Opinion
No. 3171.
Decided June 4, 1940.
A purchaser of real estate is not affected with constructive notice of an attachment against a former owner which was indexed at a date subsequent to the former owner's recorded conveyance of the property.
MOTION, by Howard B. Lane, to intervene in an action at law brought by the plaintiff, Pittsburgh Plate Glass Company, against the defendants, American Crystal, Inc., and Albert Delay, to recover the amount due on an account of goods sold and delivered. The findings of the trial court are as follows:
"The question arising on this motion to intervene is whether Howard B. Lane has a prior and superior title to the Pittsburgh Plate Glass Company, which, in its action at law against these defendants, specially attached real estate claimed to have been the property of Albert Delay and conveyed by him in fraud of creditors prior to the attachment of the Pittsburgh Plate Glass Company. In the writ we find the following: `We command you particularly to attach a certain tract or parcel of land with the buildings thereon situate on the westerly side of Main Street in said Keene and bounded and described as follows, to wit,' (herein follows a description of the property by metes and bounds). Continuing we find also the following in the writ: `being the premises conveyed by Albert Delay to George Delay on the 16th day of March, 1931, in fraud of his creditors.' Albert Delay did transfer the property in question to George Delay March 16, 1931, and this deed was recorded December 29, 1932. That this transfer was in fraud of creditors is admitted. The Pittsburgh Plate Glass Company brought its suit July 12, 1933, and attached the property on that date. George Delay afterwards deeded this property to Emma Delay March 19, 1934, and the deed was recorded March 29, 1934. Emma Delay subsequently mortgaged this property to the C. C. Savings Bank for $5,000, and later, to wit, November 17, 1936, she deeded the same property to Howard B. Lane. The records in the Registry of Deeds did not show any indexing of an attachment of the Pittsburgh Plate Glass Company against George Delay. Howard B. Lane before taking title to the property examined the records in the Registry of Deeds and did not discover this special attachment. He followed the usual practice of running down a title by taking the name of the grantee and then continuing his search to find out where the grantee had conveyed the property. When he discovered the property in George Delay's name, he continued the search on the grantor's side of the index to see when George Delay had conveyed the property, and so on, until he discovered it was in the hands of Emma Delay when he purchased it. Howard B. Lane paid good and sufficient consideration for the property, is a bona fide purchaser for value, without actual notice, and is not to be considered negligent in his search and not to be adjudged at fault for not having discovered this special attachment."
The question whether, on the foregoing facts, the intervenor "has a title which takes precedence over what title the Pittsburgh Plate Glass Company acquired through attachment" was transferred without ruling by Burque, C. J., as an important question of law.
Frederick W. Mowatt (of Massachusetts) and Arthur Olson (Mr. Mowatt orally), for the plaintiff.
Howard B. Lane, intervenor (by brief and orally), pro se.
Section 5 of chapter 332 of the Public Laws provides that the Register of Deeds shall keep a general index of all real estate attachments and that he shall enter therein at the time he receives a writ or other process the names of the plaintiff and defendant in the action.
It was of course incumbent upon the intervenor to make inquiry concerning the title of the property which he purchased. This he did by searching the records in the Register's office. Since no proceedings were then pending to set aside the alleged fraudulent conveyance, neither the name of George Delay nor that of Emma Delay appeared in the index as defendants whose land had been attached. The fraudulent conveyance antedated the bringing of the action at law by more than two years, and the intervenor, who had no actual knowledge of the character of the conveyance and was not negligent for failing to obtain such knowledge, was not bound at his peril to inquire concerning an attachment of Albert Delay's real estate made long after the particular property had ceased to be his. See Ashland Savings Bank v. Mead, 63 N.H. 435.
Nor would the result be otherwise if, as the plaintiff contends, it was the duty of the Register under a fair interpretation of the statute to show the existence of the special attachment by listing George Delay's name as a defendant; for if such were the Register's duty, the failure to perform it would be chargeable to the plaintiff rather than to the intervenor. General Motors c. Corporation v. Company, 84 N.H. 348.
But the plaintiff argues that knowledge of the situation should nevertheless be imputed to the intervenor because of his connection with the litigation. Two years after the present action at law had been instituted the defendants' attorney withdrew his appearance and the intervenor was employed by the defendants in his stead. The plaintiff contends that the intervenor, as counsel for the defendants, was presumed to know of the "special direction to the officer to make the special attachment."
It is true, as the plaintiff asserts, that the knowledge of an attorney acquired in the course of a transaction in which he is acting for his client is chargeable ordinarily to the client with the same effect as if the client had acquired the knowledge in person. White v. Hildreth, 13 N.H. 104, 106; Barry v. Bartis, 85 N.H. 202, 204; Daniels v. Barker, 89 N.H. 416, 420. But since the relation of attorney and client is governed by the same rules which apply to other agencies (2 Mechem, Agency, (2d ed.), s. 2150), it by no means follows that an attorney acting in a matter which involves no disloyalty to his client is bound by the latter's knowledge or is chargeable with notice of particular facts relating to the subject-matter of his employment. And in this connection it should be noted that the action which the intervenor was employed to defend was not brought to determine the title now in controversy but to collect an account for goods sold and delivered and that the trial court has found as a fact that the intervenor was not at fault for failing to discover the special attachment.
In view of the conclusion reached it is unnecessary to consider the intervenor's contention that the plaintiff by failing to supplement the action at law with bill in equity seeking to set aside the conveyance (see Wilson v. McCarroll, 80 N.H. 580, 582) has been guilty of laches and is therefore now precluded from obtaining equitable relief.
The question transferred is answered in the affirmative.
Case discharged.
All concurred.