Crocheron v. Savage

• Decision Date: 14 June 1909
• Citation: Crocheron v. Savage, 75 N.J.Eq. 589, 73 A. 33 (N.J. 1909)
• Court: New Jersey Supreme Court
• Parties: VALINA R. CROCHERON et al., complainants-appellants, v. EDWARD S. SAVAGE et al., defendants-respondents

73 A. 33

75 N.J.E. 589

CROCHERON et al.

v. SAVAGE et al.

Court of Errors and Appeals of New Jersey.

June 14, 1909.

(Syllabus by the Court.)

Appeal from Court of Chancery.

Bill by Valina R. Crocheron and others against Edward S. Savage and others.Decree (70 Atl. 353) for defendants, and complainants appeal.Reversed.

McDermott & Enright, for appellants.

Robert H. McCarter and William H. Osborne, for respondents.

DILL, J.The complainant Mrs. Crocheron seeks to set aside a deed of certain real property made by her to her attorney, Mr. Savage, the defendant herein, in the course of his professional employment in hac re.The conveyance is attacked on the grounds: That it was obtained by the defendant from his client in violation of the rule which requires that an attorney who bargains with bis client in a matter of advantage to himself must conduct the transaction in all respects fairly and equitably; that he must fully and faithfully discharge all his duties to his client, not only by refraining from any misrepresentation or concealment of any material fact, but by active diligence to see that his client is fully informed of the nature and effect of the transaction proposed and of his own fights and interests in the subject-matter involved, and by seeing to it that his client either has independent advice in the matter, or else receives from the attorney such advice as the latter would have been expected to give, had the transaction been one between his client and a stranger.The learned vice chancellor who heard the case below sustained the transaction and held the deed valid.

We are obliged to differ with the conclusion of the court below, applying the amplification of Lord Eldon's rule (Gibson v. Jeyes6 Ves. 266) as laid down by Justice Kay in Luddy's Trustee v. Peard, 55 L. J. R. N. S. Ch. Div. 884(1886), to the effect: That an attorney cannot maintain a purchase from a client unless he can demonstrate that he made a full communication to his client not only of all that he knew, but also, what is pertinent to this case, of all that he believed, respecting the property, its character and value; that where the attorney, in the course of his employment, forms an opinion that the property is more valuable than had theretofore been assumed, if he fails to disclose that opinion, and thus give his client all that reasonable advice against himself that he would give against a third person, the transaction cannot be sustained.Inasmuch as the relation of attorney and client is involved, we discuss the facts somewhat in detail.

The complainant was the owner of an undivided half interest in a certain tract of three acres of salt meadow land on Staten Island Sound and Thorp's creek in Middlesex county, N. J.The property in question had prior to this controversy been treated, so far as the record of title shows, as a mere adjunct to property on Staten Island, and the history of the title was therefore found in deeds to Staten Island property recorded in Richmond county, in New York state.About 1890 the Port Reading Railroad Company acquired title to the other undivided half of the property by a deed from one Louis N. Meyer.In the deed to the railroad company, the scrivener attempted to convey this undivided one-half interest in three acres by a description conveying 1 1/2 acres, although the property had never been partitioned or divided.The railroad, however, took possession of the whole three acres.The plot in question was so substantially inclosed by other lands belonging to the railroad that the only access to it was by boat, either from Staten Island Sound or inland by Thorp's creek.The railroad erected on the immediately adjacent property coal docks, bulkheads, and particularly a wharf, which practically closed Thorp's creek to navigation, and thus tended to cut off the only available access to the locus in quo from the land side.The use made of the land by the complainant and her predecessors in title was to cut salt grass upon the meadow.Because of the situation and character of the property, it had little market value and as little available value except from its contiguity to the railroad property and from its considerable water front, nearly 300 feet on Staten Island Sound and approximately 750 feet on Thorp's creek.It therefore occupied a strategic situation and was of primary importance to the railroad.

In 1903the complainant, who was a widow some 75 years of age, without apparent influence or means, employed the defendant, a lawyer of special experience in dealing with properties in this neighborhood, a realestate expert in local values, and the owner of similar adjacent property, to represent her as attorney and counsel, and either to sell the property to, or force some settlement with, the railroad.The defendant, under his professional retainer, entered into negotiations, but the railroad, sustained as it was by a record title which its attorney had advised was sufficient, seemed to rely upon possession as nine points of the law.From 1903 to November 1, 1905, the defendant had various communications with the railroad, asserting his client's ownership of the property, threatening suit, and demanding $7,500 for her interest; but he evidently desired to avoid a lawsuit, hoping to convince the railroad that the claimant had title, and thus settle the matter.In October, 1905, he again threatened suit, stating (October 18, 1905): That he had promised his client that he would file the papers within a week unless the matter was arranged, but would hold the papers until the 23d of October, 1905; that if not settled by that time he would go to Philadelphia and make a demand on the railroad preliminary to commencing the action.But the railroad constantly refused to recognize the complainant's title, although it offered the nominal sum of $100 as peace money for her interest, which she declined.Finally, in November, 1905, Mr. Savage had an interview with Mr. Cutter, the local counsel for the railroad, in which the latter told Mr. Savage: That he had spent two or three days in the Richmond county clerk's office, Staten Island, examining the title; that he had personally inspected the property, and, although the descriptions were somewhat indefinite and differed in the Oakley deed and in the Meyer deed, he thought the property mentioned in both deeds was the same.He then said that the Oakley deed, under which the complainant claimed, called only for an undivided half of the land, and that if partition proceedings were brought the company would have set apart to it the land upon which tbe docks were constructed.

In reference to this interview the railroad counsel testified that he had never admitted before that he thought the property described in the two deeds was the same property.Mr. Savage testified that Mr. Cutter told him that he had made his report, and that the impression made upon his (Mr. Savage's) mind at that interview was that Mr. Cutter had reported that the complainant had some title.The facts thus communicated to the defendant, that the railroad had through its counsel examined the records in Staten Island, and that the counsel had personally inspected the property and was satisfied that the complainant had title to an undivided one-half interest in the property, are important because, as appears from the evidence on both sides, Mr. Savage became convinced at this time that the railroad now had before it such facts that it must recognize the complainant's claim, and from this he must have formed the professional opinion that the result of negotiations or of a legal contest must eventually be an award to his client, and hence that the value of the client's interest was greater than either he or she had theretofore believed.After this interview nothing more seems to have been done, and no communications passed between any of the parties until the 3d of January, 1906, when the defendant, without previous notice to the complainant, went to her residence at Rossville, on Staten Island, with the admittedly preconceived intention of buying her interest in the property.He took with him a deed, containing a description of the property and ready for execution except as to the names of the parties, and, what is quite as significant, he provided himself with $200 in currency with which to pay for the property.

Taking the defendant's version of the interview with the plaintiff and her son, he first mentioned the subject of the proposed purchase to the son, and told him: That he had spent all the time and all the money he was going to spend on the matter, unless he commenced litigation.That he had been referred from one official to another and was no better off than he was three years before.The only offer they had ever made was an offer of $100.And that, if his mother wanted to go on with the suit, an action in partition would have to be brought that might result in a division of the property and the recovery of her half interest.To this the son replied, "The other half is not worth anything," and then defendant, without advising him, said, "That is something for you to determine."The defendant told the complainant that the best offer that he could...