Priester v. Citizens National Trust & Savings Bank of Los Angeles

• Decision Date: 07 March 1955
• Citation: 280 P.2d 835,131 Cal.App.2d 314
• Court: California Court of Appeals Court of Appeals
• Parties: Raymond N. PRIESTER, Plaintiff, Cross-Defendant, and Respondent, v. CITIZENS NATIONAL TRUST AND SAVINGS BANK OF LOS ANGELES, a national banking association, and Amber Morrison, as co-executors of the Estate of William Ellis Lady, deceased, Defendants, Cross-Complainants, and Appellants. Civ. 20615.

Page 835

280 P.2d 835

131 Cal.App.2d 314

Raymond N. PRIESTER, Plaintiff, Cross-Defendant, and Respondent, v. CITIZENS NATIONAL TRUST AND SAVINGS BANK OF LOS ANGELES, a national banking association, and Amber Morrison, as co-executors of the Estate of William Ellis Lady, deceased, Defendants, Cross-Complainants, and Appellants.

Civ. 20615.

District Court of Appeal, Second District, Division 1, California.

March 7, 1955.

John W. Preston, Millsap & Schaumer, Los Angeles, for appellants.

Henry Merton, Fred Girard, Los Angeles, for respondent.

WHITE, Presiding Justice.

This is an appeal from a judgment for plaintiff rescinding an agreement, deed, assignments, and other instruments executed by plaintiff, by which an undivided one-fourth interest in certain real and personal property worth in excess of $22,500 was transferred to his lawyer, the late William Ellis Lady, and quieting plaintiff's title to such property as against any claim of defendants, who are the executors of the Estate of Lady.

The complaint is in three counts, for rescission, reformation and quiet title, respectively. All the allegations of the first and third counts are found by the trial court to be true.

For many years prior to his death on February 26, 1951, Lady was engaged as attorney for plaintiff in various legal proceedings. During the period of several months immediately preceding the commencement of action No. 580,554, a matter involving rescission by plaintiff of a sale of real property to his brother was pending in Lady's office. Plaintiff had been actively engaged in business until 1947. He then suffered an illness which left him blind and extremely nervous.

In December, 1950, plaintiff's mother sued him to recover an apartment house of the net value, over and above the mortgage, of $85,000. She attached the real property, its furnishings, and plaintiff's bank account and two brokerage accounts. It was an undivided one-fourth interest in these properties which plaintiff had transferred to Lady. They constituted practically all of plaintiff's assets. The action by plaintiff's mother is herein referred to as No. 580,554. About, December 4, 1950, Lady commenced plaintiff's defense therein. In December 1950 and January 1951, Lady was consulted many times by plaintiff, conferred with several of his friends, assisted plaintiff's accountant in preparing statements and summarizing plaintiff's records, attended two sessions re depositions and one deposition contempt hearing, prepared plaintiff's answer and filed it on January 30, 1951.

On January 29, 1951, when decedent and plaintiff executed the agreement, and plaintiff made the deed and signed the other instruments sought to be rescinded and cancelled in the instant action, the relationship of attorney and client existed. The agreement, deed and other instruments were prepared in Lady's office. The agreement was read to plaintiff and he knew the purport of it and of the other instruments. At plaintiff's request, an attorney who was his distant relative and long time family friend, went with him to Lady's office, read the agreement to plaintiff and, in the presence of Lady, as plaintiff's friend and not as his lawyer, told plaintiff that he felt 'he was giving more than he should for the transaction'; Lady said he would not take care of the case on any other basis. Plaintiff 'insisted on going ahead and signing the agreement'. According to plaintiff's testimony, Lady had told him the deed would not be recorded and would be held by him as security for whatever fee should be fair when the work was finished; plaintiff believed Lady and trusted him; and he would not have signed the agreement or any of the other instruments if Lady had not made that promise. The deed was recorded by the appellants on June 5, 1951, about three months after Lady's death. On November 1, 1951, plaintiff first became aware of the recording of the deed. He repeatedly demanded reconveyance of his property and offered to pay the reasonable value of services rendered by Lady. Defendants refused to reconvey and refused to state what amount, if any, they claimed to be due by reason of any legal services rendered by Lady. Without legal assistance from anyone after Lady's death in February, plaintiff settled his differences with his mother and her dismissal with prejudice was filed in said action No. 580,554 on September 16, 1951.

Appellants urge as their first ground for reversal that 'the trial court erred in holding that the contract between plaintiff and W. E. Lady * * is void and unenforceable'.

A contract, conveyance, or transfer of any kind made by the client during the existence of the attorney-client relationship by which the attorney secures any advantage is presumptively invalid for undue influence and lack of consideration; and, when attacked by the client, the burden is cast upon the attorney to show that the transaction was fair and equitable and that no advantage was taken by him. Civil Code, § 2235; Bonifacio v. Stuart, 52 Cal.App. 487, 489, 199 P. 69; Clark v. Millsap, 197 Cal. 765, 783, 242 P. 918; United States Oil & Land Co. v. Bell, 153 Cal. 781, 876, 96 P. 901.

While, in cases of this kind, the presumption can be overcome by clear, convincing and satisfactory evidence, the questions of what constitutes such evidence and whether the presumption is overcome are addressed to the trial court, and its decision will not be disturbed on appeal except in cases where it is supported by no substantial evidence. Roberts v. Wachter, 104 Cal.App.2d 271, 279, 231 P.2d 534.

Appellants insist that Lady did not take any advantage of plaintiff and that the fee provided for in the contract 'was not excessive or unconscionable', for the reason that the property (valued in excess of $22,500) was also to cover Lady's services rendered in cases other than No. 580,554, including the Liebenguth, Ajax, Beard and Crebs cases, in which some years before Lady had represented plaintiff and his mother. In their answer and cross-complaint, appellants allege upon information and belief that plaintiff agreed to pay Lady for his services in such other cases the reasonable value thereof, and that the reasonable value of such services was $7,500. These allegations of the Answer were found to be untrue, and the finding is supported by the evidence. Appellants failed to produce any of decedent's books of account, contracts, letters, or any other convincing evidence to prove that Lady had not been paid in full for all services rendered by him for plaintiff in any of those cases. Plaintiff denied that he owed Lady for any past services and testified that he had been told by Lady, and by appellant, Amber Morrison, who was then Lady's secretary, that he owed nothing on account of such services and that the cash payments made by him from time to time and the optical goods and services furnished by him at Lady's request had fully paid for them.

The court found that Lady's services rendered in action No. 580,554 were reasonably worth $400 and no more; that friends sought to bring about a reconciliation between plaintiff and his mother; but that Lady sought to and did prevent such reconciliation; and that the services were of no value to plaintiff under the circumstances. These findings also find support in the evidence.

Thornley v. Jones, 96 Cal.App. 219, 274 P. 93, was an action by the executrix of the client's estate to recover the client's property from her attorney. Judgment for defendant attorney was reversed. The court, 96 Cal.App. at page 227, 274 P. at page 97, held that, even where the trial court had found that defendant had made no false or untrue representations to his 82 year old client who had transferred to him securities worth $2,500 in payment for legal services worth about $300, 'proof of mere negative conduct on the part of an attorney dealing with his client is not sufficient 'to overcome the presumption of fraud and unfair dealing which is automatically raised by the law as a protection to a client.' Estate of Witt, supra [198 Cal. 407, 245 P. 197]. The attorney must go further and show that his client was given the information which, under similar circumstances, a disinterested legal adviser would have given.'

The contract cancelled and rescinded by the judgment from which the instant appeal was taken, was in the form of a letter from Lady to plaintiff, with plaintiff's agreement at the end to be bound by the terms set forth. It reads in part, '* * * I am willing to undertake the defense of the action your mother brought against you * * * on the following basis: You are now to convey to me: * * *' Here follows a full description of the property, an undivided one-fourth interest in an apartment house, its furnishings and equipment, its rents, issues and profits after February 1, 1951, a bank account and two brokerage accounts. Then follows one of the provisions most relied upon by appellants, to wit: 'If we are not successful in the defense of this action, then you will be under no obligation to me for any services I may have rendered at your request for the benefit of your mother in defending the action of Liebenguth as assignee of the Bank of America and the Beard and Crebs action'. The letter agreement also contains an option to plaintiff until one year after final judgment to repurchase said property for $25,000. It provides that costs are to be paid by plaintiff, but if the litigation is successful they are to be borne three-fourths by plaintiff and one-fourth by Lady. Plaintiff is to render such assistance as is within his power. Then follows the provision that 'This agreement will, of course, cover the matter of compensation whether the case shall be tried and judgment rendered, or the matter settled without going to trial, but if any compromise is agreed upon, such compromise shall, of course, be approved by both of us.' Another pertinent provision of said letter agreement is that 'In case of...