Humboldt Bldg. Ass'n v. Ducker's Exr.

Opinion op the court by JUDGE O’REAR Reversing. John S. Ducker, who was an attorney at law of the Campbell county, Ky., bar was employed in 1889 by appellant as its attorney for the State of Kentucky. At the time of the employment he executed to appellant a bond, the material provisions of which, are as follows: “The condition of the above obligation is such that whereas, the said John S. Ducker has been duly appointed as attorney for the State of Kentucky of the said Humboldt Building Association Company: Now, if the said John S. Duck-er shall well and faithfully perform all his duties as said attorney for the State of Kentucky of the said Humboldt Building Association Company during his continuance in said office, then this obligation shall be void; otherwise it shall be and remain in full force and effect.” It is alleged in the petition that the duties of the attorney were that he would examine all titles submitted to him by the company upon which loans were sought; would prepare all mortgages and other papers' necessary in making ■loans of money for the plaintiff, and would see that all liens upon the property mortgaged to secure the same .were properly released; would lodge all papers for record which was necessary to be so lodged to secure the loans made; would receive from the plaintiff the money to be loaned, and turn the same over to the person to whom the loan was made, but only after he had taken all and every step necessary to be taken to secure to the plaintiff the first lien upon the property taken as a security for the loan. During the continuance of the relationship stated, appellant made a loan to Helen Morrison of $5,000 on [762] ■certain lots in Kenton county, Ky., and submitted the title to Ducker for examination. He did examine and approve it, stating that the deed to Mrs. Morrison reserved a lien for $1,200, but which was to be. released so far as its priority over the building company’s loan was concerned. Thereafter the money was turned over to Ducker in two installments, which he paid out to the principal contractors building the houses on the lots. At that time there was a local statute in force applicable to Kenton and Campbell counties (1 Acts 1889-90, p. 130), providing for liens on behalf of material men and subcontractors. This .act was an amendment to the General Statutes on this subject. The petition alleges that Ducker actually knew of the contract with the original contractors, and that he knew of the fact that certain named subcontractors and material men had liens on the property, or that “by ordinary diligence he might have known of the same.” However, without requiring the subcontractors to waive their liens, he paid the money, as stated, to the principal contractor. The subcontractors filed their liens, and suits to enforce them ensued, resulting in a loss to the building association of some $2,800; the property lacking that much in value under the foreclosure proceedings to pay both the claims and appellant’s mortgage. Appellant brought this suit against Ducker’s executrix and the sureties on the •bond mentioned to recover the loss stated, on the ground that Ducker had, by his negligence or incompetency, — that is, by his lack of care or lack of skill, — occasioned the loss. The lower court sustained a demurrer to the petition, and that action is before us for review. The execution of the bond sued on added nothing to the attorney’s liability or undertaking to the obligee. It merely secured his faithful performance of such duty as. [763] was imposed on Mm by accepting the employment. It is not argued that he became a guarantor of .the* titles passed upon .by him. He did not." Many interesting cases have been cited by counsel, and examined with care.. From them we feel authorized in stating that, while the rule in England seems to have been that an attorney is liable to .his client only in case .of gross neglect or gross- incompetence,, yet in this country a juster rule for the client, and one which the profession can not reasonably find fault with, is that the attorney is liable for the want of such skill, care, and diligence as men of the legal profession commonly possess and exercise in such matters of professional employment. Bank v. Ward, 100 U. S., 195-199, 25 L. Ed., 621. When one seeks and obtains admission to that profession dealing with so many important and involved affairs of men, and holds out his services to be engaged by those standing- in need of such, he engages that he possesses to an ordinary extent the technical knowledge commonly possessed by those in the profession, and that he will give to the matters submitted to him such care and attention as is ordinarily given similar affairs by men of this profession. He does not agree, in the absence of special contract to that effect, that he will make no mistake of judgment. On the contrary, the law recognizes, in fixing this liability of the attorney, that human judgment is fallible. Courts, as well as lawyers, do disagree concerning the many matters-about which each one may have a fairly fixed opinion. The law is a science, it is true, but an imperfect one, for the reason that it depends for exemplification and enforcement upon the. Imperfect judgments and consciences of men. Therefore when the attorney has used ordinary care-in acquainting himself with the facts, his misjudgment as. to the law thereon will not generally render himl liable.. As was said in O’Barr v. Alexander, 37 Ga., 201: “What [764] may be want of skill in any particular case, or what may be ordinary neglect, must be decided by the facts and circumstances of the case that may be under consideration. It is extremely difficult, if not utterly impossible, to lay -down any general rule which should control the measure of liability in all cases. Good faith must exist on the part of the attorney towards his client, and, when this is shown, the absence or presence of reasonable skill and diligence in each case be determined by its own facts.” It is stated in argument that the local act in this case was invoked at a time when the. bar of Kenton and Campbell counties were in great doubt whether it had been repealed by the new Constitution, which had but lately been adopted in this State; and that the attorney exercised his judgment, now seen to have been erroneously, but honestly. That, however, is a matter of defense. Whether this question raised actually existed in the minds of the profession then is one of fact. If it did, and the attorney honestly believed that the subcontractors! had no lien because of that fact, then the jury may be warranted in finding for the defendants. But if the attorney was ignorant of the 'existence of the statute, or had forgotten is at the time of this transaction, or if, knowing of it, he carelessly failed to acquaint himself with the facts as to the subcontractors’ claim for liens till after he had paid out appellant’s money, we are of opinion that he would be liable. However, the existence or non-existence of these actionable facts, as well as of those constituting the defense, are such as properly should be found by a jury under appropriate instructions, or by the trial court if a jury is not demanded. Judgment reversed, and cause remanded, with directions to overrule the demurrer, and for proceedings not inconsistent herewith.