Township of North Whitehall versus Keller

Supreme Court of Pennsylvania1882-03-27

100 Pa. 105

Summary · law.co

Holding. The judgment of the court below was affirmed. An attorney acting without express authorization from the client cannot bind the client by accepting partial payment as full satisfaction of a debt, and the court will not enforce such a compromise when the client repudiates it and the opposing party is without equity.

An attorney for a client named Keller received a partial payment on a judgment against the Township of North Whitehall and issued a receipt in full discharge of the claim without explicit authorization from his client. The court examined whether an attorney possesses inherent power to compromise or settle a client's claim by accepting less than the full amount due. The court determined that while attorneys possess broad authority to conduct lawsuits, including power to confess judgments during pending litigation, they lack independent power to remit portions of a client's claim or give away the client's property without authorization. The court noted that even when an attorney acts unreasonably, courts may grant relief to clients harmed by such unauthorized conduct.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether an attorney may compromise or settle a client's claim without explicit authorization
The scope of an attorney's implied authority in debt collection matters
Whether courts will enforce unauthorized compromises by attorneys
The effect of a client's repudiation of an attorney's unauthorized settlement

Procedural posture

The court below issued a ruling favorable to the plaintiff, and the defendant appealed, challenging the enforceability of the attorney's unauthorized compromise.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Mr Justice Gordon

delivered the opinion of the court, March 27th 1882.

The only question in this case is the one involving the power of an attorney at law to give an acquittance in full of his client’s claim against a debtor, on receipt of part only of that claim. "We readily admit all that has been said as to the very general authority conferx’ed xxpon attoxmeys at law in the conduct of suits; their power of reference, to confess judgxnents and coxxtral executions. But there is a limit to this power ; it is created for specific, not general pui’poses. When a claim .is put into the hands of an attorney for collection, without further instruction, it is generally understood to be for the purpose of having it enforced by legal process, and it is not presuxned that the attorney either can or will, without process, compioxnise and settle it on such terms as either his judgment or capx’ice may dictate. We do not say that such power can never be exercised by the attorney, without express warrant froxn his client, for an ixnplied power may result froxn the character of the claim requiring collection, and the circumstances connected with it. So, if on the tx’ial of a case the attorney should consent to a judgment less tlxaxx the amount due, a court would xxot ordixxarily, in x-elief of tlxe.cliexxt, set aside such judgment. But in. such case, in the conduct of a pending suit, the power of the attorney to direct and control it is xmdoubted. Nevertheless, even in the exaxnple when the act of the attorney has been obviously wrong, and where the rights of the client have been sexlously compromised, the court, notwithstanding the judgment, ought to grant relief. Marshall, C. J., in Holker v. Parker, 7 Cranch 452. Compromises by attorneys, in the absence of and without the assent of their clients, are not looked upon with favoi’, though, as was said in the case just cited, where the compromise is reasonable and fair a court will not disturb it. Still it remains, as was said by Mr. Justice Woodward, in Stokely v. Robinson, 10 Cas. 315, that “ the principle is that the comprcmise, being an unauthorized act, is void,” and this, though it may assume the forux of an award. To a like effect are the cases of Huston v. Mitchell, 14 S. & R. 307, and Stackhouse v. O’Hara’s Ex’rs, 2 Har. 88, in both of which cases the attorneys had agreed to take land in satisfaetioxx of the debts of their cliexxts. But it is useless to multiply authorities, for each case must be controlled, more or less, by its own peculiar circumstances, and it is not possible to express in a general rule that which will embrace all cases. It is enough for the present contention that courts have power to relieve clients from the unwarranted acts of their attorneys.

It can hardly be said that Keller was, by his attorney, compromised out of the interest due him on his claim against the township of North "Whitehall, for there was nothing on which to base a compromise. The confirmation of the award of damages was a final judgment, and bore interest of course; the pending action is but- part of an execution process to enforce payment, a result that might have been accomplished by mandamus from the Quarter Sessions. In re Sedgely Avenue, 7 W. N. C. 1.

There being, then, nothing to compromise, we need hardly say that the attorney had no power, of his own motion, to remit part of his client’s judgment without pretence of equivalent; an attorney cannot thus give away his client’s property. More than this, the defendant is utterly without equity. The supervisors knew that Mr. Stiles was acting without his client and with hesitation ; saying to them that he did not understand the matter and that Keller ought to be present to sign the receipt. Furthermore, a day or two after the payment, Stiles, having ascertained that his client refused to ratify what he had done, made a re-tender of the money, which the counsel for the defendant and its officers refused to accept. There was thus an effort made by the plaintiff’s attorney to restore the defendant to the same position which it occupied when payment was made, and that this effort was not successful resulted from no default of the plaintiff, but from the refusal of the agents of the defendant to accept the offer thus made to them. We are thus brought to the conclusion that in the rulings of the court below, there has been no departure from the principles of either law or equity.

The judgment is affirmed.