On appeal from Bergen County Court.
For affirmance -- Justice Case, Oliphant, Wachenfeld and Burling. For modification -- Chief Justice Vanderbilt, and Justices Heher and Ackerson. The opinion of the court was delivered by Burling, J.
This is an appeal from a judgment of the Bergen County Court setting aside an award of fees for legal services made by the Workmen's Compensation Division of the New Jersey Department of Labor and Industry. The appeal is addressed to the Superior Court of New Jersey, Appellate Division, but has been certified on our own motion.
The essential facts are that the petitioner filed a claim petition claiming compensation for her two dependent children and herself as the result of an accident and the ensuing death of her husband, George J. Haberberger, arising out of and in the course of his employment with the defendant. The accident and resulting death occurred on July 30, 1948. The claim petition was filed four days later on August 3, 1948. On August 26, 1948, the defendant filed an answer denying liability. On December 2, 1948, the defendant filed an amended answer admitting liability and offering to pay the full amount of compensation, as well as the amount of the funeral expenses, to which the petitioner was entitled on behalf of herself and her two children, under R.S. 34:15-13. The amended answer stated that the claim petition and original answer had been filed before a complete investigation could be made in behalf of the defendant.
The case was initially scheduled for hearing on September 27, 1948, and, after various adjournments, was finally listed for hearing on December 13, 1948, at which time the Deputy Director was advised of the amended answer which had been filed and the offer of payment therein contained. A rule for judgment was filed March 11, 1949, awarding to the petitioner the full amount of compensation, as well as funeral expenses, to which she was entitled on behalf of herself and
her two children, under R.S. 34:15-13. The amount awarded was exactly the amount offered by the defendant in the amended answer. The Rule for Judgment also awarded fees for legal services to petitioner's attorney in the amount of $1,000, $600 of which was assessed against the defendant and $400 of which was assessed against the petitioner.
The defendant appealed to the Bergen County Court from that portion of the foregoing judgment awarding fees for legal services. The Bergen County Court reversed and allowed no fee and set aside that part of the judgment of the Workmen's Compensation Division which awarded such fee which was assessed against the defendant in the sum of $600 and against the petitioner in the sum of $400.
The present appeal seeks a review of the judgment of the County Court. The basic question involved is whether, under the facts above stated, the petitioner's attorney is entitled to any fees for his legal services.
Under the early state of the law in New Jersey while an attorney was entitled to compensation for his services, an advocate was entitled to compensation only where there was an express contract to pay therefor; in the absence of such a contract his services were presumed to be gratuitous. Schomp v. Schenck, 40 N.J.L. 195 (Sup. Ct. 1878); Hopper v. Ludlum, 41 N.J.L. 183 (E. & A. 1879); Bentley v. Fidelity and Deposit Co., 75 N.J.L. 828, 829 (E. & A. 1907); McCrea v. Stierman, 76 N.J.L. 394, 395 (Sup. Ct. 1908). This situation was changed by R.S. 2:20-8 (P.L. 1903, c. 247, as amended by P.L. 1911, c. 199) and an express contract to pay a specific sum for services is no longer a condition prerequisite to recovery. Bolte v. Rainville, 138 N.J. Eq. 508 (E. & A. 1946). However, certain limitations upon the right to "ask for, contract for or receive" compensation for legal services have been imposed by our Workmen's Compensation Act, R.S. 34:15-1 et seq. R.S. 34:15-26 (P.L. 1911, c. 95, as amended by P.L. 1913, c. 174, P.L. 1919, c. 93, P.L. 1931, c. 279, and P.L. 1945, c. 74) provides in part, as follows:
"When any proceedings have been taken under the provisions of article two of this chapter, the bureau or the judge of the court of common pleas shall, as a part of the determination and order, either for payment or for commutation of payment, settle and determine the amount of compensation to be paid by the injured employee or his dependents, on behalf of whom such proceedings are instituted, to his legal advisers, and it shall be unlawful for any lawyer, or other person acting in that behalf to ask for, contract for or receive any larger sum than the amount so fixed; * * *."
Another section of the Act pertinent hereto is R.S. 34:15-64 (P.L. 1918, c. 149, as amended by P.L. 1925, c. 98, P.L. 1927, c. 324, P.L. 1928, c. ...