Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself.” Wilson’s Rev. & Ann., 1903, §§2788, 2789, 2790, sub-secs. 10-13.) As to the construction of Sec 13, see Cooper v. Flesner, 24 Okl. 47, 103 Pac. 106 (1909). 

 

Notice to agent has from an early date been recognized in equity as notice to the principal.[33] In the words of the Lord Northington,[34] “it is a fixed and settled principle that notice to the agent is notice to the principal. If it were held otherwise it would cause great inconveniences, and notice would be avoided in every case by employing agents.”

Notice to agent is by American authorities almost universally called constructive notice to principal.[35] in England notice to agent is usually called either constructive or imputed notice, but, without regard to terminology, the English courts, so far as the writer knows, considered notice to agent in every respect the same as notice to the principal personally, actual notice to agent being treated as actual notice to principal.[36]  So it was in the leading case of LeNeve v. LeVNeve.[37] And although in England, the question of terminology seems to be academic, the proprietary of calling notice to agent constructive notice to principal has been questioned. The Lord Chelmsford said:[38] “The notice, which a client is supposed to receive from his solicitor is generally treated as constructive notice. I think it would tend very much to clearness in these cases, if it were classed under the head of actual notice.”

In this country the fact that the effect of actual and of constructive notice is ordinarily the same has usually rendered it unnecessary for the courts to make a discriminating examination of the question, and in most cases no harm has resulted from a wrong classification. But where it is necessary to establish the bad faith of the subsequent purchaser, and under registration statutes requiring actual notice of an unrecorded instrument, the distinction becomes vital. If actual notice to agent is only constructive notice to principal, one has but to employ an agent to avoid the effect of actual notice, and he in equitable result may be reached that a purchaser may require a perfect title to property subject to an unrecorded claim, although his agent, through whom the purchase was made, have full knowledge of the existence of such claim. This actually happened.[39]

Such a doctrine is not only inequitable in operation but is unsound in principle. It is opposed to the philosophic foundation of the law of agency, including the rule that notice to the agent is notice to the principal. Several reasons for this role had been assigned. One is the practical reasons stated by Lord Northington, that otherwise one might avoid notice in every case by employing an agent. Another reason is found in the duty of the agent to communicate his knowledge to his principal and the legal presumption that he has performed his duty. This reason is unsatisfactory because this presumption in many cases admittedly false in fact.

It would seem that the true foundation for the rule that notice to agent is notice to principal is the principle underlying the whole doctrine of agency, that, quoad the agency, agent and principal are one person. As has been aptly said, the agent is the alter ego of the principal.  If in a law agent and principal are one person, it follows that actual notice to agent is actual notice to principal; and even disregarding the fiction of identity, if it be admitted that what one does ruin agent he does himself, they should equally be allowed that what one knows through an agent he knows himself. Philosophically and practically the only sound view is that actual notice to agent is actual notice to principal. This proposition had repeatedly received judicial support either expressly or by necessary implication,[40] and the contrary decisions are extremely few.[41]

It may be added that where nothing depends upon it, it is neither unnatural nor improper to call actual notice to agent constructive notice to principal, for it is only by construction of law that agent and principal are one person, and by construction, therefore, that the acts and knowledge of the agent are the acts and knowledge of the principal. The full statement of this notion, however, is that, since by construction of law agent and principal or one, by construction of law actual notice to agent is actual notice to principal.

Summing up: notice in equity is knowledge of the fact either actually possessed by a person or imputed to him by law. Notice is either actual or constructive, but as a purely equitable concept is primarily and properly actual notice, the foundation of which is actual knowledge. Actual notice in equity of a prior interest, claim, or right is actual knowledge thereof, either in fact possessed by the party to be charged or by his agent, or which but for the fault of such party or agent might have been so possessed.

Notice is a fact to be proven like any other fact, by evidence. Notice may be proven either (1) directly, by evidence bring in the fact of knowledge of the prior claim a home to the party, or (2) indirectly, by circumstantial evidence. Actual notice may be inferred, as a matter of fact, from proof of circumstances showing that the party had the opportunity to learn of the existence of the outstanding claim, or of circumstances of general notoriety pointing to the existence of such claim, or from proof that the party knew of facts or circumstances sufficient to put a reasonable man upon inquiry as to whether or not there was some prior adverse claim to the property in question, which facts or circumstances, if investigated, would probably have led to actual knowledge of the prior claim. Upon proof that the party knew of such facts or circumstances, it would be inferred in the absence of other evidence, that he made the investigation and actually learn of the prior claim and thus had actual notice thereof. But if it be shown that he made such investigation would do diligence, but nevertheless failed to learn of such claim, he will be held to be without notice. If, however, it be shown that he willfully or negligently failed to make such investigation and therefore did not learn of the prior claim, he will be dealt with as if he had had actual notice. In such case, while strictly speaking without notice, he has not acted in good faith and also he will be estoppeled to set up the want of notice.

Notice to agent, within certain well recognized limits, is notice to principal, and in equity notice to the agent has, within these limits, precisely the same effect as notice to principal, actual notice to agent being actual notice to principal.

Besides notice proper, there are several cases of so-called constructive notice. Constructive notice imputed by law, and is wholly independent of knowledge; indeed there can be true constructive notice only in the absence of knowledge, with knowledge the party would have actual notice. The cases of constructive notice are few and special and each rest upon its own particular ground. These cases are (1) notice by possession of real estate, where such possession is not known to the party charged with notice; (2) notice by recitals of title deeds; (3) notice by lis pendens; and (4) notice by registration. With the exception of notice by registration, which is statutory, none of these cases of constructive notice are of much importance, and the 1^st and 3^rd have been some states been abolished by statue.

Joseph R. Long. Lexington, Virginia.

 

There is no penalty for making reasonable mistakes in good faith. However, if one intentionally does harm, then he may be sued. Nevertheless, before he can be sued he must be given a fair opportunity to correct his error. The notice gives one that fair opportunity. By it, he may have sufficient notice to assert proper diligence and inquire further so as to discover that which an inquiry pursued in good faith would disclose.

There is a wide latitude in the style you use to write the notice. You can pretend you are writing to your sweet old grandmother, or to the devil himself (IRS). From the court’s point of view, the style does not manner if the legal points are made. Choice of style is a strategy decision— what effect do you want to have on the offender? Before sending the notice remember to apply a Mark Twain’s 7 rules for good writing: “revise, revise, revise, revise, revise, revise, revise.” It takes 7 major revisions to do a notice correctly.

In your notice to your adversary, make the following points:

1. what he is doing or not doing.
2. Your injuries (e.g. loss of substantive rights). (NOTICE! “Injury” and “damages” are NOT synonymous words. Injury is the harm done. Damages are the compensation for the injury.)
3. His duty to not cause you injury. The moral, public, and private laws that require him to not cause you injury (e.g. Ten Commandments; Bill of Rights, 18 USC §§ 241, 242; 42 USC §§ 1983, 1985, 1986; and your own rules).
4. He is breaching that duty.
5. State the damages (what he owes you) for the injury. Site the moral, public and private measurements of the damages (e.g. Biblical; 18 USC §§ 241, 242; 42 USC §§ 1983, 1985, 1986; and your own estimate.)
6. Demand that he, in good faith, do his duty, pay you the damages, and to do so within a reasonable number of days (usually 60 days for government, 30 days for everyone else).
7. If he does not do as demanded within the allotted time, then by tacit procuration (assumed power of attorney) you will determine for him the facts, his duties, and the damages he owes you.
8. If he does not performed as demanded, you will take lawful action (in personam and in rem) to defend against them, and persons acting in concert with him, who cause or attempt to cause such injuries; to secure your substantive rights; and to redeem the damages owed to you.

The constructive notice should be served upon the adversary and the same manner that one would serve a summons and a lawsuit. A proof of service should be executed and held for use as necessary in a future lawsuit.

“Knowledge of facts which would naturally lead an honest and prudent person to make inquiry constitutes ‘notice’ of everything which such inquiry pursued in good faith would disclose.”  Twitchell v. Nelson, 131 Minn. 375, 155 N.W. 621, 624; German-American Nat. Bank of Lincoln v. Martin, 277 Ill. 629, 115 N.E. 721, 729. Black’s Law dictionary, 4^th ED., p. 1210.

“In another sense, ‘notice’ means information, an advice, or written warning, in more or less formal shape, intended to apprise a person of some proceeding in which his interests are involved, or informing him of some fact which it is his right to know and the duty of the notifying party to communicate”. Black’s Law dictionary, 4^th ED., p. 1210.

"Actual notice has been defined as notice expressly and actually given, and brought home to the party directly. Jordan v. Pollock, 14 Ga. 145; McCray v. Clar, 82 Pa. 457; Morey v.  Milliken, 86 Me. 464, 30 A_ 102. The term 'actual notice,' however, is generally given a wider meaning as embracing two classes, express and implied; the former includes all knowledge of a degree above that which depends upon collateral inference, or which imposes upon the party the further duty of inquiry; the latter imputes knowledge to the party because he is shown to be conscious of having the means of knowledge. In this sense actual notice is such notice as is positively proved to have been given to a party directly and personally, or such as he is presumed to have received personally because the evidence within his knowledge was sufficient to put him upon inquiry. Picklesirner v. Smith, 164 Ga. 600, 139 S.E. 72, 74; White v. Fisher, 77 Ind. 65, 40 Am.Rep. 287." Black's Law Dictionary, 4th Ed., p. 1210.

"Constructive notice is information or knowledge of a fact imputed by law to a person (although he may not actually have it), because he could have discovered the fact by proper diligence, and his situation was such as to cast upon him the duty of inquiring into it. Baltimore v. Whittington, 78 Md. 231, 27 A. 984; Acer v. Westcott, 46 N.Y. 384, 7 Am. Rep. 355." Black's Law Dictionary, 4th Ed., p. 1210.

“Constructive notice' is a presumption of law, making it impossible for one to deny the matter concerning which notice is given, while 'implied notice' is a presumption of fact, relating to what one can learn by reasonable inquiry, and arises from actual notice of circumstances, and not from constructive notice. Charles v. Roxana Petroleum Corporation, C.C.A.OkI. 282 F. 983, 988. Or, as otherwise defined, implied notice may be said to exist where the fact in question lies open to the knowledge of the party, so that the exercise of reasonable observation and watchfulness would not fail to apprise him of it, although no one has told him of it in so many words. See City of Philadelphia v. Smith, Pa., 16 A. 493." Black's Law Dictionary, 4th Ed., p. 1211.

 

Presented by Melvin Stamper, JD.

Professor of Law