Maddux v. Bevan

Miller, ¡T., delivered the opinion of the Court. One of the questions presented by this appeal relates to the authority of an attorney, over claims of his client placed in his hands for collection. In White vs. Davidson, 8 Md., 186 , this Court has said, “the power of an attorney is very extensive, but it is not equivalent to that of his client. As such, it has been doubted, to say the least of it, by high authority, whether he may make a compromise, although he may submit a cause to arbitration.

Holker, et al. vs. Parker, 7 Cranch, 436 . It is true if the compromise be bona fide, and work no considerable hardship,’ Courts will be slow to disturb it, and they will refuse to do so when it has been acquiesced in with lull knowledge of the facts.” In the case in the Supreme Court there referred to, Ch. J. Marshall says, “although an attorney at law, merely as such, has strictly no right to make a compromise, yet a Court would be disinclined to disturb one, which was not so unreasonable as to be exclaimed against by all, and to create an impression, that the judgment of the attorney has been imposed on or not fairly exercised in the case.” In our opinion, the weight of authority in this country is, that an attorney as such has no power to compromise such claims 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, without ex ⁴⁹⁴ press authority from the client to that effect, and such compromise will not be binding on the client, unless he has with full knowledge ratified it. Ratification may be inferred from acquiescence, and the facts and circumstances of each case.

It is also well settled that a principal cannot ratify a transaction in part, and repudiate it as to the rest; he must either adopt the whole or none ; and hence the general rule is deduced, that where a ratification is established as to part, it operates as a confirmation of the whole of that particular transaction. Story on Agency, sec. 250. This rests upon the clear principle of right and justice, that a party cannot accept and confirm so much of a contract made by one purporting to be his agent, as he shall think beneficial to himself, and reject the remainder. 1 Parsons on Cont., 46, 47. As to the general rules of law on this subject, there is no difficulty ; but here, as ever, the difficulty lies in their application to the circumstances of particular cases.

In this case, the suit is against Alfred Maddux, on his single bill for $795,50, dated January 11th, 1855, payable on or before January 11th, 1856, with interest, to his brother, Martin Maddux, and by the latter assigned to the plaintiffs, who received thereon the sum of $200 on the 11th of March, 1856, and in this action claim the balance with interest. The facts and circumstances of the case, as disclosed by the evidence, will warrant, according as a jury may regard them, legitimate inferences on either side, of several important and vital questions. But, it appears from the uncontradicted testimony, that Martin Maddux, then engaged in business in Fauquier County, Va., came to Baltimore in April, 1855, and purchased from the plaintiffs, merchants of that city, goods to the amount of $1095.54, on which he paid $100 cash, and gave and assigned to them the bond sued on as collateral security for the bill; that afterwards in June, he made another small ⁴⁹⁵ purchase of five or fifteen dollars, and in October following paid §200 on account of the April purchase, and bought as agent for his wife, another bill oí' goods amounting to §1526, for which he passed to the plaintiffs, anote for §1009, payable in twelve months, signed by himself and his father-in-law, William E. Bartlett, and gave them his own note as agent for his wife, for §556, the balance of the purchase with interest on it for six mouths. In 1857, the plaintiffs sent to Barton & Williams, attorneys in Winchester, Ya., these two notes of $1000 and $556 for collection, and at the same lime, or subsequently, also sent them for collection a statement, showing the balance due on the account for which they held the bond sued on as security, but there is no positive proof they ever sent the bond itself to those attorneys.

Thus far there appears no important conflict in the testimony. It is also clear that Barton & Williams made a compromise or settlement with Martin Maddux, under which they received from him his four notes or bonds on time, with Bartlett as security thereon, amounting to about $1625. These notes they sent to the plaintiffs who received them, retained them, and have since, as we infer from the testimony, presented them as claims against Bartlett’s estate. The aggregate amount of these notes was less by more than $600 than the sum actually due the plaintiff's, including that secured by the bond in suit.

There is no direct proof the plaintiffs ever expressly authorized their attorneys to make any settlement or compromise, but it is beyond dispute a compromise was made. Whether it in fact embraced the debt secured by this bond, and if it did, whether there was evidence from which the jury could be left to infer, and find a confirmation or ratification of it by the plaintiffs, are the questions mainly controverted in the case, and raised by the exception to the rulings of the Court upon the prayers offered on both sides. These we shall now consider in their order. ⁴⁹⁶ It is conceded there was no error in granting the plaintiffs’ first prayer on the question of limitations. Nor do we find any error in the' granting of their second prayer.

It proceeds upon the assumption, the jury might find that the compromise actually made, did not embrace the indebtedness secured by this bond, but only the $1000 and $556 notes, and in that event there can be no question of the plaintiffs’ right to recover. The special objection appearing by the record to have been made to this instruction, is that there is no evidence legally sufficient to go to the jury to support it. In our judgment, after a careful consideration of the testimony bearing on that subject, there is evidence from which the jury may be allowed to infer and find the facts which this prayer states. We do not propose to comment upon the testimony in this respect, or to intimate that the jury may not properly find the compromise was as comprehensive as contended for by the appellant, but merely say it is not a case in which they should be instructed that there is no evidence legally sufficient to support the hypothesis of the prayer.

Except in the particulars to be presently noticed, we find no error in the granting of the plaintiffs’ third prayer. That a compromise and settlement such as this prayer submits to the finding of the jury, would be no bar to a recovery on this bond, unless they should find the plaintiffs expressly authorized their attorneys to make it, or with full knowledge of all the facts, ratified and confirmed it, is a proposition which cannot, in our judgment, be successfully controverted. The authorities already referred to sustain it, and many others might be cited in its support. It is not within the scope of his usual employment for an attorney thus to settle and compromise the claims of his clients; nor does the client hold him out to the public or to his debtors as having competent authority for that purpose.

The authority with ⁴⁹⁷ which he is clothed by his office, and which the public know and recognize him as possessing is to enforce the claims of his clients by resort to legal proceedings, and through the instrumentality of the constituted tribunals of justice. He has no implied authority to compromise and settle claims in this way. If, therefore, he makes, without express authority, a compromise like the present, it is unauthorized, and must be governed by the general law of principal and agent, that in such case the former is not bound unless after full knowledge of the transaction he ratifies it. Story on Agency, sec. 244.

But it is by no means necessary there should be any positive and direct confirmation. By far the largest class of ratifications of' unsealed contracts arises by implication from the acts and proceedings of the principal in pais. It may be presumed whenever the acts and conduct of the principal are inconsistent with any other supposition than that he intended to ratify the transaction. In many cases it may be inferred from his receiving and holding the fruits of the contract.

Long acquiescence also, without objection,*and even silence of the principal, will, in many cases, amount to a conclusive presumption of the ratification of an unauthorized act; especially where such acquiescence is not otherwise to be accounted for, or such silence is either contrary to the duty of the principal or has a tendency to mislead the agent. Thus, for example, if an agent without authority should compromise a debt of his principal, who after knowledge of the fact should make no objection, but acquiesce for a length of time in the act, he will be bound by it. Story on Agency, secs. 253, 254, 255, '255a. Numerous other instances of presumed ratifications might be cited, but these will suffice for the purposes of this case.

From these well settled principles of the law of principal and agent, it seems clear the plaintiffs were not bound by this compromise if made without express authority unless the jury should ⁴⁹⁸ find that after full knowledge of all the facts they ratified and confirmed it. - If the prayer under consideration had stated this legal proposition clearly and broadly there would have been no error in it. But it appears to us to be faulty in two particulars. First, it tells the jury if they find the facts stated in the second prayer, and shall further find the compromise did embrace the debt secured by this bond, then, &c. Now, one of the facts, and, indeed, the main fact left to their finding by the second prayer, is that the compromise did not extend to this debt.

They were thus required to make two opposite and inconsistent findings, from which the legal result asserted by the prayer would follow. This, in our judgment, was well calculated to mislead and confuse the jury and is a fatal defect in this instruction. Secondly, the jury were instructed that the compromise was no bar to the action if made without express authority, unless they believe from the evidence the plaintiffs were informed by their attorneys of the settlement, &c. But from the authorities cited it is quite clear it makes no difference whether they gained this information from their attorneys or in any other way.

The jury should not have been thus restricted as to the source of information, but should have been allowed to find ratification with knowledge, from all the facts and circumstances of the case as disclosed by the testimony. There was error in granting the plaintiffs’ fourth prayer, by which among other things, the jury were told there was no evidence that the plaintiffs ever ratified and confirmed the compromise. In our opinion there is evidence from which the jury might be allowed to infer and find a ratification with knowledge. Here again, it is not our purpose to comment upon the testimony from which this inference may be made, or to intimate an opinion that it ought to be made by the jury.

It suffices to say it is not a case which, in this respect, should be withdrawn from their consideration. ⁴⁹⁹ There was also error in