Isaacs v. Zugsmith

Mr. Justice Tkunicey delivered the opinion of the court, [80] An Auditor was appointed by the Court'of Common Pleas to audit the account of Solomon Isaacs, assignee of Isaac S. Isaacs, who had assigned in trust for his creditors, and to distribute.the balance in the hands of the accountant. Nearly all the creditors having signed an agreement that the account as filed should be confirmed, the balance divided pro rata, and that they would release the assignor from all further claims on account of their debts, it being understood that the balance was about ten per centum of the amount of the debts, and none objecting, the Auditor merely made distribution. Zugsmith did not sign the agreement, and was not present at the audit; but his attorney was present, and after confirmation of the report, received- the dividend for his client. There is no evidence that Zugsmith 'Pad any knowledge of what passed before the Auditor in relation to a compromise by the creditors, or of Mrs. Isaacs’ release of part of her claim to induce the compromise, or that his attorney had any authority other than is implied by the relation of attorney and client. This is not the case of a creditor who orally agreed to a compromise and wittingly received the per centum on the same footing with the other creditors; but it is where the attorney appeared for his client before an Auditor appointed in course of legal proceedings, in pursuance of due notice, and made no objection to what was said and done by other creditors. The plaintiff in error contends that the creditor is affected as if he had been personally, present and afterwards took the dividend, on the ground that by taking it ho adopted the implied contract of compromise made by his attorney before the Auditor. Not a circumstance indicates that the attorney had power to compromise. He was an officer of the court attending to his client’s business in a legal proceeding. His duty was to see that a proper share of the fund was appropriated to the claim. That he did. Authority to compromise cannot be inferred from the bare relationship of attorney and client: Mackey’s Heirs v. Adair, 39 Leg. Intell. 34. Persons dealing with an attorney-at-law respecting his client’s business, may justly infer that he has all the power implied by the relation, fiut not that he has the powers of a general agent to compromise and release debts, or transfer and convey the goods or lands of his client. There must be some proof of agency beyond that implied by the relation, or of a ratification, to bind the client by acts of his attorney not within the scope of his duties as an attorney. The adjudication on its face shjows no distribution of money in excess of the balance in the hands of the accountant, no release of part of any creditor’s claim, no warning to a creditor who was not a party to the agreement that his attorney had compromised his rights. It was not the duty of the attorney [81] to inform his client of agreements between other people. The creditors were notified to attend before the Auditor, for settlement of an account and distribution of the balance, not for compromising with their debtor. Had tlie client, in pursuance of an express notification fora meeting of the creditors to make a composition, attended by attorney, there would be some reason to infer that the attorney had authority to act, and for holding that his knowledge, obtained while acting within the scope of his duties, would be imputed to his client. As the case stood before the court, foundation had not been laid for admission of the offers of testimony which were rejected. Judgment affirmed.