge of Cooke under the insolvent laws was void or not.
Assuming the judgment to be valid, and the discharge void, the plaintiff clearly would be entitled to no relief in this action against the defendants Sherwood, if the conclusion of law of the judge is correct, viz. that the agreement made between Cooke and the Sherwoods was good and valid, and the subsequent assignment of that judgment by Cooke to them passed to them the said costs and judgment. If we adhere to the case of Rooney v. The Second Avenue R.R. Co., ( 18 N.Y. Rep. 368,) there would not seem to be much doubt upon this subject. In that case it had been agreed between the plaintiff and his attorney, that the latter should commence and prosecute that action to its final termination, without fee and at his own risk, and upon his final success, he should receive for his services one half of the recovery, and if the amounts should not exceed $600, he was also to have the taxable costs. The plaintiff gave the attorney an irrevocable power of attorney to receive the amount of the recovery, and this court held that the attorney had a lien upon the judgment recovered by him, for his services. That the legal measure of these services was the taxable costs, so that it always happened that the extent of the lien was equal to the costs recovered in the action. And cases were cited showing that to this extent the attorney was regarded as the equitable assignee of the judgment. Judge HARRIS, in his opinion, says, that the principle upon which the right of the attorney to the protection of his lien had been sustained is certainly unaffected by the code. As in other cases of lien, the attorney is protected, because it is by his labors and skill that the judgment has been recovered. In that case, the agreement between the attorney and his client was sustained; thus holding that the attorney, independent of any agreement, had a lien upon the judgment recovered, for his costs, to the extent of the amount thereof, but that it was competent for the attorney and client to fix a larger or different amount of compensation; and the right of the attorney, under such agreement, would be protected. That case is therefore an authority directly in point to sustain the judgment rendered in this action. The agreement made here is a fact established in this case, and it can be decided on that ground, independent of the question of lien of the attorney for costs, as such. Here the attorney was to have the whole amount of the recovery, as his compensation for carrying on the defense to the action prosecuted by this present plaintiff, to set aside Cooke's assignment. It was lawful to make such an agreement. It was based upon a good consideration, namely, services rendered and to be rendered in the defense of that action. After such agreement was made, Cooke ceased to have any interest in the recovery in that action. Whatever judgment he should recover therein, of right belonged to the defendants Sherwood, and not to the defendant Cooke. In executing to them the assignment of November 6, 1856, he did but do what in equity he would have been compelled to do. The plaintiff has therefore no legal or equitable claim to have this judgment, which, although recovered in the name of Cooke, did not in fact belong to him, nor had he any interest therein, applied in reduction of the debt which Cooke owes to him, upon his judgment. The judgment, therefore, of the New York Common Pleas was in all respects correct, and should be affirmed with costs. But the judgment of the general term reversing that of the special term, against the defendant Cooke, must be reversed, and the judgment of the special term against him affirmed with costs. The plaintiff's judgment against him was valid, and in all respects a compliance with the provisions of the code. The statement conforms to its requirements, and the assignment and discharge of the defendant Cooke were void, for the reason that the recorder had no jurisdiction of the proceedings. There was a fatal defect in these proceedings, in that the affidavit annexed to the insolvent's petition was not sworn to by him before the recorder, nor subscribed by the recorder, before granting the order for the creditors to appear and show cause. The subsequent verification of the petition did not cure this defect; and the special term of the Common Pleas, therefore, correctly held the discharge to be void. The plaintiff was entitled, therefore, to a judgment against the defendant Cooke, declaring such assignment and discharge void, and for the amount due to him.
BALCOM, J. read an opinion in favor of reversing the judgment appealed from, and for a new trial.
All the other judges concurring with DAVIES, J.
Judgment affirmed as to the defendants J. R.H. Sherwood, and reversed as to the defendant Cooke; and the judgment of the special term against him affirmed with costs.