Matter of Reisfeld , 227 N.Y. 137 ( 1919 )

This is a proceeding by attorneys to establish and enforce a lien.

The infant child of Morris and Clara Nacht was run down and killed by an automobile truck in the city of New York. The father retained the petitioners to bring an action for damages. Their compensation was to be fifty per cent of any recovery by settlement or verdict. They caused the father to be appointed administrator, wrote the owner of the truck a letter of demand for payment, and thereafter served a summons. They had no opportunity to do anything more. The action was settled without their intervention, and $1,000 paid, and divided between the parents. In this proceeding, the attorneys seek to charge the defendant with a lien to the extent of fifty per cent of the sum recovered through the settlement. The Special Term held that the lien must be restricted to the reasonable value of the services, which was found to be $150. The Appellate Division held that the lien must be measured by the contract, and modified the award accordingly.

We think the modification goes too far. The petitioners were dealing with an administrator. The proceeds of the cause of action belonged equally to the father and the mother (Code Civ. Pro. sec. 1905). Upon his own interest in the cause of action, the father might impose any lien that he pleased (Judiciary Law, sec. 474; Consol. Laws, ch. 30). Upon the interest of his wife, he could not lay a charge beyond the limits of the reasonable (Code Civ. Pro. sec. 1903; Matter of Atterbury, 222 N.Y. 355,360, 361). There is evidence justifying a finding that the administrator had ignored that restraint upon his power. The Appellate Division reversed upon the law (Code Civ. Pro. sec. 1338), and the determination of the Special Term must stand if it has any basis in the facts. By this contract, the half of any settlement, no matter how made or when, was to go to the attorneys. Whether they did much or little or substantially nothing, their reward was to be the same. The result, if the contract stands, is to give them $500 for some preliminary investigation of the accident and the service of a summons. Had the settlement been larger, they would have a claim for even more. We cannot say that the Special Term was under a duty to approve as reasonable a contract leading to such results. The father is bound, because he assented, and there is no finding of mistake or fraud (Judiciary Law, sec. 474; Matter of Fitzsimons, 174 N.Y. 15; Morehouse v. B.H.R.R. Co., 185 N.Y. 520; Matter of Howell, 215 N.Y. 466,472; Boyd v. Daily, 85 App. Div. 581; 176 N.Y. 613;Elmore v. Johnson, 143 Ill. 513; Cooley v. Miller,156 Cal. 510, 524; Taylor v. Bemiss, 110 U.S. 42). The mother is free, because she did not assent, and hence the contract must be reasonable when it imposes a charge upon her right. The fee may be made contingent (Lee v. Van Voorhis, 78 Hun, 575; 145 N.Y. 603) ; its size may be increased because of the contingency; but none the less, the bargain must exhibit a measurable degree of providence in the adjustment of reward to service. If such providence is lacking, the administrator will not bind others, even though he binds himself. The test to be applied should be substantially the same as that applied under section 474 of the Judiciary Law to contracts with a guardian.

These principles determine the extent of the lien and the distribution of its burdens. The share of the father in the cause of action and its proceeds is subject to a lien of $250, one-half of the promised fee. If he is liable for more, the remedy is against him personally. He did not charge his share with the whole fee, but only with his proportion of the fee which he attempted to charge upon the cause of action as a whole. The interest of the mother is subject to a lien of $75. That is her proportion of the reasonable value. Those are the amounts which the surrogate or the Supreme Court would have charged against the shares of the parents if application had been made in advance of the completed settlement to adjust the lien of the attorneys. Those, therefore, are the payments that must be made to the petitioners now.

We think it unimportant that the father fixed the terms of the retainer before his appointment as administrator. By prosecuting the action after appointment he approved and continued the arrangement. We think also that at the time of the settlement the petitioners employment had not been terminated by the client, and hence that the case is not brought within the rule in Martin v.Camp (219 N.Y. 170, 174). The defendant makes some point of the omission to produce the written contract. Its terms, however, are stated in the petition, and the statement is not opposed by any adequate denial.

The order of the Appellate Division should be modified by reducing the lien to the sum of $325, and as modified affirmed, without costs to either party in the Appellate Division or in this court.

HISCOCK, Ch. J., CHASE, HOGAN, POUND and ANDREWS, JJ., concur; McLAUGHLIN, J., dissents and votes to affirm the order of the Special Term

Ordered accordingly.