1. A. conveyed premises in 1851 to B., and took from him a
mortgage for the purchase money. Both deeds were recorded. B. never
took possession. A., by an instrument recorded March 19, 1852,
assigned the mortgage to C., who conveyed the premises with
warranty to D., under whom complainant claims title. B. lived near
the premises for years, and knew that C. and others were in adverse
possession claiming title, but never claimed or intimated that he
had himself any title. B. drew the conveyance of C. to D., and as a
notary public took C.'s acknowledgment thereto, and was silent as
to any defect in the title. B. executed a quitclaim deed of the
premises in 1872 to a stranger.
Held that the facts made a
complete case of estoppel
in pais, and that nothing passed
by B.'s deed.
2. An attorney employed by both parties to an agreement for the
purchase of land for the sum of $8,000, upon discovering a defect
in the title, concealed the fact from one of the parties, and in
accordance with a secret agreement with the other procured a
conveyance by quitclaim for the sum of $25 to E., his own brother.
Held that his conduct was a gross breach of professional
duty, and that E. should he decreed on receiving the purchase
money, $25, to convey to the injured party the premises, with
covenant against the title of E. and all others claiming under
him.
This was a bill filed by Sandford Baker against George P.
Humphrey, Hiram D. Hurd, Charles A. Hurd, and David Smith to have
the ostensible legal title to certain premises which had vested in
Humphrey by one Chapman declared to have been fraudulently
obtained, and that Humphrey be adjudged to convey the premises to
the complainant. The bill was heard upon the pleadings and proofs,
and dismissed. Baker appealed here.
The facts are fully stated in the opinion of the Court.
Page 101 U. S. 495
MR. JUSTICE SWAYNE delivered the opinion of the Court.
This is an appeal in equity. A brief statement of the case, as
made by the bill, will be sufficient for the purposes of this
opinion.
On the 27th of February, 1851, one William Scott conveyed the
premises in controversy to Bela Chapman, taking from him a mortgage
for the amount of the purchase money, which was $3,500.
Both the deed and mortgage were properly recorded. Chapman did
not take possession of the premises. On the 29th of November, 1851,
Scott assigned the mortgage to Jacob Sammons.
The assignment was duly recorded on the 19th of March, 1852.
Sammons conveyed the premises with warranty to William M. Belote.
From him there is a regular sequence of conveyances down to the
complainant, Baker. Chapman lived near the property for years, and
knew that Sammons and others were in adverse possession and claimed
title, but never claimed or intimated that he had any title
himself. He drew deeds of warranty and quitclaim of the premises
from others claiming under Scott, and, as a justice of the peace or
notary public, took the acknowledment of such deeds. Upon these
occasions also he was silent as to any defect in the title.
The complainant entered into a contract with the defendants Hurd
& Smith to sell and convey the premises to them for the sum of
$8,000.
He employed Wells S. Humphrey, a reputable attorney, who, for a
long time, had been employed by the complainant when he had any
legal business to do, to draw the contract. Humphrey accordingly
drew the agreement and witnessed its execution. Hurd & Smith
thereupon took possession and held it when the bill was filed. They
employed Humphrey to procure an abstract of title. In examining the
title he found there was no deed from Chapman.
He thereupon sought out Chapman, and by representing to him that
the object was to protect the title of clients, procured Chapman to
execute a quitclaim deed of the premises to George P. Humphrey, the
brother of the attorney, for the sum of $25. The deed bears date
the 10th of June, 1872. George
Page 101 U. S. 496
knew nothing of the transaction until some time afterwards. An
action of ejectment was instituted in his name to recover the
property. Baker tendered to him $25, the amount he had paid for the
deed; offered to pay any expenses incurred in his procuring it, and
demanded a release. He declined to accept or convey.
The prayer of the bill is that the deed to George P. Humphrey be
decreed to be fraudulent, and to stand for the benefit of the
complainant; that the grantee be directed to convey to Baker, upon
such terms as may be deemed equitable, and for general relief.
Such is the complainant's case, according to the averments of
the bill.
The testimony leaves no room for doubt as to the material facts
of the case.
The direction for drawing the contract between Hurd & Smith
and Baker, was given to the attorney by Robling, the agent of
Baker. Baker resided in Canada. Hurd & Smith directed the
attorney to procure the abstract of title. With this Baker and
Robling had nothing to do. The attorney disclosed the state of the
title to Hurd & Smith, but carefully concealed it from Robling.
Hurd & Smith being assured by the attorney that whatever they
might pay Baker could be recovered back if his title failed,
executed the contract with Baker, and declined to buy the Chapman
title, but gave the attorney their permission to buy it for
himself. There is evidence in the record tending strongly to show
that there was a secret agreement between them and the attorney,
that if the Chapman title were sustained they should have the
property for $5,000, which was $3,000 less than they had agreed to
pay Baker. This would effect to them a saving of $3,000 in the
cost. They refused to file this bill, and declined to have anything
to do with the litigation. It thus appears that, though unwilling
to join in the battle, they were willing to share in the spoils
with the adversary if the victory should be on that side.
There is in the record a bill for professional services rendered
by the attorney against Baker. It contains a charge of $2 for
drawing the contract with Hurd & Smith. The aggregate
Page 101 U. S. 497
amount of the bill is $43. The first item is dated July 5, 1871,
and the last July 12, 1872. The latter is the charge for drawing
the contract. There is also a like bill against Baker and Smith of
$45, and one against Baker and Mears of $6. These accounts throw
light on the relation of client and counsel as it subsisted between
the attorney and Baker.
With respect to Chapman, we shall let the record speak for
itself. Vincent testifies:
"I asked him, How is it, Chapman? I thought you owned that
property' (referring to the premises in controversy)."
"He said, 'No; I never paid anything on it.' He said,"
"Sammons has a right to rent. It is his property. . . . I asked
him how he came with the deed from Scott, and he said, 'It was only
to shield Sammons; that afterwards Michael Dansmon paid the debt
and the property went back to Sammons.' . . . When I met Bela
Chapman, and he asked for Sammons and wife, he said he had drawn a
deed from Sammons and wife to Belote for the premises, and wanted
them to sign it."
Francis Sammons, a son of Sammons, the grantor to Belote,
says:
"A part of a house situated on that lot three was leased by my
father to Bela Chapman, in 1851, for the purpose of storing goods,
and he afterwards lived in it a while. I collected the rent. I
think he occupied it with his goods and family about three months.
He never occupied or had possession of the premises at any other
time, to my knowledge. He came from Mackinac when he put the goods
in that house. He remained here four or five years after he came
from Mackinac. He lived in Mackinac until his death. He came over
to Cheboygan several times after he went to reside at Mackinac.
Sometimes he would stay a week or two, visiting. At the time he
lived here, he was a notary public, justice of the peace, and
postmaster. I know he was in the habit of drawing deeds and
mortgages for anyone that called on him. I don't think there was
any one else here during the year 1852 and 1853 who drew deeds and
mortgages but Bela Chapman in this village. My father sold the
premises to William S. M. Belote. My father was in possession of
the premises from 1846 until he sold to Belote."
Medard Metivier says:
"I hold the office of county clerk
Page 101 U. S. 498
and register of deeds for Cheboygan County; have held these
offices since 1872. . . . I am in my sixtieth year. I came to live
in this village in 1851. Lived here ever since, except about six
years when I lived in Mackinac and Chicago during the war. I know
Jacob Sammons and Bela Chapman; they are both dead. I remember
being at the house of Jacob Sammons when a deed was executed by
Sammons and wife to Belote. I witnessed the deed. That deed was
witnessed by and acknowledged before Bela Chapman, as notary
public. I think there was another deed executed by Sammons and wife
to Belote, which I witnessed when Bela Chapman was present. I
remember the circumstances distinctly of one deed being executed,
witnessed by myself and Chapman, from the fact that the room was
very dark, owing to Mrs. Sammons having very sore eyes, and we had
to raise the curtain for more light. There was not any other
full-grown person there, unless Mr. Belote was there, about which I
cannot state positively, than Mr. and Mrs. Sammons, Mr. Chapman,
and myself. A part of the deed which I witnessed was in print. It
was an old-fashioned form of printed deed. Mr. Chapman brought the
form from Mackinac or somewhere. He only had them here. I know the
premises described in the bill in this cause, and Chapman was never
in possession of them to my knowledge. I know Mr. Chapman's
handwriting very well, and I remember particularly that the deeds
witnessed by myself and Mr. Chapman and acknowledged before him
were in his (Chapman's) handwriting, and that he drew both of them.
I know one of the deeds then executed by Sammons and wife to Belote
conveyed the premises in question and other property; cannot tell
all of the other property."
These witnesses are unimpeached and are to be presumed
unimpeachable. Their testimony is conclusive as to Chapmans'
relation to the property. If there could be any doubt on the point,
it is removed by the fact that for $25 he conveyed property about
to be sold and which was sold by Baker to responsible parties for
$8,000. This fact alone is decisive as to the character of the
transaction with respect to both parties. No honest mind can
contemplate for a moment the conduct of the attorney without the
strongest sense of disapprobation.
Page 101 U. S. 499
Chapman conveyed by a deed of quitclaim to the attorney's
brother. The attorney procured the deed to be so made. It was the
same thing in the view of the law as if it had been made to the
attorney himself. Neither of them was in any sense a
bona
fide purchaser. No one taking a quitclaim deed can stand in
that relation.
May v.
LeClaire, 11 Wall. 217.
There are other obvious considerations which point to the same
conclusion as a matter of fact. It is unnecessary to specify them,
and we prefer not to do so.
The admission of Chapman while he held the legal title, being
contrary to his interest, are competent evidence against him and
those claiming under him. He said the object of the conveyance to
him was to protect the property against a creditor of Sammons. If
such were the fact, the deed was declared void by the statute of
Michigan against fraudulent conveyances (2 Comp.Laws of Mich. 146);
and it was made so by the common law. The aid of the statute was
not necessary to this result.
Clements v.
Moore, 6 Wall. 299. Nothing, therefore, passed by
the deed to Chapman's grantee.
Chapman's connection with the deed from Sammons to Belote would
bar him, if living, from setting up any claim at law or in equity
to the premises. The facts make a complete case of estoppel
in
pais. This subject was fully examined in
Dickerson v.
Colgrove, 100 U. S. 578. We
need not go over the same ground again.
See also City of Cincinnati v. Lessee
of White, 6 Pet. 431;
Doe v. Rosser, 3
East 15; and
Brown v. Wheeler, 17 Conn. 353.
If Chapman had nothing to convey, his grantee could take nothing
by the deed.
The latter is in exactly the situation the former would occupy
if he were living and were a party to this litigation. The estoppel
was conclusive in favor of Belote and those claiming under him, and
this complainant has a right to insist upon it.
But there is another and a higher ground upon which our judgment
may be rested.
The relation of client and counsel subsisted between the
attorney and Baker. The employment to draw the contract with Hurds
& Smith was not a solitary instance of professional
Page 101 U. S. 500
service which the latter was called upon to render to the
former. The bills of the attorney found in the record show the
duration of the connection and the extent and variety of the items
charged and paid for. They indicate a continuous understanding and
consequent employment. Undoubtedly either party had the right to
terminate the connection at any time; and if it were done, the
other would have had no right to complain. But until this occurred,
the confidence manifested by the client give him the right to
expect a corresponding return of zeal, diligence, and good faith on
the part of the attorney.
The employment to draw the contract was sufficient alone to put
the parties in this relation to each other.
Galbraith v.
Elder, 8 Watts (Pa.) 81;
Smith v. Brotherline, 62
Pa.St. 461. But whether the relation subsisted previously or was
created only for the purpose of the particular transaction in
question, it carried with it the same consequences.
Williamson
v. Moriarty, 19 Weekly Reporter 818.
It is the duty of an attorney to advise the client promptly
whenever he has any information to give which it is important the
client should receive.
Hoops v. Burnett, 26 Miss. 428;
Jett v. Hempstead, 25 Ark. 462;
Fox v. Cooper, 2
Q.B. 827.
In
Taylor v. Blacklow, 3 Bing.N.C. 235, an attorney
employed to raise money on a mortgage learned the existence of
certain defects in his client's title and disclosed them to another
person. As a consequence his client was subjected to litigation and
otherwise injured. It was held that an action would lie against the
attorney and that the client was entitled to recover.
In Com.Dig. tit. "Action upon the case for a Deceit, A. 5," it
is said that such an action lies
"if a man, being entrusted in his profession, deceive him who
entrusted him; as if a man retained of counsel became afterwards of
counsel with the other party in the same cause, or discover the
evidence or secrets of the cause. So if an attorney act deceptive
to the prejudice of his client, as if by collusion with the
demandant he make default in a real action whereby the land is
lost."
It has been held that if counsel be retained to defend a
particular title to real estate he can never thereafter, unless
his
Page 101 U. S. 501
client consent, buy the opposing title without holding it in
trust for those then having the title he was employed to sustain.
Henry v. Raiman, 25 Pa.St. 354. Without expressing any
opinion as to the soundness of this case with respect to the extent
to which the principle of trusteeship is asserted, it may be laid
down as a general rule that an attorney can in no case, without the
client's consent, buy and hold otherwise than in trust, any adverse
title or interest touching the thing to which his employment
relates. He cannot in such a way put himself in an adversary
position without this result. The cases to this effect are very
numerous and they are all in harmony. We refer to a few of them.
Smith v. Brotherline, 62 Pa.St. 461;
Davis v.
Smith, 43 Vt. 269;
Wheeler v. Willard, 44
id. 641;
Giddings v. Eastman, 5 Paige (N.Y.) 561;
Moore v. Bracken, 27 Ill. 23;
Harper v. Perry, 28
Wis. 57;
Hockenbury v. Carlisle, 5 Watts and S. (Pa.) 348;
Hobedy v. Peters, 6 Jurist, pt. 1, 1,794;
Jett v.
Hempstead, 25 Ark. 462;
Case v. Carroll, 35 N.Y. 385;
Lewis v. Hillman, 3 H.L.Cas. 607.
The same principle is applied in cases other than those of
attorney and client.
Where there are several joint lessees and one of them procures a
renewal of the lease to himself; the renewal enures equally to the
benefit of all the original lessees.
Burrell v. Bull, 3
Sandf. (N.Y.) Ch. 15.
Where there are two joint devisees and one of them buys up a
paramount outstanding title, he holds it in trust for the other to
the extent of his interest in the property, the
cestui que
trust refunding his proportion of the purchase money.
Van
Horne v. Fonda, 5 Johns. (N.Y.) Ch. 388.
Where a surety takes up the obligation of himself and principal,
he can enforce it only to the extent of what he paid and interest.
Reed v. Norris, 2 Myl. & Cr. 361.
Where a lessee had made valuable improvements pursuant to the
requirements of his lease, and procured an adverse title intending
to hold the premises in his own right, it was held that he was a
trustee and entitled only to be paid what the title cost him.
Cleavinger v. Reimar, 3 Watts & S. (Pa.) 486.
The case in hand is peculiarly a fit one for the application of
the principle we have been considering. It is always dangerous
Page 101 U. S. 502
for counsel to undertake to act, in regard to the same thing,
for parties whose interests are diverse. Such a case requires care
and circumspection on his part. Here there could be no objection,
there being no apparent conflict of interests, but upon discovering
that the title was imperfect it was the duty of the attorney
promptly to report the result to Baker as well as to Hurds &
Smith, and to advise with the former, if it were desired, as to the
best mode of curing the defect. Instead of doing this he carefully
concealed the facts from Baker, gave Hurds & Smith the choice
of buying, and, upon their declining, bought the property for
himself, and has since been engaged in a bitter litigation to wrest
it from Baker. For his lapse at the outset there might be some
excuse, but for his conduct subsequently there can be none. Both
are condemned alike by sound ethics and the law. They are the same
upon the subject. Actual fraud in such cases is not necessary to
give the client a right to redress. A breach of duty is
"constructive fraud," and is sufficient. Story, Eq.Jur. secs. 258,
311.
The legal profession is found wherever Christian civilization
exists. Without it society could not well go on. But like all other
great instrumentalities, it may be potent for evil as well as for
good. Hence the importance of keeping it on the high plane it ought
to occupy. Its character depends upon the conduct of its members.
They are officers of the law, as well as the agents of those by
whom they are employed. Their fidelity is guaranteed by the highest
considerations of honor and good faith, and to these is superadded
the sanction of an oath. The slightest divergence from rectitude
involves the breach of all these obligations. None are more honored
or more deserving than those of the brotherhood who, uniting
ability with integrity, prove faithful to their trusts and worthy
of the confidence reposed in them. Courts of justice can best serve
both the public and the profession by applying firmly upon all
proper occasions the salutary rules which have been established for
their government in doing the business of their clients.
We shall discharge that duty in this instance by reversing the
decree of the circuit court and remanding the case, with directions
to enter a decree whereby it shall be required that the
complainant, Baker, deposit in the clerk's office for the use
Page 101 U. S. 503
of the defendant, George P. Humphrey, the sum of $25, and that
Humphrey thereupon convey to Baker the premises described in the
bill, and that the deed contain a covenant against the grantor's
own acts and against the demands of all other persons claiming
under him, and it is
So ordered.