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against imputing knowledge previously acquired contain indications that the rule rests upon a presumption of the attorney having forgotten the knowledge.75 The English cases are not agreed upon the question. As just shown, some of the English decisions in which the rule is stated absolutely against imputing prior acquired knowledge contain suggestions that it might be otherwise if the attorney had remembered the previously acquired knowledge, or if it was acquired so shortly before the employment that he must be presumed to have remembered it.76
It is expressly stated in one case 77 "that where one transaction was closely followed by and connected with another, or where it was clear, as in the case before the court, that a previous transaction was present to the mind of the solicitor when engaged in another transaction, there was no ground for the distinction by which
75 In Warrick v. Warrick (1745) 3 Atk. 291, 26 Eng. Reprint, 970, the court, after referring to the fact that the transaction with the client whom it was sought to affect with notice occurred a year and six months after the attorney obtained knowledge sought to be imputed, states that it is very probable that the attorney had forgotten it in this length of time.
See Edgecumbe v. Stranger (1837) 1 Jur. (Eng.) 400, supra.
76 Thus, in Mountford (1823) Turn. & R. 274, 37 Eng. Reprint, 1105, although the decision turned upon another ground, it is stated that it might be necessary to consider "whether one transaction might not follow so close upon the other as to render it impossible to give a man credit for having forgotten it. should be unwilling to go so far as to say that, if an attorney has notice of a transaction in the morning, he shall be held in a court of equity to have forgotten it in the evening; it must, in all cases, depend upon the circumstances."
In Gerrard v. O'Reilly (1843) 3 Drury & War. (Ir.) 414, the court refers to the rule that if a solicitor has notice in the same transaction, or so recently that it is impossible to suppose he could have forgotten it, then the client will be chargeable with notice, and states: "The rule or principle is, in 4 A.L.R.-102.
the rule that notice to the solicitor is notice to the client had been restricted to the same transaction." And in another case 78 there is stated to be "no inflexible rule that the knowledge must, of necessity, have been acquired in the same transaction." Continuing, the court states that "knowledge acquired by the agent in one transaction may, under certain circumstances, be held binding on the principal in a second transaction. . . . If the notice be so clearly proved that no one can doubt that it was fraud in the agent to conceal it from his principal, it is ground for holding it notice to the principal." The fraud mentioned here, being constructive, merely arising from nondisclosure of facts, should not be confused with the actual fraud discussed infra.79 Previously acquired knowledge has been imputed to the client in some of the English cases.8 80 Where knowledge acquired by the atitself, a sound one, but it must not be carried too far."
77 Hargreaves v. Rothwell (1836) 1 Keen, 154, 48 Eng. Reprint, 265, 5 L. J. Ch. N. S. 118.
78 Nixon v. Hamilton (1838) 1 Ir. Eq. Rep. 46, holding a mortgagee chargeable with the knowledge of his solicitor of a prior unrecorded deed of settlement to the mortgaged land.
Twycross v. Moore (1850) 13 Ir. Eq. Rep. 250, holding the cestui que trust under a marriage settlement chargeable with knowledge of the solicitor who prepared the settlement, of a prior mortgage upon the property settled in trust, and this notwithstanding the solicitor was, as a trustee, the mortgagee. It is proved in this case that the existence of the prior mortgage was perfectly in the recollection of the solicitor, because he had a conversation in regard thereto, but it is stated that, independent of this evidence, the solicitor to whom the mortgage was made would be held to have notice of the mortgage, and of the trust upon it, being matters to which he was himself a party, just as he would be held to have had notice of any deed executed by himself as a grantor; and, consequently, through him the cestui que trust would be affected with such notice.
torney previous to his employment is sought to be imputed to a client, it has been stated that "the knowledge or notice must be of a matter so material to the transaction as to make it the agent's duty to communicate the fact to his principal." And it has been held that there must be clear proof that the knowledge was present to the mind of the attorney at the time of the second transaction; otherwise, the client is not chargeable.82
Where an attorney who in fact has no authority to act for a person assumes such authority and takes a security to such person, which the person afterwards accepts, it has been held that the act of the attorney in representing such person is ratified, and that knowledge acquired by the attorney in the transaction is imputable to the client.83 In one case,84 in which an attorney for a failing debtor took the necessary legal steps to have judgments confessed and mortgages executed in favor of certain creditors, the court, in imputing to such credCh. (Eng.) 678, 40 L. J. Ch. N. S. 701, 25 L. T. N. S. 191, 19 Week. Rep. 962. And see preceding notes. And see generally, the cases supra, imputing to a mortgagee knowledge of his solicitor.
81 Fairfield Sav. Bank Chase (1881) 72 Me. 226, 39 Am. Rep. 319. 82 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, supra; Mathews v. Damainville (1905) 100 App. Div. 311, 91 N. Y. Supp. 524, supra.
See Kirklin v. Atlas Sav. & L. Asso. (1900) Tenn. 60 S. W. 149, in
83 Lampkin v. First Nat. Bank (1895) 96 Ga. 487, 23 S. E. 390, holding knowledge of an attorney acquired in taking mortgages from a failing debtor to be knowledge of the mortgagees who afterwards accepted the mortgages.
Haas v. Sternbach (1895) 156 Ill. 44, 41 N. E. 51, holding notice to an attorney for a failing debtor, of an unrecorded mortgage given by the debtor, imputable to creditors in whose favor mortgages were given and judgments confessed, and who afterwards
itors as accepted the benefit of the securities, knowledge of the attorney of a prior unrecorded mortgage given by the debtor, states that the attorney, although retained by the debtor, was employed in the interest of and acted for the creditors. Continuing, the court stated: "He performed not merely ministerial duties, but used his professional skill and discretion in their behalf. To allow them the full benefit of his services, and at the same time relieve them from the legal effect of notice to him of the existence of the instrument he was seeking, in their interests to defeat, would be unjust, and in our opinion contrary to authority." VI. Attorney acting in his own interest, or in fraud of his client.
An exception that is ingrafted upon the general rule that knowledge of an attorney is imputable to his client is that, where the attorney is acting in his own interest, his knowledge will not be imputed to the client.85 Where knowledge acquired previous to the
accepted the benefits of such mortgages and securities.
84 Haas v. Sternbach (Ill.) supra. 85 Scotch Lumber Co. v. Sage (1901) 132 Ala. 598, 90 Am. St. Rep. 932, 32 So. 607, holding notice not imputable, where the attorney was acting for both parties in a sale of land. The court states that he was personally interested in the sale.
Hope F. Ins. Co. v. Cambreleng (1874) 3 Thomp. & C. (N. Y.) 495, holding the knowledge of a solicitor representing two clients, who borrowed money from each of the clients, giving a mortgage upon his property, of the mortgage given first, not to be imputable to the client to whom he gave the second mortgage, which was first recorded.
Goodell v. Taylor (1916) Eq. 97 Atl. 569, holding that notice of a defect in title will not be imputed to a mortgagee, where the attorney was the mortgagor. But see Mutual Bldg. & L. Asso.'s Case (1896) 19 Pa. Co. Ct. 504, supra, note 69.
FLORENCE V. DE BEAUMONT (reported herewith), ante, 1565.
Thompson v. Cartwright (1863) 2 De G. J. & S. 10, 46 Eng. Reprint, 277, 33 L. J. Ch. N. S. 234, 3 New Reports, 144, 9 Jur. N. S. 1215, 9 L. T. N. S.
employment is sought to be imputed to a client, it has been stated that "the agent must himself have no personal interest in the matter, which would lead him to conceal the knowledge from his principal." 88 In another case it is stated that "just as soon as the agent forms the purpose of dealing with his principal's property for his own benefit and advantage, or for the benefit and advantage of other persons who are opposed in interest, he ceases, in fact, to be an agent acting in good faith for the interest of his principal, and his action thereafter, based upon such purpose, is deemed to be in fraud of the rights of his principal, and the presumption that he has disclosed all the facts that have come to his knowledge no longer prevails." The application of this exception has been denied to a case in which attorneys, acting for an insolvent debtor and several creditors, obtained a mortgage to secure the creditors, and included therein an amount estimated as the value of future services which they (the attorneys) might render the insolvent.88 And this view has been doubted by an English court,89 where it was sought to charge a mortgagee with knowledge of his solicitor, who was also the mortgagor
431, 12 Week. Rep. 116, holding the grantee of an annuity not chargeable with the knowledge of his solicitor of the existence of a mortgage upon the property charged with the payments of the annuity, where the solicitor was the mortgagee.
See Hewitt v. Loosemore (1851) 9 Hare, 449, 68 Eng. Reprint, 586, 21 L. J. Ch. N. S. 69, 15 Jur. 1097, supra, note 64.
86 Fairfield Sav. Bank V. Chase (1881) 72 Me. 226, 39 Am. Rep. 319.
87 Benedict v. Arnoux (1898) 154 N. Y. 715, 49 N. E. 326, refusing to impute to a client knowledge of an attorney intrusted by the client with money to loan, acquired in a transaction in which the money was loaned to a judgment debtor of the attorney, who received payment of his judgment from the proceeds of the loan.
A similar decision appears in Olyphant v. Phyfe (1900) 48 App. Div. 1, 62 N. Y. Supp. 688, affirmed without opinion in (1901) 166 N. Y. 630, 60
of a previous lien upon the mortgaged premises. It was urged that the solicitor had an interest not to communicate the fact of the previous lien. In answer to this, the court states: "But I will not lay down as a rule that where a solicitor owes a duty on the one side, and has an interest on the other side, the presumption arises that he follows his interest and not his duty. I shall, on the contrary, presume that in this case he performed his duty, even although it was against his interest." The court then states that the mortgage would have been accepted by the mortgagee even though he had known of the previous lien, but adds: "I desire to put my decision mainly upon this, that, where there is an interest and a duty, I shall not presume that the solicitor will follow his interest and neglect his duty."
It is the doctrine of some English cases that where the solicitor intended a fraud in the transaction, which would require the suppression of the knowledge of the material fact from the person upon whom he is committing the fraud, such person is not to be charged with the knowledge.90 It is difficult to determine from the English decisions when a case is brought within this rule. It is stated by Lord
N. E. 1117, where the attorney designed to advance and further the interests of the borrower.
88 Shideler v. Fisher (1899) 13 Colo. App. 106, 57 Pac. 864. The court states that the attorneys were not engaged in any scheme with the debtor to defraud or wrong the principals whom they represented, but were engaged in an entirely reasonable effort to secure the debts due their clients.
89 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.
90 Kennedy v. Green (1834) 3 Myl. & K. 699, 40 Eng. Reprint, 266, 21 Eng. Rul. Cas. 820, holding a mortgagee who had employed the mortgagor as his solicitor not chargeable with knowledge that the mortgagor had fraudulently obtained a conveyance to himself of the mortgaged property. It is further held in this case, however, that the circumstances under which the mortgage was taken were so suspi
Hatherley, L. C.,91 "that the question, how far you are justified in assuming that the agent does not communicate to his client information which he has received, and ought to have communicated, may be affected by very delicate shades of difference. It might be said that the very fact of the solicitor not having communicated an important circumstance is of itself evidence of fraud. But Lord Justice Turner, in the case of 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, exactly meets that difficulty, and says that such a rule cannot prevail. It must be made out that distinct fraud was intended in the very transaction, so as to make it necessary for the solicitor to conceal the fact from his
cious that a solicitor ignorant of the fraud would have been put upon notice; accordingly, the mortgagee was held chargeable.
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.
Cave v. Cave (1880) L. R. 15 Ch. Div. (Eng.) 639, 49 L. J. Ch. N. S. 505, 42 L. T. N. S. 730, 28 Week. Rep. 793, holding a mortgagee not chargeable with the knowledge of his solicitor, who was also acting for the mortgagor, that the mortgaged property had been fraudulently purchased with trust money belonging to a trust of which the mortgagor and the solicitor were the trustees.
Re Southampton (1880) L. R. 16 Ch. Div. (Eng.) 178, 50 L. J. Ch. N. S. 218, 43 L. T. N. S. 687, 29 Week. Rep. 231, holding a mortgagor who had paid the mortgage debt to his solicitor not chargeable with knowledge of such solicitor, of an interest in the mortgage debt of another client of the solicitor.
Waldy v. Gray (1875) L. R. 20 Eq. (Eng.) 238, 44 L. J. Ch. N. S. 394, 32 L. T. N. S. 531, 23 Week. Rep. 676, holding that a mortgagee who had employed the mortgagor's solicitor to pass upon the title to the mortgaged premises was not chargeable with the solicitor's knowledge of a prior lien, where the solicitor, as a trustee, was the holder of the prior lien, and had fraudulently delivered up to the mortgagor the title papers evidencing the prior lien.
client in order to defraud him." In another case,92 this qualification is stated as follows: "If the disclosure of that fact of which knowledge is sought to be fixed upon the client would have imputed fraud to the solic itor, it is not to be presumed that the solicitor did make disclosure of that fact." And in a third case,93 where the assignee of a leasehold interest from one of three trustees was held chargeable with knowledge of the trust because of the knowledge of his solic itor, who was the trustee who made the conveyance, it was insisted that the doctrine of imputed notice could not apply, because the solicitor was committing a fraud. In answer to this, the court states: "But if the client would be affected with constructive notice of a trust, the existence of
In Re Barker (1875) 44 L. J. Ch. N. S. (Eng.) 487, 23 Week. Rep. 944, holding that a mortgagee to whom his solicitor had given a mortgage, and subsequently, in fraud of the mortgage, had deposited the title deed with other mortgagees, did not have constructive notice of a subsequent voluntary deed of other property executed by the solicitor.
MacArthur v. Hastings (1905) 15 Manitoba L. Rep. 500, holding the grantee of trust property from her solicitor not chargeable with his knowledge of the trust.
Sankey v. Alexander (1874) Ir. Rep. 9 Eq. 259, holding a lender not chargeable with knowledge of the solicitor, who represented both the lender and the borrower.
Cameron v. Hutchison (1869) 16 Grant, Ch. (U. C.) 526, holding the assignee of a mortgage not chargeable with knowledge of the assignor, his solicitor, of a fraudulent intent in the assignment.
See Fordtran v. Cunningham (1915) Tex. Civ. App. —, 177 S. W. 212, supra.
91 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
92 Waldy v. Gray (1875) L. R. 20 Eq. (Eng.) 238, 44 L. J. Ch. N. S. 394, 32 L. T. N. S. 531, 23 Week. Rep. 676.
93 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.
which is known to his solicitor, in a case where there is no fraud, the fact that the solicitor is committing a fraud in relation to that trust cannot afford any reason why the client should not be affected with constructive notice of the existence of the trust. It is the existence of the trust, and not the fraud, of which he is held to have constructive notice; and the constructive notice of the existence of the trust must be imputed to him whether there is a fraud relating to it or not."
VII. Knowledge of partner or clerk of attorney.
It seems clear that notice in regard to the subject-matter of the employment, to one of a number of attorneys employed by a client, is notice to the client. While it is true that notice to one of a firm of attorneys is notice to all members of the firm, it is only constructive notice to those who have no actual knowledge of the facts. This constructive notice, it has been held, is not sufficient to charge a client of a member of the firm in another and subsequent transaction; constructive notice to the client springs from actual knowledge, or such information as should awaken inquiry in a reason
94 Brown v. Oattis (1875) 55 Ga. 416; see supra, note 16.
See Smith v. Wilson & B. Sav. Bank (1892) 1 Tex. Civ. App. 115, 20 S. W. 1119, supra, note 13.
95 Wittenbrock v. Parker (1894) 102 Cal. 93, 24 L.R.A. 197, 41 Am. St. Rep. 172, 36 Pac. 374, holding that a mortgagee who employed one of a firm of attorneys to pass upon the title to the mortgaged premises before the mortgage was taken is not chargeable with notice of a mistake made by another member of the firm in a release of a prior mortgage, the release covering all the property, when it was intended to release only a part.
That constructive notice to an attorney will not be imputed to his client is held in Central Trust Co. v. West India Improv. Co. (1900) 48 App. Div. 147, 63 N. Y. Supp. 853, reversed without reference to this point in (1901) 169 N. Y. 314, 62 N. E. 387.
In Brown v. Sweet (1880) 7 Ont. App. Rep. 725, where it was sought to impute to the client of one member of
able man, imparted to or acquired by the attorney.9 95 How far the knowledge of a clerk will be imputed to the client of an attorney is a question upon which there is little authority. It has been stated that where a solicitor, with the consent of his client, puts his managing clerk to conduct the management of the matter which the solicitor was retained to conduct, he thus puts his clerk into a position which makes the notice of the clerk to be notice to the solicitor, and so to the ultimate client; but where the solicitor does not delegate the whole of his authority to his clerk, but, on the contrary, retains a part of the business in his own hands, notice to the clerk is not notice to the client. The court states: "I am not prepared to hold that, apart from the question of substitution for the principal, the position of managing clerk is one that makes notice to the clerk to be the notice of his principal." 96
VIII. Knowledge of general attorney.
Knowledge of an attorney retained generally by a client to render such legal services as the client may from time to time require is not, in all instances, imputable to the client.97 Thus, it has been held that knowledge a firm knowledge of a suit conducted by another member of the firm, it is stated simply that it was not shown that the first-mentioned member had actual knowledge of the suit, and unless there was actual knowledge such knowledge could not be imputed to his client.
That constructive knowledge of an attorney may be imputed to a client, see Presstman v. Mason (1887) 68 Md. 78, 11 Atl. 764; Shartzer v. Mountain Lake Park Asso. (1897) 86 Md. 335, 37 Atl. 786, supra, note 16. See Butler v. Morse (1891) 66 N. H. 429, 23 Atl. 90, supra, note 16.
96 Re Ashton (1891) 64 L. T. N. S. (Eng.) 28, 39 Week. Rep. 320, 8 Morrell, 72.
As to dealings with a clerk, see Northwest Constr. Co. v. Valle (1906) 16 Manitoba L. Rep. 201, supra, note 6.
97 In Hooper v. Cooke (1856) 2 Jur. N. S. (Eng.) 527, 25 L. J. Ch. N. S. 467, it is stated that communications through a solicitor, to make them no