Hope Fire Insurance v. Cambreleng

3 Thomp. & Cook 495

• Court: New York Supreme Court
• Decided: May 15, 1874
• Status: Published

Opinion

Barnard, P. J.

Mrs. Sherwood’s mortgage was first recorded, and by the record she is entitled to the surplus moneys in question. Henry O. Babcock’s administrator claims to be entitled to the surplus, notwithstanding the recording act, for the reason that Mr. Cambreleng was the attorney both of Mrs. Babcock and Mrs. Sherwood; that in 1868 he executed, a mortgage to Mrs. Babcock which • was not recorded; that in 1869 he executed another mortgage to Mrs. Sherwood which he did record, and that because he was the attorney of Mrs. Sherwood, she is to be held to have known what he ' knew.

The principle is well settled, that a party is chargeable with the knowledge which an agent or attorney acquires in the course of the agency; but the difficulty in applying that principle to the present ease is that Cambreleng was not Mrs. Sherwood’s attorney. He was, himself, the principal in the transaction of the loan as between himself and Mrs. Sherwood. As principal he drew up and executed, recorded and delivered the mortgage to Mrs. Sherwood.

If it be the rule of the English court of chancery, that knowledge by a solicitor is knowledge by the client when the solicitor is himself the borrower of the money, it has never, so far as I have been able to discover, been adopted in this State.

Its adoption would place an attorney in two opposite relations at the same time—as solicitor, with a duty to protect his client, and as a borrower of his client’s money, interested in not telling the client any thing which will injure his chances of getting the money.

I think the order at special term should be reversed, with costs, and the report of the referee affirmed without costs.

Ordered accordingly.