Appeal from Trial Term, Kings County.
Action by Gustav Bloch against Morris Bloch. From a judgment for plaintiff, and from an order denying a new trial, defendant appeals. Affirmed.
Samuel J. Goldsmith (Gordon S. P. Kleeberg, on the brief), for appellant.
Edward M. Grout (Paul Grout, on the brief), for respondent.
Argued before HIRSCHBERG, P. J., and WOODWARD, JENKS, GAYNOR, and BURR, JJ.
The plaintiff and defendant are brothers. The complaint alleges that in June, 1902, at the city of New York, the plaintiff lent to the defendant the sum of $500 on condition that the same should be repaid in a short time, by which expression, " a short time," the parties meant and intended a period of about one month, and that within one year from such time the plaintiff demanded payment of said sum of $500 from the defendant, but that no part thereof has been paid, and the defendant is now justly indebted therefor to the plaintiff in the sum of $500, with interest, etc. The answer " denies all knowledge or information sufficient to form a belief as to the allegations" [116 N.Y.S. 340] contained in the two paragraphs of the complaint briefly stated above, and a separate defense, alleging payment in full of the claim before the commencement of the action. The answer is verified by defendant's attorney, who states that his ground for belief as to all matters not stated upon his knowledge are conversations had with defendant and letters, etc. This form of denial as to a personal transaction is not approved by the courts ( Bogart v. City of New York, 128 A.D. 139, 14:0,112 N.Y.Supp. 549, and authorities there cited), and it is doubtful if any issue was fairly raised as to the loaning of tile money, the terms, and the fact that it had not been repaid, so that practically the only question presented by the pleadings was the affirmative defense that the payment had been made prior to the commencement of this action.
Before the action was reached for trial the plaintiff and defendant got together and settled the case without consideration, and on motion the plaintiff's attorney was permitted to continue the action for the purpose of determining his right to a contingent fee of one-half of the recovery. There was no appeal from the order granting the right to continue the action, and no question appears to have been raised upon the trial as to the right of the attorney to continue the action, so that the interesting question discussed on appeal as to the right of parties to settle, notwithstanding the provisions of section 66 of the Code of Civil Procedure, does not appear to be involved. The question was tried and submitted to the jury upon the theory that the plaintiff's attorney was bound to establish by a preponderance of evidence the cause of action alleged in the complaint, and while it must be conceded that the evidence is not as strong as might be desired, when the state of the pleadings is taken into consideration, we are not prepared to say that the verdict of the jury is not supported by the evidence. The result of the action is to determine that at the time of the commencement of the action there was a good claim existing against the defendant for the sum of $500, and the plaintiff's attorney was to have one-half of any sum which was recovered in the action. It is not a proceeding to enforce the lien, but to determine the amount which is due under the agreement, and, while it is extremely doubtful whether this was a case where the plaintiff's attorney was entitled to the remedy which he sought, the defendant, by failing to appeal from the order permitting the action to be continued, must be deemed to have waived the right to raise that question on appeal.
The judgment and order appealed from should be affirmed.
Judgment and order affirmed, with costs.
All concur, except GAYNOR, J., who dissents.
GAYNOR, J. (dissenting).
The law is, as it always has been, that a plaintiff may settle and discontinue the action at will, without regard to the wishes of his attorney, and no matter what the attorney's agreement for compensation is, or whether he has been paid or not. The plaintiff may settle for any amount or consideration he may see fit, or for nothing. No one may be compelled by his attorney to go on with a lawsuit and continue its risk against his will. To say otherwise [116 N.Y.S. 341] would be to turn the legal profession into one of common barrators, or worse, and degrade it.
It is difficult to see how the contrary notion seemed to have recognition for a time. Prior to the enactment of section 66 of the Code of Civil Procedure attorneys had no lien on the cause of action. They had no statutory lien at all, but only the common-law lien on the judgment for their statutory fees. Prior to judgment they had no lien. By giving the attorney a lien on the cause of action, section 66 did not take away from the plaintiff his right to control and settle the action at will. The lien is subject to the plaintiff's absolute right to settle and discontinue the action whenever and however he may see fit. " The statute by giving the attorney a lien does not make him the principal. The client still remains in control of his cause of action, with the same right to settle which clients always had." Gurley v. Gruenstein, 44 Misc. 268, 89 N.Y.Supp. 887.The cause of action being extinguished, there is a transition of the lien to the amount agreed upon in settlement, and if no amount be agreed upon, the lien is spent. This is all obvious on the settled principles which govern the relation of attorney and client, and the notion to the contrary which cropped out in some decisions and in expressions in opinions has been giving way fast, and should now be made to give way entirely. In fact recent decisions make it wholly untenable.
It is settled that upon a settlement of the action by the plaintiff, the cause of action is extinct and the lien of his attorney on the cause of action is transferred to the amount agreed upon in settlement. " The right of the parties to thus settle is absolute and the settlement determines the cause of action and liquidates the claim." " Such settlements are not prohibited by the existence of the attorney's lien." Fenwick v. Mitchell, 34 Misc. 617, 70 ...