Doster v. Scully

• Decision Date: 08 June 1886
• Citation: 27 F. 782
• Parties: DOSTER v. SCULLY.
• Court: U.S. District Court — District of Kansas

27 F. 782

DOSTER v. SCULLY.

United States Circuit Court, D. Kansas.

June 8, 1886

J. J Buck and W. H. Rossington, for complainant.

L. F Vuller, for defendant.

BREWER J.

The facts in this case are these: A man named Christie was the holder of a large body of land in Marion county, including therein the tract upon which the mortgage in controversy is sought to be foreclosed. On November 29, 1879, he executed a note for $1,973 to a man named Gregg. Both of these parties lived in Canada. On February 20, 1880, Christie acknowledged and delivered a mortgage on this tract to secure such note. That mortgage was recorded March 8, 1880. It was signed and acknowledged by him on February 20th, though not signed or acknowledged by his wife until February 24th, and but in fact it was delivered to the mortgagee on February 20th, or rather, delivered to his agent, and this agent afterwards went and got the wife's signature. It was delivered in lieu of a mortgage which had been executed in November prior and returned. So that this Mr. Gregg had a mortgage in his possession, acknowledged by the mortgagor on the twentieth day of February, 1880. On the twenty-third of February, three days after he received the mortgage, an attachment was placed upon this land by a man named Leonard. The mortgage was therefore executed and delivered by the mortgagor himself three days before the attachment, but not recorded until about eight days thereafter. That attachment suit was prosecuted to judgment, the property sold, and purchased by the defendant. Thereafter Mr. Doster became, by purchase of Mr. Gregg, the owner of that mortgage, and brings this suit to foreclose.

The first question-- which is now hardly a question-- is whether his mortgage is prior to that attachment. The case of Holden v. Garrett, 23 Kan. 98, disposes of that question; and it holds that the mortgage, having been executed and delivered before the levy of the attachment, is the prior lien.

After that attachment had been pushed to judgment, and just prior to the sale, this state of facts arose, and creates the embarrassing question in the case: Mr. Christie was the owner of a large body of land covered by several liens,--different tracts, covered by different liens. Mr. Doster, the plaintiff in this case, was counsel for some of the lienholders, though not counsel for Mr. Christie, nor for Mr. Leonard. In foreclosing these liens, of course he was anxious to find somebody to purchase. Mr. Scully, who is a large landed property owner in Marion county, also owning lands in Illinois, was induced to investigate the subject. One of his agents, Mr. John Scully, came out in May or the forepart of June, and looked the land over. He went back, and reported to his partner in Illinois, and on the twenty-second day of June Mr. Koehnle, accompanied by a Mr. Schwerdtfeger, arrived in Marion Centre, coming to look up these Christie lands, with a view to their purchase. Mr. Koehnle had been in the real-estate business for some years, and was a general agent for Mr. Scully, looking after his property in Illinois and elsewhere. The sale of the bulk of these lands, though not of the tract covered by the attachment, was to take place on the twenty-fourth of June. Mr. Koehnle and Mr. Schwerdtfeger reached Marion Centre on the 22d, in the evening. The 23d they went through the records of the county, examining the title. On the 24th they visited Mr. Doster's office. And Mr. Koehnle testifies that he intending to leave town, and not be present on the fifth of July, when the property in the attachment suit was to be sold, employed Mr. Doster in the matter, first asking him whether the Gregg mortgage was a lien prior to the attachment; that Mr. Doster told him it was not; and that he, relying upon that, left with Mr. Doster instructions to buy the land at the attachment sale, and it was bought.

Now, the defendant relies upon this proposition: That an attorney is bound by the advice which he gives his client, and that, having given advice of a certain character, he cannot thereafter deal with the property, the subject-matter of the advice, to his own personal gain, and the prejudice of the client who has acted upon his advice. His claim is: 'Mr. Doster said to me that that mortgage was an inferior lien to the attachment. I relied upon that advice, bought the land, and now Mr. Doster cannot turn round, buy that mortgage for a song, and foreclose it against my land. ' Well, the proposition of law is beyond any question. There is such an obligation resting upon a lawyer to his client that, while he does not insure the correctness of his advice, yet, after having given it, he is estopped from speculating upon it to the injury of his client. Of course, the question arises in two forms. It may be a case where the counsel knowingly and intentionally gives false advice with a view of personal speculation thereafter. In such a case as that, the law is emphatic that he takes nothing by his subsequent speculation; that he forfeits the money he has paid; and that all inures to the benefit of the client. The other case is where a lawyer, ignorantly and mistakenly, yet honestly, gives advice, and thereafter enters upon a speculation in respect to the property the subject-matter of the advice; and there the law treats him as an agent of his client, and hold his speculation as only for the benefit of the client. There would not be any dispute, I presume, among members of the bar generally, as to the correctness of these propositions of law, and the necessity of strict adherence to them in all cases. It is the foundation of the confidence which ought to exist between counsel and client, and which can alone enable counsel to act freely and fully for the benefit of the client.

Now that Mr. Doster did not intentionally misrepresent the law to his client; that he did not misrepresent the matter knowingly, and for the purposes of subsequent speculation,-- is perfectly apparent. A multitude of circumstances show that. In the first place, he had no interest in the Gregg mortgage, or in Mr. Christie, the mortgagor. He not only had no knowledge of the mortgagee,--no certainty, or even probability, that he would thereafter acquire an interest in that mortgage, or have anything to do with the mortgagee,-- but, on the other hand, he was interested pecuniarily in securing such a client as Mr. Scully, who had large interests in Marion county, and was the prospective buyer of further interests, which, in the very nature of things, would make him desirable as a client. Under those circumstances, it is not to be supposed that any man of ordinary sense would deliberately misrepresent the law to one whom he was seeking as a client, in the possible and purely speculative hope that he might, some time in the future, acquire an interest from a stranger in an outstanding mortgage. Further, if he was intending wrong, how easy it would have been for him to purchase this mortgage from Mr. Gregg through somebody else, have the transactions conducted in the name of a third party, and himself never figure, and so never be known as having any interest in the mortgage; whereas, he directly purchased the mortgage from...