Fogerty v. Jordan — 25 N.Y. Super. Ct. 319

Majority

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John B. Fogerty, plaintiff and respondent, vs. Peter M. Jordan, impleaded with Dudley W. Bain, survivors of Charles GaNun, deceased, defendant and appellant.

Headnote

1. The admissions of one partner, whether sworn to or otherwise, in regard to partnership matters, are always proper to charge his copartners; and it is immaterial whether they appear in a sworn statement, or were orally given, or were testified to under oath, by such partner as a witness on the stand. To render the .admission competent, however, it must appear, ly other evidence, that a copartnership existed aj; tlje time to which the admission refers, or in respect to which it is supposed to relate.

2. In an action against attorneys, to recover moneys collected by them as such, they cannot question the title of their client to the moneys they have collected f<?r him by his authority. Nor can they protect themselves from liability by any illegality in the transaction between their client and the person from whom they collected such money, or between their client and any assignor who may have been the original owner of the claim collected.

3. An admission in the answer, in such an action, of the employment by the plain,tiff °f the defendants “under the n/nne of G. J. S.,” as his attorneys to prosecute a claim against ]J. is conclpsiye evidence, if not of a partnership between the defendants, at least of such a joint employment o.f them and of their joint liability to the plaintiff, as would make an admission by one, in his answer, that “ the defendants ” received the money sought to be recovered, binding on the others,

4. An agreement, made since the Code, by an attorney, to commence and carry on a suit, for a client, and to “ furnish all lawyers, expenses, and every thing else,” is not a violation of the provision of the Revised Statutes, (2 S. S. 288, § 71,) which prohibits an attorney from buying a thing in action for the purpose of bringing a suit thereon-

(Before Moncbiee, Monell and McCtrair, JJ.)

Heard April 11, 1864;

decided April 30, 1864.

Appeal from a judgment entered upon the report of a referee.

The action was to recover moneys collected by the defendants, as the attorneys of the plaintiff. The complaint alleges that on the 21st of April, 1859, the defendants were attorneys and counsellors at law, lawfully entitled to practice, and practising as such in the courts of this state, “ and were partners at law, doing business in the city of New York, under the firm name of QaNun, Jordan & Bain.” That on or about

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that date, the plaintiff retained the defendants as his attorneys, in and about a certain claim against one Hogan, and that the defendants in April, 1862, as such attorneys, collected and received upon such claim the sum of $866.66, over and above their costs and charges, which upon demand they have refused to pay to the plaintiff, and for which he demands judgment against the defendants.

The defendants answered separately. The appellant, Jordan, in answering, alleged: “ First. This defendant admits that the said defendants were, at the time stated-in the complaint, attorneys and counsellors at law, duly practising as such. And this defendant denies each and every other allegation in said complaint contained, except as is hereinafter, specially admitted.” The answer then alleges that in 1852 Hogan and one Willock had entered into a contract, Hogan to sell and Willock to purchase certain lots in the city of New York, Willock agreeing to erect houses thereon, and Hogan to advance money therefor. That after a part performance of the contract, Hogan employed the plaintiff as his attorney, (said plaintiff being an attorney at law,) to extinguish the interest of Willock in the contract and premises. That as such attorney of Hogan, the plaintiff caused the interest of Willock to be sold, and produced a release from him to Hogan, under which Hogan afterwards held possession of the premises ; for all which services Hogan paid the plaintiff in full. That Willock, in 1859, claiming that his rights under the contract had not been extinguished, commenced an action against Hogan in the New York common pleas, in which action the defendants were the attorneys of Willock; and that the alleged claim of Willock against Hogan is the same claim, which, it is alleged by the plaintiff, was prosecuted by the defendants, for the benefit of the plaintiff, and to prosecute which, the plaintiff claims to have employed the defendants, and upon which the defendants collected and received the money demanded in the complaint. The answer denies that the defendants were employed by the plaintiff to commence or prosecute the actiop against Hogan, or that the plaintiff had any interest whatever

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in it. The answer then alleges that upon a settlement of said action, the defendants received from the settlement moneys their attorneys and counsel’s fees, and that said Willock the balance thereof received;

The defendant G-aHun answered separately, to the same effect. The defendant Bain admitted the partnership of the defendants, and their employment by the plaintiff, but denied all the'othet allegations in the complaint.

On the trial, the plaintiff offered in evidence an affidavit sworn to by the defendant Bain, proving, or tending to prove, the partnership of the defendants ; their retainer by the plaintiff to prosecute the suit in the name of Willock, against Hogan ; the plaintiff’s interest (two thirds) in the claim, (Willock being the owner of the remaining third ;) an agreement by the defendants to prosecute the claim, as the attorneys of the plaintiff and Willock; and the receipt by the defendants of the money in settlement of the claim.

The defendant Jordan objected to the affidavit, on the grounds, that on its face it was an extra judicial affidavit, not made in any action or proceeding ; and also, that it did not appear that the defendants were partners at the time the paper was signed. The referee overruled the objection, and allowed the affidavit to be read in evidence. To which the defendant Jordan excepted.

The referee found as facts, that in April, 1859, the defendants were attorneys and counsellors at law, and copartners as such, and were retained by the plaintiff, to prosecute the claim of Willock against Hogan. That previous to such retainer, Willock had agreed that the plaintiff should receive two thirds of the amount recovered. That the defendants took the claim to prosecute, upon the retainer of the plaintiff, with full knowledge of his agreement with Willock. That the defendants afterwards settled the claim, with the consent of the plaintiff and Willock, and received the sum of $3000, of which they paid Willock $700. That $886.66 remained in the defendants’ hands, after satisfying their costs and charges, which

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sum. was due and payable from them to the plaintiff, and for which amount he directed judgment.

The defendant Jordan excepted to all the findings of fact and conclusions of law, and appealed from the judgment to the general term. The other defendants did not appeal.

E. P. Cowles, for the appellant.

W. Fullerton, for the respondent.

By the Court,

The affidavit of the defendant Bain was properly admitted as evidence, against the defendants, of all the facts stated in it, except the single fact of partnership. If there is not other and sufficient evidence in the case, of the partnership of the defendants, then the affidavit, treating it as an admission of the parties, would not be evidence against the other defendants of any of the facts sworn to. The admissions of one partner, whether sworn to or otherwise, are always proper to charge his copartners; and it is immaterial whether they appear in a sworn statement, or were orally given, or that the same matter was testified to under oath, by a witness on the stand. To render the admission competent, however, it must appear, by other evidence, that a partnership existed at the time to which the admissions refer, and in respect to which they are supposed to relate. The objection, therefore, to the introduction of the affidavit of Bain, was well taken, unless the case furnishes other and sufficient evidence of the parnership of the, defendants.

The allegation in the complaint is that the defendants were attorneys and counsellors, and “ partners at law.” This allegation is not, in terms, denied by the defendant; nor is it in terms admitted. The express admission is, only, that the defendants were “attorneys and counsellors at law,” with a general denial of all other parts of the complaint.

It is by no means certain, that a defendant can specifically admit a part of an entire allegation, and put other parts of it in issue by a general denial. His answer must contain a gen

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eral or specific denial of each material allegation in the complaint. That is, he must deny, generally or specifically, the whole of each allegation. If he admits a part, he cannot generally deny the residue. Rut without determining that question, there are other parts of the answer which contain, in my judgment, a sufficient admission of a partnership, to charge the defendants. It is alleged in the “second” defense set up by the defendant Jordan, that in or about the spring of 1859, Willock employed the defendants, “ under the firm name of GaNun, Jordan & Bain,” as his attorneys, to prosecute the claim against Hogan. He denies «that “ these defendants,- GaNun & Jordan, or that the attorneys of record for said Willock, in said suit, GaNun Jordan & Bain,” were ever employed by the plaintiff. He further says that said action was the only one prosecuted against Hogan by said “ GaNun, Jordan & Bain, as attorneys and counsel; ” and he admits that in the settlement of the suit “ the defendants ” received the money sought to be recovered in this action. These admissions of the employment of the defendants “ under the name of GaNun, Jordan & Bain,” to commence and prosecute the very claim which the plaintiff alleges was in part assigned to him, are, I think, conclusive evidence, if not of a partnership, at least of a joint employment of the defendants, and of their joint liability to the plaintiff. In such case, the admission of one would bind the others. (1 Phil. Ev. 93.)

But the defendant read in evidence, on the trial, an assignment from Willock of the claim in that suit to “GaNun, Jordan & Bain,” his attorneys therein. And also the complaint in the same action, subscribed by “Ga Nun, Jordan & Bain, plaintiff’s attorneys.” Here is strong evidence of the joint relation of the defendants, if not of their partnership in fact; and if there was any doubt before, of the fact, there could be none now. This affidavit and complaint were in for all purposes, and removed the objection of previous want of proof of partnership. (Gibbons v. Wilcox, 2 Starkie, 39.)

• The proof of partnership was therefore sufficient to render the'affidavit of Bain competent evidence against all the defend

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ants, and fully supports the finding of the referee in that respect.

The offer by the appellant, of evidence to prove that the interest which the plaintiff acquired in the claim against Hogan, was acquired in hostility to the rights of Hogan,- who had been his client, and was therefore champertous, was properly excluded. Without inquiring whether the facts offered to be proven may or may not have been a good defense by Hogan to the action of Willock against him, it is enough to say that the defendants cannot avail themselves of it. However improper may havq been the manner in which the plaintiff procured his interest, (of which there is no evidence in the case,) and however jealously courts will protect clients from the fraud or overreaching of attorneys, they will only do so at the instance of the persons injured. And hence I think the defendants did not rightly understand their duty to their client, when they undertook to question his title to the money they had collected for him. Had Hogan, or his representatives, claimed the money, it would have afforded the defendants a pretext, at least, for withholding it from the plaintiff. No such claim appears to have been made ; and it is but for a questionable purpose, we think, that the defendants have sought to screen themselves from liability, under the pretense of misconduct on the part of the plaintiff towards Hogan. ' The defendants were employed to prosecute Hogan, to recover a claim due to Willock. They were employed by the plaintiff, and they understood that the plaintiff’s interest in the claim was two thirds. They did not refuse to agree to prosecute the suit for one half of the plaintiff’s interest; nor did they refuse to retain, out of the settlement money, their share. If the plaintiff’s transaction was champertous, I cannot see in what manner the defendants avoided being particejos fraudis; for it does not appear that they have accounted to Hogan, or his representatives, for the money they retained for themselves.

In Merritt v. Millard, ( 5 Bosw. 645 ,) money was paid to the defendant in execution of an illegal contract between the plaintiff and one Brewster. In an action to recover the money, it

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was held that the defendant could not set up as a defense, the. illegality of the contract. He was bound by his promise to pay the money to the plaintiff, and no one besides the party to the contract could avail himself of its illegality.

But it was further claimed by the appellant, that the transaction between the plaintiff and Willock, was a violation of 2 R. S. 288, § 71, which prohibits an attorney from buying a}j thing in action for the purpose of bringing a suit thereon. " Willock, who was examined as a witness on the part of the appellant, testified, that he agreed with the plaintiff to commence the suit; that at that time he had no money to carry on the suit, and he agreed to give the plaintiff two thirds of the proceeds, he to furnish all lawyers, expenses, and every thing else. Since the Code, such an agreement is not a violation of the provision in the Revised Statutes referred to. (Rooney v. Second Avenue R. R. Co., 18 N. Y. Rep. 368 .)

Even if this was not so, the defendants were not in a position to avail themselves of the objection, for the same reason that made the offer to show the illegality of the transaction towards Hogan improper. Willock has not complained. He received his share of the proceeds, and seems to have been satisfied. The appellant is in error, I think, in supposing that in this action the plaintiff was compelled to prove the transfer from Willock to him. It was only necessary to show that he employed the defendants to prosecute a claim, and that they recovered a certain sum of money upon it. They could not dispute the amount the plaintiff was entitled to, for they were informed of the extent of his interest at the time they were retained. This is an answer to the objection that the complaint did not state facts sufficient to constitute a cause of action.

If the view we have taken, that any alleged illegality in the transaction between the plaintiff and Hogan, or between the plaintiff and Willock, was unavailable to the defendants, then the defence failed, and the referee was justified in rejecting all the offers of evidence tending to establish such facts. They were immaterial upon the issues between the parties.

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That part of the referee’s finding of fact, which states the . agreement between Willock and the plaintiff, was unnecessary.

: The plaintiff was not bound to prove it, and • the defendants could not go into it. Hence none of the exceptions to the rulings of the referee, in allowing Willock to testify to the arrangement, can be sustained. The evidence being, as we have seen, wholly immaterial, did not injure the defendants. Eor the same reason it was proper to exclude the affidavit of Willock, offered as evidence by the defendants.

The assignment from Willock to the defendants, of the whole claim involved in the suit against Hogan, was taken by the defendants with knowledge of the prior interest of the plaintiff, and was therefore subject to it.

An error, clerical or otherwise, seems to have been made by the referee in the amount. for which he directed judgment. ■ The plaintiff claimed to recover $866.66, and there was no proof which authorized a judgment for a larger sum.

There being no other error, we can see no reason, if the plaintiff will stipulate to correct the amount of the judgment, for reversing the judgment on that ground.

If the plaintiff gives such stipulation, the judgment will be affirmed, otherwise it must be reversed, and a new trial ordered, with costs to abide the event.

Cases cited

Merritt v. Millard 5 Bosw. 645 N.Y. Super. Ct. 1859-12-31 p. 324