Opinion
May Term, 1900.
William H. Good [ Robert H. Wilson with him on the brief], for the appellant, assignee.
Theodore B. Gates, respondent, in person.
The respondent, an attorney, recovered certain judgments for clients who subsequently made a general assignment for the benefit of their creditors. The attorney moved that the assignee pay his claim for services in gaining such judgments, or that he, the attorney, be authorized to enforce the payment of the costs of the judgments in satisfaction of his lien in each case. The Special Term, on April 18, 1899, ordered that the attorney for the assignee "having stipulated in open court to commence, within a reasonable time, proceedings supplementary to execution upon the various judgments set forth in the exhibits attached to said petition, and to pay to the said Theodore B. Gates, out of each one of the judgments so collected, the costs of said Theodore B. Gates included in each judgment so collected," the motion be denied. On November 9, 1899, the assignee gave notice of the sale of a number of judgments recovered by his said assignors, including those in question, and in that notice stated that these particular judgments were sold subject to any claim of Theodore B. Gates for attorney's liens for costs. These particular judgments were sold to one Bladen on November 23, 1899, for ninety dollars, 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 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; Bish. Insolv. Debt. § 340; Russell v. Somerville, 10 Abb. N.C. 395, n.; Schnitzler v. Andrews, 16 Wkly. Dig. 74; Matter of Bailey, 31 Hun, 608; Merchant v. Sessions, 5 N Y Civ. Proc. Rep. 24.) The judgment itself was sufficient notice of such lien. ( McGregor v. Comstock, 28 N.Y. 237; Marshall v. Meech, 51 id. 140; Delaney v. Miller, 84 Hun, 244.) The question here presented 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 counsellor 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 whosesoever 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 R.R. Co. ( 152 N.Y. 521) the court, in commenting upon this section, says: "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 equipollent with harvest or product. It is generally defined and understood as "the amount proceeding or accruing from some possession or transaction, especially the sum derived from the sale of goods." (Cent. Dict.) It is "the useful or material results of an action or course." (Stand. Dict.) And such are substantially the definitions of the law lexicographers. (Black, Bouvier, Kinney, Rapelye.) It is a word of great generality (Am. Eng. Ency. of Law, "Proceeds;" Phelps v. Harris, 101 U.S. 380), and of equivocal import. ( Thomson's Appeal, 89 Penn. 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 an 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 requite the labor that brought the harvest. ( Goodrich v. McDonald, 112 N.Y. 157, 163; Matter of Knapp, 85 id. 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 thing 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. Lowndes, 3 C.B. 808, where the fund was received by compromise.) Many cases are collected in Wharton on Agency (§ 626). (See, too, Turwin v. Gibson, 3 Atk. 720; Mitchell v. Oldfield, 4 T.R. 123; Read v. Dupper, 6 id. 361; Randle v. Fuller, Id. 456; Skinner v. Sweet, 3 Madd. 244; Matter of Knapp, supra; Ward v. Craig, supra; Weeks Attys. 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 R.R. Co., 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 not 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 id. 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 N.Y. St. Repr. 259) or Spors v. Shultheis (28 id. 50), cited by the learned counsel for the appellant, establishes his proposition; while in Goodrich v. McDonald (20 N.Y. St. Repr. 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 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 ninety dollars was not obtained by supplemental proceedings as contemplated by the order of April 18, 1899, 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 eighteenth. The amount of the costs was a definite sum. The practice of the attorney was warranted. ( Peri v. New York Central R.R. Co., supra; Code Civ. Proc. § 66, as amd. by chap. 61, Laws of 1899.)
We think that the order of the learned Special Term should be affirmed, with costs.
All concurred.
Order affirmed, with ten dollars costs and disbursements.