Hall v. Presnell
| Decision Date | 27 November 1911 |
| Citation | 72 S.E. 985,157 N.C. 290 |
| Parties | HALL v. PRESNELL et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Watauga County; Long, Judge.
Action by W. G. Hall against W. W. Presnell and E. F. Lovell and another. From a judgment for plaintiff, defendant Lovell appeals. Affirmed.
Where an attorney employed to collect a note secured by a mortgage without the consent or ratification of his principal, gave the debtor a slight extension of time upon a mortgage given to secure the note, such an extension will not discharge a surety upon the note, as the extension was not valid.
Edmund Jones, for appellant.
There is but one question in this case. On November 5, 1906, G. W Presnell made his note to W. G. Hall for $135.96, payable May 1, 1907, and indorsed by W. W. Presnell and E. F. Lovell as sureties. This note was deposited by Hall with the Bank of Blowing Rock as collateral security for a debt he owed the bank. Presnell, at the request of Lovell, gave a mortgage to Hall for $120.70 on a pair of horses to secure the debt and indemnify his sureties, and it was duly registered. The note and mortgage were placed in the hands of an attorney for collection, and he immediately pressed the defendants for payment. Lovell requested the attorney to take immediate steps to secure possession of the horses for the purpose of selling them, we assume, under the power contained in the mortgage, and gave him $5 to pay his expenses. The attorney demanded the horses of Presnell, the debtor, who asked indulgence for several days, so that he might dispose of the horses and pay the debt, which was granted, and Presnell paid the attorney $5 for his expenses. The attorney afterwards sold the horses, but did not realize enough to pay the debt and meanwhile Presnell left the state. W. G. Hall had no knowledge of the transactions between the attorney and the bank, and, of course, did not authorize the extension of time, nor did the bank. It was simply a slight accommodation given by the attorney to Presnell on his own responsibility and without any express authority or any ratification afterwards of his act. It does not appear whether or not Presnell was solvent at the time the attorney granted the slight indulgence to him, and has remained so to this time, nor does it appear distinctly that the attorney extended the time for paying the debt, but it rather appears that the short extension was restricted to the time of seizing and selling the horses under the mortgage. Upon the facts admitted by the parties, the court rendered judgment for the plaintiff, and the defendant Lovell appealed.
We think the decision of the court below was right. It is not clear to us how the appellant was injured by the transaction of which he complains, but assuming that it was such an extension of the time for paying the note as would have discharged him, as surety, if it had been given by the plaintiff, we are of the opinion that the attorney had no express or implied authority to bind his client, the bank, or Hall, the payee, by the agreement. He was retained to collect the debt, and not to release it or any party liable to Hall or the bank for its payment; and any one dealing with him was fixed in law with notice of this lack of authority. As said in Bank v. Hay, 143 N.C. 326, 55 S.E. 811: No one could reasonably suppose that it was within the scope of an attorney's authority to release a debt or any party to a note, or to do anything which would have that effect, when his commission extended only to the collection of the debt. It is stated in the books that an attorney has no implied authority to work any discharge of a debtor, but upon actual payment of the full amount of the debt, and that in money. He cannot release sureties or indorsers, nor enter a retraxit, when it is a final bar (Lambert v. Sanford, 2 Blackf. [Ind.] 137, 18 Am. Dec. 149), nor release a witness ( Wood v. Hopkins, 3 N. J. Law, 689; Campbell v. Kincaid, 3 T. B. Mon. 63), nor a party in interest (Succession of Weigel, 18 La. Ann. 49). It is a general rule that an attorney, who is in many respects considered as a mere agent, cannot waive any of the substantial rights of his client without the latter's consent, and in such a case he is not barred thereby without ratification, or something which amounts to an estoppel, to deny his attorney's authority. These principles will be found to be sustained by the following authorities: Weeks on Attorneys, § 219, and cases cited in the notes; Savings Inst. v. Chinn, 70 Ky. (7 Bush) 539; Ireland v. Todd, 36 Me. 149; Givens v. Briscoe, 3 J. J. Marsh. (Ky.) 529; Union Bank v. Govan, 10 Smedes & M. (Miss.) 333, and cases cited; Tankersley v. Anderson, 4 S. C. (4 Desaus.) 44; Terhune v. Colton, 10 N. J. Eq. 21.
It was directly held in Roberts v. Smith, 3 La. Ann. 205 that an attorney at law in whose hands a note has been placed for collection has no power by an agreement made out of court without authority of his client to give an extension of time to the principal obligor, which would have the legal effect, if the act were valid, to relieve or discharge a surety on the note. Of like effect is Varnum v. Bellamy, 4 McLean 87, s. c. 28 Fed. Cas. 1096, No. 16,886. In Savings Inst. v. Chinn, supra, it was held to be well settled that an attorney at law employed to collect a debt has not authority to release the sureties upon his client's claim, either directly or indirectly, nor to do any act with reference thereto prejudicial to his interest. "No implied power (of an attorney) exists, under a general...
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