Appeal, No. 235, April T., 1958, from order of Court of Common Pleas of Washington County, Feb. T., 1957, No. 78, in case of Mike Sustrik et ux. v. Jones & Laughlin Steel Corporation. Order affirmed.
Gaylord W. Greenlee, with him McCune and Greenlee, for appellants.
H. Gilmore Schmidt, with him Schmidt & Allison, for appellee.
Before Rhodes, P.j., Hirt, Gunther, Ervin, and Watkins, JJ. (wright and Woodside, JJ., absent).
[ 189 Pa. Super. Page 49]
The plaintiffs, Mike Sustrik and wife, are the owners by entireties, of coal bearing property in West Pike Run Township, Washington County. Their land adjoins similar property of Jones & Laughlin Steel Corporation on which the company had conducted a mining operation. The subsurface boundary line between the two properties however had not been located on the vein of coal. In this action of trespass (quare clausum fregit for the taking of coal, brought under § 6 of the Act of April 20, 1846, P.L. 411, 12 PS § 1442) the evidence was that the defendant by careless mining procedures had removed 1768 tons of coal from the land of the plaintiffs; on the other hand the testimony also indicated that plaintiffs had mined 803 tons of coal from the defendant's land. During the course of the trial, negotiations for the settlement of the controversy were carried on between the parties to the action, and their counsel. The discussion principally dealt with the value of the coal removed. The difference in tonnage, in plaintiffs' favor, of the coal negligently mined, by each of the parties on the other's land, was 965 tons. The plaintiffs were represented at the trial by Palmer J. McCloskey, Esquire, of the Washington County Bar. He, under a settlement agreement with defendant's counsel, accepted the defendant's check for $750 in full
[ 189 Pa. Super. Page 50]
of the plaintiffs' claim, and on June 18, 1957 marked the case settled and discontinued of record in the prothonotary's office. When he, however, attempted to deliver the check to the plaintiffs, accompanied by a release to be signed by them, they refused to accept the check and they would not execute the release. The plaintiffs then discharged Palmer J. McCloskey as their attorney and retained new counsel, upon whose advice they presented their present petition to reopen and vacate the settlement on the ground that their counsel had acted without authority in discontinuing the case of record. On June 5, 1958 after hearing, the prayer of the petition was refused by the court en banc. Defendant's check or draft in the sum of $750 is still in the hands of plaintiffs' present counsel.
The general rule is that an attorney engaged to press a claim or prosecute an action at law has no implied power by virtue of his general retainer to settle, by compromise, his client's claim or cause of action; (5 Am. Jur., Attorneys at Law, § 98); ordinarily, prior specific authority or subsequent ratification is necessary to make such compromise valid and binding on his client. 66 A.L.R. 107, and supplemental annotation in 30 A.L.R. 2d 944. Of course the act of an agent or attorney affecting the relation of his principal or client, with a third person, done in accordance with his principal's manifestations of consent although without special authority, may bind his principal or client. Restatement, Agency, § 8, 27, 49. In § 159 of the Restatement, Agency, it is said in comment b: "A person not authorized to do so but purporting to make a contract on behalf of a principal subjects him to liability to the same extent as if the contract were authorized if, under the circumstances, the principal may fairly be charged with responsibility for the third person's misapprehension as to the agent's authority."
[ 189 Pa. Super. Page 51]
The factual background as stated by Judge WEINER speaking for the court en banc may be taken as the findings upon which the plaintiffs' petition was refused. In the course of the trial when it appeared that counsel were talking settlement, the trial judge invited them to his chambers. The discussion there dealt principally with the value of the coal which had been removed. In the discussion, the defendant's representative stated that he was prepared to prove that the value of the coal in place was 50 cents a ton. And appellants' brief in effect admits the fairness of "(50c) a ton as compensation for all coal wrongfully extracted by the defendant from the plaintiffs' property." After some discussion the defendant agreed to pay $750 in full settlement of the claim which amount would pay plaintiffs, not 50 cents, but about 77 cents per ton for the 965 tons of coal for which they were entitled to recover. Plaintiffs' counsel then left the judge's chambers to discuss the matter with his clients and he was observed in consultation with them outside the courtroom. When he returned he reported that the plaintiffs had agreed to accept $750 if the defendant would lease to them, for the purpose of strip-mining, a designated part of its property in the same area. Defendant's counsel then stated that in general it was against the policy of Jones & Laughlin to lease any of its property, but he offered to use his best offices to secure the desired lease for the plaintiffs "should the policy of his client permit it." Thereupon plaintiffs' ...