John Delahunty, Respondent, v. Richard A. Canfield, Appellant

John Delahunty, Respondent, v. Richard A. Canfield, Appellant. First Department, April 19, 1907. Contract — attorney and client — agreement to collect gambling debts for contingent fee. An agreement by an attorney to collect for a contingent fee all claims which may be defended upon the ground that they were gambling debts is contrary to public policy and void. The court will not aid in its enforcement. (Per Laughlin, J., and Pattbkson, P. J): A verdict for an attorney founded upon said contract made ten years before the services were rendered is not warranted by the evidence when the attorney iails to deny testimony that a settlement for claims collected was made upon a different basis. Appeal by the defendant, Bichard A. Canfield, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of New York on the 12th day of June, 1906, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 13th day of June, 1906, denying the defendant’s motion for a new trial made upon the minutes. H. Snowden Marshall [George Gordon Battle with him on the ‘brief], for the appellant. Edmund L. Mooney [S. Hanford with him on the brief], for the respondent. [MAJORITY — Laughlin, J.:] Laughlin, J.: " The complaint sets forth two causes of action for legal services which were embraced in separate actions. and consolidated into one. The first cause of action is- for services rendered in collecting the sum of $130,000, on three notes, each for $100,000. Plaintiff sought to bring this collection within the terms of a special agreement, made between him and the defendant.some teii years prior to the rendition of the services, by which he was to receive twenty-five per cent on the collection of any notes, obligations or claims that might be turned over to him by the defendant for collection, to which the defense of gambling should or might be interposed. These notes were not placed in the hands of che plaintiff by the defendant for collection in the usual manner in which a client places claims in the hands of his attorney.' The negotiations which resulted in the collection of $130,000 on the notes were instituted, not by the defendant, but by an offer on the part of the maker of the notes through an attorney to the plaintiff, to compromise the defendant’s claims thereon, and this before the notes had become due or payable. The notes were given principally for. ■ borrowed money, and the ground upon which a deduction from the face of the notes appears to have been claimed was the infancy of the maker. It does, not appear what part of the indebtedness, if any, was incurred, or claimed to have been incurred, in gambling. The defendant authorized the plaintiff to negotiate a settlement for $100,000 if no more could be obtained. The plaintiff obtained for his client $30,000 more than the latter was willing to accept, and, therefore, his services were very valuable in the result obtained. It is not at all clear, however, that these notes, in any view of the case, fall within the terms of the special contract for twenty-five per cent of the amount collected. Some claims had been placed in the hands of the plaintiff under the special agreement many years before, but no collection had been made thereunder. At the time the negotiations which resulted in the settlement of these notes were instituted the defendant was in Europe, having discontinued the pursuit of gambling, which he had followed in the city of Mew York for many years, and had placed all of his affairs, so far as the services of an attorney were required, in the hands of the plaintiff under general authority to take such steps as he might deem advisable for the protection of the rights and interests of the defendant. In the circumstances there is much force in the contention made in behalf of the appellant that the special agreement with respect to collections terminated with this general employment. The plaintiff testified that he paid over the $130,000 collected by him to the defendant’s manager, and at the same time requested and received $5,000 on account for the services rendered. The defendant’s manager testified- that the plaintiff at the time stated in substance that his charges for collecting the notes would be $10,000, $5,000 "of which he directed should be credited upon obligations held by the defendant against him for borrowed money, and $5,000 of which he desired and received in cash, and that this charge for the services was communicated to and approved by the defendant. The defendant admits that he acquiesced in the charge of $10,000, and his manager testified that at a subsequent interview between them and plaintiff, upon the rendition of plaintiff’s bill, this charge of $10,000 was expressly agreed upon by the parties. Plaintiff, when first called as a witness, testified in substance that at the time he received the $5,000 in cash from the defendant’s manager, nothing more was said with respect to his charges for the collection than has already been stated in this opinion in giving his version of that interview. After the manager of the defendant testified that plaintiff stated that he would charge $10,000 for collecting the notes, and testified concerning the allusion to and acquiescence in this charge at a subsequent interview between plaintiff and defendant^ plaintiff was called to the stand in rebuttal, but made no.denial of the conversa-, tion between him and the defendant and the latter’s manager, concerning which lie had not been interrogated when first on the stand; and he made no specific or further denial of the testimony . of defendant’s manager with respect to his having made a charge of $10,000 for his services in collecting the notes. The court submitted to the jury the question as to whether the plaintiff at that time agreed to accept $10,000 for the services in collecting the notes, and the verdict shows that the jury found that he did not, for they found for the plaintiff for the full amount demanded in . each cause of action. In the circumstances we think -that in the absence of a denial by the plaintiff'of the testimony of defendant’s manager with respect • to plaintiff’s having made -a charge of $10,000 for these services, which was acquiesced in by defendant, the verdict should not be permitted to. stand in the amount rendered. In the judgment which has been entered upon the verdict, the plaintiff has been ■ allowed $32,500, which is twenty-five per cent of the $130,000 collected. We are of opinion that the verdict in this regard is not fairly sustained by the evidence, and unless the plaintiff is willing to reduce the recovery by the sum of $22,500, together with interest thereon from the 17th day of December, 1904, the date of - the rendition of his bill, being the date from which interest was figured, which will be in accordance with the proof as we gather it from the record as to the first cause of action, there-should be a new trial. The evidence is sufficient to support the recovery on the second causé of action,- and we think no other error sufficiently serious to require a new trial was committed. ... . It follows that the judgment and order should.be reversed and a ' new trial granted, -with costs to appellant to abide the event, unless within ten days from the service of the order to be entered hereon the plaintiff shall file a stipulation consenting that the judgment be modified by reducing the recovery by the sum of $22,500, together with interest thereon from the 17th day of December, 1904;- and if such stipulation shall be filed, the' judgment will be modified accordingly, and as so modified it and the order will be affirmed, without costs of the appeal to either party. Patterson, P. J., concurred. [CONCURRENCE — Scott, J. (concurring):] Scott, J. (concurring): So far as concerns the plaintiff’s first cause of action for collecting $130,000 on notes for $300,000 the plaintiff sues on an alleged special agreement, made ten years before, whereby defendant promised to pay to plaintiff twenty-five per cent of all claims he might collect which were defended or. objected to on the ground that they were gambling debts, If such a contract was, in fact, made it was, in our opinion, contrary to public policy and void, and the court should give no aid to its enforcement. The defendant was a common gambler pursuing his vocation in a house maintained by him for the purpose in the city of Hew York, and also at other places. The statutes of this State have placed gambling, such as the defendant pursued, in the category of crimes, and have expressly declared that all evidences of indebtedness, of which the consideration, in whole or iii part, is money lost at play, shall be utterly void. If gambling is criminal, illegal and immoral, and the money lost thereat is for that reason made uncollectible, it seems. to me to be perfectly clear that- an agreement to compensate a lawyer for collecting such a claim by paying him a percentage of the ^amount recovered must be treated as itself illegal and nnenforcible. Such an agreement amounts to nothing more than the employment of an attorney to collect the fruits of a crime for compensation consisting of a percentage of such fruits. In the present case not only was the claim tainted with illegality, but the person against whom it was made is shown to have been a boy under age. . If, therefore, the plaintiff’s claim upon his first cause of action is to rest upon such a contract between himself and defendant he should have been nonsuited. If, on the other hand, the claim which he collected was, as the defendant says, mainly or partly for borrowed money, as to which the defense that it was for a gambling debt would be unavailing, the case did not fall within the terms of the alleged special agreement, and $10,000 is certainly a very liberal allowance. The amount allowed by the jury and now .about to be confirmed for the services, mainly futile and often injudicious, included in.the second cause of action, appears to be, to say the least, very generous, but as to that question we are not disposed to set up our own judgment against that of the jury. We, therefore, concur in the disposition of the appeal indicated in the opinion of Mr. Justice Laughlin. Ingraham and Clarke, JJ., concurred. Judgment reversed and new trial ordered, with costs to appellant to abide event, unless plaintiff stipulates to reduce judgment as stated in opinion, in which event judgment as so modified and order affirmed, without costs. Settle order on notice.