Summary
In National Exhibition Co. v. Crane (167 N.Y. 505), cited by the learned attorney, it was held that the court in its inherent power to prevent a stain on its record by collusion and fraud could impose the payment of costs to the defendant's attorney by plaintiff when after joinder of issue, notice of trial and placing of cause on the calendar, the defendant, without the knowledge or consent of his attorney, without paying or providing for the payment of costs, and for the purpose of depriving him of his costs, stipulates for a discontinuance without costs.
Summary of this case from Russo v. DarmstadtOpinion
Argued June 4, 1901
Decided June 14, 1901
De Lancey Nicoll for appellant.
John M. Ward for respondent.
The following question has been certified to us by the Appellate Division for decision, viz.: "Where it appears that, after issue joined in an action at law in which no counterclaim is interposed, the defendant, after the cause is on the calendar and noticed for trial, without the knowledge or consent of his attorney; without paying or providing for the payment of his costs, and for the purpose of depriving him of his costs, stipulates with the plaintiff that the action may be discontinued, without costs, is the Supreme Court vested with discretionary power to impose the payment of costs to the defendant's attorney by plaintiff, as a condition to the granting of an order discontinuing the action on application of the plaintiff?"
Honest settlements by parties, made with no intention to take advantage of their attorneys, but for the simple purpose of ending the litigation, are praiseworthy and should be encouraged. Dishonest and collusive settlements, made with intent to defraud the attorneys upon either side, are reprehensible and should be condemned. The plaintiff asked for relief founded on a settlement of the latter character, and the court had the power to refuse to stain its records by an entry based upon fraud. The power of the court is not founded upon a lien of the defendant's attorney, for, as there was no counterclaim, he had none, but upon its right to protect one of its own officers against collusion and fraud practiced by the parties after they had come before it for trial. The power is not statutory but inherent, and has frequently been recognized by the courts, although their decisions upon the subject are not uniform. ( Coughlin v. N.Y.C. H.R.R.R. Co., 71 N.Y. 443, 448; Randall v. Van Wagenen, 115 N.Y. 527, 532; Pulver v. Harris, 52 N.Y. 73; McBratney v. R., W. O.R.R. Co., 17 Hun, 385; Walsh v. Flatbush, N.S. C.R.R. Co., 11 Hun, 190; Wormer v. Canovan, 7 Lans. 36; Quinnan v. Clapp, 10 Abb. N.C. 394; Quincey v. Francis, 5 Abb. N.C. 286; Rasquin v. Knickerbocker Stage Co., 21 How. Pr. 293, 295; Marquat v. Mulvy, 9 How. Pr. 460, 463; Talcott v. Bronson, 4 Paige, 501; People v. Hardenbergh, 8 Johns. 335.) In this case the plaintiff asked the aid of the court to carry into effect a settlement "made for the purpose of depriving" an attorney of his costs, and the court was not obliged to assist in effecting the fraudulent design. While the parties have an undoubted right to adjust their differences, when the settlement is the result of a conspiracy between them to cheat the attorney of either out of his compensation for faithful service, the court may properly withhold its aid from those who seek by furtive means to perpetrate a wrong under the cover of a compromise.
The order of the Appellate Division should be affirmed, with costs, and the question certified answered in the affirmative.
If the power exists in the court, which I doubt, of compelling parties against their will to litigate to the end a pending action in order to secure to the defendant's attorney a bill of costs out of the plaintiff in the event that it shall transpire that the defendant has a good defense, it should never be exercised, for the creation of such a precedent will tend to promote, not to check, useless litigation, thereby adding to the public burdens and contributing to the annoyance of the responsible litigant. No principle can be invoked in support of such a holding, for the plaintiff owes the defendant's attorney no duty whatever and is under no obligation to pay him anything, and as the defendant has no cause of action his attorney is without any lien for the court to enforce. Without any claim then of any kind or character against a plaintiff, a defendant's attorney nevertheless asks that against his will the plaintiff be forced to try an action to see if the attorney cannot secure a claim against him. And the excuse presented to the court for requesting such a determination is that the plaintiff has not agreed in his settlement to pay to his opponent's attorney something that he is concededly under no obligation to pay him. The plaintiff's conduct is miscalled fraudulent, for how can it be fraudulent for one to omit to provide for the payment to another of money which he does not owe to him, and for which that other has no claim whatever.
BARTLETT, HAIGHT, VANN, LANDON, CULLEN and WERNER, JJ., concur for affirmance; PARKER, Ch. J., reads dissenting memorandum.
Order affirmed.