76 S.E. 222 | N.C. | 1912
The facts are sufficiently stated in the opinion of the Court by MR. JUSTICE WALKER. This case was brought here by the appeal of the plaintiff from an order upon a motion of the defendants to set aside a consent judgment, and presents the following facts:
Plaintiff, as a judgment creditor of S.M. McEwen, brought an action by the above title to impeach and set aside two deeds of trust, one executed on 16 October, 1909, by S. M. McEwen and his wife, Nannie B. McEwen, to G. L. Park, as trustee, to secure a debt due to W. J. McEwen for $2,500, which amount had been advanced to the plaintiff by said W. J. McEwen at the request and for the benefit of the defendant, S. M. McEwen, and the other executed on 18 October, 1909, by the said S. M. McEwen, to T. E. Parker as trustee for the benefit of Nannie B. McEwen, to secure the payment to her of $2,500, which she had (417) loaned to her husband, S. M. McEwen. Issues were submitted to the jury and answered as follows:
1. Was the deed of trust from S. M. McEwen and wife to G. L. Park, trustee, on 16 October, 1909, made with the intent to hinder, delay, defeat, and defraud the plaintiff? Answer: Yes.
2. If so, did W. J. McEwen have knowledge of said fraudulent intent and participate therein? Answer: Yes.
3. Was the deed of trust from S. M. McEwen and wife to Eugene Parker, trustee, on 18 October, 1909, made with intent to hinder, defeat, delay, and defraud the plaintiff? Answer Yes.
4. If so, did Nannie B. McEwen have knowledge of the fraudulent intent of her husband, S. M. McEwen, and participate therein? Answer: Yes.
Judgment was entered upon the verdict, to the effect that the deeds of trust should be canceled, and defendant W. J. McEwen having moved in apt time to set aside the verdict to the extent that it affected his interests adversely, and the judge having intimated that he would grant the motion, the plaintiff's and defendant's attorneys agreed, at the suggestion of the court, that the equities of the parties should be adjusted and *341 settled upon the following basis: The issue of fraud as to W. J. McEwen to be set aside and the land described in the deed of trust to G. L. Park to be sold and the proceeds of sale to be applied, first, to the costs of the action, and the balance to the payment of the debt of $2,500 due to W. J. McEwen, and then to the payment of the judgment creditors, and any surplus to be paid to Nannie B. McEwen. This agreement was inserted in the consent judgment, which was signed by Judge Lyon and the attorneys of the respective parties at Fall Term, 1911. This judgment was entered without the knowledge or consent of Mrs. Nannie B. McEwen or her husband, and without any authority given by them, or either of them, to their attorneys to consent to the judgment, and really against their consent. These defendants, after having successfully applied for an injunction to Judge W. J. Adams, moved beforeJudge F. A. Daniels, at Spring Term, 1912, to set aside the (418) consent decree because they had not, in fact, agreed thereto, and had given no authority to their attorneys to do so. Judge Daniels found and stated the facts in his judgment upon the motion, and among others, that the attorneys acted without authority; but instead of setting aside the judgment in toto, he modified it by striking out so much of it as directed that a part of the proceeds of the sale of the second tract of land be applied to the payment of the judgment creditors of S. M. McEwen, and then proceeded to order a sale of the land first described in the deeds of trust, for the purpose of paying the costs and the debt of $2,500 due to W. J. McEwen, and if the proceeds of that sale should prove insufficient for the designated purpose, then that the tract last described should be sold to pay any balance due, with a direction that the surplus, if any, should be paid to S. M. McEwen and wife, Nannie B. McEwen. Plaintiff excepted to this judgment, and appealed.
The learned judge was manifestly right in holding that so much of the alleged consent judgment, signed by Judge Lyon, as did not receive the consent of the defendants S. M. McEwen and wife, Nannie B. McEwen, and which prejudiced their rights, was not binding upon them; but instead of amending or reforming the judgment, he should have set it aside altogether. It appears that the defendants McEwen and wife held the land by entireties, and it is insisted by their counsel that it could not be sold to pay the judgment creditors of the husband, unless with the consent of both, and only to the extent that they had encumbered it, and the court could not sell it without their consent, which was no given. They rely on Bruce v.Nicholson,
It is found by Judge Daniels that defendants McEwen and wife never consented to the judgment, and that counsel had no authority to consent for them. This was known to plaintiffs at the time the consent judgment was entered, for it was stated in open court by defendants' counsel that they had not consulted with their clients in regard to the proposed consent judgment, as they lived at a great distance, in Tennessee, and there was no chance of doing so. Where the relation of attorney (420) and client exists, the law of principal and agent is generally applicable, and the client is bound, according to the ordinary rules of agency, by the acts of his attorney within the scope of his authority. 4 Cyc., 932. *343
The power of an attorney with reference to the release of his client's interests is fully considered in Hall v. Presnell,
In Savory v. Chapman, 39 E. C. L., 242 (11 Ad. Ell., 829), JusticePatteson lays down the law upon this subject very clearly and succinctly, and what is stated in the same case by Justice Coleridge is so appropriate to the facts in our record that we quote it as he said it: "A party is bound to know the legal qualifications of persons filling certain employments. The question, therefore, turns on the authority of the attorney; and there is nothing here to show that he had any, either in his general character or with reference to the circumstances of the suit. He could, *344
as it appears here, be only an agent de facto; and there is nothing shown to make him one for the present purpose." It seems, therefore, to be the generally accepted doctrine that an attorney charged with the collection of a debt, has no power, in virtue of his general authority, to do any act which will either release his client's debtor or his surety, nor can he materially jeopardize his client's interest in any way. An attorney at law is an officer in a court of justice, who is employed by a party in a cause to manage the same for him (4 Cyc., 897), and his client is concluded by his acts done within the range of his authority. "An attorney's authority is not limited to the mere prosecution of the suit, but extends to everything necessary to the protection and promotion of the interests committed to his care, so far as they are affected by proceedings in the court where he represents his client." 4 Cyc., 934, and cases cited. An attorney cannot compromise his client's case without special authority to do so, nor can he, without such authority, receive in payment of a debt due his client anything except the legal currency of the country or bills which pass as money at their par value by the common consent of the community. A subsequent ratification of the acts of the attorney is equivalent to a special authority previously granted to do those acts, but it must be the ratification of the (422) client himself and not of his agent. Moye v. Cogdell,
In Alspaugh v. Jones,
An attorney may submit his client's cause to arbitration without his knowledge or consent, as this is one of the modes of trial, and the client's assent to it is implied, and if it is wrongfully done, the client's remedy is an action against the attorney for damages (Thomas v.Hews, 2 C. M., 327); but he cannot compromise his client's case without his authority. Halker v. Parker, 7 Cranch, 436. These principles were approved and applied in the leading case of Morris v. Grier,
Mr. Weeks says an attorney, in the management of a suit, has a very extensive authority, which springs from his general retainer. He has the free and full control of a case, in its ordinary incidents, and to this extent he is not bound or required to consult his client (section 220), and that an agreement to refer the cause, or to arbitrate, comes within the scope of the attorney's general authority, the weight of authority being to the effect that he cannot compromise his client's interests, citingHalker v. Parker, supra, in which Chief Justice Marshall, delivering the opinion, said that the client is not bound by a compromise made by his attorney without his consent, and the compromise and judgment entered therein in that case was of no effect, as the attorney (423) had exceeded his authority. Weeks on Attorneys, sec. 228, p. 398. But he is clear that the general authority of an attorney, under his retainer, does not include the power to sell or release his client's property. He must have special authority or instructions for that purpose. Weeks, sec. 219.
Having settled this question as to the scope of an attorney's authority, and remarking that in this case plaintiff had notice that they did not profess to act with special authority to agree to a sale of the land held by entireties, we proceed to a consideration of the next and last question.
The court had the power to set aside the decree, as a whole, but not to eliminate from it that part only which affected the defendants McEwen and wife, prejudicially. The agreements of the parties were reciprocal, and each was the consideration for the other. If you take out what hurts the said defendants, what is left is not what was agreed to. The plaintiff might well say, "I made no such contract" (non hoec in federa veni). Besides, the supposed voluntary relinquishment by defendants of their land to sale formed the consideration for plaintiff's release of certain of its rights. Equity and common fairness, therefore, demand that the entire decree be vacated. We said in Massey v. Barbee,
The correct procedure is stated in Aronson v. Sire, 85 N.Y. App. Div. (1903), page 607: "An interlocutory judgment, in strict accordance with a stipulation entered into between the parties, cannot be amended on a motion made by one of the parties and opposed by the other; the remedy of the party objecting to the form of the judgment is to make a motion to be relieved from the stipulation and to have the (425) judgment vacated." A court has the power to open or vacate a judgment which appears to have been entered by consent or agreement of the parties, on adequate grounds, e. g., fraud or mistake or the real absence of consent, if so found, but it cannot alter or correct it *347 except with the consent of all the parties affected by the judgment. 23 Cyc., 733. In Foley v. Gatliff, 19 Ky. L., 1103, a special judgment was vacated because entered with the consent of an unauthorized attorney, but it was entirely set aside, and not only in part and to the detriment of one of the parties. He who asks equity must do equity. The court will not award relief for the defendants to the prejudice of their adversary, who has, at least, an equal equity.
The authorities cited by plaintiff's counsel, to the effect that a consent order cannot be vacated except by consent of all the parties, are not in point, as in them the attorneys were only exercising their ordinary functions in the prosecution or defense of the suits, and were not giving away their clients' rights, which were not involved therein, being entirely collateral. The very nature of the transaction here was notice to the plaintiff of a lack of authority in the attorney, and, moreover, the plaintiff had actual notice of it, as the judge finds. Besides, in the cases cited by counsel for plaintiff, it was assumed, or was the case, that consent had actually been given, and the attempt was to amend the agreement, or, ignoring or repudiating the consent, to vacate it. Such was the fact in Stump v. Long,
Defendant contends that the judgment can be modified in part, and reasons substantially in this wise: "If it is found as a fact that an error has been committed, along with an act of right, then are we required to undo the righteous act in order to correct the evil? The idea *348
that a court cannot correct its mistakes is too antiquated to admit of argument. This question was ably fought out during the reign of James I. of England, when equity first began to exercise the power to set aside and modify judgments at law. In that great controversy Lord Coke defended the time-honored practices of the courts of law, while Lord Ellesmere defended the advanced idea of giving to the courts of equity the right to set aside or to modify judgments of law. In that well-fought legal battle, equity won (and we add, as all good causes should win), and its protecting arm has ever since been thrown around unfortunate litigants. 1 Story Eq., sec. 51; Spence Chanc. Jur., p. 674." But the authorities, supra and others cited, refer to ordinary judgmentsin invitum, and not to those rendered by consent. If the Court should withdraw an essential part of the judgment, which was entered by consent, it would surely destroy the agreement, and this it has no power to do. As Judge Gaston said in Wilcox v. Wilcox, 36 N.C. at p. 41, we can very well understand the propriety of the Court refusing to rehear a decree rendered by consent, because it is, in truth, a decree of the parties, and in such a case their will is a sufficient reason for it (statpro ratione voluntas.) The court takes no part in the formation of the consent, but merely enters its decree in conformity therewith. But before there can be such a decree, it is absolutely necessary that there should have been a previous consent of the parties to be affected thereby. This constitutes the authority of the court to enter its decree, and is the essential basis of its action. Chief Justice Smith, in the case of Vaughanv. Gooch,
What judgment to render here, represents a more serious and difficult problem, but we have concluded that as by the abortive agreement the defendants have lost their right to prosecute an appeal to this Court from the verdict, having moved for a new trial in due time for that purpose, and the judge having left the district, the only equitable thing left for us to do is to set aside the verdict and judgment, in analogy to those cases where some accident e. g., loss of papers, has thwarted the appeal. The parties can give a fresh consent, or can start anew from the beginning and try out the issue of fraud to a final decree. It is, therefore, ordered that the judgments of Judge Daniels and of Judge Lyon be set aside, and also the verdict, and that the case stand for trial upon the issues joined between the parties.
We have not adverted to the form of the proceeding, as being a motion and not an independent action, as no point was made in respect to it, and we are not, therefore, called upon to express any opinion in regard to it. We consider that the parties have elected to place the decision *349 upon the real merits of the controversy, without regard to mere form, so that their rights may the more speedily be determined. It is not intended to intimate that a motion is not the proper remedy.
We are indebted to counsel for their excellent briefs, filed in the cause, which exhibit unusual ability and research, and have been of great utility to us in the investigation of the important questions involved.
We must declare that there was error in the proceedings and judgment of the court below.
Error.
Cited: Cox v. Boyden,
(428)