Case Name: Thomas G. Patterson, Appellant, v. John P. McGovern, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1899-11
Citations: 44 A.D. 310
Docket Number: 
Parties: Thomas G. Patterson, Appellant, v. John P. McGovern, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 44
Pages: 310–313

Head Matter:
Thomas G. Patterson, Appellant, v. John P. McGovern, Respondent.
Estoppel—acts which ratify an unauthorized act of an agent — detriment to one acting in reliance thereon. ' t
After a judgment foreclosing a mechanic’s lien had been affirmed by the Court of Appeals and a sale had been bad thereunder, the attorneys for the respective parties agreed that all the judgments, including the deficiency judgment which had not yet been entered and the exact amount of which could not be ascertained until the filing of the referee’s report of sale, should be satisfied . upon the payment of a certain sum, to enable the defendant to raise which the sureties upon the undertakings given on appeal released certain securities given to indemnify them. A check for the amount agreed upon was delivered to the plaintiff’s attorney, who; in exchange therefor, delivered to the defendant’s attorney satisfactions of the judgments then entered and an agreement that, upon the filing of the referee’s report, any judgment for a deficiency would be immediately satisfied.
A few days afterward the plaintiff informed the defendant’s attorney that he had not received the Check, and the plaintiff was then fully informed of what his attorney had clone on his behalf. The plaintiff subsequently obtained possession of the check and cashed it. Thereafter the referee filed his report, to which the defendant, having no interest in the amount of the deficiency, took no exception. Nearly two months after collecting the money on the check the plaintiff made a motion to discharge the satisfactions and for leave to issue execution.
Held, that the motion was properly denied;
That, assuming that the agreement made by the plaintiff’s attorney was unauthorized, the use of the check by the- plaintiff with full knowledge of such agreement, operated as a ratification thereof,, and for the further reason that the position of the defendant and his sureties had been changed to their detriment by the act of the plaintiff.
Appeal by the plaintiff, Thomas G. Patterson, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the' 7th day of July, 1899, denying the plaintiff’s motion to set aside a satisfaction of judgment and for leave to issue execution- thereon.,
Pierre M. Brown, for the appellant.
John Vincent, for the respondent.

Opinion:
McLaughlin, J.:
This action was brought to foreclose a mechanic's lien on certain premises in the city of New. York, and on the 10th of January, 1895, judgment was rendered establishing the amount due the plaintiff at $8,215.11, and directing that the premises be sold to satisfy the same. The defendant appealed from the judgment to the late General Term, which affirmed the same, with costs, and.from such affirmance an appeal was taken to the Court of Appeals, which also affirmed, with costs. An undertaking on each of the appeals was given by the defendant with two sureties, one undertaking to pay any deticiency arising upon the sale and the costs of the appeal to the General Term, and the other to pay the costs of the appeal to the Court of Appeals, and to indemnify the sureties the defendant deposited certain securities to cover their liability. After the affirmance of the judgment by the Court of Appeals,, and on or about the 22d of March, 1899, a sale was made, by the referee .appointed in the judgment, for $8,250 and a deed was given. It was then known that there would be a deticiency, the exact amount of which could not be ascertained until the referee's report had been filed and his fees and disbursements ascertained. After the sale and before the referee liad filed his report, negotiations were had between the parties looking toward the-payvnent of a certain sum in satisfaction of the three judgments, and whatever deficiency there might be, without waiting until the referee's report had been filed and the exact amount of the deficiency ascertained. ' As the result of such negotiations it was finally agreed between the attorneys for the respective parties that all the judgments, including one for the deficiency, would be satisfied for $2,329.30; and to enable the defendant-to raise this sum the sureties upon the undertakings permitted him to use the securities which had been deposited to indemnify them. In pursuance of this arrangement the attorneys for the parties met on the twenty-fifth of March, three days after the sale, and the plaintiff's attorney then delivered to the defendant's attorney a satisfaction of the original judgment, executed by the plaintiff himself, and satisfactions of the other two judgments, executed by the attorney for the plaintiff, and also an agreement that, upon the report of the referee being filed, any judgment for deficiency would he immediately satisfied ; and in exchange therefor he received a check payable to the order of the plaintiff for $2,329.30, the amount theretofore agreed upon. On the thirtieth of March, the plaintiff through another attorney informed the defendant's attorney that the check referred to had not been delivered to the plaintiff, that lie feared his former attorney had collected the check and used the money, and he requested, if the check had not been paid, that payment be stopped. The plaintiff, through his attorney, was then informed of just what had been done, of the amount of-the check and that satisfactions of the* judgments, including the deficiency, had been given in exchange for it. Payment of 'the check was stopped as requested. Some days thereafter the defendant was notified through his attorney theft the check had been recovered and that payment was- desired. . A direction to this effect was given to the bank upon which it was drawn, and the plaintiff thereafter indorsed it and received from the bank the money called fo'r by it. On the fifth of April, tile referee filed his report which showed that he had retained the sum of $250 for his fees; and on the twenty-fourth of the same month he made an application to amend his report so as to increase his fees $126.17, which motion was granted and the report amended accordingly. The plaintiff filed exceptions to the report but had not brought them on for a hearing when the order appealed from was made. On the twenty-third of May,- nearly two months after the money was collected on the check, the plaintiff made a claim that the defendant was liable for the deficiency arising on the sale, aid the defendant refusing to recognize sii'eh claim, the plaintiff made a motion to discharge the satisfactions' given and" for leave to issue execution.
The motion was denied, and we think properly. There is. no doubt about the general rule that an attorney, as such, has no authority, either express or implied, to satisfy a judgment except on payment of the full amount thereof, but such rule has iio application to this case as presented in the record before us. Whether the plaintiff knew of the agreement made by his attorney at the time tire settlement was made and the check and satisfactions given it is unnecessary to consider. The use of the check by him with full knowledge of what had been done by his attorney and of the purpose for which the check was given, ratified the act of the attorney and as effectually bound the plaintiff as. though he had previously authorized the attorney to do just what he did. The position of the defendant, and his sureties upon the undertakings, had been changed by the' act of the plaintiff. They had been led to believe that the satisfactions would relieve them from liability by reason of the deficiency. The defendant, therefore, had no interest in its amount, and he did not except to the referee's report; and the sureties had released the securities which they had held to indemnify themselves. The sureties are now without any indemnity, and if the motion had been granted they, of course, would have been liable under their undertaking. It would be manifestly unjust and unfair, both to the defendant and the sureties, upon the facts stated in this record, to set aside the satisfactions of the judgments, and to permit the plaintiff now to issue an execution for the deficiency. If the plaintiff were not satisfied with the settlement as made, he should have returned the check, unused. Having used the check he must be held to have acquiesced in what his, attorney had done.
The order is right and must he affirmed, with costs;
Van Brunt, P_ J., Barrett, Rumsey ana Ingraham, JJ., concurred.
Order affirmed, with costs.