Hamburger v. Paul

Brent, J. delivered the opinion of the Court. The defence set up, by the appellant to this action, is a compromise made between the parties during its pendency. ²²⁶ The cause of action is a note of the Merrimac Perpetual Building Association, endorsed by the appellant for value to the appellee prior to its maturity. The note is for $1000, and the alleged compromise was a note of the appellant for $250 which it is claimed was taken in full satisfaction of the debt. This note was paid at maturity, but no entry of satisfaction was made in the suit then pending for the note of $1000, nor is there any entry in regard to the alleged compromise.

The note sued upon was brought to an attorney by Mr. Negengard, who is since dead, with instructions from the appellee to bring suit upon it. Suit was accordingly instituted against the appellant, but some doubt existing before the decision of the Court of Appeals, of Jackson vs. Myers, 43 Md., 452 , as to the liability of an endorser upon a note of this description, the attorney, who brought the suit, afterward saw Mr. Negengard, and advised a compromise. Through him and with the assent of the attorney, it is alleged, that an arrangement was made with the appellant to take his note at a short date for $250, and that this when paid should be in full of the appellee's claim against him. There is no pretence that any special authority was given to the attorney to make any such arrangement.

The case of Maddux vs. Bevan and others, 39 Md., 485 , conclusively establishes that an attorney, without express authority to do so, has no power to compromise claims of his client by taking a bond or any thing except money in satisfaction of them, or by receiving a less sum- or any security for a less sum than is due on them. If therefore there is any effective compromise binding upon the appellee, it must be worked out through the agency of Negengard. The uncontradicted proof in the case is, that the appellee knew nothing of any compromise until she was informed of it by her counsel, which was some time after ²²⁷ the death of Negengard. Not receiving as large a dividend as she expected, from the effects of the Building Association which was insolvent, she requested her attorney to press her case against the appellant to final judgment.

He then informed her of the alleged compromise, and refused to do so. She expressed her surprise and ignorance of any such arrangement and employed without delay other counsel to proceed with the case. The authority of Negengard, to make the compromise, must depend upon the extent of the control conferred upon him as agent, over the note. Upon this point the evidence is also uncontradicted.

The note was placed in his hands solely for the purpose of carrying it to an attorney to have suit brought upon it. He was not and never acted as the general agent of the appellee. So soon, therefore, as the note was placed in the hands of an attorney for suit his power as agent in the transaction finally ceased. In this respect the case differs from that, cited by the appellant’s counsel, of Barclay vs. Hopkins, decided by the Supreme Court of Georgia, and found reported in the Law Reporter of June 5th, 1878.

There the note was placed in the hands of the agent for collection; while in this case it was given to Negengard for the purpose alone of