Lee v. Van Voorhis , 78 Hun 575 ( 1894 )

HAIGHT, J.

This action was brought to procure a judgment declaring a contract between the plaintiff and the defendants null and void. It appears that on the 21st day of December, 1887, John Lee died, in cons-'quence of injuries received through the negligence of the Vacuum Oil Company; that he left, him surviving, the plaintiff, his widow, and six minor children; that thereafter letters of administration were issued to the plaintiff solely for the purpose of enabling her to bring and maintain an action against the Vacuum Oil Company for damages; that she employed the defendants, who are attorneys at law, to prosecute such action, agreeing with them that they should defray the expenses of bringing and prosecuting the action, and, as compensation, that they should have one-third of the recovery over and above, taxable costs and disbursements, and, in case of their failure to recover any damages, they were to receive nothing for their services. Thereafter, and on the 13 th day of June, 1888, the action was tried, and resulted in a verdict for the plaintiff for $5,000, on which a judgment was mitered December 31, 1888, for $5,801.38, being the amount of the damages, costs, and extra allowance made. An appeal was then taken to the general term of the supreme court, where the judgment was affirmed, and a judgment entered for $91.56, costs of appeal.¹ An appeal was then taken to the court of appeals, and, pending such appeal, the plaintiff, without the knowledge and consent of her attorneys, settled the judgments recovered by her with the Vacuum 0.1 Company for $4,500, $1,000 of which was paid to her in cash, and the remaining $3,500 were deposited with the Rochester Trust & Rafe Deposit Company, under an agreement that the same should be paid over to her upon the delivery to the Vacuum Oil Company of a release by her attorneys of all claims by them by reason of tlm judgments so recovered by her. The issues formed by the pleadings in this action were, by an order of the court, submitted to a jury, and a verdict rendered thereon. The findings in this action were based upon the verdict and such additional testimony as was deemed material. The trial court has found as facts that, when the plaintiff signed the agreement with the defendants, she was fully informed as to its contents and meaning; that she executed the same freely, and without, undue influence exerted over her by the defendants, or either of them; and that, under the circumstances of the case, the agreement was not unfair or unreasonable,—and, as conclusions of law, that she had the authority to ent'-r into the agreement in question; that it is valid, and created a lien in favor of the defendants upon the recovery, etc. Exceptions were taken only to the conclusions of law.

Did the plaintiff have the authority to make the agreement in -question? Is it valid, and did it create a lien in favor of the defendants upon, the recovery? It appears to us that these questions should be answered in the affirmative. An attorney, dealing with his client, should show that his contracts for services are fair and reasonable. This the defendants have done.

Fc-clion 1902 of the Code provides that:

“An executor or administrator of a decedent, who has left, him or her surviving, a husband, wife, or next of kin, may maintain an action to recover damages lor a wrongful act, neglect, or default, by which the decedent's death was caused," etc.

Section 1903 provides that:

“The damages recovered in an action, brought as prescribed in the last section, are exclusively for the benefit of the decedent’s husband or wife, and. next of kin; and, when they are collected, they must be distributed by the plaintiff, as if they were unbequeathod assets, left in his. hands, after payment of all debts, and expenses of administration. But the plaintiff may deduct therefrom the expenses of the action, and ills commissions upon the residue; which must be allowed by the surrogate, upon notice given in such a maimin' and to such persons, as the surrogate deems proper.”

It thus appears that the right to bring and maintain the action is given by the express provisions of the Code. In order to bring an action, it was necessary for her to have the services of an attorney. She must therefore be deemed empowered to engage such services, and, as an incident thereto, to agree upon the compensation that should be given therefor, with the qualification, that the amount so agreed upon is fair and reasonable In re Hynes, 105 N. Y. 560-503, 12 N. E. 60; Taylor v. Bemiss, 110 U. S. 42, 3 Sup. Ct. 441. We are aware that it has been held that contracts made by executors and administrators for services to be rendered are dc-emed to be the individual contract of such executors and administrators, and that they do not create a liability against the estate. See Austin v. Munro, 47 N. Y. 360. While no liability may he created against the estate where the prosecution is for and on-behalf of the estate, a liability by the executor or administrator individually is created; and, if the contract is fair and reasonable, such executor or administrator may he reimbursed out of the estate. In the case under consideration the action was not prosecuted for and on behalf of the estate, but was prosecuted for and on behalf of the widow and minor children. The recovery was for their benefit, and tin plaintiff, as administratrix, represented them in the action, and the employment of counsel by her to prosecute the action was the discharge of one of the duties that devolved upon lnr; and under the provisions of the Code referred to, as such administratrix, she is expressly authorized to deduct from the iecovery the expenses of the action. This, we understand, includes all of the necessary and propvr expenses incurred by her,, including the services of her attorneys.

Section GG of the Code provides that:

“The compensation of an attorney or counselor for h’s services is governed by agreement express or implied which is not restrained by law. From the commencement of an action 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 or counterclaim which attaches to a verdict, report, decision or judgment in his client’s favor and the proceeds thereof in whosoever hands they may come; and cannot he affected by any settlement between the parties before or after judgment.”

Here we have an express provision of the statute authorizing the fixing- of the compensation of attorneys by agreement. We also have express provisions giving the attorney a lien upon his client’s cause of action to the amount of the compensation so agreed upon. It is contended that this provision did not operate to give the defendants a lien.on the recovery, for the reason that the same did not belong to the plaintiff. But we cannot assent to this interpretation of the provision. It would in many cases operate to deprive the attorney of any compensation whatever, for he has no claim against the estate, and the administrator may be insolvent. As we understand, the provisions of section 66 give' the attorney a lien; and section 1903 provides that the amount of his claim shall be deducted from the recovery by the administrator. This we understand to be in accord with the suggestion of the court in the case of Lee v. Oil Co., 126 N. Y. 579, 27 N. E. 1018. See, also, In re Knapp, 85 N. Y. 284. The $325 paid to the plaintiff by her attorneys should be regarded as an advancement to her of that amount, and was properly allowed. The judgment appealed from should be affirmed, with costs. All concur.

1 Lee v. Vacuum Oil Co., 7 N. Y. Supp. 420.