negotiations. The proposition involves the doctrine of imputed notice or knowledge, and it is to this principle we now give attention.

The relation of attorney and client is predicated on the doctrine of agency or representation. A person is legally obligated either (1) because he has consented to be, or (2) because the law, by reason of public policy, thinks it best that he should be. In the employment of an agent and the creation of obligations thereunder, it must be borne in mind that the principal must take account, not only of his own will, but also of the will of the agent, and, within certain limitations, not only his own knowledge, but the knowledge of the agent. Historically speaking, the doctrine of representation or agency is bottomed on the fiction of identity, the unity of principal and agent. The general notion is expressed in the maxim, "qui facit per alium facit per se." No one questions the legal identity of principal and agent, since equity

Notice-to agent-effect.

and good conscience require that one who acts through an agent and avails himself of the benefits of his agent's participation should be charged with his agent's knowledge as well as his acts. In the last analysis, it is a rule of public policy. As stated by Justice Holmes: "Every important principle which is developed by litigation is in fact and at bottom the result of more or less definitely understood views of public policy; most generally, to be sure, under our practice and traditions, the unconscious result of instinctive preferences and inarticulate convictions, but none the less traceable to views of public policy." Holmes, Common Law, p. 35.

The general rule that knowledge of the attorney is chargeable to the client cannot be questioned. This rule is sometimes spoken of as a conclusive presumption of law, but this is a mere matter of terminology. A conclusive presumption is a substantive rule of law, and, when the basic

38 A.L.R.-52.

of law.

facts are before a court, the rule, like any other legal Evidence-preprinciple, finds ap- sumption-rule plication. In the evolution of such a rule, we find that in its origin it was based on presumption; for example, that a child under seven years cannot commit a felony; that a right by prescription presumes a lost grant. Referring to the instant rule, it is said in the note in 4 A.L.R. 1593: "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 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 prefer to characterize it as

imputed notice."

The viewpoint of Dean Wigmore finds expression in these words: "In strictness, there cannot be such a thing as a 'conclusive presumption.' Whenever from one fact another is conclusively presumed, in the sense that the opponent is absolutely precluded from showing by any evidence that the second fact does not exist, the rule really provides that, where the first fact is shown to exist, the second fact's existence is wholly immaterial for the purpose of the proponent's case; and to provide this is to make a rule of substantive law, and not a rule apportioning the burden of persuading as to certain propositions or varying the duty of coming forward with evidence. The term has no place in the principles of evidence (although the history of a 'conclusive presumption' often includes a genuine presumption as its earlier

stage), and should be discarded." [Ev. § 2492.]

To the same effect it is said: "It may well be urged that all of these so-called conclusive presumptions may be more properly described as substantive rules of the law than as conclusive presumptions of law." 1 Jones, Ev. p. 23.

The rule is not technical or arbitrary, but is applied when the conditions upon which it is predicated are shown to exist. The so-called exceptions to the general rule call for the consideration of facts and circumstances other and different from what must be established in order to invoke the general rule, but it is not correct to say that the rule or or its so-called exceptions are mere rebuttable presumptions. These exceptions are also based upon "more or less definitely understood views of public policy." Fictions and presumptions against the

-when pre

dulged.

actual facts should

sumption in- be indulged only when some substantial advancement of the ends of justice is to be attained. If the natural or necessary consequence of a rule is productive of injustice, a court should not hesitate to adopt one consonant with right and justice. It is said in Wallace v. Fletcher, 30 N. H. 434: "The common law has been everywhere modified, to adapt it to the wants of our community. The English decisions on this subject [prescription] have been but modes of evading the effect of early decisions of their courts, which have been found inconsistent with the principles of justice; and it is clearly as much within the legitimate sphere and customary action of the courts to disregard or to overrule such decisions, as it can be to evade them by nice presumptions, either of fact or of law."

In Bradley v. Oskaloosa, 193 Iowa, 1072, 188 N. W. 896, it is written: "In the passing of years the necessity or basis for a rule of civil conduct may disappear, but the rule itself remains. The occasion for the rule may be forgotten, but a

new reason is formulated consistent with the life and public policy of a later period, and the rule lives on. The crowning glory of the common law is its elasticity and its adaptability to new conditions and new state of facts."

Courts have recognized the unfairness of charging the client with the acquired knowledge of his agent under all circumstances, and therefore have ingrafted the so-called exceptions to the rule governing imputed notice or knowledge. The decisions are not uniform, or the fundamental reasons uniformly consistent, but the exceptions are fairly well defined. Some courts predicate the rule on the duty of the agent to disclose to the principal all of the material facts coming to his knowledge with reference to the subject of his agency, with the supplemental presumption that he had discharged that duty. 21 R. C. L. p. 838. The notice or knowledge, however, has the same effect as to third persons as though the duty had been faithfully performed, since the communication in law is in præsenti. The breach of duty on the part of the agent to his principal is no defense; nor may the Notice-rebutrule be rebutted by ting presumpshowing that the

tion of.

agent did not in fact disclose his information. The majority rule also affirms that knowledge acquired by an agent before the commencement of the relationship of principal and agent is imputable to the former, if the knowledge is present in the mind of the agent while acting for the principal in a transaction to which the information is material. H. W. Wright Lumber Co. v. McCord, 145 Wis. 93, 34 L.R.A. (N.S.) 762, 128 N. W. 873, Ann. Cas. 1912B, 92. This is the Iowa rule. McClelland v. Saul, 113 Iowa, 208, 86 Am. St. Rep. 370, 84 N. W. 1034. This is the Federal rule. Distilled Spirits (Harrington v. United States) 11 Wall. 356, 20 L. ed. 167. This is the English rule. Dresser v. Norwood, 17 C. B. N. S. 466, 144 Eng. Reprint, 188. In the study of the so

-exceptions to

notice.

called exceptions to the general rule, the circumstances of the adjudicated cases show that rule imputing the knowledge (1) came from a privileged source, and is therefore not legally or properly communicable, or (2) that the attorney had a personal interest adverse to his principal, or (3) that the attorney was acting fraudulently, or, (4) by reason of the "peculiar facts of the case," as said in Irvine v. Grady, 85 Tex. 120, 19 S. W. 1028, knowledge is not imputed; but we do not consider this exception well defined or the reasons therefor well based.

Illustrating these exceptions, we quote the following:

"The client will not be charged with notice of a fraud or wrong to which his attorney was a party while employed by another, and which it is quite certain he would conceal." Melms v. Pabst Brewing Co. 93 Wis. 153, 57 Am. St. Rep. 899, 66 N. W. 518.

"When [the knowledge] has been acquired confidentially as attorney for a former client in a prior transaction, the reason of the rule ceases, and in such a case an agent would not be expected to do that which would involve the betrayal of professional confidence, and his principal ought not to be bound by his agent's secret and confidential information." Akers v. Rowan, 33 S. C. 451, 10 L.R.A. 705, 12 S. E. 165.

"An attorney is not required to disclose to one client the secrets of another intrusted to him prefessionally by the other client in the transaction of his business. Were the rule otherwise, a man could not safely advise with his attorneys, because he could not foresee by whom they might be thereafter employed, or what use might be made of the facts communicated to them." Downer v. Porter, 116 Ky. 422, 76 S. W. 135.

See also Laird v. McCord, 196 Iowa, 972, 195 N. W. 517: Scotch Lumber Co. v. Sage, 132 Ala. 598, 90 Am. St. Rep. 932, 32 So. 607.

Predicating the primary rule on

the legal identity of principal and agent, the so-called exceptions are not quite logical. If the fiction is preserved, the exception is an antithesis of the reason for the rule.

"But, so long as the fiction which makes the root of a master's liability is left alive, it is as hopeless to reconcile the differences by logic as to square the circle." Holmes, Common Law, p. 231.

The exceptions, however, like the rule, are grounded on a principle of public policy, and are sound and wholesome. The exception based on confidential communication simply invokes another rule general in its application, and destroys the efficacy of the agency rule. Carrying a little farther the figure of speech based on the fiction of identity, it may be said that the hostility of the agent, evidenced by his personal adverse interests or fraud, destroys, for the time being, the legal identity of principal and agent. The result, therefore, is a mixed question of law and fact. The rule is one of law. Its application depends on the facts of the particular case. There is nothing in the Iowa cases that lends color to a contrary doctrine. Walker v. Ayres, 1 Iowa, 449; De Louis v. Meek, 2 G. Greene, 55, 50 Am. Dec. 491; Jones v. Bamford, 21 Iowa, 217; Allen v. McCalla, 25 Iowa, 464, 96 Am. Dec. 56; Walker v. Schreiber, 47 Iowa, 529; Delaware County Bank v. Duncombe, 48 Iowa, 488; Sowler v. Day, 58 Iowa, 252, 12 N. W. 297; Baldwin v. Davis, 118 Iowa, 36, 91 N. W. 778; Cochburn v. Hawkeye Commercial Men's Asso. 163 Iowa, 28, 143 N. W. 1006.

It remains only to consider whether the case at bar falls within the defined rule. In other words, do the instant facts call for the application of the rule? Admittedly the plaintiff's attorney did not communicate the facts to the plaintiff; but this, under the theory of the rule, was not necessary. The knowledge in question was not privileged, and it is within the purview of a communication involving the duty of the attorney to communicate.

The ultimate question is: Did the illness and consequent inability of the attorney to confer with his client on the matter in suit relieve the client from the imputation under the rule? A condition arose which made it impossible for the attorney, from the viewpoint of the client, to continue in his representative capacity. It was not an abandonment of the agency by the attorney, but a termination of services by the client. Had Attorney Fishburn brought the attachment suit, clearly, his knowledge of the facts would be imputed to his client. Does a change of attorneys, under the facts presented, make the knowledge acquired by the former attorney in the instant matter not imputable? We think not. No different result would follow had torney on im- the plaintiff peremptorily dismissed Attorney Fishburn from her service. The evidence was properly admitted, and the instruction given by the court in the first instance was a correct statement of the law applicable to the facts.

-effect of change of at

puted notice.

cannot deny a new trial for the reason that the motion was sustained on an improper or insufficient ground. When a motion for new trial presents several grounds and is sustained generally, the ruling cannot be disturbed, unless it is shown that the mo

-from grant

tion could not have ing of new trial been properly sus- when sussus--when tained. tained on any of the

grounds urged. Van Wagenen v. Parsons, 106 Iowa, 263, 76 N. W. 675; Holland v. Kelly, 149 Iowa, 391, 128 N. W. 338; Woodbury Co. v. Dougherty & B. Co. 161 Iowa, 571, 143 N. W. 416. No reversal can be had if any of the remaining grounds of the motion are tenable. Holman v. Omaha & C. B. R. & Bridge Co. 110 Iowa, 485, 81 N. W. 704; Murray v. Chicago, R. I. & P. R. Co. 145 Iowa, 212, 123 N. W. 954. It must affirmatively appear that a new trial should not have been granted on any of the grounds stated in the motion. Boyd v. Western U. Teleg. Co. 117 Iowa, 338, 90 N. W. 711; McDonald v. Mutual L. Ins. Co. 178 Iowa, 863, 160 N. W. 289.

Appellant is

Appellant has presented and argued but one proposition on this appeal. Under the rule we will not consider any other. bound to show that none of the grounds of the motion for new trial are good. Therefore, the order granting the new trial must be and is affirmed.

burden on

appellant.

Arthur, Ch. J., and Stevens and Vermilion, JJ., concur.

a. In general, 822.

b. Attorney acting for both clients at the same time:

1. In general, 822.

2. Vendor and purchaser, mortgagor and mortgagee, 823.

[No later decisions herein.]

V. Facts acquired prior to the employment, 823.

I. Introductory.

This annotation is supplementary to that in 4 A.L.R. 1592.

A purchaser of a lot out of a tract which had been subdivided but the lots not numbered, the same being described by metes and bounds, is not chargeable with knowledge that the conveyance to him described a lot other than the one he bargained for, because he had an attorney examine the title, where there is nothing to show that the attorney had any knowledge of what had taken place between the parties, or that he had any knowledge that the lot described by metes and bounds in the abstract of title was one other than the one bargained for, he having been requested merely to pass upon the title contained in the abstract and to draw a contract. Nelson v. Petersen (1922) 305 Ill. 606, 137 N. E. 486.

II. Theories.

No later decisions herein. For earlier cases, see annotation in 4 A.L.R. 1593.

III. General rules.

a. In general.

or in fraud of his client, 824.
[No later decisions herein.]

VII. Knowledge of partner or clerk of attorney, 824.

[No later decisions herein.]

VIII. Knowledge of general attorney, 824.

[No later decisions herein.] IX. [New] Knowledge of attorney who has been discharged or who has abandoned the employment, 824.

wife is imputable to the purchaser, and also to a creditor of the husband, to whom the husband agrees to transfer a note and mortgage to be given in the transaction. Pearson v. Johnson (1921) 297 Ill. 417, 130 N. E. 742.

The court in Ratshesky v. Piscopo (1921) 239 Mass. 180, 131 N. E. 449, states the general rule that purchasers of land were bound by the knowledge of their counsel, who had been fully informed of a prior agreement to sell the land to another, and of an attempt to register the land. In that case, however, it appeared that the purchasers had actual knowledge of the agreement.

Knowledge of counsel retained by a company and its treasurer, and through whose effort a mortgage was ultimately procured to the president and afterwards assigned to the company, that the mortgage was secured by duress, was held binding upon the treasurer, who subsequently purchased the property on foreclosure sale. Stevens v. Thissell (1922) 240 Mass. 541, 134 N. E. 398.

The knowledge of an attorney for the purchaser of property of an unacknowledged, unrecorded, and unex

Knowledge of an attorney for the holder of a note given by an individual and assumed by a corporation, of the resolution of assumption of indebtedness by the corporation, is held to be the knowledge of his client in Bogart v. George K. Porter Co. (1924) 193 Cal. 197, 31 A.L.R. 1045, 223 Pac. 959.

The knowledge of an attorney for the purchaser of property from a husband that the record title is in the

had gone into possession, as well as knowledge of the subletting which violated the lease, but which violation the lessor had waived, is held imputable to his client. Lincoln v. Sauer (1922) 243 Mass. 201, 137 N. E. 642. In this case the attorney acted for the purchaser in the negotiations preliminary to the sale, and was given information of the lease and of the subletting. He also made examination of the title for his client, and represented him in "passing papers."