Mallory v. Mariner , 15 Wis. 172 ( 1862 )

By the Court,

PAINE, J.

This suit was brought to restrain ' the defendant from proceeding in a suit to foreclose a mortgage, and to compel him to discharge the mortgage, upon the ground that it had been paid. The material facts in the case are as follows : Mariner & Pratt, a law firm in Milwaukee, were employed to collect a claim against Barlow & Co. in Walworth county, which claim was owned by parties in New York. The mortgage in question was given as security on a settlement of that claim, and was executed to Mariner in his own name, for the purpose of facilitating its discharge. A foreclosure suit was afterwards commenced, and Pratt, not wishing to wait until the case was reached at the May term of the Walworth circuit in 1858, employed Carpenter, a lawyer at Elkhorn, to attend to the case. “ At the same time,” he says, “ I instructed him that if the parties would give a good indorsed note or bank acceptance at ninety days, and pay all costs, I would take it, as I bad had some with Mr. Barlow (a son-in-law of Mallory,) for whose debt these notes were given, about settling the matter in that way.” No decree was obtained at the May term, and no settlement was made, and the notes and mortgage were af-terwards returned by Carpenter to Mariner & Pratt, but at the next September term were again forwarded by them to him, with a letter instructing him to get a decree, but saying nothing in regard to a settlement. He did however then make a settlement, receiving in payment a draft at sixty days for the greater part of the debt, and the balance in money and notes against third parties, and gave up the mortgage. Mariner afterwards repudiated this settlement, claiming that Carpenter had no authority to make it, and refused to discharge the mortgage of record, on request.

The whole merits of the case depend on the question whether Mariner was bound by the acts of Carpenter. He claims that he was not, and relies on the general rule that an attorney employed merely to bring a suit to collect a debt, has no authority to compromise it, or to extend the credit, or exchange the old securities for new. This principle he claims to be twice applicable in the case — first, to the authority of Mariner & Pratt, as attorneys for Bruft Brothers & Seaver, who owned the claim; next, to the authority of Carpenter, who was employed by them. The first application fails, for the reason that it must be assumed from the evidence that the authority of Mariner & Pratt was something more than that of mere attorneys to sue and collect the claim. There is no evidence as to what were the specific instructions to them from Bruff Brothers & Seaver, but it appears that in acting under those instructions they negotiated a settlement of the claim, upon which this very mortgage was executed as a security. This is fully sufficient, as against them, to warrant the inference that they had more enlarged powers than those of mere attorneys, and that they still possessed the same powers to' settle, the exercise of which had first called this mortgage into existence. And it is also obvious that Pratt must be held to have had the same authority as Mariner, as both were mere agents, as of the eastern firm.

The question then remains, whether, upon the evidence, they were bound by the acts of Carpenter. It must' be conceded that if Carpenter had been employed by them merely to attend to the foreclosure suit, they would not have been bound by the settlement which he made. It must also be conceded that the letter of instructions sent to him at the September term, when the mortgage was last forwarded, contains no other authority than that of an attorney to conduct the foreclosure suit Yet although, as between him and his employers, this might be regarded as a restriction of the authority which had previously been conferred upon him to settle the claim and take new securities, we think it cannot be so regarded to the prejudice of the rights of the mortgag- or, who acted, so far as appears, in good faith, upon a knowledge of the previous authority, and without any knowledge that it had been in any degree restricted. The testimony of Pratt, that at the May term he authorized Carpenter to settle and take new paper, has already been quoted. Barlow also testified, that at that time Pratt told him “ he should leave the note with Carpenter to settle.” Barlow also says that he “ took it of course ” that he “ was to deal with Carpenter,” which was entirely natural and evidently what Pratt intended to have him understand. And there can be no doubt that if the settlement which was afterwards made, had been made at or about that time, Mariner & Pratt would have been bound by it. And we think that the mortgagor, and Barlow acting for him, had the right, although no settlement was immediately made, to assume that Carpenter still had the same authority which they had once been notified that he had, so long as they found the mortgage still in his po-session and had no notice that his authority had been in any manner abridged. There was no notice originally that the authority was limited to any particular time, and it was undoubtedly intended to be left open, as is usual in such cases, so that the parties might negotiate until they could come an understanding mutually satisfactory. It is evident that Barlow so understood it, and we think he had a right so to understand it, and that having dealt with Carpenter in a manner evidently within the scope of the authority which had once been notified that Carpenter posessed, in good faith, that dealing must be held binding upon Mariner. This conclusion is fully supported by the well established rules which hold the principal liable for "such acts of the agent as he has held the agent out to the world as having authority to do, notwithstanding private instructions to the contrary, and liable to one dealing in good faith with an agent whose authority had been revoked, but of which the party dealing had no notice.

The judgment must be affirmed, with costs.