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Matter of Fitzsimons.

Appeal from an order of the Appellate Division in the First Department, reversing an order of the New York County Surrogate's Court, and dismissing the appellant's proceeding to establish and enforce an attorney's lien and denying him the relief prayed for in his petition therein.

Henry W. Jessup, for appellant.

Charles E. Miller, for respondent.

MARTIN, J.-On August 27, 1897, Ann Cassidy died in the City of New York, leaving her surviving, as her only heirs at law and next of kin, a daughter, Mary E. Fitzsimons; a son, Peter A. Cassidy, and a grandson, John P. McNally. About ten days before her death she delivered to Father Colton, rector of St. Stephen's Roman Catholic Church, eighteen or twenty bank books belonging to her, and requested him to collect the sums due thereon, amounting to $71,481.93, declaring that she would subsequently inform him what disposition to make of the money, when so collected. He collected that amount, but the intestate never gave him any instructions or information as to the disposition she desired made of the amount thus received by him. Subsequently to her death he delivered to Mary E. Fitzsimons $12,931.63 and an equal amount to Peter A. Cassidy. He also delivered to the latter, who had been appointed administrator of the estate of Ann Cassidy, deceased, as such administrator, the further sum of $43,618.66 to protect the rights of John P. McNally as one of the next of kin and heirs at law of the deceased. This sum Peter A. Cassidy deposited for the estate with the New York Life Insurance and Trust Company in his name, as such administrator. He afterwards died, and Mary E. Fitzsimons was appointed as administratrix de bonis non. Soon after her appointment she withdrew from the insurance and trust company the amount so deposited by Peter, and secretly, and without any notice to John P. McNally, his father, or his committee,

Matter of Fitzsimons.

divided it between herself and Mary L. Cassidy, the widow of Peter A. Cassidy, to the exclusion of John P. McNally and the parties representing him or his interest therein. At the time of the death of Ann Cassidy, John P. McNally was, and had been for years, insane and confined in an asylum in the State of New Jersey, of whom William Harrigan had been duly appointed a committee both of his person and estate by the Supreme Court of the State of New York. The appellant's first retainer was by such committee, by whom he was employed as attorney to discover and obtain the property belonging to such estate in which his ward had an interest, which arrangement or retainer was made with the consent and approval of Michael McNally, the father of such incompetent. After the death of John P. McNally, leaving his father his only next of kin and heir at law, the latter, under and by a written agreement, retained the appellant as his attorney to discover and secure all the property to which he was entitled as heir at law and next of kin of his deceased son in the estate of Ann Cassidy, and agreed to pay him, in full compensation for his services, one-half of the property that should be recovered. He also thereby assigned and set over to the appellant one-half of all the property which he thus inherited. The appellant accepted the employment and agreed to perform the necessary services, and likewise to pay out of the compensation he should thus receive the claim of Robert S. Pelletreau for his services therein, who was also then employed to act, and acted as one of the attorneys in the case in conjunction with the appellant. Of this agreement, notice was given to all the parties interested in the estate.

In 1901 proceedings were instituted by the appellant as such attorney in the Surrogate's Court of the County of New York to compel Mary E. Fitzsimons, as administratrix of the estate of Ann Cassidy, deceased, to account as such for the estate of her intestate. She thereupon filed an account in the form of an affidavit, in which she averred that

Matter of Fitzsimons.

she never received any property of any kind or description belonging to the estate of the decedent. The appellant, as attorney for McNally and Harrigan, administrators of the estate of John P. McNally, deceased, then filed objections to the account, charging the administratrix with having received upwards of $40,000 in cash and of being legally responsible to account for $85,000 in addition thereto. After these objections were filed, the matter was, by the Surrogate's Court, referred to Charles H. Beckett, Esq., to take proof thereon. Thereafter such reference proceeded to a hearing, and continued from time to time from the 6th of December, 1901, to the 8th of May, 1902. On the 1st of April, 1902, counsel for the administratrix offered in evidence before the referee a consent purporting to have been signed on March 21 by Michael McNally, one of the contestants of the account, withdrawing the objections and consenting that the account be judicially settled and allowed as filed. It is obvious from the record that this consent was procured secretly and by collusion between the respondent and said McNally, who was insolvent and irresponsible. A motion was then made by the administratrix that the referee report to the court approving such account. This motion was opposed by the appellant upon the ground that he had a lien upon and an assignment of a part of the claim of McNally for his fees and compensation as such attorney, which should be first adjusted. The motion was denied. Subsequently a release by McNally was produced; the motion was renewed and was opposed upon the same ground. The matter was then brought before the Surrogate's Court, where the same motion was made, and thereupon the appellant filed a petition setting forth the facts of his retainer as attorney; that he had a lien upon the claim of McNally for his fees and services performed under such retainer; had a written agreement therefor and an assignment of one-half of such claim; that the settlement was secret and collusive, and that his client was insolvent, and prayed that the motion

Matter of Fitzsimons.

might be denied and the reference continued to the end that his rights as such attorney under his agreement and under the provisions of the Code might be determined and enforced according to law. The record tends to show that after they had full notice of the appellant's claim and assignment, Mary E. Fitzsimons and Mary L. Cassidy, by whom the property of the estate had been wrongfully appropriated, agreed with Michael McNally to pay the appellant and his associate their fees and compensation, and gave a bond in the penal sum of $20,000 to indemnify him against all their charges. Upon the presentation of the appellant's petition and the affidavits and other papers accompanying it, the motion of the administratrix was denied. She then appealed to the Appellate Division, which reversed the order denying her motion and dismissed and denied the petition of the appellant to have his lien as such attorney determined and enforced. It further ordered that the objections to the administratrix's account be withdrawn, the referee directed to report to the Surrogate's Court approving her account as filed, and that the appellant pay to her $10 costs on the dismissal of his petition and $10 costs on the motion to withdraw. From that determination the appellant has appealed to this court.

The first question presented is whether the order appealed from was a final order in a special proceeding and reviewable by this court. A proceeding before the surrogate for a compulsory accounting by the administratrix was pending. The latter applied to have the objections to her account withdrawn, and the proceedings terminated in her favor upon the consent of one of the original contestants. Upon the presentation of that motion to the Surrogate's Court the appellant 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. He also asked that his rights as such attorney under the agreement between himself

Matter of Fitzsimons.

and the contestants be determined in that proceeding and the proceeding continued for that purpose. That he had a right to present such a petition to the Surrogate's Court and that it was the duty of the court to continue the proceeding for the purpose of enabling him to establish his right to the compensation claimed, especially as his client was insolvent and the alleged settlement was secret and collusive, is abundantly established by the plain provisions of the statute and the decisions of this court (Code Civ. Pro., sec. 66; Peri v. New York Central RR., 152 N. Y. 521; Matter of Regan, 167 N. Y. 338; Matter of King, 168 N. Y. 53; Fischer-Hansen v. B'klyn Heights RR., 33 Civ. Pro. Rpts.) 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. Obviously the Surrogate's Court entertained that view and continued the proceeding for that purpose. But the Appellate Division dismissed the appellant's petition and denied his right to establish such lien before any evidence as to the facts had been given and with no proof before it except that set forth in the affidavits used upon the motion. The order of the Appellate Division dismissing the appellant's petition and denying his right to establish such lien was a final order in a special proceeding, and, therefore, appealable to this court.

This brings us to the consideration of the question whether the learned Appellate Division was justified in denying the appellant the relief sought and in dismissing his proceeding. The grounds upon whch this deter mination was based were twofold: First, that the agreement entered into between the appellant and his client was champertous; and, second, that it was unconscionable.

First, then, was it champertous. Section 74 of the Code of Civil Procedure provides that "An attorney or counselor shall not, by himself or by or in the name of another person, either before or after action brought, promise to give or procure to be promised or given, a valuable consideration

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