from their clients. It was obtained in open court." "57 The contrary view is taken where an attorney is acting for the clients at the same time, and it has been held that knowledge of an attorney who represents two persons, acquired while transacting the business of the one, will not be imputed to the other.58 It has been held that knowledge of a claim to land, derived by one as attorney for a defendant in a suit by the claimant, is not imputable to one who, while the suit was pending, employed the attorney with reference to the purchase of a mortgage which the defendant in the ejectment suit had given on the land.59 The Louisiana court 59 states: "What knowledge he [the attorney] had was derived by him entirely outside of this transaction and in his capacity as attorney of [the defendant in the ejectment suit] in that suit. For aught that appears, it may have been his duty to Gilmer not to speak of it to these parties." It has 57 Blake v. Clary (1891) 83 Me. 154, 21 Atl. 841. 58 In Union Square Bank v. Hellerson (1895) 90 Hun, 262, 35 N. Y. Supp. 871, an attorney represented an individual and also a bank. The individual whom the attorney represented was the debtor of another, who in turn was a debtor of the bank. In adjusting these debts a note was given by the attorney's individual client to his creditor, and this note indorsed to the bank by the payee therein. In an action by the bank upon this note an accommodation indorser thereon defended on the ground that there was an agreement that the note was not to become an existing obligation, and sought to impute notice thereof to the bank by reason of the knowledge of the attorney. The court, assuming that the attorney had knowledge in the transaction in which the note was given, of this fact, states that he was not acting for the bank, but for his other client, endeavoring to further his other client's cause. The note was handed over to the payee, and by the payee taken to the bank and given to it in exchange for certain stocks securing his debt to the bank, and the court concludes that it is clear that in this part of the transaction the attorney was acting not as the attorney [4 A.L.P.. been held that knowledge of an attor ney of a sale upon execution, in a suit in which he represents the plaintiff, is not imputable to other clients whom he represented in obtaining judgments and selling the land under executions thereon.60 In cases involving an attorney for several creditors, some courts have refused to charge one creditor with knowledge of an attor ney, derived in a transaction with another, on the theory that it is disadvantageous to the first creditor.61 2. Vendor and purchaser, mortgagor and mortgagee. A well-defined rule is announced in many cases that, where a purchaser employs the same attorney as the vendor, he will be affected with notice of whatever such attorney acquired notice of, in his capacity of attorney for either vendor or purchaser in the transaction in which he was so employed. This rule, it seems, is ap plicable to a case of mortgagor and for the bank, but for his other client, and whatever knowledge he had in regard to the origin of the note could not be imputed to the bank, because he was not acting for the bank. Wright v. Snell (1901) 12 Ohio C. D. 308, 22 Ohio C. C. 86, holding the assignee of a judgment not chargeable with the knowledge of the fraudulent transactions out of which the notes upon which the judgments were obtained arose, possessed by his attor ney, who was also attorney for the judgment creditor, the assignor. But see Constant Case and other cases, infra, note 71. 59 Templeman v. Hamilton (1885) 37 La. Ann. 754. 60 Ford v. French (1880) 72 Mo. 250. Suits were pending at same time. 61 Bates v. Rosenberg (1910) 121 N. Y. Supp. 335, refusing to charge certain creditors with the knowledge of their common attorney that other creditors had been induced to sign a composition agreement by payments over and above that stipulated for in the composition agreement. 62 Melms V. Pabst Brewing Co. (1896) 93 Wis. 153, 57 Am. St. Rep. 899, 66 N. W. 518 (dictum); Toulmin v. Steere (1817) 3 Meriv. 210, 36 Eng. Reprint, 81, 17 Revised Rep. 67; Atkins v. Delmege (1847) 12 Ir. Eq. Rep. 1. mortgagee.63 Under the English cases, a mortgagee is chargeable with knowl Sykes v. Bond (1861) 7 Jur. N. S. (Eng.) 1024, 4 L. T. N. S. 859, charging a purchaser of personal property with the knowledge of the solicitor who acted for both purchaser and seller, and also for himself. Gunn v. Vinegratsky (1911) 20 Manitoba L. Rep. 311, holding a grantee chargeable with knowledge of the solicitor, of the insolvency of the grantor. 63 In Tweedale v. Tweedale (1857) 23 Beav. 341, 53 Eng. Reprint, 134, a mortgagee was held chargeable with the knowledge of the mortgagor's solicitor of a prior lien, where the mortgagor's solicitor, at the instance of the mortgagee's solicitor, whose duty it was to prepare the mortgage deed, prepared the deed on behalf of the mortgagees. This, the court holds, makes the mortgagor's solicitor agent of the mortgagee's solicitor so as to bind the mortgagee by his knowledge. The mortgagee's solicitor testified that, in order to avoid expense and delay, he consented that the mortgagor's solicitor, who was well acquainted with the title to the premises, should prepare the draft to the mortgage, but that the mortgage was, after preparation, submitted to mortgagee's solicitor, who, being satisfied with the same on behalf of the mortgagee, procured the same to be executed by the mortgagor. In Frail v. Ellis (1862) 16 Beav. 350, 51 Eng. Reprint, 814, 22 L. J. Ch. N. S. 467, 1 Week. Rep. 72, a mortgagee was held chargeable with the knowledge of his solicitor, who had previously acted for the mortgagor and his vendor in effecting the sale, that the balance of the purchase money had not been paid, and that the contract for the purchase was not such as to prevent the vendor having a lien on the property. Whether the executor represented the vendee at the time of the mortgage is not altogether clear. See Boursot v. Savage (1866) L. R. 2 Eq. (Eng.) 134, 35 L. J. Ch. N. S. 627, 14 L. T. N. S. 299, 14 Week. Rep. 565, supra, note 11. See Blackwell v. British American Mortg. Co. (1902) 65 S. C. 105, 43 S. E. 395, supra, note 48. But some doubt has been thrown on this rule. The court in Warrick v. Warrick (1745) 3 Atk. 291, 26 Eng. Reprint, 970, states: "It would be a pret edge of his solicitor, although such solicitor is himself the mortgagor,64 ty harsh thing to affect the lender of the money with all kinds of knowledge which the agent may have of the title of borrower; but still I will not lay it down as a general rule that, where the same person is concerned for the mortgagor and mortgagee, that notice to such person will not be good constructive notice to the mortgagee." In Re Marseilles Extension R. Co. (1871) L. R. 7 Ch. (Eng.) 161, 41 L. J. Ch. N. S. 345, 20 Week. Rep. 254, the court refused to impute to a mortgagor the knowledge of a common solicitor for mortgagor and mortgagee. It is stated that the mortgagor, which was a company, acted upon the responsibility of its directors in making the mortgage, and the solicitor was employed merely to draw up the mortgage deed. In Wyllie v. Pollen (1863) 3 De G. J. & S. 596, 46 Eng. Reprint, 767, 2 New Reports, 500, 32 L. J. Ch. N. S. 782, 9 L. T. N. S. 71, 11 Week. Rep. 1081, where, in effecting a transfer of mortgage securities, the duty of obtaining the execution by the mortgagor of the transfer was delegated by the transferee's solicitor to the mortgagor's solicitor, it was held that the mortgagor's solicitor did not become the solicitor of the transferee in such a way as to attract the operation of the doctrine of constructive notice. 64 Sheldon v. Cox (1764) 2 Ambl. 624, 27 Eng. Reprint, 404. Rolland v. Hart (1871) L. R. 6 Ch. (Eng.) 678, 40 L. J. Ch. N. S. 701, 25 L. T. N. S. 191, 19 Week. Rep. 962, holding a second mortgagee chargeable with the knowledge of his solicitor, of a previous mortgage, where the solicitor himself was the mortgagor, he holding the property as trustee and fraudulently keeping both mortgages off the record. The mortgages were given less than a month apart. Bradley v. Riches (1878) L. R. 9 Ch. Div. (Eng.) 189, 38 L. T. N. S. 810, 47 L. J. Ch. N. S. 811, 26 Week. Rep. 910, charging a mortgagee with the knowledge of his solicitor, who was also the mortgagor of a previous lien upon the mortgaged property. Turton v. Meacham (1869) 19 L. T. N. S. (Eng.) 760, 17 Week. Rep. 429, holding the lien of a subsequent legal mortgage postponed to the lien of an equitable mortgage, of which the legal but this rule has been denied by at least one American court.65 This rule that the knowledge of a solicitor representing both mortgagor and mortgagee is imputable to both clients is subject to the exception mentioned, infra, that knowledge will not be imputed where the solicitor intended a fraud.66 V. Facts acquired prior to the employment. As to whether knowledge acquired mortgagee's solicitor had knowledge, he being the mortgagor. Majoribanks v. Hovenden (1843) 6 Ir. Eq. Rep. 238, holding a second mortgagee chargeable with the knowledge of a prior unrecorded mortgage given by the mortgagor, who acted as solicitor for the second mortgagee. It is stated in Hewitt v. Loosemore (1871) 9 Hare, 449, 68 Eng. Reprint, 586, that "where a mortgagor is himself a solicitor and prepares the mortgage deed, the mortgagee employing no other solicitor, the mortgagor must be considered to be the agent or solicitor of the mortgagee in the transaction of the mortgage." But it is held in this case that the mortgagee is not, therefore, to be considered to have had notice of a prior equitable mortgage, by a deposit of the title papers. In Atterbury v. Wallis (1856) 8 De G. M. & G. 454, 44 Eng. Reprint, 465, 25 L. J. Ch. N. S. 792, 2 Jur. N. S. 1177, 4 Week. Rep. 734, an owner of land who had already given two mortgages thereon gave a third mortgage, in which the two prior mortgagees joined for the purpose of making the third mortgage a prior lien. The second mortgagee, who was a solicitor, had assigned the mortgage given to him, but said nothing about this at the time of giving the third mortgage. The third mortgagee was held chargeable with this knowledge, the solicitor having acted for all parties to the transaction. In Espin v. Pemberton (1879) 3 De G. & J. 547, 44 Eng. Reprint, 1380, a mortgagee was held not bound by knowledge of a previous lien, possessed by the mortgagor, who was himself a solicitor and prepared the mortgage deed, the mortgagor employing no other solicitor; but this decision is based on the theory that the mortgagor was not the solicitor for the mortgagee. [4 A.L.R. before the relation of attorney and client arose is imputable to the principal, the courts are not agreed. By some, the rule is limited to facts acquired within the period of the agency; at least, knowledge previously acquired, none of which was obtained in doing business for the client to whom it is sought to be imputed, will not be so imputed.67 The rule is stat ed that, to charge a client with notice, the knowledge of the agent or at And see Wyllie v. Pollen (Eng.) supra. See Mutual Bldg. & L. Asso.'s Case (1893) 19 Pa. Co. Ct. 504, infra, note 68. 65 See Goodell v. Taylor, infra, note 85. But see Mutual Bldg. & L. Asso's Case, note 68, infra. 66 See Kennedy v. Green (1834) 3 Myl. & K. 699, 40 Eng. Reprint, 266, 21 Eng. Rul. Cas. 820, infra, note 90; Cave v. Cave (1880) L. R. 15 Ch. Div. 629, 49 L. J. Ch. N. S. 505, 42 L. T. N. S. 730, 28 Week. Rep. 793, infra, note 90; Waldy v. Gray (1875) L. R. 20 Eq. 238, 44 L. J. Ch. N. S. 394, 32 L. T. N. S. 531, 23 Week. Rep. 676, infra, note 90. 67 That the notice must have been given within the time of the existence of the relation, to be imputable to the client, is approved in Marshall v. Lister (1916) 195 Ala. 591, 71 So. 411. It is stated in Lucas v. Bank of Darien (1830) 2 Stew. (Ala.) 280, that, were the rule otherwise, "the doctrine would be mischievous, for then it would be most dangerous to employ counsel of the most practice and greatest eminence." It is stated in McCormick v. Joseph (1887) 83 Ala. 401, 3 So. 796, that "notice or knowledge by an attorney, to carry home constructive notice to the client, must be shown to have been given or acquired after the relation of attorney and client was found." It was held in this case that notice of the insolvency of a merchant, acquired by an attorney in preparing a mortgage and bill of sale, was not imputable to a client for whom the attorney subsequently obtained property of the merchant in satisfaction of a claim. Warner v. Hall (1894) 53 Mich. 371, 19 N. W. 40. But see Littauer v. Houck (1892) 92 Mich. 162, 31 Am. St. Rep. 572, 52 N. W. 464, supra, note torney should be gained in the course of the same transaction in which he is employed by his client.68 In one case, it is stated to be settled "that notice to an agent or counsel who was employed in the thing by another person, or in another business, and at another time, is no notice to his client who employs him afterwards." 43, where there is no discussion of time of receipt beyond the statement that notice was received prior to the time suit was begun on the claim. 68 Pennsylvania cases in note 38, supra. Rogers v. Driscoll (1910) 59 Tex. Civ. App. 415, 125 S. W. 599, see supra, note 32, for facts. Lowther v. Carlton (1741) 2 Atk. 242, 26 Eng. Reprint, 549, Cas. t. Talb. 187, 25 Eng. Reprint, 730, supra, note 32, for facts; Warrick v. Warrick (1745) 3 Atk. 294, 26 Eng. Reprint, 970, supra, note 14, for facts; Ashley v. Baillie (1751) 2 Ves. Sr. 368, 28 Eng. Reprint, 236. Edgecumbe v. Stranger (1837) 1 Jur. (Eng.) 400, holding a mortgagee of property not chargeable with knowledge of facts relating to the title of the mortgagor because of the fact that the solicitor employed by the mortgagee had, two years before, represented the mortgagor in obtaining title to the property. It is here stated, however, that it is not necessary to suppose that at the later date the attorney had in his mind the full recollection of the circumstances by which the contract would be impeached, which, at the earlier date, he had concluded, and had discharged from his mind. It is stated in Preston v. Tubbin (1684) 1 Vern. 287, 23 Eng. Reprint, 474, that, "though notice to a man's counsel be notice to the party, yet, where the counsel comes to have notice of the title in another affair, which, it may be, he has forgot when his client comes to advise with him in a case with other circumstances, that shall not be such a notice as to bind the party." Mountford v. Scott (1818) 3 Madd. Ch. 34, 56 Eng. Reprint, 422, 18 Revised Rep. 189, affirmed on another ground (1823) Turn. & R. 274, 37 Eng. Reprint, 1105, 24 Revised Rep. 55, see infra, note 76. See statement as to Pennsylvania cases. supra, note 14. But in the majority of jurisdictions the rule is not so limited, but it is held that the client may be charged with knowledge acquired by the attorney before the relation was created.70 The better-considered cases in these jurisdictions limit the imputation of knowledge acquired previous to the existence of the relation, to such Notice to an attorney for the defendant in an action brought for the recovery of damages for personal injury suffered by reason of a defective sidewalk, of another action in which. the plaintiff sought to recover damages of the municipality for the same injury, is not notice in the same transaction, and therefore not binding upon the client. Chester v. Schaffer (1904) 24 Pa. Super. Ct. 162. It has been held in Pennsylvania that the knowledge of an attorney who purchased land at a sheriff's sale, that the deed had not yet been delivered to him, would be imputed to his client, a building and loan association of which he borrowed money, giving as security a mortgage on the premises, where the loan was consummated within a week or two after the purchase at the sheriff's sale. The court states that it seemed that it can fairly be said that the attorney gained the knowledge in the course of his employment as counsel for the building and loan association, "because the nonpayment of the purchase money and the nondelivery of the deed were not antecedent facts somewhere back in the chain of title, but were the main facts about which the association desired information, and doubtless were the principal questions involved in the supposed examination of title." Mutual Bldg. & L. Asso.'s Case (1896) 19 Pa. Co. Ct. 504. It will be noticed also that the information involved in this case was not derived while transacting business for another client. See Fuller v. Benett (1843) 2 Hare, 394, 67 Eng. Reprint, 162, 12 L. J. Ch. N. S. 355, 7 Jur. 1056, supra, note 10. 69 Worsley v. Scarborough (1746) 3 Atk. 392, 26 Eng. Reprint, 1025. 70 Williams v. Tatnall (1862) 29 Ill. 553 (without discussion); Fairfield Sav. Bank v. Chase (1881) 72 Me. 226, 39 Am. Rep. 319. See Littauer v. Houck (1892) 92 Mich. 162, 31 Am. St. Rep. 572, 52 N. W. 464, supra. Lyons v. Wait (1893) 51 N. J. Eq. 60, 26 Atl. 334, imputing to defend knowledge as was present to the mind of the attorney while acting for the client to whom notice of such fact is sought to be imputed.71 In one case72 it is stated, after reviewing a number of cases, that "it will be seen that the farthest that has been gone in the way of holding a principal chargeable with knowledge of facts communicated to his agent, where the notice was not received or the knowledge obtained in the very transaction in question, has been to hold the principal chargeable upon clear proof that the knowledge which the agent once had, and which ants in an action for specific performance, the knowledge of their attorney of the contract of sale entered into by an agent, the contract having been drawn by the attorney before his employment by the defendants, and being in his possession at the time of such employment. 71 Donald v. Beals (1881) 57 Cal. 399, imputing to the assignee of a mortgage notice of a mistake in recording a prior mortgage so that the prior mortgage appeared to be a subsequent one, acquired by an attorney when acting for the mortgagee in a suit begun to foreclose, where the attorney acted for both parties in the assignment, which took place after the foreclosure proceedings had been dismissed. The court, in Wittenbrock v. Parker (1894) 102 Cal. 93, 24 L.R.A. 197, 41 Am. St. Rep. 172, 36 Pac. 374, conceding that knowledge acquired previous ly to the creation of the relation may be imputed to the principal, states that it should be limited, as is stated in the text. This case is approved in Otis v. Zeiss (1917) 175 Cal. 192, 165 Pac. 524. HESS V. CONWAY (reported herewith) ante, 1580. Fairfield Sav. Bank v. Chase (1881) 72 Me. 226, 39 Am. Rep. 319, holding knowledge of an attorney who wrote and took the acknowledgment of a deed to land, of the existence of the deed, imputable to a client who employed him two days thereafter to write and take the acknowledgment of a mortgage from the grantor in the deed. Constant v. University of Rochester (1889) 111 N. Y. 604, 2 L.R.A. 734, 7 Am. St. Rep. 769, 19 N. E. 631, 2d appeal (1892) 133 N. Y. 640, 31 N. E. 26. [4 A.L.R. he had obtained in another transaction, at another time, and for another principal, was present to his mind at the very time of the transaction in question." Where the knowledge is present to the mind of the attorney it is imputable to the client.73 Some cases hold merely that the knowledge of an attorney acquired in a prior transaction is imputable to his client, if the information is so precise and definite that it is or must be present to his mind and memory in transacting business for his client.74 Some of the cases which state the rule absolutely Slattery v. Schwannecke (1890) 118 N. Y. 543, 23 N. E. 922, holding that knowledge acquired by attorneys in a conversation with another, in regard to an abstract of an unrecorded deed, is not imputable to a mortgagee for whom the attorneys foreclosed a mortgage on the premises, where there is no evidence that the knowledge was present in their minds. Denton v. Ontario County Nat. Bank (1896) 150 N. Y. 126, 44 N. E. 781, holding that knowledge of an attorney of a foreclosure in which he represented a party is not imputable to a junior mortgagee, who thereafter employed the attorney to foreclose his mortgage, where there was no clear evidence that it was present to his mind. But see comment, supra, note 34. Mathews v. Damainville (1905) 100 App. Div. 311, 91 N. Y. Supp. 524, holding a purchaser not chargeable with knowledge of his attorney of an equitable lien on the property purchased, derived in transacting business for another client, there being no proof that it was present in his mind. See Hart v. Farmers' & M. Bank (1860) 33 Vt. 252, supra, note 21. 72 Constant v. University of Rochester (N. Y.) supra. There being no evidence that the attorney, at the time of taking a second mortgage, retained knowledge of a prior unrecorded mortgage taken by him eleven months before, the client was held not chargeable. 73 HESS V. CONWAY (reported herewith) ante, 1580; McCutcheon v. Dittman (1900) 164 N. Y. 355, 58 N. E. 97. 74 Deering v. Holcomb (1901) 26 Wash. 588, 67 Pac. 240, 561; Schmidt v. Olympia Light & P. Co. (1907) 46 Wash. 360, 90 Pac. 212. |