Court Opinion

ID: 6967482
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:56:27.267994+00
Date Added: 2024-06-11T16:08:40.462676
License: Public Domain

Mr. Justice Magruder delivered the opinion of the court: This court has decided, that the appellee was entitled to the relief prayed for in the original bill, that is to say, that he was entitled to have paid to him by appellant the $750.00 of purchase money, and to have transferred to him said note for $3690.00, and the trust deed securing the same. The question then arises, whether the facts set up in the supplemental answer constitute a defense against the granting of the relief prayed for in the bill. Appellant contends, that appellee released his right to the $750.00 and to the note for $3690.00 by accepting the bond for $4500.00. Appellee claims, that the bond never was accepted as a release or discharge of appellant from his liability to pay the $750.00 and the note of $3690.00 to appellee. Upon this question of fact there is a sharp conflict in the testimony. The testimony of appellee tends to show, that the consideration, for which the bond was given, was merely that appellee should take no steps to apply to the Appellate Court for a continuance of the injunction; and that neither appellee, nor his solicitor, ever intended to release appellant from his obligation to pay the note and money to appellee, or ever intended that the note should be paid to the defendant, Hartman. Upon this question of fact the lower courts have decided in favor of appellee. After a careful examination of the evidence, we are unable to say that the finding of the lower courts is against the weight of evidence, and therefore decline to disturb it. The bond was never delivered to the appellee. It was executed and handed to appellee’s solicitor before appellee knew anything about it. It was some time after the delivery of the bond to his solicitor before appellee knew, that any such bond had been executed or delivered to his solicitor. None of the transactions in reference to the bond took place between any of the defendants and appellee, but only between the defendant, Hartman, or his solicitor, and appellee’s solicitor. Appellee’s solicitor told him a few days after the execution of the bond, that such a bond had been executed, but, in connection with this statement, he told appellee that it was not necessary to continue the injunction in the Appellate Court, as the note was overdue, and the pendency of the suit was a sufficient protection. He told appellee, that the solicitor on the other side had left the bond with him, and that he did not know whether it was of any account or not, but that he considered it an additional security; and that appellee had lost nothing by its delivery, but had gained a point. Appellee’s solicitor swears, that he did not tell Helberg that appellant was released by the taking of the bond, or that anybody was released or discharged thereby. It is furthermore established by the testimony, that, before Mrs. Hartman began suit against appellant upon the note, appellant caused application to be made to appellee to release some of the property covered by the trust deed, and appellee declined to do so. There is no evidence whatever in the record, that appellee ever authorized his solicitor to accept this bond as a substitute for the liability of appellant to pay the §750.00 to appellee, and to pay to appellee the amount due on the note for §3690.00. Furthermore, there is no evidence in the record, which at all establishes the fact, that appellee ratified, or in any way approved, of the taking of said bond as a substitute for such liability, and as a release of appellant, even if his solicitor had agreed to take it as such substitute or as such release. An attorney has no authority, by reason of his general retainer in a suit, to discharge a debtor to his client, or to accept anything other than money in payment of his client’s debt. He must have special authority from his client to settle a debt due to the client otherwise than by the payment of money. (Trumbull v. Nicholson, 27 Ill. 149; Nolan v. Jackson, 16 id. 272; Wetherbee v. Fitch, 117 id. 67). An attorney has no power, without express authority, to bind his client by a compromise of a pending suit, or other matter, intrusted to his care. An executory agreement to compromise a suit, made by an attorney, does not bind the client, unless the latter ratifies such agreement after full knowledge of all the facts. The attorney has no implied authority to compromise his client’s claim, or to release his client’s cause of action. He cannot bind his client by any act, which amounts to a surrender, in whole or in part, of any substantial right. He cannot commute a debt, or materially change the security, which his client may have, without his consent; nor has he the power to assign or sell a claim or judgment of his client without special authority. (3 Am. & Eng. Ency. of Law, —2d ed.—pp. 358-360, 363; Mechem on- Agency, sec. 813; 2 Greenleaf on Evidence, sec. 141; Penniman v. Patchin, 5 Vt. 346; Benedict v. Smith, 10 Paige, 126; Smock v. Dale, 5 Rand. 639; Wilson v. Wadleigh, 36 Me. 496; Chapman v. Cowles, 41 Ala. 103; Wadhams v. Gay, 73 Ill. 415). Where an attorney, in making an agreement with the opposite party, compromises a claim for less than the amount due, or takes security of less value than that which already secures the claim, or accepts anything other than money in payment of the claim, such party is put upon inquiry as to the attorney’s authority to make such compromise or settlement; and, if he omits to make inquiry, or to demand the production of the authority, he deals with the attorney at his peril. (Brooks v. Kearns, 86 Ill. 547; Miller v. Lane, 13 Ill. App. 648; Weeks on Attorneys, sec. 240; Wharton on Agency, secs. 580-583; Campbell’s Appeal, 29 Pa. St. 401). In the case at bar, appellant charges, that appellee’s solicitor surrendered a claim for §750.00 against appellant who was a responsible party, and a note for §3690.00 secured by a trust deed upon land which was worth much more than the amount of the note, in exchange for a bond which was, to say the least, of very doubtful value. The transactions in regard to the bond were made out of court, and were not a part of the record in the pending suit. Appellant was bound to know, that appellee’s solicitor had no right to make any such surrender without special authority from appellee. Appellant should, therefore, have inquired as to the authority of the solicitor to make the arrangement; and, after it was made, it was his duty to inquire whether or not it had been ratified and accepted by appellee. When he applied to appellee for a release of the property covered by the trust deed and was met with a refusal, he was put upon his guard and was virtually informed, that appellee had not accepted the bond as a release of his liability. In addition to this, it is in proof, that, when appellant was sued upon the note by Mrs. Hartman, appellee’s solicitor advised him to defend against the suit, upon the ground that, if he paid the note to Mrs. Hartman, he might be obliged to pay it again to appellee. Moreover, if appellee’s solicitor surrendered this note and trust deed in exchange for this bond, the former was a security so much more valuable than the latter, as to render such solicitor liable to the charge of bad faith. It is a well settled rule, that agreements by an attorney, which are so unreasonable as to imply bad faith, will operate as notice of such bad faith to the opposite side, and will have no binding effect upon the client. (Ball v. Leonard, 24 Ill. 146; Weeks on Attorneys, sec. 220). It is not altogether clear, that the note sued upon by Mrs. Hartman was actually paid by appellant. The suit brought upon the note could have been defended by appellant. The note was never in the possession of Mrs. Hartman, and the suit, though brought in the name of Mrs. Hartman, was really a suit by Hartman himself. Appellant was advised by his own attorney, that he had a good defense to the suit. It appears, that appellant had some claims against Hartman growing out of old transactions. Hartman had sold some property for him, and failed to pay over some of the money due on account of such sale. The larger part of the payments made upon the note consisted of an application upon the note of these old claims against Hartman. There was thus an inducement on the part of appellant to regard Hartman as the owner of the note, in order that, by such application, he could secure payment of these other claims. Certainly he well knew, that the note and trust deed were claimed, on the one side by appellee, and on the other by Hartman. He owed the debt due upon the note, and has never been disposed, so far as we can discover, to deny his obligation to pay the note to somebody. When, therefore, appellee was seeking to recover the note by the chancery suit, and Mrs. Hartman was seeking to recover the amount due upon the note by a suit at law, he should have filed a bill of interpleader instead of paying the note to Mrs. Hartman. He would thereby have protected himself. He had a right to file a bill of interpleader under the circumstances stated. (Ryan v. Lamson, 153 Ill. 520; National Live Stock Bank v. Platte Valley State Bank, 54 Ill. App. 483; Curtis v. Williams, 35 id. 518; Livingstone v. Bank of Montreal, 50 id. 562). When appellant paid the note to Mrs. Hartman, if he paid it, the present suit was pending, and he and Hartman and Kuhns and Kintz and all the agents were parties to that suit. He thus had full notice of the claim of appellee, and was aware of the fact, that appellee was prosecuting the suit in the Appellate Court and in this court. It is undoubtedly a hardship upon appellant to pay the §750.00 and the note to appellee, if he has already paid them to Hartman or his wife, but, in view of the circumstances already stated, and for the reasons already given, he has no equity in the matter which is superior to the equity of appellee. Accordingly the judgment of the Appellate Court is affirmed. Judgment affirmed.