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The United States Mortgage Company v. Henderson et aL

the principles laid down. The instruction, however, embraced another subject of which it is proper that something should be said in this connection. The claim was made both in the pleading and in the evidence, that Mr. Henderson, acting as the attorney of the mortgage company in foreclosing the mortgage against the Journal Company, foreclosed for the principal and interest in violation of instructions, and without the knowledge of his client and principal, when he was instructed to foreclose only for the matured interest, and that he had thereby made himself liable for the interest.

Pertinent to this feature of the case, the court instructed the jury, in substance, that however that might be, since the decree of foreclosure had been given, and the bond, mortgage and coupons had all been merged in the decree, even if Henderson had acted in bad faith, and thereby made himself liable to his client for any damage which may have accrued to it, the issues were not so formed in this case as to authorize an assessment of damages on that account. The court told the jury, moreover, that if Mr. Henderson acted in good faith, and with an honest purpose to protect the interests of his client, and the mortgage company, with full knowledge of what had been done, ratified the decree and the receivership established thereunder, and accepted and enjoyed the benefits procured under the decree, it could not then assert that the acts of Henderson in procuring the decree were unauthorized, so as to hold him liable on his contract for the payment of interest in this action. Without enlarging, it is sufficient to say, we approve the instruction as a correct statement of the law applicable to the subject-matter under consideration. If we should adopt the appellant's view, and assume that Mr. Henderson had not acted in good faith, it would by no means follow that it could treat the decree into which the securities have all been merged as subsisting for its benefit, and at the same time proceed against him under the contract for the interest which is merged in the decree. If the appellee is liable for misconduct as the appellant's attorney, that liability The United State* Mortgage Company t>. Henderson et aL

is altogether independent of, and without any relation to, the written contract of agency. The question at this point, is not as to the effect of negligence or misconduct in attending to his client's business, upon the right of the attorney to recover for services, nor as to his liability to the client for any resulting injury, but whether or not his alleged bad faith continued his liability under the contract for the interest coupons, after they were merged in a decree, the benefits of which his clients adopted. This is all that need be said in respect to the claim of the appellant that its agent remains liable on his contract for interest.

One of the items included in the plaintiff's bill of particulars, upon which his complaint was founded, was a charge for services in foreclosing the mortgage against the Journal Company. It is strenuously urged that the evidence shows that Mr. Henderson declared a forfeiture of the credit to the Journal Company, and foreclosed the mortgage for the whole amount, in violation of the instructions of the mortgage company, and that his conduct in relation to the whole matter was such that he was not entitled to compensation for his services in the foreclosure proceeding. In respect to this subject there was a mass of evidence given to sustain the positions assumed by the litigants respectively. Relevant to that subject, the court instructed the jury, in substance, that, notwithstanding the foreclosure suit in question may have been originally commenced under instructions from the mortgage company to proceed only for the matured interest coupons, yet if, after the proceeding was so commenced, such a condition of affairs ensued as that during the litigation that followed Mr. Henderson, in good faith, believed it to be for the protection and advancement of the interests of the mortgage company, that he should give notice of a forfeiture, and foreclose the mortgage for both principal and interest, and that he did so foreclose it, and within a reasonable time thereafter notified his client of what Vol. 111.—3

The United States Mortgage Company t. Henderson el al.

had been done, explaining to them the reasons and apparent necessity for so doing, and the company did not repudiate, or make any attempt to set aside the decree, but accepted the benefits thereof, and adopted the receivership established thereunder, then such acceptance was a ratification of what had been done; and that under such circumstances Mr. Henderson was entitled to reasonable compensation for his services. #

The jury were further instructed that if the appellee had violated his instructions in making an election for the company, and failed to give the company, notice of the course pursued, and if the election made and the proceedings taken had not been ratified by the company, then nothing should be allowed for his services in the foreclosure proceeding. These instructions put the question in issue between the parties fairly to the jury.

It is impossible that parties or attorneys should foresee in advance every emergency which may arise during the progress of a litigation, and it is not every mistake or misapprehension that will render an attorney liable, or forfeit his right to compensation. If the attorney exercises reasonable and ordinary skill and diligence, and proceeds in good faith with an honest purpose to subserve the best interest of his client, the latter may not accept the fruits of his labor without objection, and then deny and refuse to make compensation.

We are unable to ascertain from the record whether or not the jury allowed anything in their verdict, which was for a gross sum, for foreclosing the Journal Company mortgage. As we discover no error of law relating to that subject, and as it is impossible to tell which way the jury found the facts on that issue, we do not examine the evidence or consider the point further.

The mortgage company claimed that there had been a settlement and accounting between it and Mr. Henderson, prior to the commencement of this suit, and that it was The United States Mortgage Company r. Henderson d aL

ascertained at that settlement that Henderson and Jameson were indebted, on account of interest guarantees on loans made for the company, under the contract of agency, to the amount of $11,650.66. Henderson executed six notes covering this amount, payable to the company. The plaintiff alleged that these notes, which were pleaded as a set-off to his claim, had each and all been executed without consideration.

The evidence tended to show that the .various sums which entered into the settlement and made up the amount for which the notes were executed, were, with but one exception, for interest claimed to be due from the agents of the mortgage company, under their agency contract.

There was also evidence tending to prove that the interest thus claimed had all been realized by the mortgage company, by being embraced in various decrees of foreclosure, upon which the company had in each instance bid in the mortgaged property for the full amount of the decree. The claim of the company seemed to be, that notwithstanding the interest had been so included in the several decrees, which had been fully satisfied by sales of property, yet the circumstances were such that the agents remained liable, under their contract, for the interest so included, nevertheless. After being appropriately instructed by the court in reference to this feature of the case, the jury, by their verdict, affirmed the position of the plaintiff below, viz., that the notes had been executed without consideration.

The appellant, however, assumed the law to be, and so asked the court to give it in charge to the jury, that if there was a controversy between the parties respecting the liability of the plaintiff to pay the claims for interest, and the company, in good faith, believed that its agents were indebted to it upon the claim preferred, and the plaintiff, in order to settle the dispute and avoid litigation, executed the notes in question, then, whether the company had an actual claim or real right was immaterial, since, in that event, The United States Mortgage Company r. Henderson el aL

the compromise of the controversy was a sufficient consideration for the notes.

The charges requested proceed upon the idea that no matter how groundless the claim of the mortgage company may have been, so that it was made in good faith, under the belief that the plaintiff was liable, if as a result of making the claim the notes were executed in order to avoid litigation, they were upon a sufficient consideration. It must be conceded that decisions from courts of great respectability and authority are cited, which seem to sustain the theory of appellant in all its breadth.

The rulings of this and other courts do not, however, sustain the view urged on appellant's behalf. In the first place, in order that a compromise may constitute a sufficient consideration to support an executory contract, the claim compromised must have been at least "doubtful," and there must have been some colorable ground of dispute, and some legal or equitable foundation for the claim. Harris v. Oatsady, 107 Ind. 158.

If, for instance, a question is made concerning the liability of a party under a written contract, upon the face of which the rights of the parties are perfectly plain, it has been held that a compromise of such a dispute is without consideration. Coy v. Slacker, 31 Ind. 161. So, where the maker of a note secured by mortgage, had paid the note in full, but the holder, claiming that it had not all been paid, refused to surrender the note and release the mortgage, until another note was executed for the amount claimed to be due, it was said " that there must be at least a colorable ground of a claim, in law or in fact, to sustain an executory contract, given as a compromise." Smith v. Boruff, 75 Ind. 412.

In the recent case of Warey v. Forst, 102 Ind. 205, the facts were that a claim was made, that a husband had fraudulently conveyed his real estate to his wife. A creditor of the husband believed that he had a right to set the conveyance aside, and subject the land to the payment of his

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