Wilcox v. Executors of Plummer

THIS case came before the court, on a division of opinion between the judges of the circuit court of the United States, for the district of North Carolina.

It was an action of assumpsit, to which was pleaded the statute of limitations.

It was alleged, and proof offered, that on the 28th of January 1820, the testator of the defendants, who was a collecting attorney, accustomed to collect for John V. Wilcox and Company, received from them, for collection, a note which had been drawn by Edmund Banks, on the 2d of October 1819, payable to John Hawkins two months after date, and by him indorsed, on the 9th of November 1819, to Hinton and Brame, and by them, subsequently, to the plaintiffs.

On the 7th of February 1820, the testator, Kemp Plummer, instituted a suit in the name of John V. Wilcox and Thomas Wilcox, who composed the firm of John V. Wilcox and Company, against Banks, and at August 1820, recovered a judgment against him. Banks proved insolvent, and on the 8th of February 1821, the testator caused a writ to be issued in the names of John V. Wilcox, Arthur Johnson and Major Drinkherd, as co-partners in the firm and style of John V. Wilcox and Company, against Hawkins, the indorser of the note.

This action, thus instituted and docketed as a suit by John V. Wilcox and Company against John H. Hawkins, was, after various delays, brought to a trial in April 1824, when the plaintiffs were nonsuited; and this nonsuit was affirmed on an appeal to the supreme court, at June term 1824.

Thereupon the present suit was instituted, viz. on the 27th of January 1825, by John V. Wilcox and Thomas Wilcox, copartners under the firm and style of John V. Wilcox and Company, against the testator of the defendants; and on his death this suit was revived against them by scire facias.

Two breaches were assigned, in distinct counts, by the plaintiffs in their declaration:

The first, that the testator neglected to institute any suit for them against the indorser, until the 9th of November 1822, on which day the remedy against the indorser was barred by statute.

The second, that he instituted and carried on for them the suit, as herein before stated, against the indorser, negligently and unskilfully; and before the same was terminated, the remedy against him was barred as aforesaid, as fully appears by the record.

The jury found a verdict for the plaintiffs, subject to the opinion of the court on the statute of limitations. The time allowed by this statute for bringing all actions on the case, is three years after the cause of action accrues, and not afterwards.

In the circuit court, it was contended by the defendants; that on the first count of the declaration, the cause of action arose from the time when the attorney ought to have sued the indorser, which was within a reasonable time after the note was received for collection; or, at all events, after the failure to collect the money from the marker: and that on the second count, his cause of action arose at the time of committing the blunder, in the issuing of the writ in the names of the wrong plaintiffs.

It was contended by the plaintiffs; that on the first count their cause of action accrued when the testator of the defendants suffered the remedy to be extinguished by a neglect to sue on or before the 9th of November 1822: and on the second count, when the suit unskilfully brought and prosecuted was terminated; or, at all events, on the 9th of November 1822.

It was agreed, that if the positions taken on the part of the defendants be correct on both counts, then a judgment is to be entered for the defendants.

If those taken by the plaintiffs be correct, then a judgment is to be entered for the plaintiffs on both counts: or if either of the positions thus taken by the plaintiffs be correct, then a judgment to be entered for the plaintiffs on the count wherein the statute ought not to bar.

On which questions the judges divided in opinion, and directed the difference to be certified to the supreme court.

Mr. Wirt, for the plaintiff, maintained; that the positions taken by the plaintiffs in the circuit court were correct, and that the same should be so certified to the circuit court, by this court.

The action is against an attorney for negligence, by which the plaintiffs lost their debt. It is admitted, that an attorney is only liable for gross negligence, 2 Starkie's Evid. 133. In all the cases it is held that the action is not maintainable until the debt is not recoverable. Russel vs. Palmer, 2 Wilson, 328. 3 Day, 390.

It is the loss of the debt which gives the action; and where the object of the action is to recover the whole debt from the attorney, the cause of action does not arise until the debt is lost.

If the plaintiff has sustained a special damage by the negligence of the attorney, which is short of the loss of the whole debt, he may have an action for such special damage; and the cause of action will arise from the date of the negligence which produces it. But, where the negligence is charged to be the cause of the loss of the whole debt, the cause of action does not arise until the negligence has continued so long as to produce that effect.

Thus, in this case, it was not the negligence of one or two years which produced the loss of the debt; it was not until the continuance of this negligence for three years had raised the bar of the statute of limitations in favour of the original debtor, that the loss of the debt became complete, and the cause of action for the whole debt arose against the attorney.

Starkie says; in an action against an attorney for negligence, it seems that the statute runs from the time when the plaintiff was damnified, and not from the time of the negligence.

If this be law, it decides the case before the court; for the plaintiff was not damnified to the extent of the demand made by this action, until his right of action was extinguished against the original debtor; that is until the bar of the statute arose to protect that debtor. Ballantine on Limitations, 100, 101. Now, the universal principle is, that the cause of action runs from the act or omission which produces the injury.

There are some modern cases which on their first aspect may seem to bear adversely on this action; but when examined with reference to this principle, and compared with the cause of action stated in this declaration, they will be found to proceed on a marked distinction between these cases, and the case at bar.

In the case of Short vs. M'Carthy, 3 Barn. & Ald. 626, the attorney had neglected to examine whether certain stock the plaintiff was about to purchase, stood in the name of the seller on the books of the bank of England. He reported that it did, and the plaintiff purchased. The court held, that the cause of action arose from the time of the neglect to make the examination, and his false report that he had done so. This was a single act, by which the mischief was done.

The case of Howell vs. Young, 5 Barn. & Cres. 259. 11 Eng. Com. Law Rep. 219. This is a case similar to that of Short vs. M'Carthy. The attorney neglected to examine if real property was incumbered, and the statute was held to run from his neglect, which was a single act. In both those cases, the injury was consummated at once by an act of negligence. And herein the cases have a strong resemblance to that of Hilson vs. Boddington, 11 Com. Law Rep. 223, cited by Holroyd, Justice, in Howell vs. Young.

In reply to the argument for the defendant; Mr Wirt said, the question is whether, during the whole of the connexion of Mr Plummer with his clients, he had used due diligence? The distinction is between a single act of wrong, and a continuing act of wrong. The first cause of action was not sufficient in itself: until its effect was fatal to the plaintiffs' interests, no suit could have been maintained. The error in the inception of the suit, was a continuing cause of action.

The principle being acknowledged, that an attorney is not liable but for gross negligence, and not for every negligence; for that only which produces the injury; could an action have been brought on the failure of Mr Plummer to institute the suit properly. This would not have been permitted.

In this case, every year was a new negligence until the final loss of the plaintiffs' debt. It is suggested, that the principle which in some cases makes the statute of limitations run from the time of the knowledge of the fraud or injury, will apply.

Mr Justice STORY. This principle applies only in cases of torts; and it has been expressly decided, not to apply to cases of assumpsit.