Nephew v. Michigan Central Railroad

Grant, J. (after stating the facts). Authority to settle a lawsuit does not imply authority on the part of the attorney to make contracts for future employment. [602] Mr. Russel, the attorney for the company, had nothing whatever to do with operating the road, or the employment or discharge of employés. His sole duty was connected with legal matters. Corporations usually have such a general attorney, to whom they refer their legal matters, and ask for advice. His authority is limited to what is customary or necessary in such transactions. Mechem, Ag. §§ 285, 286; Upton v. Suffolk County Mills, 11 Cush. 586 (59 Am. Dec. 163). No authority is cited holding that an attorney at law is, by virtue of his employment, authorized to settle a suit against his client by entering into life contracts, or any contract affecting the future status between the claimant and the client. This contract is a most unusual one, to sustain which the proof should be clear and explicit. One seeking to uphold such a contract must show either express authority in the agent to make it, or a clear ratification. Neither is shown. In Gamacho v. Engraving Co., 37 N. Y. Supp. 725, it was held, in regard to even a general manager, that no presumption exists that he has “the power to bind his principal to contracts of an extraordinary nature, and of such a character as would involve the corporation in enormous obligations and for long periods of time.” It has been held that even directors have no authority to make contracts beyond the statutory terms of office. Carney v. Insurance Co., 162 N. Y. 453 (57 N. E. 78, 49 L. R. A. 471, 76 Am. St. Rep. 347). This case is expressly ruled by Maxson v. Railroad Co., 117 Mich. 218 (75 N. W. 459), where we distinguished and limited the application of the case of Brighton v. Railway Co. 103 Mich. 420 (61 N. W. 550). Judgment affirmed. The other Justices concurred.