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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 in (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 III. 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 subject-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

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the same time the attorney in other matters, unconnected with the transaction, for one who subsequently became the purchaser of the note, is not imputable to the latter so as to preclude him from becoming a bona fide holder. Lynch v. Holbrook (1920) 49 Cal. App. 380, 193 Pac. 505. The above point, which was so ruled by the trial judge, was not contested in the final brief upon the appeal.

The knowledge of an attorney who represented both the equitable owner of land and the holder of the legal title, in a suit to impress a mechanic's lien thereon, of the equitable owner's claim to ownership, was held imputable to the holder of the legal title in a subsequent action by him to quiet title to the land. Herrick v. Woodrow-Shindler Co. (1924) 75 Colo. 363, 226 Pac. 137.

2. Vendor and purchaser, mortgagor and mortgagee.

No later decisions herein. For earlier cases, see annotation in 4 A.L.R. 1612.

V. Facts acquired prior to the employment.

(Supplementing annotation in 4 A.L.R. 1614.)

As shown in the earlier annotation, at p. 1614, the courts are not agreed whether knowledge acquired before the relation of attorney and client arose is imputable to the principal.

The court in Bogart v. George K. Porter Co. (1924) 193 Cal. 197, 31 A.L.R. 1045, 223 Pac. 959, approves the rule that knowledge acquired by an attorney of matters within the scope of his authority is notice to his principal, although it may have been acquired before the agency was created, if it appears that such knowledge was present in his mind at the time he acted for his principal.

In the majority of jurisdictions it is held that the client may be charged with knowledge acquired by the attorney before the relation was created. This rule is adhered to in Atkinson v. Foote (1919) 44 Cal. App. 149, 186 Pac. 831, where, in holding that the purchaser of a first mortgage was

chargeable with knowledge of a second mortgage on the property, and of a sale and conveyance of the property under the second mortgage, acquired by her attorney prior to her purchase, it is stated that the purchase was consummated several months after her attorney first acquired knowledge of the second mortgage and the conveyance of the property thereunder, and, this being true, the presumption that the attorney retained such knowledge, and had it present in his mind when the purchase of the first mortgage was made, must depend upon the lapse of time and other circumstances. The court then, reviewing the circumstances, says: "The circumstances of the two transactions, with both of which the attorney for [the purchaser] was connected in his capacity as an attorney or counsel, afford no other reasonable inference than that the circumstance of the sale and conveyance of the property on the sale thereof under the trust deed to Atkinson [the second lienor] was present in his mind when the said [purchaser] acquired ownership" of the first mortgage. It is further stated that the attorney appeared as one of the attorneys for other parties in an action of ejectment brought by the purchaser under the second mortgage. The court says that the attorney for the purchaser of the first mortgage appeared as one of the attorneys for a relative of such purchaser, in an action of ejectment brought by the purchaser under the second mortgage against the relative to secure possession of the property, and furthermore, just prior to the consummation of the negotiations resulting in the transfer of the first mortgage, the attorney consulted with the first mortgagee's attorney, and discussed the second mortgage lien and the sale thereunder.

Knowledge of an attorney for an attaching creditor that the land attached had been sold by the debtor, acquired by the attorney about forty days before the attachment suit was filed, was held imputable to his client in Bailey v. Hickey (1921) 99 Or. 251, 195 Pac. 372.

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The commission of appeals of Texas in Ives v. Culton (1921) Tex. -, 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 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.

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earlier cases, see annotation in 4 A.L.R. 1621.

IX. [New] Knowledge of attorney who has been discharged or who has abandoned the employment.

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 a 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.

(Ariz., 234 Pac. 553.)

CONSOLIDATED NATIONAL BANK OF TUCSON et al., Appts.,

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1925.

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.]

effect of findings.

Appeal, § 688
2. Findings of fact by the trial
court are binding on appeal if there
is any reasonable evidence to sustain
them.

[See 2 R. C. L. 206; 1 R. C. L. Supp. 444; 5 R. C. L. Supp. 82.]

Merger, § 3 of mortgage in legal title.

3. The taking by the owner of a mortgage of real estate of title to the property does not merge the mortgage in the title where such is not his intention, and at the time of taking the legal title the mortgage had been assigned by him as collateral security.

[See 19 R. C. L. 484, 487.]

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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, & Connor and F. M. Hartman for appellants.

Messrs. Chalmers, Stahl, Fennemore, & Longan, and Luther P. Spalding, for appellee:

An acknowledgment by the mortgagor while he owns the mortgaged property or an equity therein, or by his grantees while they own the mortgaged property or an equity therein, tolls the Statute of Limitations as against subsequent lien holders, especially where such subsequent lien holders acquired their rights prior to the running of the statute.

Kerndt v. Porterfield, 56 Iowa, 412, 9 N. W. 322; Kaiser v. Idleman, 57 Or. 224, 28 L.R.A. (N.S.) 169, 108 Pac. 193; Du Bois v. First Nat. Bank, 43 Colo. 400, 96 Pac. 169; McLaughlin v.

Senne, 78 Neb. 631, 111 N. W. 377; Fitzgerald v. Flanagan, 155 Iowa, 217, 135 N. W. 738, Ann. Cas. 1914C, 1104; Senninger v. Rowley, 138 Iowa, 617, 18 L.R.A. (N.S.) 223, 116 N. W. 695; Hughes v. Edwards, 9 Wheat. 489, 6 L. ed. 142; Gilman v. Heitman, 137 Iowa, 336, 113 N. W. 932; Stein v. Kaun, 244 Ill. 32, 91 N. E. 78; Cotcher v. Barton, 49 Cal. App. 251, 193 Pac. 169; Hastie v. Burrage, 69 Kan. 560, 77 Pac. 268; Foster v. Bowles, 138 Cal. 346, 71 Pac. 494, 649; Jackson v. Longwell, 63 Kan. 93, 64 Pac. 991; Hollister v. York, 59 Vt. 1, 9 Atl. 2; McLane v. Allison, 60 Kan. 441, 56 Pac. 747; Bowmar v. Peine, 64 Miss. 99, 8 So. 166; Johnston v. Lasker Real Estate Asso. 2 Tex. Civ. App. 494, 21 S. W. 961; Palmer v. Butler, 36 Iowa,

576; Moore v. Clark, 40 N. J. Eq. 152; Jones, Mortg. 7th ed. ¶ 1201; Hahl v. Ellwood, 34 Tex. Civ. App. 642, 79 S. W. 829; Great Western Mfg. Co. v. Elledge, 68 Colo. 594, 192 Pac. 498.

Martin E. Tew had authority to execute the acknowledgments on behalf of the Copper State Mining Company.

Washington Sav. Bank v. Butchers' & D. Bank, 107 Mo. 133, 28 Am. St. Rep. 405, 17 S. W. 644; Gilman v. Heitman, 137 Iowa, 336, 113 N. W. 932; Chestnut Street Trust & Sav. Fund Co. v. Record Pub. Co. 227 Pa. 235, 136 Am. St. Rep. 874, 75 Atl. 1067; Crowley v. Genesee Min. Co. 55 Cal. 273, 4 Mor. Min. Rep. 71; 3 Cook, Corp. 7th ed. p. 2496; American Exch. Nat. Bank v. Oregon Pottery Co. 55 Fed. 265; 4 Fletcher, Cyc. Corp. ¶ 2195; Morgan v. Merchants' Nat. Bank, 13 Lea, 234; Clark Realty Co. v. Douglas, 46 Nev. 378, 212 Pac. 466; Wehrung v. Portland Country Club & Live Stock Asso. 61 Or. 48, 120 Pac. 747; Finance Corp. v. Jones, 97 N. J. L. 106, 116 Atl. 277; Edmunds Bros. v. Smith, 95 Vt. 396, 115 Atl. 187; Com. use of Board of Education v. Mehler & E. Lumber Co. 183 Ky. 11, 208 S. W. 13; Ford v. Hill, 92 Wis. 188, 53 Am. St. Rep. 902, 66 N. W. 115; Martin v. Webb, 110 U. S. 7, 28 L. ed. 49, 3 Sup. Ct. Rep. 428; Murphy v. W. H. & F. W. Cane, 82 N. J. L. 557, 82 Atl. 854, Ann. Cas. 1913D, 643; National L. Ins. Co. v. Headrick, 63 Ind. App. 54, 112 N. E. 559; Peyton v. Sturgis, Tex. Civ. App.

202

S. W. 205; De Pasquale v. Mason Mfg. Co. 39 R. I. 114, 97 Atl. 816; Advance Rumely Thresher Co. v. Evans Metcalf Implement Co. 103 Kan. 532, 175 Pac. 392; Sells v. Rosedale Grocery & Commission Co. 72 Miss. 590, 17 So. 236; Moller v. Keystone Fibre Co. 187 Pa. 553, 41 Atl. 478; Campbell v. Argenta Gold & S. Min. Co. 51 Fed. 1; El Cajon Portland Cement Co. v. Robert F. Wentz Engineering Co. 92 C. C. A. 447, 165 Fed. 619.

The acknowledgments relied upon as tolling the statute were made before the statute had run.

Tolman v. Smith, 85 Cal. 280, 24 Pac. 743; Southern P. Co. v. Prosser, 122 Cal. 413, 55 Pac. 145.

The written acknowledgments made by the grantee and owner of the premises, prior to the expiration of the statutory period, are binding upon mere judgment lienors.

First Nat. Bank v. Security Mut. L.

Ins. Co. 283 Mo. 336, 222 S. W. 832; Sleeper v. Elliott, 36 N. D. 280, 162 N. W. 305; Wooster v. Scorse, 16 Ariz. 11, 140 Pac. 819; Senninger v. Rowley, 138 Iowa, 617, 18 L.R.A. (N.S.) 223, 116 N. W. 695.

The facts in the case clearly demonstrate that no merger resulted.

Jones, Mortg. § 848; 18 R. C. L. p. 848; 27 Cyc. 1379.

Lockwood, J., delivered the opinion of the court:

On February 16, 1912, one Roy Sibley executed a mortgage on certain unpatented mining claims in Pinal county to secure the payment of four notes, due, respectively, June 15, 1912, September 1, 1912, December 15, 1912, and February 14, 1913, in favor of A. Kegal and E. C. Taylor. On the same date he deeded the claims to Calumet & Copper Creek Mining Company, a corporation. On November 16, 1914, a judgment against the corporation was obtained and docketed by Leo Goldschmidt, which was afterwards assigned to the Consolidated National Bank of Tucson, one of the defendants herein. On November 4, 1914, Albert Steinfeld & Company obtained a judgment against the corporation, which was docketed November 6, and on November 25 of the same year the Eagle Milling Company also obtained a judgment against the corporation, which was duly docketed December 3.

On June 2, 1915, the Calumet & Copper Creek Company was adjudicated a bankrupt and on September 24 of the same year the trustees in bankruptcy deeded the property to S. H. Hudson, subject expressly to the lien of the judgments referred to, and the mortgage aforesaid. October 28, 1915, Hudson conveyed the property to the Copper State Mining Company, a corporation, subject to all the liens thereon.

On August 18, 1919, an execution was issued on the Goldschmidt judgment and the property sold to him October 25, a sheriff's certificate of sale duly issued, and by him assigned to the Consolidated National Bank. September 30, 1919, an ex

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