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The director and president of a corporation who was a creditor of the corporation, and who, with knowledge of the company's financial condition and of the indebtedness due to other creditors, caused all its tangible personal property, except what was covered by mortgage, to be attached, is chargeable with the knowledge of his attorney in the attachment proceedings as to what subsequently took place under the attachment. Putnam v. Handy (1924) 247 Mass. 406, 142 N. E. 77.
The general rule that the knowledge of an attorney is imputed to his client is admitted in Fletcher v. Allen (1921) 51 Cal. App. 774, 197 Pac. 952; but it is there held that the attorney did not have knowledge of the facts which were sought to be imputed to the client.
The court in Re Locust Bldg. Co. (1924) 299 Fed. 756, petition for writ of certiorari denied (1924) 265 U. S. 590, 68 L. ed. 1195, 44 Sup. Ct. Rep. 635, recognizes the general rule that notice to an attorney is notice to the client employing him. The court, reviewing a number of cases, says it has been held necessary that the knowledge of the attorney be gained in the course of the particular transaction in which he is employed in order to affect the client, and further, that, as the doctrine of imputed notice to a client rests upon the ground that the attorney has knowledge of something material to the particular transaction, which it is his duty to communicate to his principal, it has been held that notice will not be imputed to the client where it would be a breach of professional confidence to make the communication. The court concludes, however, that it did not clearly appear from the records that the attorneys had knowledge of fraud, so that the question was really not raised as to whether their knowledge was to be imputed to their client.
A litigant is charged with knowledge possessed by his attorney in regard to the orders of the court relating to the trial of his cause. Dillon v. Hawkins (1921) 147 Ark. 1, 227 S.
W. 758. The court in Hollan v. Kepner (1921) 297 Ill. 332, 130 N. E. 699, refers to the general rule that knowledge of an attorney is knowledge of his client in a case involving a question of notice in a legal proceeding-a question that is not included in this annotation. b. Knowledge not relating to the sub
ject-matter of employment. (Supplementary annotation in 4 A.L.R. 1604.)
The court in Citizens' Bank v. Citizens' & Southern Bank (1925) Ga. —, 127 S. E. 219, in holding that notice to an attorney, who was examining a title to property for a bank about to make a loan thereon, that the owners, who were the devisees in a will and also the executors, had assented to the devise giving them this property without paying a debt which the testator owed, was imputable to the bank so as to render its lien and title subsequently acquired inferior to the lien of a judgment thereafter secured by the creditor against the estate, the court limits the rule that knowledge of an attorney is knowledge of his client to such notice and knowledge as come to the attorney in and about the subject matter of his employment.
c. Limited employment. No later decisions herein. For earlier cases,
see annotation in 4 A.L.R. 1605.
IV. Facts acquired in transacting the
business of another client.
a. In general. (Supplementing annotation in 4 A.L.R. 1607.)
See Re Locust Bldg. Co. (1924) 299 Fed. 756, supra, III. a, and Ficke v. Spence (1922) 15 Sask. L. R. 282, 65 D. L. R. 249, infra, V. b. Attorney acting for both clients at
the same time.
1. In general. (Supplementing annotation in 4 A.L.R. 1610.)
Knowledge acquired by an attorney for the payee of a note, who was at
the same time the attorney in other chargeable with knowledge of a secmatters, unconnected with the trans- ond mortgage on the property, and of action, for one who subsequently be- a sale and conveyance of the property came the purchaser of the note, is not under the second mortgage, acquired imputable to the latter so as to pre- by her attorney prior to her purchase, clude him from becoming a bona fide it is stated that the purchase was conholder. Lynch v. Holbrook (1920) 49 summated several months after her Cal. App. 380, 193 Pac. 505. The attorney first acquired knowledge of above point, which was so ruled by the second mortgage and the conveythe trial judge, was not contested in ance of the property thereunder, and, the final brief upon the appeal.
this being true, the presumption that The knowledge of an attorney who the attorney retained such knowledge, represented both the equitable owner and had it present in his mind when of land and the holder of the legal the purchase of the first mortgage was title, in a suit to impress a mechanic's made, must depend upon the lapse of lien thereon, of the equitable owner's time and other circumstances. The claim to ownership, was held imputa- court then, reviewing the circumble to the holder of the legal title in a stances, says: “The circumstances of subsequent action by him to quiet the two transactions, with both of title to the land. Herrick v. Wood. which the attorney for the purchaser) row-Shindler Co. (1924) 75 Colo. 363, was connected in his capacity as an 226 Pac. 137.
attorney or counsel, afford no other
reasonable inference than that the 2. Vendor and purchaser, mortgagor and
circumstance of the sale and conveymortgagee.
ance of the property on the sale thereNo later decisions herein. For
of under the trust deed to Atkinson earlier cases, see annotation in 4
[the second lienor) was present in his A.L.R. 1612.
mind when the said (purchaser) ac1. Facts acquired prior to the employ
quired ownership" of the first mortment.
gage. It is further stated that the at(Supplementing annotation in 4
torney appeared as one of the attorA.L.R. 1614.)
neys for other parties in an action of
ejectment brought by the purchaser As shown in the earlier annotation,
under the second mortgage. The at p. 1614, the courts are not agreed whether knowledge acquired before
court says that the attorney for the the relation of attorney and client
purchaser of the first mortgage aparose is imputable to the principal.
peared as one of the attorneys for a
relative of such purchaser, in an acThe court in Bogart v. George K. Porter Co. (1924) 193 Cal. 197, 31
tion of ejectment brought by the pur
chaser under the second mortgage A.L.R. 1045, 223 Pac. 959, approves
against the relative to secure possesthe rule that knowledge acquired by
sion of the property, and furthermore, an attorney of matters within the
just prior to the consummation of the scope of his authority is notice to his
negotiations resulting in the transfer principal, although it may have been
of the first mortgage, the attorney acquired before the agency was created, if it appears that such knowl
consulted with the first mortgagee's edge was present in his mind at the
attorney, and discussed the second time he acted for his principal.
mortgage lien and the sale thereunder. In the majority of jurisdictions it
Knowledge of an attorney for an atis held that the client may be charged
taching creditor that the land atwith knowledge acquired by the attor
tached had been sold by the debtor, ney before the relation was created.
acquired by the attorney about forty This rule is adhered to in Atkinson v. days before the attachment suit was Foote (1919) 44 Cal. App. 149, 186 filed, was held imputable to his client Pac. 831, where, in holding that the in Bailey v. Hickey (1921) 99 Or. 251, purchaser of a first mortgage was 195 Pac. 372.
The commission of appeals of Texas in Ives v. Culton (1921) 229 S. W. 321, in holding a judgment creditor not chargeable with the knowledge of an attorney, derived in another transaction, of an unrecorded conveyance of the property of the judgment creditor, bases its conclusion upon the principle that the knowledge acquired by the attorney prior to his employment should not be imputed to his client. The court of civil appeals, the decision of which is affirmed by the commission of appeals, does not emphasize the fact that the knowledge was acquired prior to the employment, but does emphasize the fact that the knowledge was acquired in other transactions. From the report of the decision of the court of civil appeals it appears that the attorney testified that he did not have the required knowledge in mind at the time he was transacting the business of the client whom it was sought to charge with such knowledge.
See Re Locust Bldg. Co. (1924) 299 Fed. 756, supra, III. a. The court in Ficke v. Spence (1922) 15 Sask. L. R. 282, 65 D. L. R. 249, held that knowledge obtained by a solicitor in another
a matter, sometime prior to the one in question, and not at all in connection therewith, with nothing to bring it to the solicitor's mind in connection with the matter in question, is not imputed to his client.
earlier cases, see annotation in 4
has been discharged or who has aban-
The court in FARNSWORTH V. HAZELETT (reported herewith) ante, 814, charges the client with knowledge of an attorney who had been discharged from the employment, another attorney being employed who had no knowledge of the fact.
On the contrary, in Lynch v. McKee (1919) Tex. Civ. App. —, 214 S. W. 484, a client is held not chargeable with knowledge acquired by his attorney in the course of litigation, where the attorney subsequently abandoned his agency. In this case an action had been brought upon a note against the maker, who had been adjudicated a bankrupt. The note had not been filed as claim, but the defendant set up the bankruptcy in the action on the note, so that the attorney for the plaintiff received notice thereof, but did not communicate such notice to the plaintiff. Subsequently, the attorney notified his client to secure other counsel as he intended to enlist in the Army; instead, the client directed the clerk to dismiss the case. This was done, and subsequently, and after the bankruptcy proceedings, a new action was brought on the note, in which the discharge in bankruptcy was pleaded as a bar, assuming that knowledge of such pleading was a fact or circumstance sufficient to put the attorney, and consequently his client, upon notice. The court says that the attorney abandoned his agency,—that is, quit the employment and enlisted in the Army,-resulting in the client dismissing the case, and that in such cases—that is, where the agent abandons his agency before concluding the matter undertaken, and it is consummated through the agency of another -his knowledge is not to be imputed to the principal.
W. A. E.
VI. Attorney acting in his own interest,
or in fraud of his client. No later decisions herein. For earlier cases,
see annotation in 4 A.L.R. 1618.
VII. Knowledge of partner or clerk of
see annotation in 4
(- Arie. — 234 Poc. 553.)
CONSOLIDATED NATIONAL BANK OF TUCSON et al., Appts,
Arizona Supreme Court - March 27, 1925.
(- Ariz. -,284 Pac. 553.) Limitation of actions, $ 237 -- effect of acknowledgment as against junior
§ lienors. 1. The acknowledgment of a mortgage lien before it is barred by the Statute of Limitations by an assignee of the equity of redemption is effective as against holders of junior liens on the mortgaged property.
[See note on this question beginning on page 833.] Appeal, $ 688 — effect of findings. Limitation of actions, § 237 mort2. Findings of fact by the trial
who may court are binding on appeal if there effect. is any reasonable evidence to sustain 4. An acknowledgment to toll the them.
Statute of Limitations on a mortgage, [See 2 R. C. L. 206; 1 R. C. L. Supp.
should be signed by the present owner 444; 5 R. C. L. Supp. 82.]
of the title to the property and not by Merger, $ 3 – of mortgage in legal the original mortgagor. title.
[See 17 R. C. L. 916. See also note 3. The taking by the owner of a in 18 A.L.R. 1027.] mortgage of real estate of title to the
Limitation of actions, § 235 form property does not merge the mortgage in the title where such is not
for tolling. his intention, and at the time of tak- 5. The statutory form for removing ing the legal title the mortgage had
the bar of the Statute of Limitations been assigned by him as collateral need not be utilized to effect a tolling security.
of the statute before the limitation [See 19 R. C. L. 484, 487.]
period has run.
APPEAL by defendants from a judgment of the Superior Court for Pinal County (Baughn, J.) in favor of plaintiff in a suit brought to foreclose a mortgage. Affirmed.
The facts are stated in the opinion of the court.
Messrs. Kingan, Campbell, & Con- Senne, 78 Neb. 631, 111 N. W. 377; nor and F. M. Hartman for appellants. Fitzgerald v. Flanagan, 155 Iowa, 217,
Messrs. Chalmers, Stahl, Fenne- 135 N. W. 738, Ann. Cas. 1914C, 1104; more, & Longan, and Luther P. Spald- Senninger v. Rowley, 138 Iowa, 617, ing, for appellee:
18 L.R.A. (N.S.) 223, 116 N. W. 695; An acknowledgment by the mort- Hughes v. Edwards, 9 Wheat. 489, 6 gagor while he owns the mortgaged L. ed. 142; Gilman v. Heitman, 137 property or an equity therein, or by Iowa, 336, 113 N. W. 932; Stein v. his grantees while they own the mort- Kaun, 244 III. 32, 91 N. E. 78; Cotcher gaged property or an equity therein, v. Barton, 49 Cal. App. 251, 193 Pac. tolls the Statute of Limitations as 169; Hastie v. Burrage, 69 Kan. 560, against subsequent lien holders, espe- 77 Pac. 268; Foster v. Bowles, 138 Cal. cially where such subsequent lien 346, 71 Pac. 494, 649; Jackson V. holders acquired their rights prior to Longwell, 63 Kan. 93, 64 Pac. 991; the running of the statute.
Hollister v. York, 59 Vt. 1, 9 Atl. 2; Kerndt v. Porterfield, 56 Iowa, 412, McLane V. Allison, 60 Kan. 441, 56 9 N. W. 322; Kaiser v. Idleman, 57 Pac. 747; Bowmar v. Peine, 64 Miss. Or. 224, 28 L.R.A. (N.S.) 169, 108 Pac. 99, 8 So. 166; Johnston v. Lasker Real 193; Du Bois v. First Nat. Bank, 43 Estate Asso. 2 Tex. Civ. App. 494, 21 Colo. 400, 96 Pac. 169; McLaughlin v. S. W. 961; Palmer v. Butler, 36 Iowa, 576; Moore v. Clark, 40 N. J. Eq. 152; Ins. Co. 283 Mo. 336, 222 S. W. 832; Jones, Mortg. 7th ed. 1 1201; Hahl v. Sleeper v. Elliott, 36 N. D. 280, 162 Ellwood, 34. Tex. Civ. App. 642, 79 N. W. 305; Wooster v. Scorse, 16 Ariz. S. W. 829; Great Western Mfg. Co. v., 11, 140 Pac. 819; Senninger v. Rowley, Elledge, 68 Colo. 594, 192 Pac. 498. 138 Iowa, 617, 18 L.R.A.(N.S.) 223,
Martin E. Tew had authority to ex- 116 N. W. 695. ecute the acknowledgments on behalf The facts in the case clearly demonof the Copper State Mining Company. strate that no merger resulted.
Washington Sav. Bank v. Butchers' Jones, Mortg. § 848; 18 R. C. L. & D. Bank, 107 Mo. 133, 28 Am. St. p. 848; 27 Cyc. 1379. Rep. 405, 17 S. W. 644; Gilman v.
Lockwood, J., delivered the opinHeitman, 137 Iowa, 336, 113 N. W.
ion of the court: 932; Chestnut Street Trust & Sav. Fund Co. v. Record Pub. Co. 227 Pa.
On February 16, 1912, one Roy 235, 136 Am. St. Rep. 874, 75 Atl. Sibley executed a mortgage on cer1067; Crowley v. Genesee Min. Co. 55 tain unpatented mining claims in Cal. 273, 4 Mor. Min. Rep. 71; 3 Cook, Pinal county to secure the payment Corp. 7th ed. p. 2496; American Exch. of four notes, due, respectively, Nat. Bank v. Oregon Pottery Co. 55 June 15, 1912, September 1, 1912, Fed. 265; 4 Fletcher, Cyc.. Corp. December 15, 1912, and February 1 2195; Morgan v. Merchants' Nat.
14, 1913, in favor of A. Kegal and Bank, 13 Lea, 234; Clark Realty Co. v. Douglas, 46 Nev. 378, 212 Pac. 466;
E. C. Taylor. On the same date he Wehrung v. Portland Country Club &
deeded the claims to Calumet & Live Stock Asso. 61 Or. 48, 120 Pac.
Copper Creek Mining Company, a 747; Finance Corp. v. Jones, 97 N. J. corporation. On November 16, L. 106, 116 Atl. 277; Edmunds Bros. 1914, a judgment against the corv. Smith, 95 Vt. 396, 115 Atl. 187; poration was obtained and docketed Com. use of Board of Education v.
by Leo Goldschmidt, which was aftMehler & E. Lumber Co. 183 Ky. 11, erwards assigned to the Consolidat208 S. W. 13; Ford v. Hill, 92 Wis.
ed National Bank of Tucson, one of 188, 53 Am. St. Rep. 902, 66 N. W. 115; Martin v. Webb, 110 U. S. 7, 28
the defendants herein. On NovemL. ed. 49, 3 Sup. Ct. Rep. 428; Murphy
ber 4, 1914, Albert Steinfeld & Comv. W. H. & F. W. Cane, 82 N. J. L. pany obtained a judgment against 557, 82 Atl. 854, Ann. Cas. 1913D, 643; the corporation, which was docketNational L. Ins. Co. v. Headrick, 63 ed November 6, and on November Ind. App. 54, 112 N. E. 559; Peyton 25 of the same year the Eagle Millv. Sturgis, Tex. Civ. App. - 202 ing Company also obtained a judgS. W. 205; De Pasquale v. Mason Mfg. ment against the corporation, which Co. 39 R. I. 114, 97 Atl. 816; Advance
was duly docketed December 3. Rumely Thresher Co. v. Evans Metcalf Implement Co. 103 Kan. 532, 175
On June 2, 1915, the Calumet & Pac. 392; Sells v. Rosedale Grocery &
Copper Creek Company was adjudiCommission Co. 72 Miss. 590, 17 So.
cated a bankrupt and on September 236; Moller v. Keystone Fibre Co. 187 24 of the same year the trustees in Pa. 553, 41 Atl. 478; Campbell v. Ar- bankruptcy deeded the property to genta Gold & S. Min. Co. 51 Fed. 1; S. H. Hudson, subject expressly to El Cajon Portland Cement Co. v. Rob- the lien of the judgments referred ert F. Wentz Engineering Co. 92 C. C.
to, and the mortgage aforesaid. OcA. 447, 165 Fed. 619. The acknowledgments relied upon
tober 28, 1915, Hudson conveyed the as tolling the statute were made be
property to the Copper State Mining fore the statute had run.
Company, a corporation, subject to Tolman v. Smith, 85 Cal. 280, 24
all the liens thereon. Pac. 743; Southern P. Co. v. Prosser, On August 18, 1919, an execution 122 Cal. 413, 55 Pac. 145.
was issued on the Goldschmidt judgThe written acknowledgments made ment and the property sold to him by the grantee and owner of the prem
October 25, a sheriff's certificate of ises, prior to the expiration of the statutory period, are binding upon
sale duly issued, and by him asmere judgment lienors.
signed to the Consolidated National First Nat. Bank v. Security Mut. L. Bank. September 30, 1919, an ex