I agree with my brother HISCOCK that the appellants, the attorneys, are entitled to some form of relief in this proceeding. I am, however, unable to agree with the conclusion reached by him that an agreement between an attorney and client, creating a lien upon the cause of action, cannot lawfully contain the provision that neither party shall settle the litigation without the consent of the other.
If it be the fact that this court has never passed upon the validity of such a clause in a contract, I am of opinion that it is valid. I see no reason why counsel entering upon a long and difficult litigation for an impecunious client should not protect himself against a premature and ill-advised settlement of the litigation. These contracts are under the strict supervision and scrutiny of the court, and I am unable to see anything in contravention of public policy when this clause appears to have been entered into in good faith by both parties. In the absence of such a clause it has been frequently held in this state and elsewhere that the client may negotiate an honest and reasonable settlement at any time. *Page 76 There is no reason, in my judgment, why this right cannot be waived.
The Special Term held that the attorneys had a lien upon the $7,500.00 paid into court on the settlement, and that the original contract having been abandoned by the action of the clients, it was competent for the attorneys to go before a referee and prove the reasonable value of their services. If the services, however, were proved to exceed in value the $7,500.00 paid into court, the clients would, in my opinion, be liable for the excess in an action by the attorneys to recover damages for a breach of the contract.
The order of the Appellate Division should be reversed and the order of the Special Term modified so as to provide that if the attorneys prove their services to be in value exceeding the sum of $7,500.00 paid into court, that they may bring an action against the clients to recover this balance as damages for a breach of the original contract, and as so modified affirmed, with costs and disbursements in the Appellate Division and in this court.
CULLEN, Ch. J., O'BRIEN, HAIGHT, VANN and CHASE, JJ., concur with HISCOCK, J.; EDWARD T. BARTLETT, J., reads dissenting opinion.
Ordered accordingly.