McCoy v. Gas Engine & Power Co.

71 Misc. 537, 129 N.Y.S. 251
CourtNew York Supreme Court
DecidedApril 15, 1911
StatusPublished
Cited by1 cases

This text of 71 Misc. 537 (McCoy v. Gas Engine & Power Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCoy v. Gas Engine & Power Co., 71 Misc. 537, 129 N.Y.S. 251 (N.Y. Super. Ct. 1911).

Opinion

Mills, J.

The character of this action and its history, to and inclusive of the decision by the Appellate Division upon the appeal taken thereto by the defendant Flannery from the former judgment entered after trial at Special Term, are fully and clearly stated in the opinion of the Appellate Division, reported at 135 Appellate Division, 771, and need not be restated here.

After such decision the action came on for retrial at the Westchester 'Special Term, and the complaint was' dismissed upon authority of such decision and upon the grounds stated in the opinion of the Appellate Division reported as above noted. Thereupon the defendant corporation moved at such Special Term for leave to amend its answer, so as to set up as a claim against the defendant Flannery substantially the cause of action against- him which the plaintiff had attempted to allege in the complaint. Such motion was there granted, and from the order entered granting the same the defendant Flannery appealed to the Appellate Division’, which, in July, -1910, affirmed such order without opinion, as appears in 139 Appellate Division, 938.

The defendant corporation then served an amended answer ; and the action, upon the issues joined between the two defendants by their .respective answers, has been tried before this court and been submitted by both counsel upon very complete briefs.

The amended .answer of the defendant corporation, which [539]*539now stands practically as a complaint, after stating the contract between the two defendants, by reference to the complaint for the same, alleges: (1) That such contract is illegal, as violating section 74 of the Code of Civil Procedure, which was in force in 1906, when the contract in question was made, but which is now incorporated in subdivision 2 of section 274 of the Penal Law; and (2) That the contract is unconscionable because it provides so large a compensation to the attorney, the defendant Flannery, for the services to be rendered by him. Such contract, according to the allegations and the proofs, provided that his compensation should be on a sliding, ascending scale, viz.: twenty-five per cent, of the amount recovered, provided such amount ■ did not exceed $50,000; thirty-three 'and one-third per cent, if it should be more than $50,000 and less than $100,000; forty per cent, if it should be $100,000 and less than $150,000; and fifty per cent, if it should be $150,000 or over; and the award so secured by the defendant Flannery for the other defendant upon its claim was the sum of $306,000' and interest thereon from September 1, 1905."

Such amended answer alleges no false representation and no fact showing imposition, ¡aside from the naked fact of the amount of the contingent fee provided for the attorney. Therefore, by elementary rules, no false representation on the part of the defendant Flannery, as an inducement to the other defendant to enter into the contract, even if any such may have been incidentally proven, can be here considered as .a basis of invalidating the contract. The only allegation in the amended answer looking at all in such direction is ■that in paragraph 3, to the effect that the defendant Flannery, in soliciting the employment, -represented the contract which was finally made as the proper and usual contract providing for the compensation of an attorney for doing that class of work;” but such answer is entirely wanting in any allegation that such representation was false, and, therefore, the allegation as to the making of such representation is entirely insufficient" as an averment of false representation as a ground to hold the contract invalid. Such amended answer, as relief, asks that the contract be declared [540]*540void, or modified so as to fix the compensation, to which the defendant Flannery may he fairly entitled.

After considering carefully the evidence, the arguments of counsel and the authorities cited in the briefs1 submitted, I have reached the following conclusions, viz.:

First. The contract in question cannot here be held to have been or to be unconscionable merely because of the percentage of the recovery thereby secured to the attorney for his services therein ¡agreed by him to be rendered.

Second. The contract provides for services to be rendered by the attorney in any action which may be necessary for the defendant corporation to bring against the city of Hew York to recover the amount of the award made or to be made by the board of assessors, as well as for the attorney’s services before such board in securing their award. Therefore, such contract,, in and by its concluding provision to the effect that the attorney should pay all expenses of every kind incurred in the prosecution of the claim, was within the provisions and condemnation of section 74 of the Code of Civil Procedure and must, for that reason, here be held to be invalid.

Third. The value of the services already rendered by the defendant Flannery to the other defendant in prosecuting its claim is the sum of $30,000 payable when the award be actually collected by the defendant corporation, the defendant Flannery to render such further legal services in its behalf as1 may be needed to collect the award, if the defendant corporation elect to have him do so, and he to have a lien upon the award for such amount of $30,000.

As to 'the first of the conclusions above stated, viz.: that the contract w.as and is not unconscionable because of the large share, fifty per cent, of the actual recovery secured to the attorney for his services, the recent decision of the Appellate Division in this department in the case of Murray y. Waring Hat Mfg. Co., 142 App. Div. 514, appears to be conclusive. In that case the agreement of forty per cent, at 'all events appears" to have been more favorable to the attorney than this agreement for a sliding, ascending scale of compensation to the attorney as above stated. In [541]*541that case the court at Special Term in effect held that the forty per cent, agreement was not unconscionable, if an actual trial had been had; but that, as the claim of the plaintiff (for damages for the death of her husband) was collected •by a settlement without a trial and evidently with far less work on the attorney’s part than if a trial had been had, the forty per cent, reserved to the 'attorney became excessive and, therefore, unconscionable; and, upon that ground, the court reduced the attorney’s share of the recovery to $2,0'00 or twenty per cent, of the entire amount collected. The Appellate Division, however, decided, in effect, that the contract should not be regarded as unconscionable even as to its provision providing for the full percentage to the attorney, even if the claim were collected by settlement without trial. In that case, as here, the agreement provided, in effect, that the attorney should receive a given percentage for collecting the claim, however such collection might be accomplished and whatever the character and extent of the services which the attorney might have to render to effect that result. That court evidently deemed its decision in that case to be in plain accord with section 474 of the Judiciary Taw, formerly section 66 of the Code of Civil Procedure, that the compensation of an attorney or counselor for his services is governed by agreement, express or implied, which is not restrained by law.”

The case here at bar is like the Waring Case, supra,

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Related

McCoy v. Gas Engine & Power Co.
152 A.D. 642 (Appellate Division of the Supreme Court of New York, 1912)

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Bluebook (online)
71 Misc. 537, 129 N.Y.S. 251, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccoy-v-gas-engine-power-co-nysupct-1911.