In re the Final Judicial Settlement of the Account of Proceedings of Smith

111 A.D. 23, 1906 N.Y. App. Div. LEXIS 95

Opinion

Chase, J.:

It is provided by section .66 of the Code of Civil Procedure as follows: “.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 counter-u claim, 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 liis client’s favor and the proceeds thereof in whosoever

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* hands they may come; and the lien can not be affected by any settlement between the parties before or after judgment or final order. The court upon the petition df the client or attorney may determine and enforce the" lien.”

By the amendment of said section in 1899 (Laws of 1899, chap; 61) a special proceeding was included therein, and the court was given, express authority upon the petition of the client or attorney to “determine and enforce the lien” therein mentioned. Surrogates’ Courts are now courts of record (Code Civ. Proc. § 2) and the Constitution of 1894 (Art. 6, § 15) provides :> “ Surrogates and Surrogates’ Courts shall have the jurisdiction and powers Which the surrogates and existing Surrogates’ Courts now possess, until otherwise provided by the Legislature.” - .

The Court of Appeals in Matter of Regan (167 N. Y. 338) say : “It seems to us that the power of the Surrogate’s Court to protect the lien of an attorney has been assimilated by modern legislation to the power exercised in that respect by' the Supreme - Court and the other-courts -of record of the State. There is -now no reason that we can perceive for denying this power to a court that exercises such extensive jurisdiction over persons and property. An attorney, duly admitted to practice in all the courts of record of the; State,, is an attorney of the Surrogate’s Court, and his functions as an officer zof that court aré quité as important to. the community .and to his clients as the' services that, he may perform in any other' court. * * •" * It must be regarded as settled law. in .this State that an attorney who has procured for his client a judgment •or decree has a lien upon the same for his compensation, and this lien is not confined to mére taxable costs but to such sum as he is entitled to receive Under his retainer or under an agreement expressed or implied.” ,

In Matter of Fitzsimons (171 N. Y. 15) the court, on an appeal from an order made in a proceeding before the surrogate for a compulsory accounting by an administratrix and in which the appellant, an attorney, presented a petition setting forth facts entitling him to a part of any recovery to which his clients would be entitled upon such accounting and to compensation as attorney for the contestants, say : “ That the proceeding instituted by the appellant to establish his lien was a special proceeding which might be properly instituted in a Surrogate’s Court there is now no doubt.” -

In Matter of King (168 N. Y. 53) the court, in discussing the question of the jurisdiction of the Supreme Court to determine the amount of indebtedness in a proceeding under said section 66 of the Code of Civil Procedure, say : “ We do not understand the clause to be violative of the provisions of the Constitution, or that the parties were entitled to a jury trial. In this case the petitioners had a lien created by statute. The proceedings provided for by the Code are instituted by a petition and are in the nature of the foreclosure of a lien.” -

The statute must be construed liberally (Fischer-Hansen v. Brooklyn Heights R. R. Co., 173 N. Y. 192), and as so construed it gives to Surrogates’ Courts power to' determine the lien and the amount thereof and to enforce it.

Bule 10 of the General Buies of Practice provides : “ An attorney may be changed by consent of the party and his attorney or upon application of the client upon cause shown and upon such terms as shall be just, by the order of the court or a judge thereof, and not otherwise.”

The General Buies of Practice are applicable to Surrogates’ Courts. (Code Civ. Proc. § 17. See Chatfield v. Hewlett, 2 Dem. 191; Jessup Surr. Pr. 126.) The proceeding for a judicial settlement of the account of the executors Was pending when the proceedings by the appellants and respondents respectively weré commenced. The proceedings by the appellants and respondents respectively were heard and determined as one proceeding, and by the petitions and answers the substantial question for the determination of the court was the amount which should be paid to the attorneys from the estate of. the deceased. Primarily an executor personally and not the estate is liable for all contracts made by him ill the execution of histi'ust. ' Notwithstanding this rule, the neees^ sary expenses of administering an estate may be regarded as a charge upon, although not a debt against the estate, and when the expenses-incurred by an executor are by the court found to'be necessary and proper in the administration 'of the estate they are payable from the estate. (Shaffer v. Bacon, 35 App. Div. 248; affd., 161 N. Y. 635; 18 Cyc. 443; 11 Am. & Eng. Ency. of Law [2d ed.], 1240.)-Ah attorney has a lien for his compensation for professional services and for disbursements upon the moneys and property received by him on his client’s behalf in the course of his" employment. This right of lien is not affected by the fact that the client is an executor and the services were rendered and moneys and property received on behalf of the estate, nor is it confined to moneys and property recovered by judgment. (Matter of Knapp, 85 N. Y. 284; 4 Cyc. 1015, 1016; Arkenburgh v. Little, 49 App. Div. 636, with opinion in same case sub nom. Arkenburgh v. Arkenburgh, 27 Misc. Rep. 760; Matter of Crouch, 41 id. 349; Krone v. Klotz, 3 App. Div. 587; Halbert v. Gibbs, 16 id. 126.)

The record does not disclose that any one at any time suggested that i.f the court had" jurisdiction to determine the amount of the attorneys’ lien for services that the lien should be confined to services rendered after the commencement of the proceeding for a judicial settlement of the executors’ account. It seems to have 'been assumed without controversy or objection that with the two proceedings before the court an allowance should be made, if at all, for all services rendered to the executors in the administration of the. estate and for which the estate should pay. It .may be assumed from the record'that the attorneys had papers of the-estate in their possession to which a lien would attach foi’ services and which fact the court cotild consider in determining under rule 10 of the General Rules of Practice what would be just on the substitution of attorneys as asked by the appellants. The referee’s report is in. effect tjiat the attorneys, in addition to the amounts already received by them, were entitled from the estate to $1,500, from which should be deducted a payment thereon of $200. No services were shown to have been performed for the executors as legatees or for them individually apart-from the services, the amount of which were proper expenditures from the" estate of the deceased. Nothing was directed by the order to be paid by said executors individually beyond or m addition to the amount made a lien upon the assets of said estate.

The order of the Surrogate’s Court confirmed the report, of the referee in all things. The findings'submitted to and made by the surrogate months after the order had been made and entered were somewhat contradictory when taken in connection with the order confirming in all things the referee’s report; but such findings do not change .the question now before us for. consideration. The report of the learned referee and the order of the Surrogate’s Court confirming said report are principally based upon the determination of questions of fact. The evidence was conflicting, and the learned referee and the court, with the parties and witnesses before them, have determined such questions in favor of the respondents, and we cannot say that their determination is against the weight of evidence.

The surrogate has by the order found that the amount found due the attorneys is a lién on the assets of the estate and must.be paid before the substitution of attorneys takes effect. The order goes further and directs that the respondents have execution against the executors individually for the amount so found due the respondents. This in effect directs a judgment iu favor of the respondents against the appellants individually as in a common-law action for work, labor and services.. We are not aware of any authority in the Surrogate’s Court to make that part of the order. The order should be modified by striking therefrom that part thereof directing that execution issue against the executors individually for the amount directed to be paid to the attorneys, and as so modified affirmed, without costs.

All concurred.

Motion to dismiss denied. Order.modified by striking therefrom that part thereof directing that execution issue against the executors individually for the amount directed to be paid to the attorneys, and as so modified affirmed, without costs.

Sic.