This section is from the book "Popular Law Library Vol6 Real Property, Abstracts, Mining Law", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
An attorney employed by a purchaser of real property to investigate the title of the grantor prior to the purchase, impliedly contracts to exercise reasonable care and skill in the performance of the undertaking, and if he is negligent or fails to exercise such reasonable care and skill in the discharge of the stipulated service, he is responsible to his employer for the loss occasioned by such neglect or want of skill. Like conditions and results also follow an employment to investigate and ascertain whether property offered is a safe or sufficient security for a loan of money.
The obligation imposed on the attorney does not require of him the possession of perfect legal knowledge or the highest degree of skill in relation to business of that character, nor that he will conduct it with the greatest degree of diligence, care, and prudence, but simply that he shall possess the ordinary legal knowledge and skill common to members of the profession; and that in the discharge of the duties he has assumed, he will be ordinarily and reasonably diligent, careful and prudent.90 This is the undertaking of every attorney in every branch of legal employment, and while courts have ever been inclined to exercise leniency in dealing with questions of this character the rule has always been strictly enforced whenever the facts have been brought within its operation. Hence, it follows, as a necessary sequence, that if the attorney fails to bring to the discharge of the duties assumed by him, the ordinary legal knowledge and skill possessed by the members of the profession, or has failed to discharge the duties with ordinary and reasonable care and prudence, he will be guilty of negligence, and liable to the client for the damages he may have sustained by reason thereof.91
90 Gambert vs. Hart, 44 Cal., 643; Skil-len vs. Wallace, 3G Ind., 319.
In most of the cases where the question has been raised the errors charged have related mainly to the management of suits, and consisted in the non-observance of established forms and legal rules. But the principle is just as applicable to opinions and assurances of title and the attorney must be held to a strict accountability for acts of negligence. If he acts in good faith, however, to the best of his skill, and with an ordinary degree of attention, he will not be responsible.92 Neither is he liable for mere errors of judgment, nor for mistakes of law in matters where the law is not well settled.93 These are general principles of universal recognition.
It is a further rule, that an attorney is liable for the negligent performance of professional duties, arising from ignorance or want of care, only to the person who employed him - that is, to one between whom and the attorney a contract of service existed. To insure a recovery for any injury arising from mere negligence, however gross, the rule seems to be imperative that there must exist between the one inflicting the injury and the one injured, some privity, by contract or otherwise, by reason of which the former owes some duty to the latter, and the rule applies with full force to acts of an attorney in framing an opinion of title. A third party, therefore, who may have acted upon the opinion would be without remedy against the attorney unless something in the circumstances of the case should take it out of the general rule.94 Malice, fraud, collusion or other tortious act would be sufficient to create a responsibility without reference to any question of privity between the tort feasor and the injured party, but where these elements are wanting no recovery can be had by a third party, and a contract between two persons will not be held to inure to the benefit of a third person from the mere fact that its breach, or the negligent discharge of the duties involved in it, has resulted in injury to another.95
91 Spangler vs. Sellers, 5 Fed. Rep., 882 92 Wilson vs. Russ., 20 Me., 421.
93 Dodd vs. Williams, 3 Mo. App., 278; Morrill vs. Graham, 27 Tex., 646.
 
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