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Hatherley, L. C.,91 "that the question, client in order to defraud him." In how far you are justified in assum

another case, 92 this qualification is ing that the agent does not commu stated as follows: "If the disclosure nicate to his client information which of that fact of which knowledge is he has received, and ought to have sought to be fixed upon the client communicated, may be affected by would have imputed fraud to the solicvery delicate shades of difference. It itor, it is not to be presumed that the might be said that the very fact of solicitor did make disclosure of that the solicitor not having communicated fact.” And in a third case,93 yvhere the an important circumstance is of it assignee of a leasehold interest from self evidence of fraud. But Lord Jus one of three trustees was held chargetice Turner, in the case of Atterbury able with knowledge of the trust be. v. Wallis (1856) 8 De G. M. & G. 454, cause of the knowledge of his solic44 Eng. Reprint, 465, 25 L. J. Ch. N. itor, who was the trustee who made S. 792, 2 Jur. N. S. 1177, 4 Week. Rep. the conveyance, it was insisted that 734, exactly meets that difficulty, and the doctrine of imputed notice could says that such a rule cannot prevail. not apply, because the solicitor was It must be made out that distinct fraud committing a fraud. In answer to was intended in the very transaction, this, the court states: "But if the so as to make it necessary for the client would be affected with construcsolicitor to conceal the fact from his tive notice of a trust, the existence of cious that a solicitor ignorant of the In Re Barker (1875) 44 L. J. Ch. N. fraud would have been put upon no S. (Eng.) 487, 23 Week. Rep. 944, holdtice; accordingly, the mortgagee was ing that a mortgagee to whom his soheld chargeable.

licitor had given a mortgage, and subRolland v. Hart (1871) L. R. 6 Ch.

sequently, in fraud of the mortgage, (Eng.) 678, 40 L. J. Ch. N. S. 701, 25

had deposited the title deed with othL. T. N. S. 191, 19 Week. Rep. 962. Cave v. Cave (1880) L. Ř. 15 Ch.

er mortgagees, did not have construc

tive notice of a subsequent voluntary Div. (Eng.) 639, 49 L. J. Ch. N. S. 505, 42 L. T. N. S. 730, 28 Week. Rep. 793,

deed of other property executed by holding a mortgagee not chargeable

the solicitor. with the knowledge of his solicitor,

MacArthur v. Hastings (1905) 15 who was also acting for the mort

Manitoba L. Rep. 500, holding the gagor, that the mortgaged property grantee of trust property from her had been fraudulently purchased with solicitor not chargeable with his trust money belonging to a trust of knowledge of the trust. which the mortgagor and the solicitor Sankey v. Alexander (1874) Ir. Rep. were the trustees.

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9 Eq. 259, holding a lender not chargeRe Southampton (1880) L. R. 16 Ch. able with knowledge of the solicitor, Div. (Eng.) 178, 50 L. J. Ch. N. S. 218,

who represented both the lender and 43 L. T. N. S. 687, 29 Week. Rep. 231, the borrower. holding a mortgagor who had paid the

Cameron v. Hutchison (1869) 16 mortgage debt to his solicitor not

Grant, Ch. (U. C.) 526, holding the aschargeable with knowledge of such

signee of a mortgage not chargeable solicitor, of an interest in the mort

with knowledge of the assignor, his gage debt of another client of the so

solicitor, of a fraudulent intent in the licitor. Waldy v. Gray (1875) L. R. 20 Eq.

assignment. (Eng.) 238, 44 L. J. Ch. N. S, 304, 32

See Fordtran v. Cunningham (1915) L. T. N. S. 531, 23 Week. Rep. 676,

Tex. Civ. App. 177 S. W. 212, holding that a mortgagee who had em

supra. ployed the mortgagor's solicitor to

01 Rolland v. Hart (1871) L. R. 6 pass upon the title to the mortgaged Ch. (Eng.) 678, 40 L. J. Ch. N. S. 701, premises was not chargeable with the 25 L. T. N. S. 191, 19 Week. Rep. 962 solicitor's knowledge of a prior lien, 92 Waldy v. Gray (1875) L. R. 20 where the solicitor, as a trustee, was Eq. (Eng.) 238, 44 L. J. Ch. N. S. 394, the holder of the prior lien, and had 32 L. T. N. S. 531, 23 Week. Rep. 676. fraudulently delivered up to the mort 93 Boursot v. Savage (1866) L. R. 2 gagor the title papers evidencing the Eq. (Eng.) 134, 35 L. J. Ch. N, S. 627, prior lien.

14 L. T. N. S. 299, 14 Week. Rep. 565.

16 11

Cal 72

which is known to his solicitor, in a able man, imparted to or acquired by case where there is no fraud, the fact the attorney.95 How far the knowlthat the solicitor is committing a edge of a clerk will be imputed to the fraud in relation to that trust cannot client of an attorney is a question upafford any reason why the client on which there is little authority. It should not be affected with construc- has been stated that where a solicitor, tive notice of the existence of the with the consent of his client, puts his trust. It is the existence of the trust, managing clerk to conduct the manand not the fraud, of which he is held agement of the matter which the solicto have constructive notice; and the itor was retained to conduct, he thus constructive notice of the existence of puts his clerk into a position which the trust must be imputed to him makes the notice of the clerk to be nowhether there is a fraud relating to tice to the solicitor, and so to the it or not."

ultimate client; but where the solic

itor does not delegate the whole of VII. Knowledge of partner or clerk of

his authority to his clerk, but, on the attorney.

contrary, retains a part of the busiIt seems clear that notice in regard

ness in his own hands, notice to the to the subject-matter of the employ- clerk is not notice to the client. The ment, to one of a number of attorneys

court states: "I am not prepared to employed by a client, is notice to the

hold that, apart from the question of client.94 While it is true that notice substitution for the principal, the posito one of a firm of attorneys is notice

tion of managing clerk is one that to all members of the firm, it is only

makes notice to the clerk to be the constructive notice to those who have

notice of his principal.” 96 no actual knowledge of the facts. This constructive notice, it has been

VIII. Knowledge of general attorney. held, is not sufficient to charge a cli- Knowledge of an attorney retained ent of a member of the firm in another generally by a client to render such and subsequent transaction; construc- legal services as the client may from tive notice to the client springs from time to time require is not, in all inactual knowledge, or such information stances, imputable to the client.97 as should awaken inquiry in a reason- Thus, it has been held that knowledge

94 Brown V. Oattis (1875) 55 Ga. a firm knowledge of a suit conducted 416; see supra, note 16.

by another member of the firm, it is See Smith v. Wilson & B. Sav. Bank stated simply that it was not shown (1892) 1 Tex. Civ. App. 115, 20 S. W. that the first-mentioned member had 1119, supra, note 13.

actual knowledge of the suit, and un95 Wittenbrock v. Parker (1894) 102 less there was actual knowledge such Cal. 93, 24 L.R.A. 197, 41 Am. St. Rep. knowledge could not be imputed to his 172, 36 Pac. 374, holding that a mort- client. gagee who employed one of a firm of That constructive knowledge of an attorneys to pass upon the title to the attorney may be imputed to a client, mortgaged premises before the mort- see Presstman v. Mason (1887) 68 Md. gage was taken is not chargeable with 78, 11 Atl. 764; Shartzer v. Mountain notice of a mistake made by another Lake Park Asso. (1897) 86 Md. 335, member of the firm in a release of a 37 Atl. 786, supra, note 16. See Butler prior mortgage, the release covering v. Morse (1891) 66 N. H. 429, 23 Atl. all the property, when it was intended 90, supra, note 16. to release only a part.

96 Re Ashton (1891) 64 L. T. N. S. That constructive notice to an at- (Eng.) 28, 39 Week. Rep. 320, 8 Mortorney will not be imputed to his cli- rell, 72. ent is held in Central Trust Co. v. West As to dealings with a clerk, see India Improv. Co. (1900) 48 App. Div. Northwest Constr. Co. v. Valle (1906) 147, 63 N. Y. Supp. 853, reversed with- 16 Manitoba L. Rep. 201, supra, note out reference to this point in (1901) 6. 169 N. Y. 314, 62 N, E. 387.

97 In Hooper v. Cooke (1856) 2 Jur. In Brown v. Sweet (1880) 7 Ont. N. S. (ng.) 527, 25 L. J. Ch. N. S. App. Rep. 725, where it was sought to 467, it is stated that communications impute to the client of one member of through a solicitor, to make them no

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fore.99

by such an attorney, of the retirement solicitor and representative of the of a member of a partnership with Savings & Loan Association, but that which his clients are doing business, is this was done in an independent and not imputable to the clients, where it separate transaction in which he repdoes not appear that such knowledge resented other clients in the performhad any relation to the business in ance of an accustomed service of an which the attorney was at any time attorney. It is further stated that if employed by the clients.98 The court it had been a part and parcel of the stated :98 "If he had been employed transaction between the parties for to ascertain in advance who were par- whom the contract was drawn, that one ties to whom credit might safely be of the parties thereto was to apply to given, and who were the responsible the Savings & Loan Association, repmembers of firms, they [his clients] resented by him as a general attorney would have been bound by his knowl

for a loan which was to be secured by edge on this subject. But a general

land, in which the equitable interest retainer to do business as an attorney at law does not include this kind of

had been created, a different case service." A savings and loan associa

might be presented. It is further addtion is not chargeable with the knowl

ed that a different question would be edge of an attorney regularly employed presented if it were made to appear to pass upon titles to property offered

by the proof that knowledge was presas security for loans, of an equitable

ent in the mind of the attorney at interest in such a property created by

the time he passed upon the abstract a contract which the attorney drafted

of title for the Savings & Loan Assofor other clients, in an independent

ciation. The court adds: “It will separate transaction, a few days be- not do, in the opinion of the writer, to

The Tennessee court 99 states establish the rule that a busy attorney, that in the drafting of this contract called on in his office by two strangers the attorney was, in no sense, the to him, to write executory agreements tice to a client, must be made in re- tween the insured and a lighterman, spect of some pending matter, and because of the fact that knowledge of be such that the solicitor was bound this arrangement had been disclosed to communicate them to the client; the to the defendant's solicitor, the court mere circumstance of being the or- states: “It seems to me that such a dinary solicitor of a party amounting disclosure has no effect at all. A 80to nothing.

licitor is not a standing agent for one It is stated by Bramwell, L. J., in who has been or may be his client, to Saffron Walden Second Ben. Bldg. Soc. receive a mercantile notice in respect v. Rayner (1880) L. R. 14 Ch. Div. of mercantile business." (Eng.) 406, that “there is no such In Akers v. Rowan (1890) 33 S. C. thing as a standing relation of a so- 451, 10 L.R.A. 705, 11 S. E. 389, 12 S. licitor to a man. A solicitor does not E. 165, it is held that, though an atstand in a permanent relation to his torney of a bank may be its agent, yet client, as a chaplain does to a noble- the knowledge which such an officer man, or body, having a chaplain. A has acquired while acting for himself man is a solicitor for another only or for a third person, not for the bank, when that other has occasion to em- cannot be imputed to the bank, espeploy him as such. That employment cially where such knowledge cannot may be either to conduct a suit or to be communicated without a breach of advise him about some matter in which confidence on the part of the attorney. legal advice is required; but there is

98 Vietor v. Spalding (1908) 199 no such general relationship as that

Mass. 52, 127 Am. St. Rep. 472, 84 N. of solicitor and client, of a standing

E. 1016, approved on 2d appeal in

(1909) 202 Mass. 234, 88 N. E. 846. It and permanent character, upon all oc

is stated that there was nothing to incasions and for all purposes." As to

dicate that the attorney knew that his facts in this case, see supra, note 28.

client was dealing with the partner, In Tate v. Hyslop (1885) L. R. 15

ship until a long time after the sale of Q. B. Div. (Eng.) 368, where it was goods for which recovery was sought. sought to affect an insurance company 99 Kirklin v. Atlas Sav. & L. Asso. with notice of an arrangement be- (1900) — Tenn. 60 S. W. 149.

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to exchange their real estate when one covered by the papers he, as attorney
of them gets to a court to ratify the for the parties, drew days, or weeks,
trade, and during the time he is en or perhaps months, before."
gaged in securing this ratification the Notice to the general attorney of a
other is to mortgage his farm to se railroad company of the assignment
cure a loan, must remember and com of a land claim, before any action was
municate the fact to a regular client, pending with reference thereto, is not
who is thereafter applied to for the notice to the company unless, prior to
loan, when his client submits to him such notice, the attorney had been
for his opinion the abstract of title directed to take charge of the subject-
to the property offered as security for matter thereof.100
the loan, and, moreover, that he is But notice to the general counsel
called on to remember that the proper for a company, respecting a matter in
ty offered as security for the loan is which he was authorized to act for
the same property embraced in and his employer, is notice to the client. 101

100 Atchison, T. & S. F. R. Co. v. E. 1105, holding notice to the attorney Benton (1889) 42 Kan. 698, 22 Pac, for a company which stood in the re698.

lation of indemnitors, of a suit against 101 Vogemann v. American Dock & the indemnitees, notice to the client. Trust Co. (1909) 131 App. Div. 216, Cochburn v. Hawkeye Commercial 115 N. Y. Supp. 741, affirmed without Men's Asso. (1913) 163 Iowa, 28, 143 opinion in (1910) 198 N. Y. 586, 92 N. N. W. 1006, supra, note 16. W. A. E.

7

DAKOTA CENTRAL TELEPHONE COMPANY et al., Plffs. in Err.,

V.
STATE OF SOUTH DAKOTA EX REL. BYRON S. PAYNE, Attorney

General, et al.

United States Supreme Court - June 2, 1919.

(250 U. S. 163, 63 L. ed. 910, P.U.R.1919D, 717, 39 Sup. Ct. Rep. 507.) Telephones - intrastate rates -- state control.

1. State control over intrastate telephone rates ceased with the exercise by the President of his authority under the joint resolution of July 16, 1918, as a war emergency measure, to take complete possession and exclusive control, with the right to the entire operating revenues, of the telephone and telegraph systems, notwithstanding the proviso in such resolution that nothing therein contained shall be construed “to amend, repeal, impair, or affect existing laws or powers of the states in relation to taxation or the lawful police regulations of the several states, except wherein such laws, powers, or regulations may affect the transmission of government communications, or the issue of stocks and bonds by such system or systems."

[See note on this question beginning on page 1680.] - Federal operation war measure.

Courts relation to other depart2. Congress possessed the right un ments Executive discretion. der the war power to confer upon the 3. The courts may not inquire into President by joint resolution of July an asserted excess or abuse of discre16, 1918, the power to take over and tion by the President in exerting the operate telephone and telegraph sys authority conferred upon him by joint tems as a war emergency measure. resolution of July 16, 1918, to take over

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and operate telephone and telegraph measure, “to supervise or to take possystems as a war emergency measure. session and assume control of any tele[See 7 R. C. L. 1048.]

graph, telephone, marine cable, or radio Telephones Federal operation

system or systems, or any part thereof,

and to operate the same in such manner right to revenues.

as may be needful or desirable for the 4. Authority to take complete pos- duration of the war, which supervision, session and exclusive control, with the possession, control, or operation shall right to the entire operating revenues, not extend beyond the date of the proc. was conferred upon the President by lamation by the President of the exthe joint resolution of July 16, 1918, change of ratifications of the treaty of empowering him, as a war emergency peace.'

(Mr. Justice Brandeis dissents.)

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ERROR to the Supreme Court of the State of South Dakota to review a decree enjoining defendants from putting into effect a schedule of rates for telephone service alleged to have been prepared by the Postmaster General. Reversed.

The facts are stated in the opinion of the court.

Mr. Alexander C. King, Solicitor United States acquiring a right of temGeneral, for plaintiffs in error: porary possession, control, and operaThe purpose and effect of the joint tion of the telegraph, telephone, etc.

, resolution and proclamation was com- systems for which it should pay. This pletely and exclusively to vest the pos- still left the then owners of the propsession and control of defendants' tele- erty as owners; and as between themphone systems in the President through selves and the United States, as a quasi the Postmaster General as his appointee tenant, the owners are responsible to on behalf of the United States.

the state for, and bound to pay, the Public Service Commission V. New taxes thereon. England Teleph. & Teleg. Co. 232 Taylor, Land & T. 3d ed. & 341; CoolMass. 465, post, 1662, P.U.R.1919D, 49, ey, Taxn. 3d ed. 822; East Tennessee, 122 N. E. 567, affirmed in 250 U. S. 195, V. & G. R. Co. v. Morristown, – Tenn. 63 L. ed. 934, 39 Sup. Ct. Rep. 511.

35 S. W. 771. The taking possession and assuming Where police power is conferred in control and operation by the President

general terms upon municipalities in under the joint resolution of July 16, their charters, such delegations of pow1918, constituted such systems public

er are uniformly held not to embrace utilities operated by the government,

the power to regulate rates of even and made it the right and duty of the

strictly local public occupations or President and his representative to fix

utilities. the charge to be paid for service.

State ex rel. Wisconsin Teleph. Co. Ex parte Milligan, 4 Wall. 2, 18 L.

V. Sheboygan, 111 Wis. 23, 86 N. W. ed. 281; Legal Tender Cases, 12 Wall.

657; St Louis v. Bell Teleph. Co. 96 457, 20 L. ed. 287; Stewart v. Kahn

Mo. 623, 2 L.R.A. 278, 9 Am. St. Rep. (Stewart v. Bloom) 11 Wall. 493, 20

370, 10 S. W. 197; Bluefield WaterL. ed. 176; Atchison, T. & S. F. R. Co.

works & Improv. Co. v. Bluefield, 69 v. United States, 225 U. S. 640, 649, 56

W. Va. 1, 33 L.R.A. (N.S.) 759, 70 S. E. L. ed. 1236, 1239, 32 Sup. Ct. Rep. 702;

772; Jacksonville v. Southern Bell State ex rel. Smith v. Burleson, - Ala. P.U.R.1919F, 1, 82 So. 458; Pen

Teleph. & Teleg. Co. 57 Fla. 374, 49 So.

509. sacola Teleg. Co. y. Western U. Teleg. Co. 96 U, S. 1, 9, 10, 24 L. ed. 708, 710,

A state or its local government, when 712; Atty. Gen. v. Edison Teleph. Co. so empowered, may make a binding L. R. 6 Q. B. Div. 244, 50 L. J. Q. B. contract devesting itself for a substanN. S. 145, 43 L. T. N. S. 697, 29 Week. tial period of time of the power to Rep. 428; Railroad Commission v. Cum- regulate rates. berland Teleph. & Teleg. Co. (La. Sup. Home Teleph, & Teleg. Co. v. Los Ct.)

Angeles, 211 U. S. 273, 53 L. ed. 182, The utmost which the resolution pur- 29 Sup. Ct. Rep. 50; Minneapolis ported to do was to provide for the Minneapolis Street R. Co. 215 U. S.

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