Chicago Building Society v. Haas

Mr. Justice Dickey delivered the opinion of the Court: This is a bill to impeach a decree between the same parties,-for fraud in procuring the same. The grounds relied on to establish the fraud are, that Leary, the solicitor of the complainants in this ease, for the sum of $356 paid him by the building society, sold out his clients, and entered into a stipulation that a decree should be entered against them for the sum of $24,785.56, (a sum much greater than they owed,) without their knowledge or consent, and that the society had notice, before taking its decree for the sum agreed upon by the solicitor, that he had no authority to make such stipulation. There can be no question as to the treachery of the solicitor to his clients, and it may be that he imposed upon the officers of the building society, and obtained money from them by false pretences or representations; but if they were ignorant, at the time, of the falsity of his representations, there was enough to cause them to suspect his fidelity to his clients. At any rate, before filing the stipulation and taking their decree they had knowledge of the solicitor’s want of authority to make the stipulation. Charles B. Brooke, secretary of the society, testifies that about October 23, 1874, Leary came to the office of the society and proposed a settlement of the litigation, stating that Mrs. Haas had no further defence in the matter; that she had given him a quitclaim deed of the property, in order to assure him that he would he right in all he did, so that he acted not only in that capacity, but also as her attorney; that a large loan had been made some time previous, in anticipation of a settlement, and it was lying in bank at his credit, and that if the society would come to an agreement as to figures, he would bring a certified check; that on the next day Leary came again, and went over the figures, and agreed to them; that about two days later Leary called and said there was some interest or commission due upon the loan, and that he could not handle the money until that was paid; that this amount was $356, and neither he nor Mrs. Haas had the money just then to advance, and asked that the society advance this sum for a few days; that by the direction of some of the directors this sum was advanced to Leary, who gave his note therefor, and executed and delivered the following stipulation: [[Image here]] “D. J. Leary, as attorney for the above named defendants, and for himself, hereby stipulates and agrees with the Chicago Building Society that he holds a good and sufficient authority from Elizabeth and Valentine Haas, the aforesaid defendants, to make the following stipulation and agreements: It is hereby stipulated and agreed by Elizabeth Haas and Valentine Haas, that a decree of the said court be entered as of record in favor of the Chicago Building Society, for the amount of $24,785.56, due October 15, 1874, as soon as such decree can be drawn. And it is hereby further stipulated and agreed, that the said Elizabeth Haas and Valentine Haas, or D. J. Leary, as their attorney, will pay or cause to be paid .to the Chicago Building Society the sum of $30,000, on or before the 31st day of October, A. D. 1874, in which case the said building society hereby stipulates and agrees to control and procure three other trust deeds, securing an aggregate sum of $5000, together with a certain judgment obtained against the said defendants by the Chicago Building Society, and as soon as said decree can be confirmed by the court, to give the said defendants, or said Leary, as their attorney, a full and entire release of all claims now held by said society against the property involved in this suit, and all other property owned or possessed by the said defendants. D. James Least, Solicitor for Haas.” This stipulation bears no date, but the proof shows it was executed and delivered October 27, 1874, though not filed until November 24, 1874. With this stipulation, if made rightfully and by authority of the parties, the further taking of evidence before the master was unnecessary. That, alone, would settle the rights of the parties. Notwithstanding this, we find that on October 29, 1874, two days after this stipulation was given, Brooke, the secretary, appeared before the master, and was sworn to his deposition. At the close of Brooke’s deposition, the master entered a memorandum that the parties, “by their attorneys, announced that they did not desire to offer any further testimony.” Mrs. Haas had not then been examined, and this stipulation was not filed with the master, who filed his report October 30, 1874. On the same day a second stipulation was filed, agreeing that the evidence and master’s report then on file might be withdrawn, for the purpose of taking additional evidence before the master. It seems strange that the solicitor for the building society, with the first named stipulation in his hands controlling and settling the whole case, should consent to a re-reference of the case to take further evidence, if the stipulation was believed to have been given with the consent or authority of the adverse parties. The parties again went before the master, and on November 6, 1874, Brotike was recalled, and cross-examined at great length by Leary. On the same day Mrs. Haas testified in her own behalf, and was cross-examined fully upon the question at issue by the pleadings, but her attention was not called to this stipulation. From the facts stated in Brooke’s affidavit, made December 22, 1874, to procure the arrest of Leary, and his testimony in this cause, it is evident that the stipulation would never •have been obtained unless Leary had got the $356. It is said that the decree in the original case was not made upon this stipulation. There is no direct proof as to this, but the fact that the decree is for precisely the sum named in the stipulation on file at the time of the hearing, makes it evident that the court did not overlook the same. It was before the court, and the court decreed in accordance with it; and this court, when the cause was before us, (80 Ill. 248,) held that the decree entered was entered by consent. There is no doubt but that the Haas had a meritorious defence to the cross-bill. It seems to be conceded that the notes and trust deeds contained usurious interest; but it is contended that it is competent for an attorney to waive such a defence for his client. This the attorney may do when his client makes no objection, and he acts in good faith; but no court can ever sanction the doctrine that an attorney has the power fraudulently -to barter away any of his client’s rights to the opposite party. On the contrary, it is the duty of the courts to protect suitors from the fraud and treachery of their attorneys or solicitors, so far as possible; and a party having knowledge of an attorney’s. fraudulent purpose or want of authority, can not profit from his acts to the injury of his client. In this case we hold, with the circuit court, that the stipulation from Leary was the result of fraud and collusion between the appellees’ solicitor and the officers of the appellant, and that the filing of the same in the cause without the knowledge or consent of appellees, was a fraud, not only upon appellees, but also upon the circuit court and upon this court when the case was presented for consideration. It is also objected that the appellees were barred of relief by laches in bringing their bill and bringing it to a hearing. A party has, by law, the same time in which to file a bill of review to set aside a decree as he has to prosecute a writ of error, unless there be special facts requiring more prompt action. Perceiving no substan~ia1 error in the record, the judgment of the Appellate Court will be a~ffirmed. Jztdgrnent ctlirmecl.