Supreme Court of United States.
Present ... . All the Judges except TODD, J.
*444 HARPER, for the Appellants.
AMORY and P.B. KEY, contra.
*449 MARSHALL, Ch. J. after stating the facts of the case, delivered the opinion of the Court as follows:
On the part of the Appellants it is contended that an attorney at law has no power, without the consent of his client, to transfer a cause to other judges than those appointed by the laws, and to place it before a tribunal distinct from that before which the party himself has chosen to place it.
In this opinion however the majority of the Court does not concur. It is believed to be the practice throughout the union for suits to be referred by consent of counsel without special authority, and this universal practice must be founded on a general conviction that the power of an attorney at law over the cause of his client extends to such a rule. Were it otherwise, Courts could not justify the permission which they always grant, to enter a rule of reference when consented to by counsel on both sides. In this case, however, the letter *450 and affidavit of Mr. Holker of the 8th of September, 1798, manifests at least an acquiescence in the rule, which the opposite party had a right to consider as an assent to it.
The same letter and affidavit will meet the still stronger objection which has been made to the reference of matters not involved in the suit actually depending in Court. They certainly impair very much the weight and influence of those arguments which have been urged against so much of the award as respects those demands of Holker which were not in suit.
The Court, however, does not perceive, in the transactions which took place previous to the award itself, any circumstance which could justify a decree to set it aside. The great and real question in the cause is, has the award been made under such circumstances, and is it of such a character, that it ought to bind the Parties?
In examining this question it is natural to enquire whether this be in fact an award, in forming which the judgment of the arbitrators has been exercised, or a compromise wearing the dress of an award.
The evidence upon this point is thought very clear. Nothing can be more explicit than the testimony of general Hull, who was the attorney of Mr. Parker. He states an agreement in the most express terms between himself and Mr. Lowell on the sum for which the award should be given; and the arbitrator, whose deposition has been taken, declares that the award was made solely on the acknowledgement of the Defendant's counsel.
To the deposition of Mr. Lowell himself great respect is due. He denies a compromise; but on examining his testimony the Court is of opinion that his denial goes no further than to the form of an agreement. The facts he states prove one in substance. Believing himself that Holker's judgment against Parker was released, and that the referees would entirely disregard it: he himself not having insisted on it, or questioned the validity of the pleas in bar; he reminded Parker's attorney in the presence of the referees of his former offer to give $7,200 in satisfaction of all demands.
*451 It was impossible to misunderstand this declaration. It was substantially a proposition to accept an offer which had been formerly rejected. General Hull replied that he would not now give that sum, but would give $5,000. Mr. Lowell did not agree to accept this offer, but he did not reject it. He looked on silently, and saw the referees about to make up an award, not on the testimony of the cause, but on a declaration on the part of the Defendant that he would give $5,000, made in answer to one from himself apparently clinging to a former offer to give $7,200. The referees necessarily construed this silence into consent, and Mr. Lowell was not unwilling that they should put this construction on it. He thought it his duty, he says, to secure even this sum for his client rather than have an award that Parker owed him nothing; which would have been equally obligatory.
This then is substantially a compromise, and not an award. It is difficult to examine this cause, and to feel the clear conviction which was felt by Mr. Lowell that the referees, had the case of Holker been brought as fully before them as it was in the power of his attorney to bring it, and pressed as earnestly on them as its importance deserved, would have awarded that Parker owed him nothing.
Had not the sufficiency of the pleas in bar been impliedly admitted had the legal operation of the covenant of six parts been seriously contested, it is far from being clear that the referees would have affirmed the sufficiency of these pleas, or have construed the covenant to be a release of the judgment. There is certainly much reason to doubt whether the covenant of Holker, although it may be an independent covenant, amounts to a release of the judgment he had obtained against Parker. The mind of the referees does not appear to have been exercised on, or called to this question. They do not appear to have had a fair opportunity to form an opinion on it. It does not appear that the indenture itself was inspected by them, and the description given of it in the pleas is inaccurate. The pleas describe the covenant as containing the word "judgment," which it does not contain. The covenant is "to vacate, annul, discontinue and withdraw, all *452 suits, actions and proceedings whatever." The pleas introduce the word "judgment" in their description of the covenant; a word which essentially varies its construction. Had the real case been brought before the referees, and their attention been directed to this circumstance, it cannot be assumed as certain that they would have considered the judgment as vacated, or would have refused to receive it as prima facie evidence of a claim to its full amount; open to such objections as Parker might make to it.
Had they even been of a different opinion, they could not have believed it certain that Parker, who had escaped from this country, leaving debts to an immense amount which Holker was compelled to pay, against whom, when only part of those debts were paid, Holker had obtained a judgment for $125,951 04, was not the debtor of Holker to a large amount. With this view of the case, had they understood that Holker was intercepted in his attempt to attend them, and detained by legal process, it ought not to have been supposed that they would have refused to suspend their award until the issue of his application to the Supreme Court of Pennsylvania for the liberation of his person should be known.
To this Court, then, it appears that this award is not the judgment of the arbitrators in the cause, but a compromise, between the attornies, taking the form of an award, and a compromise made at a time when the cause was not so desperate as the attorney supposed it to be. It was a sacrifice of great and important interests at a time when that sacrifice does not appear to have been absolutely necessary. Has the attorney a right to make such a compromise?
Although an attorney at law, merely as such, has, strictly speaking, no right to make a compromise; yet a Court would be disinclined to disturb one which was not so unreasonable in itself as to be exclaimed against by all, and to create an impression that the judgment of the attorney has been imposed on, or not fairly exercised in the case. But where the sacrifice is such as to leave it scarcely possible that, with a full knowledge of every circumstance, such a compromise could be fairly *453 made, there can be no hesitation in saying that the compromise, being unauthorized and being therefore in itself void, ought not to bind the injured party. Though it may assume the form of an award or of a judgment at law, the injured party, if his own conduct has been perfectly blameless, ought to be relieved against it. This opinion is the more reasonable because it is scarcely possible that, in such a case, the opposite party can be ignorant of the unfair advantage he is gaining. His conduct can seldom fail to be tainted with some disingenuous practice; or, if it has not, he knows that he is accepting a surrender of the rights of another from a man who is not authorized to make it.
The testimony in this cause accounts for the readiness with which Mr. Lowell acceded to the offer of general Hull. He acted under a mistake, and that mistake is fully disclosed in the record. He believed Parker to be irretrievably ruined. He thought him totally and absolutely insolvent. This impression was communicated to the referees. They too were of opinion that to drudge through the trunks of papers arrayed before them for the purpose of ascertaining how much one insolvent owed another, would be a useless waste of time.
Mr. Lowell was apparently of opinion that nothing beyond the attached effects was worth pursuing He believed sincerely that an award of $700,000 would not avail his client more than an award for $7,000, and that he should ill perform his duty if he put the attached effects in any hazard in the vain attempt to get a judgment for a larger sum. He could not therefore venture on any measure which might have produced a release of those effects. They were the sole object of his contemplation and pursuit. Those he knew to be substance, every thing further he thought a shadow. This opinion seems to have influenced his whole conduct, and to have determined him to accede to the compromise offered by Parker's attorney.
It has been said that an award rendered under these circumstances ought not to bind Holker unless his own gross negligence may have deprived him of that equity which would otherwise belong to his case.
*454 Let his conduct be examined.
He appears to have been strongly impressed with the importance of his personal attendance on the arbitrators. Indeed it could scarcely be otherwise. Although his judgment against Parker might not be viewed as a nullity, it would certainly be opened, and all the items on which it was founded be liable to exception. His personal explanations would certainly be essential. They would also be essential in encountering the credits which might be claimed by Parker. His personal attendance was impossible.
He appears to have indulged the hope that he might be liberated in time, until the period allowed for appearing before the referees had passed away.
It is true that he ought to have transmitted his papers to his attornies. The evidence now adduced or a considerable part of it, might then have been obtained. That he was led to believe Parker insolvent, would not be a sufficient excuse for neglecting to do so, unless it could be shown that this impression was made by Parker himself, or by his agents. The evidence to this point does not amount to more than light suspicion.
Yet when it is recollected that the Plaintiff was embarrassed and detained by legal process; that he did not possess a clear and distinct knowledge of the testimony which would be required; that some apology for not making an early exertion to obtain that testimony is to be found in the hope he indulged of being enabled by the discharge of his person to attend the referees; that the expectation, that the judgments in the hands of his counsel would be regarded by the referees, ought not to be considered as entirely unfounded; this Court is of opinion that it would be too rigid an application of the rule which exacts, from those against whom iniquitous judgments have been obtained, evidence of having done all that was practicable at law, to deny relief in this case.
With the single exception of his omitting to furnish the evidence on which his judgment against Parker was obtained, and to furnish copies of other judgments rendered *455 against him as one of the firm of Daniel Parker & Co. as he did in the case of Ross, (of the efficacy of all which if furnished nothing decisive can be said,) no negligence can be imputed to Holker. He has not rested under the decision against him, until Parker, confiding in his security, may have lost the means of protecting himself from an unjust demand, but has pursued him diligently in the Courts of France. Finding this award and the judgment thereon to be an insurmountable bar to the examination of his claim in the Courts of France, he has without loss of time instituted this suit. Nothing appears in the cause to induce an opinion that the claims of the parties may not now be as fairly and as fully examined as they could have been before the referees in 1799.
Upon a full view of the whole cause this Court is of opinion that the Circuit Court erred in dismissing the bill of the Plaintiffs; and that the decree ought to be reversed and annulled, with directions to set aside the award and the judgment rendered in October, 1799, and to direct an account between the Plaintiff, Holker, and the Defendant.
This cause came on to be heard on the transcript of the record, and was argued by counsel: On consideration whereof this Court is of opinion that the award made in October, 1799, in a suit brought by the Plaintiff, John Holker, against the Defendant, Daniel Parker, in the Circuit Court of the United States for the district of Massachusetts, and referred by a rule of that Court to referees therein named, and the judgment of the said Court rendered thereon, ought not to bar the claim of the Plaintiffs in this cause to an account of all the transactions of the parties, Holker and Parker, with each other as members of the firm of Daniel Parker & Co. and that there is error in the decree of the Circuit Court dismissing the bill of the Plaintiffs. This Court doth therefore decree and order that the decree of the Circuit Court be reversed and annulled, and that the cause be remanded to the Circuit Court to be further proceeded in according to law.
*456 After the opinion was delivered, P.B. Key mentioned that in the opinion the Court had said that an account ought to be taken, but the decree only directs that the proceedings below should be according to law.
We wish for leave to answer fully before an account be taken, and wish it may be understood that this Court does not mean to prevent a further answer.
MARSHALL, Ch. J. That is the meaning of the Court.
