ANNOTATION. Imputation of attorney's knowledge of facts to his client. I. Introductory, 1592. a. In general, 1594. subject-matter of employ ment, 1604. c. Limited employment, 1605. business of another client: both IV. b-continued. 2. Vendor and purchaser, mortgagor and mort. gagee, 1612. V. Facts acquired prior to the em ployment, 1614. VI. Attorney acting in his own interest, or in fraud of his client, 1618. VII. Knowledge of partner or clerk of attorney, 1621. VIII. Knowledge of general attorney, 1621. . 1. Introductory. the question of notice, has not reThis note is confined to the ques ceived consideration in many cases. tion whether knowledge of facts pos- In one case, in which the knowledge sessed by an attorney is imputable to of an attorney that a person had deedhis client. It does not include a dis- ed away land was sought to be imcussion of the right to serve notice puted to a client subsequently employupon an attorney in a proceeding. ing the attorney to write and take the Whether an intention on the part of acknowledgment of a mortgage from an attorney for an insolvent to give a such person, the court states: "The preference is imputable to his client knowledge must be that of a person is not discussed. It may be stated in who is executing some agency, and not passing that it has been held that it acting merely in some ministerial cawill be so imputed; so to impute this pacity, as servant or clerk. For inintention is held to be within the prin- stance, if in the present case ciple that knowledge of the attorney [the attorney] had merely taken the is imputable to the client.1 acknowledgment of the deed to the It is not questioned that the general bank, or had transcribed the deed as rule of agency, that notice to or knowl- a clerk or copyist, such acts would edge possessed by an agent is imputa- not have imposed a duty to impart his ble to the principal, applies in the re- knowledge to the bank. But if emlation of attorney and client.la As ployed to obtain the title for the bank pointed out below, this general state- by a deed to be drawn by him for the ment is subject to some limitations, purpose, that would place the transbut for introductory purposes it may action within the rule.” 2 There is be used as a sufficiently accurate state- some authority to the effect that, to ment of the rule. The extent of the bring an attorney within the operaattorney's employment, as affecting tion of the rule that notice to him is 1 Sartwell y. North (1887) 144 Mass. to their own rights. Champlin v. Lay180, 10 N. E. 824. tin (1836) 6 Paige (N. Y.) 189. See Bank of Commerce v. Hoeber 2 Fairfield Sav. Bank v. Chase (1881) (1885) 88 Mo. 37, 57 Am. Rep. 359, in- 72 Me. 226, 39 Am. Rep. 319. The fra, note 11. court continues: “In the case before la See cases cited in note 9, infra. us, Brown was employed by The rule that a purchaser of land the bank to make an instrument to is chargeable with constructive notice convey a title from a person to the of all the facts communicated to his bank. We think such a case attorney for the purchase, or obtained comes reasonably within the rule, in the examination of the title, has been though it is not so marked a case as it held not to apply to a contest between would be if Brown had been employed the vendor and the vendee in relation by the bank to ascertain if the grantor . ever which can be imputed to the defendants. No instructions were given them, and no communication had with them, and the defendants did not even know what lawyers had charge of the claim and the agents employed by them had no instructions to subject their clients to any of the penalties of fraud, but only to do their best to collect the debt; and it does not appear to me that if, in their zeal, any of the provisions of the Bankrupt Act has been violated, this knowledge can be imputed to the defendants within the meaning of the act.” A purchaser of land from a trustee has been held not chargeable with knowledge of the trust because of the employment of a clerk in the office of the trustee's solicitor, where the solicitor had no notice of the purchase until it had been completed. It is assumed in the present note that the relation of attorney and client does exist, and cases denying the imputation of notice on the theory that this relation did not exist are not generally included herein. imputable to his client, "he must be employed in some other capacity than as a mere professional and legal adviser; he must be employed to represent his client in a transaction whereby the principal is to acquire some rights, or is to be subjected to some liabilities." 3 The extent of the attorney's employment as bearing upon the imputation of notice is further illustrated in the cases cited infra, II. c, of employment of an attorney by a purchaser of property, to pass upon the title thereto. It is apparent that if the relation of attorney and client does not exist there can be no imputation of notice. It has been held that an attorney employed not by the creditor, but by a collection agent, who undertakes the collection of the debt, is the agent of the collecting agent, and not of the creditor who employs that agent; therefore, such attorney's knowledge of the bankrupt condition of the vendor is not imputable to the creditor." It has been held that creditors who have handed a claim to their attorney for collection, which claim is forwarded by the attorney to other attorneys at the place of residence of the debtor, are not chargeable with knowledge of the latter attorneys, who obtained a confession of judgment and collected the claim, of an intent to give a fraudulent preference in violation of the Bankruptcy Act. The court argued: “There was no relation of attorney and client, or principal and agent, between the attorneys (to whom the claim was sent by the creditors' attorney) and the defendants, which, by construction, can charge them with the knowledge of the affairs of [the debtor] they said attorneys] had, or of any action of theirs had in fraud of the Bankrupt Law. ... In any view they were not commissioned or authorized to commit any fraud whathad the title, and if he had, then, to make the deed." 32 Pom. Eq. Jur. $ 668. This statement is approved in Arrington v. Arrington (1894) 114 N. C. 151, 19 S. E. 351, holding that knowledge possessed by an attorney who was merely consulted as to title to land, but not employed to negotiate the purchase or to II. Theories. There are at least two distinct theories upon which the knowledge of facts possessed by an attorney is imputed to the client. One theory is that of the unity of the attorney and client. A modification of this idea is expressed in the language that the client knows what the attorney knows. Another theory is that it will be presumed that the knowledge was communicated to the client. The presumption that the agent has communicated the facts known to him is as conclusive as the presumption that the principal remembers facts brought home to him personally. It cannot be rebutted by showing that the agent did not in fact impart such information, at least, the client is chargeable acquire the title, is not imputable to a purchaser. 4 Hoover v. Wise (1876) 91 U. S. 308, 23 L. ed. 392. 5 Hoover v. Greenbaum (1874) 61 N. Y. 305. 6 Northwest Constr. Co. v. Valle (1906) 16 Manitoba L. Rep. 201. III. General rules. in the same manner as if personal notice had been communicated to him. In other words, it is one of those anomalies of the law known as a conclusive presumption. More accurately speaking, it is not a presumption at all; it is a rule of law which charges a client with the knowledge possessed by his attorney. This is sometimes called constructive notice; other courts, particularly some English courts, prefer to characterize it as imputed notice. This constructive or imputed notice to the client must be distinguished from the mere rebut le presumption, held by some courts to exist, that knowledge possessed by the attorney when acting for his client will be communicated. ? Miller v. Fraley (1860) 21 Ark. 22. Notice to an attorney for the purchaser of land from one who purchased at an execution sale that such purchaser at the execution sale held for the execution debtor, by reason of which the sale to him was fraudulent and void as to other creditors, is imputable to the client. Coryell v. Klehm (1895) 157 Ill. 462, 41 N. E. 864. Green v. Stevenson (1905) 9 Ont. L. Rep. 671, holding a purchaser of land chargeable with knowledge of her solicitors, while acting for her, of a previous agreement of sale by the vendor. 8 Jennings v. Carter (1890) 53 Ark. 242, 13 S. W. 800, holding that a purchaser through an attorney at a fraudulent execution sale is affected by the notice of fraud possessed by his attorney, who, as attorney for the execution creditor, conducted the proceeding. See infra, IV., to facts acquired in course of employment by another client. 9 United States.—May v. Le Claire (1870) 11 Wall. 217, 20 L. ed. 217; Smith v. Ayer (1880) 101 U. S. 320, 25 L. ed. 955; Rogers v. Palmer (1880) 102 U. S. 263, 26 L. ed. 164; Armstrong v. Ashley (1907) 204 U. S. 272, 51 L. ed. 482, 27 Sup. Ct. Rep. 270. Alabama.-Wiley v. Knight (1855) 27 Ala. 336; Price v. Carney (1883) 75 Ala. 546; Silvey v. Cook (1914) 191 Ala. 228, 68 So. 37. Arkansas. — Allison Falconer (1905) 75 Ark. 343, 87 S. W. 639; Singfield v. Vogler (1917) 127 Ark. 618, 192 S. W. 906. California. Munter Watson a. In general. Some cases do not go beyond the general statement appearing in the introduction, supra, that knowledge of facts possessed by an attorney is imputable to his client, even though they involve facts that are, by other courts, regarded as imposing limitations upon the rule. The great majority of cases do not support this unqualified doctrine, but hold, with certain exceptions hereinafter discussed, that knowledge of facts relating to the subject matter of the employment, acquired while the attorney is engaged in the discharge of his duties under the employment, is imputable to his client. According (1859) 12 Cal. 363, 73 Am. Dec. 543; Bierce v. Red Bluff Hotel Co. (1866) 31 Cal. 160; Watson v. Sutro (1890) 86 Cal. 500, 25 Pac. 64, 24 Pac. 172; Mabb v. Stewart (1905) 147 Cal. 413, 81 Pac. 1073; Rauer v. Hertweck (1917) 175 Cal. 278, 165 Pac. 946; People v. Duncan (1908) 8 Cal. App. 186, 96 Pac. 414. Colorado.-Davidson V. La Plata County (1899) 26 Colo. 549, 59 Pac. 46; Bunnell v. Holmes (1918) - Colo. 171 Pac. 365. Connecticut. - Sweeney V. Pratt (1898) 70 Conn. 274, 66 Am. St. Rep. 101, 39 Atl. 182. District of Columbia.—Patten v. Warner (1897) 11 App. D. C. 149. Georgia.-Brown v. Oattis (1875) 55 Ga. 416; Jones v. Lamon (1892) 92 Ga. 529, 18 S. E. 423; see Lampkin v. First Nat. Bank (1895) 96 Ga. 487, 23 So. 390, infra, note 83. Hawaii.--Tisdale v. The H. W. Almy (1882) 4 Haw. 503. Illinois.-Williams v. Tatnall (1862) 29 Ill. 553; Webber v. Clark (1891) 136 Ill. 256, 26 N. E. 360, 32 N. E. 748. Iowa.—De Louis v. Meek (1849) 2 G. Greene, 55, 50 Am. Dec. 491; Walker V. Ayres (1855) 1 Iowa, 449; Jones v. Bamford (1866) 21 Iowa, 217; Allen v. McCalla (1868) 25 Iowa, 464, 96 Am. Dec. 56; Walker v. Schreiber (1877) 47 Iowa, 529; Foy v. Armstrong (1901) 113 Iowa, 629, 85 N. W. 753; Cochburn Hawkeye Commercial Men's Asso. (1913) 163 Iowa, 28, 143 N. W. 1006. Kentucky.-Barnes v. Com. (1918) 179 Ky. 725, 201 S. W. 318; Semonin v. Duerson (1891) 13 Ky. L. Rep. 169. as V. V. to the weight of authority, knowledge when acting for the client, or, accordpreviously acquired is imputable if it ing to some cases, if it was acquired was present to the attorney's mind so shortly before the employment that Louisiana.-Allen v. Frank Janes Warren (1897) 51 S. C. 560, 29 S. E. Co. (1918) 142 La. 1056, 78 So. 115. 659; Scottish-American Mortg. Co. v. Maryland. Presstman Mason Clowney (1904) 70 S. C. 229, 49 S. E. (1887) 68 Md. 78, 11 Atl. 764; Balti- 569, 3 Ann. Cas. 437. more v. Whittington (1893) 78 Md. Texas.-Givens v. Taylor (1851) 6 231, 27 Atl. 984; Shartzer v. Mountain Tex. 315; Van Hook v. Walton (1866) Lake Park Asso. (1897) 86 Md. 335, 37 28 Tex. 59; Riordan v. Britton (1887) Atl. 786. 69 Tex. 198, 5 Am. St. Rep. 37, 7 S. Minnesota.-Bates v. A. E. Johnson W. 50; Smith v. Wilson & B. Sav. Bank Co. (1900) 79 Minn. 354, 82 N. W. 649; (1892) 1 Tex. Civ. App. 115, 20 S. W. Riley v. Pearson (1913) 120 Minn. 210, 1119; Bexar Bldg. & L. Asso. v. LockL.R.A.1916D, 7, 139 N. W. 361. wood (1899) - Tex. Civ. App. —, 54 Mississippi.-Allen v. Poole (1877) S. W. 253; Presidio County v. Shock 54 Miss. 323; Edwards v. Hillier (1900) 24 Tex. Civ. App. 622, 60 S. W. (1893) 70 Miss. 803, 13 So. 692. 287; Missouri, K. & T. R. Co. v. Bacon Missouri.—Bank of Commerce V. (1904) – Tex. Civ. App. 5,80 S. W. Hoeber (1885) 88 Mo. 37, 57 Am. Rep. 572; Bradford v. Malone (1908) 49 359; Hedrick v. Beeler (1892) 110 Mo. Tex. Civ. App. 440, 130 S. W. 1013; 91, 19 S. W. 492; Priddy v. Mackenzie Fordtran v. Cunningham (1911) (1907) 205 Mo. 181, 103 S. W. 968; Tex. Civ. App. —, 141 S. W. 562; MisHunter v. Wabash R. Co. (1910) 149 souri, K. & T. R. Co. v. Wood (1913) Mo. App. 243, 130 S. W. 103. Tex. Civ. App. - 152 S. W. 487; New Hampshire.-Butler v. Morse Newton v. Easterwood (1913) Tex. (1891) 66 N. H. 429, 23 Atl. 90. Civ. App. 154 S. W. 646; Mitchell New Jersey.—Dickerson v. Bowers v. Morgan (1914) - Tex. Civ. App. (1886) 42 N. J. Eq. 295, 11 Atl. 142; 165 S. W. 883; Ives v. Culton Fidelity Trust Co. v. Baker (1900) 60 (1917) Tex. Civ. App. --, 197 S. N. J. Eq. 170, 47 Atl. 6. W. 619; Dowdy v. Furtner (1917) New York. — Griffith v. Griffith Tex. Civ. App. - 198 S. W. 647. (1841) 9 Paige, 315; Westervelt v. Vermont.-Hart v. Farmers & M. Haff (1844) 2 Sandf. Ch. 98; Stone v. Bank (1860) 33 Vt. 252; Abell v. Howe Schenectady R. Co. (1904) 99 App. (1871) 43 Vt. 403; Vermont Min. & Div. 44, 90 N. Y. Supp. 742; Hyde v. Quarrying Co. v. Windham County Bloomingdale (1898) 23 Misc. 728, 51 Bank (1872) 44 Vt. 489, 3 Mor. Min. N. Y. Supp. 1025; Taft v. Wright Rep. 312. (1873) 47 How. Pr. 1, affirmed in Washington.-Wells V. McMahon (1875) 59 N. Y. 656; Kendall v. Nei- (1888) 3 Wash. Terr, 532, 18 Pac. 73; buhr (1879) 58 How. Pr. 156, affirmed Hyman v. Barmon (1893) 6 Wash. in (1880) 14 Jones & S. 544, which is 516, 33 Pac. 1076; Deering v. Holcomb affirmed in (1881) 87 N. Y. 1. (1901) 26 Wash. 588, 67 Pac. 240, 561. North Carolina.—Greenlee V. Mc- England. - Warrick v. Warrick Dowell (1847) 39 N. C. (4 Ired. Eq.) (1745) 3 Atk. 291, 26 Eng. Reprint, 481; Hulbert v. Douglas (1886) 94 970; LeNeve v. LeNeve (1748) 3 Atk. N. C. 122; Bryant Mfg. Co. v. Hester 647, 26 Eng. Reprint, 1172; Sheldon v. (1919) - N.C. - 98 S. E. 721. Cox (1764) 2 Ambl. 624, 27 Eng. ReOklahoma. - Bigsby v. Eppstein print, 404; Fuller v. Bennett (1823) (1913) 39 Okla. 466, 135 Pac. 934; 2 Hare, 402, 67 Eng. Reprint, 165, 12 Lambert v. Smith (1916) 53 Okla. 606, L. J. Ch. N. S. 355, 7 Jur. 1056; Tun A.L.R. —, 157 Pac. 909; PYEATT v. stall v. Trappes (1830) 3 Sim. 286, 57 ESTUS (reported herewith) ante, 1570. Eng. Reprint, 1005; Gosling's Case Pennsylvania.-Patterson's Estate (1830) 3 Sim. 301, 57 Eng. Reprint, (1912) 234 Pa. 128, 82 Atl. 1130; 1011; Harrison v. Wiltshire (1835) 4 Barnes v. M'Clinton (1831) 3 Penr. L. J. Ch. N. S. 260; Brewin v. Briscoe & W. 67, 23 Am. Dec. 62; Mutual Bldg. (1859) 2 El. & El. 117, 121 Eng. Re& L. Asso.'s Case (1893) 19 Pa. Co. Ct. print, 45, 28 L. J. Q. B. N. S. 329, 5 504. Pennsylvania Cases cited in Jur. N. S. 1206, 7 Week. Rep. 584; notes 38, 39, 68, 69. Rickards v. Gledstanes (1861) 3 Giff. South Carolina.-American Free- 298, 66 Eng. Reprint, 423, 8 Jur. N. S. hold Land Mortg. Co. v. Felder (1895) 455; Spaight v. Cowne (1863) 1 Hem. 44 S. C. 478, 22 S. E. 598; Peeples v. & M. 359, 71 Eng. Reprint, 156; Bour he must be presumed to have remem- the attorney to make a disclosure bered it.9a The weight of authority in thereof (see IV. infra); and (2) cases support of the rule imputing previous- in which the attorney is acting in his ly acquired knowledge which is pres- own interest or is acting fraudulently ent to the agent's mind is more marked (see VI. infra). in cases of agents generally, than in There are various statements of the cases dealing with attorneys. The ex- rule. In a number of cases, in which ceptions above referred to, in which the knowledge of an attorney is imcases knowledge will not be imputed, puted to his client, it appears merely are (1) with reference to knowledge that the knowledge was acquired in the acquired from such a source, or in such course of the attorney's employment;20 a way, that it would be improper for in some such cases the court states sot v. Savage (1866) L. R. 2 Eq. 134, possession of the mortgage he assumed 35 L. J. Ch. N. S. 627, 14 L. T. N. S. to release, nor of the note secured 299, 14 Week. Rep. 565; Dixon V. thereby, is imputable to the client. Winch [1900] 1 Ch. 736, 82 L. T. N. S. Allen v. Frank Janes Co. (1918) 142 437, 69 L. J. Ch. N. S. 465, 48 Week. La. 1056, 78 So. 115, charging a purRep. 612, 16 Times L. R. 276. chaser of land with facts shown on an Canada.—McCauley v. Butler (1902) abstract of the title thereto, examined 1 Ont. Week. Rep. 72; Real Estate by his attorney. Invest. Co. v. Metropolitan Bldg. Soc. Hedrick v. Beeler (1892) 110 Mo. 91, (1883) 3 Ont. Rep. 476. 19 S. W. 492, imputing to an applicant 9a See V., infra, and cases in notes, for a patent to certain lands, notice to 19-22. an attorney who assisted him in pro10 Rogers v. Palmer (1879) 102 U. S. curing the title. Just what knowledge 263, 26 L. ed. 164, charging an execu the attorney possessed is not clearly tion creditor with the knowledge of his stated. attorney of the debtor's insolvency, Griffith v. Griffith (1841) 9 Paige and of an intent to evade the Bankrupt Law. (N. Y.) 315, holding notice to an atDavidson v. La Plata County (1899) torney employed to examine the title 26 Colo. 549, 59 Pac. 46. Knowledge to premises which the client was about to purchase, of an equitable claim of a of attorneys for the assignee of a judgment that attorneys for the assignor third person, constructive notice to the purchaser. intended to claim a lien on the judgment for their services, is knowledge Westervelt v. Haff (1844) 2 Sandf. of the client. Ch. (N. Y.) 98, holding that notice to Patten v. Warner (1897) 11 App. D. the solicitor of a subsequent mortC. 149. Knowledge of a general attor gagee, who prepared the securities in ney for certain persons, of the profit his behalf, of a prior mortgage, was made by one claimed to be a trustee notice to the client. for such persons in a sale of property Hyde v. Bloomingdale (1898) 23 to them, is knowledge of the persons. Misc. 728, 51 N. Y. Supp. 1025, imThe knowledge was acquired shortly puting to a client knowledge of the after the sale. The court states that fraudulent intent of an insolvent debtthe attorney had been attorney for or, to whom the client furnished money these persons, "specially, in this whole on the security of a mortgage, postransaction with the appellee; he had sessed by the attorney. even been specially charged by them to Stone v. Schenectady R. Co. (1904) ascertain what profit, if any, the ap- 99 App. Div. 44, 90 N. Y. Supp. 742, pellee had made." holding a patron of an electric lightWalker v. Ayres (1855) 1 Iowa, 449, ing company, from whom the current holding that knowledge of an attorney had been cut off, chargeable with noemployed with reference to the assign- tice to her attorney as to when it would ment of a judgment, of claims of the be restored. judgment debtor to credits, acquired Kendall v. Neibuhr (1879) 58 How. in negotiating for the assignment, is Pr. (N. Y.) 156, affirmed in (1880) 14 imputable to the client. Jones & S. 544, which is affirmed in Foy v. Armstrong (1901) 113 Iowa, (1881) 87 N. Y. 1, holding the knowl629, 85 N. W..753, holding knowledge edge of an attorney, employed by a of the attorney for a mortgagee that mortgagee about to release part of the one who had assumed the right to re- property, to make the necessary lease a prior mortgage did not have searches and prepare the releases of a |
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