
    The Van Kannell Revolving Door Company, Plaintiff, v. John Jacob Astor and W. & J. Sloane et al, Defendants.
    (Supreme Court, New York Special Term,
    July, 1907.)
    Stipulations — Relief from stipulations — Grounds for relief — Want of attorney’s authority.
    Attorney and client—The relation with the client — Authority of attorney — Stipulations.
    Heading — Supplemental pleadings — Supplemental answer — Setting up release — Subsequent adjudication.
    In an action against the owner and general contractor to foreclose a mechanic’s lien, a stipulation, consenting to the payment to the general contractor of the balance of the contract price, which in effect destroys the plaintiff’s lien, is not within the authority of the plaintiff’s attorney; and the plaintiff, not having consented to such stipulation, should be relieved therefrom and the general contractor should be required, out of the balance so paid him, to deposit in court a sufficient sum to meet the plaintiff’s lien and costs to abide the result of the action.
    In such a case, the motion of the general contractor to set up by supplemental answer the judgment dismissing the complaint as to the owner after his payment of the balance of the contract price and the owner’s failure to appeal therefrom and other matters occurring after the commencement of the action should be denied, as, under the circumstances, the plaintiff’s lien would not be impaired but would be transferred to the fund.
    Motion to set aside stipulation.
    
      Hitchings & Palliser, for plaintiff.
    Carter, Ledyard & Milburn, for defendants.
   Dayton, J.

Plaintiff is within its rights in moving to set aside the stipulation entitled in this action. Defendant W. & J. Sloane (Incorporated) moves to serve a supplemental answer setting up, in effect, said stipulation, the proceedings on appeal herein and the unconditional payment by Mr. Astor on ¡November 21, 1906, to W. & J. Sloane of all moneys due under the contract. The Appellate Division, referring to a motion to dismiss plaintiff’s appeal from the judgment, said in its prevailing opinion: From the record there disclosed it appears that the owner, Mr. Astor, after the time to take an appeal as to him had expired, and under some alleged stipulated right, paid the balance of the contract price of construction of the building in question to the general contractor (Sloanes), and it may be that upon a trial of the case it will be shown that the money payment was to be held as a substitute for the 1 real property improved ’ to abide the event of the action, or that'it was paid and received under such circumstances that it became impressed with a trust available to the appellant.” On motion of the respondent the order of the Appellate Division reversing the judgment dismissing the complaint was resettled, and it was adjudged “ that the judgment so appealed from be and the same is hereby, in so far as it dismisses the complaint as to said W. & J. Sloane, reversed upon questions of fact and of law and a new trial ordered.” Plaintiff took no appeal from the judgment dismissing the complaint as to Astor. The stipulation was as follows:

[Title of this action.] “ We hereby consent to the payment by the defendant John Jacob Astor to the defendant W. & J. Sloane, of all sums due to the latter under the contract dated July 1, 1902, for the furnishing of the interior woodwork and trim in the Hotel St. Regis, as stated in the complaint and the several answers herein, regardless of any appeals taken or to be taken herein, and the plaintiff' hereby releases the said Hotel St. Regis and the said sums due to the defendant W. & J. Sloane from the defendant John Jacob Astor, and the said defendant John Jacob Astor of and from any and all alleged liens, demands or claims referred to in the complaint in the above entitled action, reserving, however, all rights against each and all of the other defendants herein.

“Dated, New York, the 10th day of July, 1906.

“ Hitchings & Palliser, attorneys for the plaintiff.

“..........., attorney for the defendant W. & J. Sloane.

“.........:., attorneys for the defendant John Jacob

Astor.”

This paper was presented for signature to Mr. Palliser, who says in his affidavit that on July 10, 190-6, a representative from the attorneys for Mr. Astor called on Mr. Palliser and asked whether the plaintiff intended to take an appeal from the judgment rendered upon the decision of Mr. Justice Dugro, and whether plaintiff intended to give a bond to stay the judgment, to which Mr. Palliser replied that they did not desire to give a bond, inasmuch as the only question in the case was whether certain payments which had been made by W. & J. Sloane were valid, and if said payments were held to be invalid W. & J. Sloane had a fund sufficient to pay the plaintiff’s lien; that said representative from Mr. Astor’s attorneys then stated they desired to pay over said moneys to W. & J. Sloane, and presented a stipulation which he stated had been prepared and submitted to the attorneys for Mr. Astor by the attorney for W. & J. Sloane, and that if plaintiff’s attorneys had no objection to the stipulation, inasmuch as W. & J. Sloane were solvent and had $40,000 in their hands at the time of the filing of plaintiff’s lien, they would like to clean up the matter with W. & J. Sloane; that the said proposed stipulation contained blank spaces for the signatures of the attorney for W. & J. Sloane and for the attorneys for Mr. Astor, and Mr. Palliser, supposing that it would be signed by said attorneys, thereupon signed the stipulation, so that the money might be paid over by Mr. Astor to W. & J. Sloane, to whom the plaintiff could look, and that said representative of the attorneys for Hr. Astor also stated that said stipulation would he signed hy the attorneys for W. & J. Sloane before the turning over of the money by Hr. Astor. This paper, however, was never signed by the attorneys for Hr. Astor nor by the attorney for W. & J. Sloane. Hr. Bacon, attorney for W. & J. Sloane, denies that the stipulation was suggested or prepared by him or that he knew of it until' two months after the money had been paid over by Hr. Astor to W. & J. Sloane. Hr. Harvin, representing Hcssrs. Carter, Ledyard and Hilburn, who obtained the stipulation from Hr. Palliser, denies that he stated to Hr. Palliser that the paper had been submitted to Hr. Bacon, and he avers that it was drafted without any suggestion from W. & J. Sloane or its attorney, and that he made no request to have it signed by W. & J. Sloane or its attorney. He alleges that he made no claim upon W. & J. Sloane or its attorney, and that the payment by Hr. Astor was in nowise conditioned upon such stipulation or any other condition. The blanks for the signatures of the attorneys for Hr. Astor and of the attorney for W. & J. Sloane are somewhat corroborative of Hr. Palliser’s contention as to his supposition that they would be filled in by the proper parties. The payment by Hr. Astor to W. & J. Sloane after the stipulation indicates his reliance upon it, but in my view it will be unnecessary for me to determine the dispute of fact among these gentlemen. The claim of W. & J. Sloane now is that it has none of this fund out of which to satisfy any part of plaintiff’s lien of about $7,000. I understood the learned counsel for W. & J. Sloane to contend upon the argument, as he does in his brief, that the stipulation was inoperative and void. With that contention I agree. In effect it purported to he a release by the plaintiff of all its claim against any “ sums due to the defendant W. & J. Sloane from the defendant John Jacob Astor.” The clause “reserving, however, all rights against each and all of the other defendants herein ” did not serve to protect the lien of the plaintiff. In other words, when Hr". Astor paid money to W. & J. Sloane after the signing of this stipulation by Hr. Palliser, those sums had supposedly been expressly released by the plaintiff from any and all liens referred to in the complaint. In Bush v. O’Brien, 164 N. Y. 210, which contains a full discussion of the authorities on this question, Judge Haight, writing the prevailing opinion, reaffirms the language of Folger, J., in Handeville v. Reynolds, 68 N. Y. 528, as follows: “An attorney is not authorized by his retainer to satisfy a judgment without payment, and if he does so, the satisfaction will be set aside. The authority of an attorney does not extend lo a compromise or a release. lie cannot settle a suit, and conclude his client in relation to the subject in litigation without consent of the latter.” As the attorney for W. & J. Sloane does not consent that the plaintiff be relieved from the stiprdation, my opinion is that the attorneys for the plaintiff, having no power to release these funds by stipulation or otherwise, without express consent of their client, and such consent not appearing, plaintiff’s motion to be relieved from said stipulation should be granted, and that said stipulation should be returned for cancellation. I am also of opinion that W. & J. Sloane shóuld be required, out of the moneys received from Hr. Astor, to restore and deposit in court a sufficient sum to meet the lien of the plaintiff, and its costs to abide the result of this action. The motion of W.. & J. Sloane to serve a supplemental answer containing any allegations in substance or effect setting up said stipulation or. any reliance thereon should be denied. Defendant W. & J. Sloane desires leave to serve a proposed supplemental answer setting up specifically the various proceedings resulting in the judgment dismissing the complaint as to Astor, the failure to appeal as to Astor from this judgment, the payment to Astor in reliance on the subsequent proceedings above recited and other matters which have taken place since the commencement of the action. Even if it should be held that Astor and the locus in quo are released from all liability under and by virtue of the plaintiff’s lien by reason of the judgment dismissing the complaint and the failure of the plaintiff to appeal therefrom as to Astor, yet as indicated by the language of the prevailing opinion in the Appellate Division in this case the money payment to W. & J. Sloane by Astor may be held upon the new trial which has been ordered as to W. & J. Sloane to be a substitute for the real property improved.” In that event it takes the place of a portion of the original locus in quo, equivalent in value to the sum of money so paid over, and as to it the rights of the lienor became fixed as of the time of filing of the lien. This being so, no subsequent action or proceedings of the parties could in any way affect the substantial right of the lienor (Van Olief v. Van Vechten, 130 N. Y. 571), and it would, therefore, he improper to allow a supplemental answer to set up allegations which, in the circumstances, would be immaterial. Settle order upon notice.  