Cook v. Brundidge, Fountain, Elliott & Churchill

533 S.W.2d 751 (1976)

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Cook v. Brundidge, Fountain, Elliott & Churchill

Texas Supreme Court
533 S.W.2d 751 (1976)

RW

Facts

Betty Cook (plaintiff) consulted the Texas law firm of Brundidge, Fountain, Elliott & Churchill (partnership) (defendant) for legal advice concerning her divorce. The partnership referred Cook to one of its partners, Warren Lyon. In the course of the ensuing discussions, Cook informed Lyon that she wanted a local real estate agent’s or investment counselor’s advice on how Cook should invest the proceeds of a real estate sale Cook was transacting in Illinois. Lyon responded by advising Cook to invest in a fast-food chain he was about to launch, which Cook agreed to do. At no time did Lyon inform Cook that, in giving this advice, he was acting in any capacity other than that of Cook’s lawyer. Cook’s Illinois lawyer followed Cook’s instructions to draft a check for the real estate sale proceeds, made out to Lyon “as attorney” for Cook, and mail it to Lyon at his partnership’s law offices. Lyon invested those proceeds in his chain, pursuant to a contract that Lyon fraudulently assured Cook, as her lawyer, fully protected Cook’s interests. The chain subsequently declared bankruptcy. Cook sued the partnership as being vicariously liable for Lyon’s fraud. The trial court’s summary judgment for the partnership was affirmed by an intermediate appellate court. Cook appealed to the Texas Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Steakley, J.)

Dissent (McGee, J.)

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