Perkins v. Philbrick

Decision Date30 March 1982
Parties34 UCC Rep.Serv. 210 Gertrude M. PERKINS v. Norman A. PHILBRICK.
CourtMaine Supreme Court

Rudman & Winchell, Edith Richardson (orally), John W. McCarthy, T. David Plourde, Bangor, for plaintiff.

Gross, Minsky, Mogul & Singal, George Z. Singal (orally), Carl F. Rella, Bangor, for defendant.

Before McKUSICK, C.J., and GODFREY, NICHOLS, ROBERTS and WATHEN, JJ.

WATHEN, Justice.

Plaintiff appeals from a judgment entered in Superior Court, Penobscot County, denying her request for a declaratory judgment. The issue raised by this appeal is whether defendant's forged signature on settlement drafts and a release form can effectuate a settlement and bar defendant's underlying tort claim against plaintiff. 1 We hold that it cannot and deny the appeal.

In 1976 the parties were involved in an automobile accident in which defendant was injured. He hired an attorney to press his claim against plaintiff, and the attorney entered into communications with plaintiff's insurer. In late 1976, in a conversation with the attorney, the insurer's claims adjuster offered to settle defendant's claim for $26,000. The attorney replied that he would have to discuss the offer with his client. In January 1977 without prior discussion with his client the attorney told the adjuster that the settlement was acceptable. The insurer prepared drafts together with a release and inadvertently mailed them to the defendant. Two of the drafts received by the defendant were payable jointly to him and his attorney and one was payable to him and Blue Cross/Blue Shield. Defendant gave the unsigned documents to his attorney explaining that he did not want to settle for that amount. Defendant neither signed nor authorized the endorsement of any draft or the release. The two drafts payable jointly to defendant and his attorney were subsequently presented for payment bearing defendant's purported endorsement. The release form was not immediately returned to the insurer. When, after numerous calls, the claims adjuster visited the attorney's office, he was given the release purportedly signed by defendant. Sometime in February or March of 1977 the attorney gave defendant between $7,000 and $7,800 which he claimed was part of a $10,000 advance by the insurer. Throughout this period defendant took an active interest in the progress of his claim without learning that the drafts and release had been signed and presented.

In 1979 defendant, represented by his present attorney, commenced suit against plaintiff in Superior Court, seeking damages for his injury in the 1976 accident. Plaintiff then filed this action seeking a declaratory judgment that her obligation to defendant had been discharged when the drafts issued by her insurance company were paid by the bank and the executed release form was received by the insurer. The presiding justice did not issue a declaratory judgment but instead denied plaintiff's request. He based his order on his findings that defendant had neither accepted the settlement nor authorized anyone including his attorney to do so for him by signing the release. These factual findings are undisputed, and we find no settlement has been effectuated under these circumstances.

The Superior Court did not specifically find that the attorney forged defendant's endorsement on the documents. That inference is ineluctable, however, and the court's order proceeds on the postulate that even if the attorney forged the documents, the client is not bound on the facts of the case. The parties' briefs focus solely upon the legal principles of authority and ratification applicable to defendant's endorsement forged by his attorney. Dealing with the issue as thus framed, we find a long established principle in Maine and many other jurisdictions that "an attorney clothed with no other authority than that arising from his employment in that capacity has no power to compromise and settle or release and discharge his client's claim." Pomeroy v. Prescott, 106 Me. 401, 76 A. 898 (1910); see also, e.g., Thomsen v. Terrace Navigation Corp., 490 F.2d 88 (2d Cir. 1974); Senyshyn v. Karlak, 450 Pa. 535, 299 A.2d 294 (1973); Linsk v. Linsk, 70 Cal.2d 272, 74 Cal.Rptr. 544, 449 P.2d 760 (1969); Palm Beach Royal Hotel, Inc. v. Breese, 154 So.2d 698 (Fla.App.1963). In the absence of authority, the mere fact that the release was signed with defendant's name does not constitute a bar to defendant's tort action.

Neither does the payment of the settlement draft over defendant's forged endorsement effect a settlement of the underlying claim. 11 M.R.S.A. § 3-404(1) (1964) provides in pertinent part: "Any unauthorized signature is wholly inoperative as that of the person whose name is signed, unless he ratifies it or is precluded from denying it." Thus, the forgery of defendant's name, even if accomplished by his attorney, was not an...

To continue reading

Request your trial
15 cases
  • Am. Holdings v. Town of Naples
    • United States
    • Maine Superior Court
    • May 5, 2015
    ...of the unauthorized act within a reasonable time.QAD Investors, Inc. v. Kelly, 2001 ME 116, ¶ 21, 776 A.2d 1244 (citing Perkins v. Philbrick, 443 A.2d 73, 75 (Me. 1982)). In this case, the Klimeks continued to operate Sunnyside Village under the condominium form of ownership after Merrill e......
  • Am. Holdings, Inc. v. Town of Naples
    • United States
    • Maine Superior Court
    • March 23, 2015
    ...of the unauthorized act within a reasonable time. QAD Investors, Inc. v. Kelly, 2001 ME 116, ¶ 21, 776 A.2d 1244 (citing Perkins v. Philbrick, 443 A.2d 73, 75 (Me. 1982)). In this case, the Klimeks continued to operate Sunnyside Village under the condominium form of ownership after Merrill ......
  • In re Estate of Frost
    • United States
    • Maine Supreme Court
    • August 16, 2016
    ...behalf, the mortgage advances of $208,000 secured pursuant to the POA were not binding on Frost when they were made. See Perkins v. Philbrick, 443 A.2d 73, 74 (Me.1982) (concluding that an attorney who settled a client's claim without authority did not bind the client to the settlement).[¶ ......
  • Stone v. First City Bank of Plano, N.A.
    • United States
    • Texas Court of Appeals
    • July 3, 1990
    ...by retaining some benefit from it. See TEX.BUS. & COM.CODE ANN. § 3.404 comment 3 (Tex. UCC) (Vernon 1968); see also Perkins v. Philbrick, 443 A.2d 73, 75 (Me.1982). The Bank alleges that by settling their claims against MCOS, the Stones have obtained a benefit. This defense will not apply ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT