Opinion
12-20-1901
LYNDE v. LYNDE.
John W. Dickinson, for petitioner. James Westervelt, pro se, and Richard Lindabury.
Bill by Mary W. Lynde against Charles W. Lynde. Petition by complainant to have her solicitor pay into court the amount of money received by him in settlement of the suit, and that the court fix a compensation to be paid such solicitor. Petition dismissed.
On petition to have the solicitor of the complainant in said suit pay into court the amount of money received by him as alimony decreed to be paid to complainant by the defendant, and that out of said amount a reasonable compensation, as fixed by this court, shall be paid to said solicitor. The petition sets out that after a decree of divorce had been made against the defendant, Charles W. Lynde, in the suit brought against him by Mary W. Lynde, Mr. James Westervelt, an attorney of this state, had such decree opened, and a new decree made, by which alimony was awarded to the complainant This decree was appealed, and the appeal was dismissed, and a final decree was made ordering the defendant to pay $7,840 alimony then due, and $80 a week thereafter. The defendant resided in the state of New York, and five actions were there commenced by the said Westervelt, who is an attorney of that state also, one of which was appealed to the supreme court of the United States, and by that court affirmed. A settlement was effected, and a release was signed by complainant at the request of her solicitor, in which release nothing was mentioned concerning the solicitor's compensation. She also gave him a power of attorney to indorse checks drawn to her order. The settlement of the alimony matter was made upon the terms that defendant should pay $41,000. This was paid by check to complainant's order for $38,500, and note to her order for$2,500, both delivered to the solicitor, indorsed and deposited by him to his own credit He thereafter submitted a bill for his services, amounting to $19,900. Of this sum he claims $15,000 for his own services, $500 counsel fee to George H. Bruce, and $4,000 counsel fee to Gayley & Fleming. This amount he claims the right to retain out of the amount received, in addition to the sum of $2,513.31 for costs taxed in the actions. She never entered into any agreement as to the amount of his compensation, or with Bruce or Gayley & Fleming. She paid $070 for disbursements under an agreement that her solicitor's charges would be less than they otherwise would be if she were successful. In July last when asked by complainant what his charges would be, her solicitor told her that they would probably be between 30 and 40 per cent. The answer of respondent denies that he is amenable to this court for his conduct in collecting the money in New York. He admits the settlement Says that his agreement with her was that he should receive one-third of the amount received if the matter did not involve protracted litigation, many appeals, or an unusual amount of work; otherwise, one-half, and she was to pay the disbursements. That she agreed that the fees of Bruce and Gayley & Fleming were to be first paid out of the gross sum received. In his affidavit accompanying his answer the respondent swears that he was introduced to the petitioner by a Mr. Ball, who had an adjoining office in New York City; Mr. Ball saying that petitioner had a claim which he could not take up, he not being an attorney of New Jersey. In the conversation which followed it was agreed that respondent should take petitioner's case, and his compensation was to be from one-third to one-half of the amount finally recovered, she to pay the disbursements. She was to pay nothing, if nothing was recovered. This statement of the original conversation is supported by the affidavit of Mr. Ball. This conversation they say occurred in January, 1896. The affidavit proceeds, in substance, as follows: "On December 28, 1897, a decree for alimony was entered in this court, and an attempt was made to sequester the defendant's property in New Jersey through the appointment of a receiver. No lien was obtained because defendant sold his property in New Jersey, and removed into the state of New York. In January or February, 1897, the parties were negotiating for a settlement, and in a conversation held about that time respondent told the petitioner that, as the case had gone no further, his fee would be 33 per cent A settlement was not consummated. The amounts mentioned between the petitioner and respondent at that time as the basis of settlement was between $20,000 and $30,000. The next time that the subject of compensation was discussed was on the 4th day of May, 1899. In the meantime an action had been begun in the New York courts asking for equitable relief as well as a money judgment upon the New Jersey decree. In these actions Gayley & Fleming appeared for the defendant and judgment was entered in the supreme court in one of the actions in favor of the petitioner (that court granting not only a money judgment, but the equitable relief prayed for) on January 1, 1899. Apparently after the failure to effect a settlement, this judgment was taken by appeal to the appellate division (58 N. Y. Supp. 567), and reversed as to that part which granted equitable relief, and affirmed as to the part for moneys which had accrued as alimony, at the time of the beginning of the action. Then three other actions were begun for accrued alimony. The first judgment already obtained was taken to the court of appeals, and in April, 1900, affirmed. 56 N. E. 979, 48 L. R. A. 679. It afterwards was taken to the federal supreme court, and there affirmed on April 15, 1901. 21 Sup. Ct 555, 45 L. Ed. 810. Gayley & Fleming seem to have served in all these proceedings.
Now, in the conversation had on the 4th day of May, 1899, respondent says she asked about the fee, and that he told her that, in view of the extraordinary amount of work, he would have to charge her more than 33 per cent. and that 35 or 40 per cent. would be about right, to which she agreed, and she then signed a release of her claim, under the New Jersey decree, in blank. Nothing definite was further said until February 24, 1900. At that time action No. 1 was in the court of appeals awaiting decision. In that interview defendant mentioned facts theretofore concealed from respondent, the existence of which rendered a settlement very difficult. Respondent told her that he would probably have to withdraw from the case, but upon her request consented to remain, but told her that, as the eventual settlement would be much smaller because of what she had told him, his remuneration would have to be larger proportionately. So far nothing appears in respondent's affidavit about the compensation to be paid to Gayley & Fleming and Mr. Bruce. Later in his affidavit respondent says that when the first action was brought on for trial in New York he suggested to petitioner the advisability of having counsel associated with him in the case, and, as petitioner did not then feel in a position to pay fees for counsel, it was agreed that Gayley & Fleming should be hired as associates in the case, because respondent could get them to act without receiving any retainer, they to be paid out of the amount of the recovery. Respondent says that, to the best of his recollection, a similar arrangement was made at the time the suit was commenced in New Jersey with regard to the services of Mr. George H. Bruce. A settlement was finally effected on the 12th of July, 1901, for $41,000. The respondent sent petitioner a statement, in which $4,400,as paid to Gayley & Fleming, and $500 to
Bruce, was first deducted from the $41,000, leaving $30,100. Of this, respondent retained one-half.
John W. Dickinson, for petitioner.
James Westervelt, pro se, and Richard Lindabury.
REED, V. C. (after stating the facts). The right of this court to take control of this matter is challenged by the respondent, upon the ground that the money in his hands was not raised in any proceeding in this court, but by actions in the courts of the state of New York. It is to be observed that the moneys came to the respondent by the terms of a settlement; and that this settlement included, not merely a release by the petitioner of all her rights in the judgments obtained in New York, but of all rights, past and future, under the decree made by this court. As solicitor in the suit in which the decree satisfied by this settlement was made, I am of the opinion that he is amenable to this court for his conduct in dealing with the money so received.
It is not a question whether, as an attorney of the state of New York, his conduct in the New York actions is also the subject of judicial supervision there. Assuming that this court has the right to take control of this matter, and order the respondent to pay to the petitioner such portion of the moneys in his hands as remains after deducting a reasonable compensation for his services, the question remains, should this court exercise that power in this case? The ground upon which a court moves in matters of this kind is stated by Mr. Justice Dixon in delivering, his opinion for the court of errors and appeals in Strong v. Mundy, 52 N. J. Eq. 833, 31 Atl. 611: "The right to proceed summarily against an attorney arises from his dishonest and oppressive or clearly illegal conduct. If it appears that there exists between a lawyer and his client a fair dispute, which can be decided only on the settlement of doubtful questions of fact or law, the court should not exercise its summary power, but should leave the parties to their ordinary remedies." Among the cases cited in support of this statement of the law is In re Paschal, 10 Wall. 483, 19 L. Ed. 992, in which Mr. Justice Bradley, for the supreme court of the United States, said: "If an attorney has collected money for his client, it is prima facie his duty, after deducting his own costs and disbursements, to pay it over to such client, and his refusal to do so, without some good excuse, is gross misconduct and dishonesty on his part, calculated to bring discredit on the court and on the administration of justice. It is this misconduct on which the court seizes as a ground of jurisdiction to compel him to pay the money in conformity with his professional duty. The application against him in such cases is not equivalent to an action of tort or assumpsit, but it is a quasi criminal proceeding, in which the question is not whether the attorney has received the money, but whether he has acted improperly or dishonestly in not paying it over. If no dishonesty appears, the party will be left to his action at law."
Tested by the doctrines thus enunciated, I am of the opinion that the facts displayed do not present a case for the exercise of the summary power of this court. While it is true that, in the absence of a contract, an attorney who agrees to enforce a right or collect a claim, in consideration of a certain sum, or of a percentage upon the amount recovered, must pay out of the sum mentioned, or out of his proportion thereof, for the services of any counsel employed by him, it is equally true that if such counsel is employed by the client of the attorney, or by the attorney himself at the client's request, under an arrangement that the counsel shall be first paid out of the gross amount recovered, the attorney cannot be compelled to pay the counsel fees. The question, then, is one the solution of which depends upon conflicting testimony; the petitioner denying, and the respondent asserting, the existence of an agreement that the counsel should be paid out of the sum recovered. There is nothing illegal in such a contract, and the only question is whether such a contract existed. The appropriate form for the adjudication of the rights of the parties is a court of law.
The petition must be dismissed.