Ferdinand Zogbaum, Appellant, v. Perry G. Parker, impleaded, etc., Respondent

Ferdinand Zogbaum, Appellant, v. Perry G. Parker, impleaded, etc., Respondent. (Argued November 13, 1873; decided November 25, 1873.) Plaintiff was the owner of a judgment against defendant B. B. brought an action against plaintiff for false imprisonment, in which defendant P. was his attorney. At the commencement of the action it was agreed between B. and P. that out of the recovery, if any, P. was to own and have his taxable costs and a reasonable counsel fee, and that an associate counsel should be paid; and if anything remained, it should be assigned and belong to P. to pay a prior indebtedness. B. obtained a verdict which he assigned to P. This action was brought to compel the set-off of the judgment against this verdict, B. being insolvent. Held, that as the mutual demand did not arise out of the same transaction, there was no inherent equity in favor of plaintiff; that the contract between B. and P. was lawful and valid; that the equities of P. were superior to those of plaintiff, and that, therefore, the complaint was properly dismissed. It seems that the Supreme Court, in the exercise of its equitable powers, has authority in an action brought for that purpose to compel the set-off of a demand, not in judgment, against a judgment; and this, although the demand is a verdict in an action for a personal tort. Appeal from judgment of the General Term of the Supreme Court in the fourth judicial department, affirming a judgment in favor of defendants entered upon the decision of the court at Special Term. This action was brought to compel the set-off of a judgment recovered in June, 1870, for $482.79, in favor of the plaintiff in this suit and one Rufus Fairchild against defendant John R. Blodgett, of which judgment plaintiff is the owner, against and, upon a judgment recovered in November, 1871, in favor of said Blodgett against plaintiff for $527.17. Defendant Parker was the attorney and counsel of Blodgett in his action against plaintiff, which was an action for false imprisonment. The court finds as facts that at the time of the commencement of the action of Blodgett v. Zogbcmm, Blodgett was indebted to Parker in the sum of $200, and that it was then agreed between Blodgett and Parker that out of the.reeovery in the action, if any, Parker was to own and have for his services, as attorney and counsel therein, the taxable costs and a reasonable counsel fee; that at the time of the commencement of the action Blodgett retained John G-anson, Esq., counselor of the court, to assist Parker on the trial, and that for such Ganson should be paid a reasonable counsel fee out of the recovery; that if anything remained, after paying the expenses of the suit, such residue should be assigned and belong to Parker for the purpose of paying and satisfying the debt, $200, previously due to him. The recovery against Zogbaum was for $400 damages ; and upon the rendition of the verdict, before any judgment was entered, Blodgett assigned the verdict, damages and all his interest in the costs and disbursements to Parker. This assignment was with the consent of Ganson, and upon the agreement that when the amount should be collected Parker should pay over to Ganson the sum of $150 as his counsel fee. The General Term held (Talcott, J., writing the opinion) that the equities of Parker and G-anson were superior to those of plaintiff; and also, even if no equities had intervened, plaintiff could not compel a set-off by action, as there was no set-off against or in favor of a mere verdict in an action for tort. W. W. Rowley for the appellant. Courts, in setting off judgments, do not proceed upon any defined statute. (Simpson v. Hart, 11 J. R., 74; Waterman, Set-offs, 368, § 316, and notes.) It is always within the discretion of the court whether the set-off shall be allowed upon motion. (Simpson v. Hart, 11 J. R., 74; Talbert v. Harrison, 1 Bailey, 599.) Such control has been very limited, and only exercised when both judgments are in actual existence, and between the same parties when the motion is made. (Graves v. Woodbury, 4 Hill, 559 ; Mackey v. Mackey, 43 Barb., 58.) Insolvency of one of the parties is a sufficient ground for the set-off in equity. (Smith v. Fulton, 43 N. Y., 422; Bradley v. Angel, 3 id,, 475 ; Lindsay v. Jackson, 2 Paige, 581.) Blodgett’s claim against plaintiff, being for a mere personal tort, was not assignable. (People v. Tioga C. P., 19 Wend., 73; McKee v. Judd, 12 N. Y., 622; Zabriskie v. Smith, 13 id., 322; 2 R. S., 448, §§ 1, 2; Cronch v. Grisley, 6 Hill, 250; Stanton v. Thomas, 24 Wend., 70; Pulver v. Harris, 62 Barb., 500; Brooks v. Hanford, 15 Abb., 342.) Blodgett could have released the verdict without regard to the claim of Parker and Ganson. (Wade v. Orton, 12 Abb. [N. S.], 444; Mary Clark’s Case, 1 Blackf., 122; Shoemaker v. Keeley, 2 Dall., 213; Somner v. Witt, 4 S. & R., 244.) Plaintiff’s equity to offset attached the moment the verdict was given, and no act of Blodgett could divest him of the right. (Gay v. Gay, 10 Paige, 377; Lindsay v. Jackson, 2 id., 581; Smith, v. Felton, 43 N. Y., 422; Bush v. Lathrop, 22 id., 535.) The attorney’s lien for costs had not attached when the assignment was made, and is no bar to this action. (Nicoll v. Nicoll, 16 Wend., 446; Shank v. Shoemaker, 18 N. Y., 489; Ward v. Orton, 12 Abb. [N. S.], 444; Benedict v. Harlow, 5 How., 347; Púlver v. Harris, 62 Barb., 500.) _P. G. Parker for the respondent. The agreement made by Parker with Blodgett, as to his compensation, was valid in law and proper. (Benedict v. Stewart, 23 Barb., 420; Wilde v. Joel, 15 How., 329; Stow v. Hamlin, 11 id., 452; Fox v. Fox, 24 id., 409; Sedgwick v. Staunton, 14 N. Y., 289; Fitch v. Gardinier, 2 Keyes, 516.) Parker and G-anson had a valid lien upon the recovery, by virtue of their agreement with Blodgett. (Fogarty v. Jordan, 2 Rob., 319; Voorhees v. Dorr, 51 Barb., 480.) Attorneys have a lien for their compensation for services upon claims they prosecute and judgments they recover, whether arising out of tort or contract. (Rooney v. Second Avenue R. R. Co., 18 N. Y., 368; Hall v. Ayer, 19 How., 91; McGregory v. Comstock, 28 N. Y., 237; Ely. v. Cook, id., 365 ; Mackey v. Mackey, 43 Barb., 58.) The assignment of the verdict on the day it was rendered, with the costs to be taxed, perfected defendant’s equitable lien into a legal right. (Code, § 121; Mackey v. Mackey, 43 Barb., 58; Wood v. Phillips, 11 Abb. [N. S.], 1.) There was no right to set-off existing at the time of the assignment to Parker. (Roberts v. Carter, 38 N. Y., 107; Ely v. Cooke, 28 id., 365; 11 Paige, 518; 4 J. Ch., 11; 6 Cow., 261; 3 Wend., 400.) [MAJORITY — Chuboh, Ch. J.] Chuboh, Ch. J. I concur in the general views of Judge Talcott in his opinion in the court below, except that I think it is unnecessary to determine that if no equity had intervened in favor of other persons, the plaintiff could not by action have compelled a set-off of the demand of Blodgett while it existed as a verdict and before judgment against the judgment held by him. The power of a court of equity is incidental to the court, and maybe exercised by action in cases when the demands are not in judgment. If or is it necessary to deny that the right of the plaintiff to an offset against the verdict would, but for the rights of other persons, have existed although the verdict was for a personal tort. There is a recognized distinction, in some cases, as to the rights of parties to a set-off, depending upon whether the application is by motion or action. The power of common-law courts to compel a set-off of judgments, by motion, is based upon their supervisory power over their own judgments and suitors in their courts, and is governed by no fixed rules; while, in actions in equity, it is said that suitors may ask the interference of the court ex debito justitia. (14 J. R., 62; 2 Paige, 581.) The plaintiff bases his right to equitable relief upon the insolvency of the defendant Blodgett, and it is clearly the duty of the court to protect the equities of all persons who have any interest in the demand sought to be set-off. The mutual demands of the plaintiff and Blodgett did not arise out of the same business, and there is no inherent equity in favor of the plaintiff. The question is, which of these parties has the superior equity ? I concur with the conclusions of the learned judge, that the equities of Parker and Granson are superior to those of the plaintiff. The agreement for their services in prosecuting the action for false imprisonment to be compensated by the security of the verdict, when obtained, although not effective to transfer the cause of action, attached as an equitable claim to the verdict, and the assignment transferred the title to them. The contract was not unlawful nor for any reason invalid. The consideration, being for services for obtaining the verdict, gives them a right superior to that of the plaintiffj who occupied no relation to the demand whatever, and was only a common judgment creditor. The only question there can be is as to the $200, which was a precedent debt in favor of Parker; but that was included in the original arrangement, and, we may presume, constituted an inducement, on his part, in undertaking the prosecution; and I see no reason why the insolvency of Blodgett should not inure to his benefit as well as the plaintiff. Mainly concurring in the opinion of Judge Taloott, I do not deem it necessary to repeat the authorities cited by him, nor to review the numerous cases cited in the able and elaborate brief of the counsel for the appellant. It is sufficient to say that no one of them is in conflict with the conclusion arrived at. (Perry v. Chester, Court of Appeals, 53 N. Y., 240.) The judgment must be affirmed. All concur except Grover, J., who concurs as to all but the $200. Judgment affirmed.