POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS
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1878 Nov. 15.
BEFORE THEIR LORDSHIPS
DENMAN and LINDLEY, JJ.
Solicitor for plaintiff: James Neal, for Wallingford, Day, & Wallingford, Huntingdon.
Solicitors for defendant: Milne, Riddle, & Mellor
TORT AND PERSONAL INJURY – NEGLIGENCE:- Where negligence is established – Whether plaintiff entitled to recover full pecuniary value of loss sustained – Where defendant fails to adduce evidence to reduce the damages – Effect
REAL ESTATE/LAND LAW:- Real estate transaction – Duty of solicitor to ascertain existing encumbrances or charge over the land – Failure thereto – Whether client may recover against solicitor
ETHICS – LEGAL PRACTITIONER: Solicitor, Action against, for Negligence – Failure to ascertain existence of a charge upon the land Measure of Damages
HISTORY AND SUMMARY OF CASES
The plaintiff, who held a mortgage for 4600£. upon lands belonging to one F., agreed to make him a further advance of 400£. upon having an additional piece of land, which F. had subsequently acquired, added to the former security. The defendant, who acted as the plaintiff’s solicitor in the transaction, omitted to ascertain (as the fact was) that a third person had an equitable charge to the extent of 46£. upon this additional piece of land; in consequence of which the plaintiff, upon the sale of the property, was unable to convey without paying the 46l.:-
Held, that this was negligence for which the defendant was liable; and that, in the absence of evidence to reduce the amount, the 46l. so paid was the proper measure of damages
Upon an appeal by motion under the County Courts Act, 1875 (38 & 39 Vict. c. 50), s. 6, the Court of Appeal has power to order judgment to be entered, – the former provision in that respect (13 & 14 Vict. c. 61, s. 14) not being repealed or varied by s. 6 of 38 & 39 Vict. c. 50, which only gives an additional mode of procedure.
APPEAL, by way of motion, from a decision of the judge of the county court of Northamptonshire holden at Thrapstone.
The facts appear more clearly by the following written judgment than by the notes taken by the learned judge at the trial.
“The plaintiff sought in this case to make the defendant personally liable for negligence as his solicitor, on the following grounds, viz. that when, in the year 1876, he the plaintiff was applied to for a further sum of 400l. in addition to 4600l. then owing to him, with interest, by W. Foscutt on mortgage, he objected to make the further advance, as not being satisfied with the then existing security, and only agreed to do so on having a little piece of land, which had been bought by Foscutt of the devisees of one Parker, added to his security, and that he would not have advanced the further 400l. if he had been aware of a prior incumbrance on that land, of which he was kept in ignorance through the defendant’s having omitted to obtain delivery of the title-deeds when Foscutt executed the new security.
“These grounds, except as to the omission by the defendant to have the title-deeds delivered up, and the plaintiff’s ignorance of the prior encumbrances, were not supported by the evidence. On the contrary, the plaintiff’s letters showed that he thought the security ample for the further advance without the addition of the little piece of land referred to (2 roods 8 perches), and that such addition was made at his own suggestion only on the ground apparently that it was not included in his former mortgages, and he might as well have all that Foscutt could give him. In a letter of the 27th of July, 1875, to the defendant, he (the plaintiff) says:- “I went over Mr. Foscutt’s estate yesterday, and feel satisfied that the security is ample at the present. I am willing to advance him about 300l. more, to make the mortgage amount to 5000l. My advice was to him, Have sufficient to set you straight and pay your interest regularly as it comes due. Will you kindly inform me the outgoings upon it, – whether tithe-free. He says his sister has a charge of 300l.: that he states to be all. It would be much to his advantage either to let or sell his estate. I expect it consists of about 100 acres. Just state if that is correct. Is the little piece he bought of Parker included in the mortgage? If not, I think it should be.” To this the defendant replied on the 2nd of August, 1875, so far as is material, as follows:- “The amount of your mortgage at present is 4600l., and so 400l. (not 300l.) is required to make up the 5000l. Mr. Foscutt, however, has only asked for 300l., which he wants this week. The land is about 100 acres in extent. The land in Ringstead (about 74 acres) is subject to tithe rent-charge, about 24l. a year. The little piece Foscutt bought of Parker’s devisees shall be included. I am not aware of any other outgoings; but I think there must be some Nene drainage tax. But I will get particulars from Foscutt.”
“Under these circumstances 400l. was advanced by the plaintiff to Foscutt on the 9th of August, 1875, and was secured by a mortgage of that date from Foscutt to the plaintiff, prepared by the defendant, acting for both parties; and he witnessed Foscutt’s execution of the deed, which included the little piece of land bought of Parker’s devisees.
“In the following year the plaintiff instructed the defendant to call in the mortgage and sell under the powers for that purpose contained in the mortgage deeds; and on the 10th of October, 1876, portions of the property (including the little piece of land bought of Parker’s devisees, and mortgaged by the deed of 9th August, 1875) were sold for sums amounting to 1142l. 2s. 2d. Other parts were sold in the year 1877 for 1590l.; and the remainder is still unsold, having been bought in for 2800l.
“On the occasion of the sales in October, 1876, it was discovered that one French had a charge, under a deposit of the title-deeds, on the little piece of land bought of Parker’s devisees comprised in the mortgage of August, 1875, to the amount of 46l., which the plaintiff was obliged to pay in order to get possession of the deeds relating to that piece of land. This sum, with 3l. 2s. for interest from the 13th of March, 1877, the date of the payment to French, amounting in all to 49l. 2s., the plaintiff seeks to recover in this action from the defendant, by way of damages for his negligence in allowing the plaintiff to make the further advance of 400l. in August, 1875, on a defective security to the extent of French’s equitable mortgage, and in not requiring the delivery of the title-deeds relating to the additional piece of land from Foscutt prior to such advance, which enabled him to conceal the charge to French.
“Under the circumstances, I am of opinion that this is not such a case of gross negligence as would justify me in holding the defendant liable to this claim. The letter of the 27th of July, 1875, was calculated to lead the defendant to suppose that the additional security of the little piece of land therein suggested was of trifling importance, the security otherwise being, according to the plaintiff’s statement, ample, and, further, to suppose that the plaintiff had himself ascertained that the only charge on the mortgaged property was the sister’s 300l., and that the little piece bought of Parker’s devisees, and proposed incidentally in that letter to be included, was free from incumbrances, as Foscutt afterwards in the deed of August, 1875, covenanted that it was. It is to be observed that the then existing mortgage of 4600l. comprised sums advanced on ten different occasions by the plaintiff to Foscutt during a period of thirty-five years from April, 1840, the first advance being on the 24th of April, 1840, and that the plaintiff must have had repeated communications with Foscutt on the subject of those advances and the security for them; and that he was well acquainted with the property is shewn by his suggestion as to the land bought of Parker’s devisees. No previous complaint had ever been made against the defendant, who acted in these several transactions.
“No explanation, on the other hand, was given of how the defendant came not to require delivery of the title-deeds of the land bought of Parker’s devisees, or why, when he ascertained at the plaintiff’s request the outgoings on the land, he did not in the particulars he promised in his letter of the 2nd of August, 1875, to get from Foscutt as to the outgoings, include inquiries as to any incumbrance or charge on the land bought of Parker’s devisees. It was, however, stated on the part of the plaintiff that there was no wish to impute to the defendant any knowledge of French’s charge, or any wilful intention to mislead the plaintiff into advancing his money on a defective security, but only negligence in the conduct of the mortgage of the 9th August, 1875.
“Supposing I should be justified, as I think I am, in holding that not to be gross negligence for which a solicitor may be personally liable to his client, the question of damages in this case still would raise a very serious difficulty. Foscutt, it appears, cannot be sued to any useful purpose on his covenant, though the evidence as to this was not conclusive, there being only evidence of an action against him for the whole mortgage debt, principal and interest, being abandoned as useless: but that would not prove it to be useless to sue him only for the amount claimed of the defendant.
“Independently, however, of this, there was no evidence of the piece of land bought of Parker’s devisees, and mortgaged by the deed of 9th August, 1875, having been sold at a loss, at less than 90l., the price stated to have been paid for it by Foscutt to Parker’s devisees, or the 46l. paid to French, or at less than its real value; no evidence, in fact, of the security of the 9th August, 1875, being an insufficient security to the extent of that piece of land notwithstanding French’s charge. There was no evidence of how much of the 1142l. 2s. 2d. realised by the sales in October, 1876, was the price of this particular piece of land. It may have been sold for more than the 46l., for more even than 90l. and the additional 46l., for 140l., or some sum near to that.
“An account was put in, shewing a deficiency of 344l. 12s. to meet the whole debt, principal and interest; but it was not shewn how much of this deficiency was attributable, if any at all, to the piece of land in question; and the whole of this deficiency rests on the supposition that the remainder of the property not yet realised is worth only 2800l. There was no further evidence of this than its being brought in for that amount, which is evidence rather of its being worth more; and the plaintiff had himself more than once stated the whole property was worth more than 5000l., and was ample security for that amount.
“In Chapman v. Chapman (1), a suit instituted by a client against his solicitor for negligence, it being uncertain whether the plaintiff would sustain any loss, Vice-Chancellor Stuart, in deciding against him, said there was no precedent, so far as he knew, of a decree declaring generally that the plaintiff in such a case should be indemnified in respect of an apprehended loss, which might never occur. This principle was acted on by Vice-Chancellor Hall in the late case of British Mutual Investment Co. v. Cobbold (2), also a case against a solicitor for negligence in investigating a title, where, it being impossible then to say what loss (if any) the plaintiff company would sustain, the Vice-Chancellor allowed a demurrer to the bill, and said they must take their case to a Court of law. But I apprehend no specific damages can be recovered at law, in respect of only an apprehended loss, which may never occur; although it has been held that such an action is maintainable, though the damages be only nominal. This is not such an action. Special damages are asked in respect of a loss which is not proved to have occurred, and which may never occur. I know of no precedent for the recovery of damages in such a case; and my judgment must be for the defendant; but, as I think he was, in the absence of any sufficient explanation, wanting in due care in not requiring the title-deeds of the additional land comprised in the mortgage of August, 1875, to be delivered to the plaintiff, and the prior incumbrance to be paid off, I give no costs.”
This judgment was pronounced on the 20th of March, 1878; and on the 8th of April, the following order was made by Field, J., at chambers, upon the application of the plaintiff, and upon reading the judge’s notes:- “I do order that the defendant do at the next sitting of the Divisional Court, for hearing appeals from inferior courts, shew cause why the judgment for the defendant in this action should not be set aside, and the judgment entered for the plaintiff for the amount claimed, or a new trial granted, on the grounds, – first, that the judge of the Court was wrong in holding that, although the defendant was wanting in due care while acting as solicitor for the plaintiff, in not requiring the title-deeds of the additional piece of land mentioned in the particulars of claim to be delivered to him and the prior incumbrance to be paid off, yet the defendant was not liable to an action for negligence, – secondly, that, even if negligence were proved against the defendant, the plaintiff was not entitled to recover any damages from the defendant.”
(1)Law Rep. 9 Eq. 276.
(2)Law Rep. 19 Eq. 627.
Channell shewed cause. He contended that, upon the facts found, the judgment was perfectly correct, relying mainly upon the plaintiff’s letter of the 27th of July, which, upon the authority of Waine v. Kempster (1), he submitted, absolved the defendant from making minute inquiries as to the sufficiency of the title. It was further contended that, until the whole of the securities had been realised, it was uncertain whether or not the plaintiff would sustain any loss, and consequently that he could only be at the most entitled to nominal damages.
Hensman, in support of the rule. Godefroy v. Jay (2) is an authority to shew that, where an attorney has been guilty of negligence as such, he is liable in damages to the extent of the injury sustained by his client; and that, if he relies upon the absence of actual damage, it is incumbent upon him to prove it. Here, the defendant was admittedly guilty of negligence in not possessing himself of the title-deeds of the piece of land bought of the devisees of Parker; and the plaintiff sustained damage to the extent of the 46l. paid to French in order to get possession of those title-deeds. The defendant offered no evidence: and for that sum the plaintiff is entitled to judgment.
(1)1 F. & F. 695.
(2)7 Bing. 413.
[DENMAN, J. Have we power to enter judgment upon a motion in this form?]
[ Channell. In the case of an appeal under 13 & 14 Vict. c. 61, s. 14 (1), the Court has such power; but not under 38 & 39 Vict. c. 50, s. 6 (2), under which this order was obtained.]
(1) 13 & 14 Vict. c. 61, s. 14, enacts that, “If either party in any cause of the amount to which jurisdiction is given to the county courts by this Act shall be dissatisfied with the determination or direction of the said Court in point of law, or upon the admission or rejection of any evidence, such party may appeal from the same to any of the superior Courts of Common Law at Westminster,” &c. “Provided that such party shall, within ten days after such determination or direction, give notice of such appeal to the other party or his attorney, and also give security, &c. And the said Court of Appeal may either order a new trial on such terms as it thinks fit, or may order judgment to be entered for either party, as the case may be, and may make such order with respects to the costs of the said appeal as such Court may think proper: and such orders shall be final.”
(2) 38 & 39 Vict. c. 50, s. 6, enacts that, “In any cause, suit, or proceeding other than a proceeding in bankruptcy tried or heard in any county court, and in which any person aggrieved has a right of appeal, it shall be lawful for any person aggrieved by the ruling, order, direction, or decision of the judge, at any time within eight days after the same shall have been made or given, to appeal against such ruling, order, direction, or decision, by motion to the Court to which such appeal lies, instead of by special case, – such motion to be ex parte in the first instance, and to be granted on such terms as to costs, security, or stay of proceedings, as to the Court to which such motion shall be made shall think fit: and if the Court to which such appeal lies be not then sitting, such motion may be made before any judge of a superior Court sitting in chambers: And at the trial or hearing of any such cause, suit, or proceeding, the judge, at the request of either party, shall make a note of any question of law raised at such trial or hearing and of the facts in evidence in relation thereto, and of his decision thereon, and of his decision of the cause, suit, or proceeding, and he shall at the expense of any person or persons, being party or parties in any such cause, suit, or proceeding, requiring the same for the purpose of appeal, furnish a copy of such note, or allow a copy to be taken of the same by or on behalf of such person or persons; and he shall sign such copy, and the copy so signed shall be used and received on such motion and at the hearing of such appeal.”
See Turner v. Great Western Ry. Co. (2 Q. B. D. 125), and Morgan v. Davies (3 C. P. D. 260). See also Rules of Court of Hilary Sittings, 1877.
Sect. 6 of 38 & 39 Vict. c. 50 merely gives a new mode of appealing from the decision of the county court. The Court of Appeal is still to do full justice between the parties, as in the case of an appeal under s. 14 of the former Act. Their power is in no degree abridged.
I am of opinion that Mr. Hensman has established his right to have the verdict entered for him for 46l. The case is one of a very peculiar character. I do not think it necessary, after the very elaborate judgment delivered by the county court judge, to go into the details. If his judgment turned upon any supposed distinction between different degrees of negligence, – if he thought that, to render the defendant liable to substantial damages, it was necessary to establish gross negligence as contradistinguished from a want of due care and attention to his business as a solicitor, – I think he was wrong. He appears to have come to the conclusion that the plaintiff could at the most be entitled to nominal damages. I cannot help thinking he did so upon the erroneous supposition that he could not give him more, on the ground that it was uncertain what damage the plaintiff had actually sustained. There appears to me to be no foundation for that. I think we have abundant materials before us to shew to what extent the plaintiff has been damnified by the admitted negligence of the defendant. The whole case was fully gone into, and the defendant offered no evidence to shew that the plaintiff had really sustained no damage. I apprehend it to be a sound principle of law, as against a wrongdoer, that, if negligence is proved, in the absence of evidence on the part of the defendant to reduce the damages, the plaintiff is entitled to recover the full amount of the pecuniary loss he has sustained. In Featherston v. Wilkinson (1), the defendants by charterparty agreed with the plaintiff that their ship should at a specified time load 1300 tons of coal in the Tyne, to be carried to Havre for the plaintiff. They broke their contract, and the plaintiff had in consequence, first, to hire other vessels at an advanced freight, and, secondly, to buy 1300 tons of coal at an enhanced price. He was unable, according to the custom of the coal-trade in the Tyne, to secure a cargo until he had chartered vessels to carry it. The plaintiff having sued the defendants in respect of both these heads of damage, the defendants admitted their liability to pay the advanced freight, but denied that they were liable for the enhanced price of the coal. At the trial the rise in the price at the pit’s mouth was not disputed; but it was not directly proved that there had been an equivalent rise at Havre. It was held that the fact of the plaintiff having paid the advanced price was primâ facie evidence of damage to that extent, and entitled him, in the absence of evidence to the contrary, to recover. “The plaintiff,” said Kelly, C.B., “made out a primâ facie case of damage, to which the defendants attempted no reply.” So I say here. The principle, – or at least one part of it, – is, that the wrongdoer cannot be permitted to measure the damages resulting from his own wrong. I do not say that there is no conceivable evidence which might have been given here to modify the measure of damages. But I entirely assent to the argument of Mr. Hensman that it was for the defendant to offer such evidence. He did not do so: and he must abide by the case as the evidence stood at the trial. The judge ought to have given judgment for the plaintiff for the 46l., and I think we ought to do so now.
(1)Law Rep. 8 Ex. 122
With respect to our power to order judgment to be entered upon this order, it seems to stand thus:- Sect. 14 of 13 & 14 Vict. c. 61 gave the Court that power in the case of appeals under that section. That provision is still unrepealed, and consequently the power still exists, notwithstanding the new mode of procedure introduced by s. 6 of the County Courts Act, 1875 (38 & 39 Vict. c. 50); and I think it right to exercise it in this case. There will therefore be judgment for the plaintiff, with costs.
I am of the same opinion. The plaintiff, being a mortgagee, and being asked to make a further advance, agreed to do so, and instructed his solicitor (the defendant) to get an additional small piece of land, which the mortgagor had acquired since the first mortgage, included in the new security. It was manifestly the duty of the defendant to see that this piece of land was unincumbered, and to get the title-deeds. In this he failed, and it turned out that this small piece was charged with an equitable mortgage to the extent of 46l., and so became of less value to the plaintiff. The mortgaged property was subsequently sold in pursuance of the power contained in the mortgage deed; and, in order to effect that sale, the plaintiff was obliged to pay off the charge. Now, the defendant was clearly guilty of negligence of such a kind as to render him liable to an action. What, then, is the proper measure of damages? The plaintiff, having paid off the charge, is out of pocket to the extent of 46l. Primâ facie that is the proper measure of damages. It has been suggested that the plaintiff is not to be treated as having lost that sum, because the whole of the securities for the mortgage have not been realised. But, what right has the defendant to throw the plaintiff on the unsold land more than on the mortgagor personally? Upon the evidence as it stands, the plaintiff has been damnified to the extent of 46l.; and there was no proof to the contrary.
Judgment accordingly. (1)
(1) Leave to appeal was refused