Manzo v. Dullea (96 F.2d 135, 1938)

CHASE, Circuit Judge.

The appellant owned the equity in a •plot of land on which stood a building in Staten Island, N. Y. This real estate was encumbered by two mortgages in the total sum of $5,216.24 held by the Westerleigh Building Loan & Savings Association, and Mrs. Manzo was personally liable for the amount secured by the mortgages.

There were three policies of fire insurance issued by the National Reserve Insurance Company of Illinois, of which two, one for $16,000 and. one for $10,000, covered the building, and one for $5,000 Covered the furniture and other personal property. The $16,000 .policy contained what is . known' as. a standard mortgagee clause providing that a loss should be payable to the mortgagee to the extent of its interest.

A fire occurred which partially destroyed the property mortgaged and insured. ' Proofs of loss were filed in which $5,000 was claimed under the policy insuring the contents of the building and $9,797 under the policies on the building itself. The interest of the mortgagee in the proceeds of the loss was stated, and the appellant claimed the remainder as payable to her.

The insurance company paid the mortgagee and took assignments of the mortgages but refused to pay the appellant because of alleged fraud in the proofs of loss and on the additional ground that certain provisions of the policies relating to the storage of fireworks on the premises had been violated. Appellant consulted the appellee, an attorney at law, who undertook to represent her in the matter of the collection of the insurance in accordance wtih the terms of a written retainer executed by the appellant and her husband. This retainer provided for a contingent fee to the attorney amounting to 25- per cent, of any amount recovered by trial and to 20 per cent, of what might be realized by compromise settlement before trial.

Pursuant to the retainer, the attorney brought suit against the insurance company and recovered a judgment consisting of $13,500 damages; based on a verdict of $8,500 for the damage to the building an