Shropshire v. Ryan

• Decision Date: 24 May 1900
• Citation: 82 N.W. 1035,111 Iowa 677
• Parties: SHROPSHIRE v. RYAN.
• Court: Iowa Supreme Court

111 Iowa 677

82 N.W. 1035

SHROPSHIRE

v.RYAN.

Supreme Court of Iowa.

May 24, 1900.

Appeal from district court, Jasper county; A. R. Dewey, Judge.

The plaintiff, in her petition, alleges that on the 6th day of January, 1886, the defendant entered into a written contract to convey her certain real premises in consideration of her assignment to him of a claim of some $13,000 against one John Lyle. In her prayer she asks for a specific performance of this contract, “and for such other and further relief as equity and good conscience should give in the premises.” The answer admits the making of the contract in substance as alleged by the plaintiff, and avers that it related to certain litigation then pending in the supreme court of the United States, and that preceding this litigation, and on the 15th day of February, 1890, a certain other contract in writing was entered into between the plaintiff and her husband, A. C. Shropshire, and the defendant, and that subsequent to the execution of the two contracts, and after a final determination of the litigation referred to, there was, on the 6th day of November, 1893, a full and complete accounting between this defendant and the plaintiff, in which the contract of January 6, 1886, was canceled in writing, and a full receipt given the defendant by this plaintiff and A. C. Shropshire, in words as follows: “Newton, Iowa, Nov. 6, 1893. Received of D. Ryan this day the sum of nine hundred dollars, in full of all demands to this date, and in full settlement of all matters between him and Ryan Bros. and ourselves. [Signed] A. C. Shropshire. Loretta Shropshire.” In reply to this answer, plaintiff admits that the cancellation on the margin of the contract was signed by her, and says that it was without consideration, and was procured by fraud on the part of the defendant. She denies an accounting, or that any sum was determined upon as due her as a result thereof, and alleges that her signature to said receipt was procured by the defendant through his false and fraudulent representations. Plaintiff also charges that the alleged instrument of February 15, 1890, is fraudulent and void. There was a trial to the court, and judgment for the defendant. The plaintiff appeals. Reversed.Young, Gorrell & Rinehart and C. C. Cole, for appellant.

Wm. Phillips, Robert Ryan, and W. O. McElroy, for appellee.

SHERWIN, J.

Upon the original submission of this cause it was affirmed by reason of a divided court, and no opinion was written. The defendant, in argument, claims that the record is not properly certified by the trial judge, and that for this reason we cannot consider the case de novo, but he does not point out wherein it is insufficient, and hence we pass this point. It is now urged that the pleadings are insufficient to warrant an accounting between the plaintiff and the defendant. Whatever doubt there may be as to this matter is rendered immaterial for the reason that the case was tried in the court below on the theory of a full accounting, as well as on the claim for a specific performance, and no question of this kind was raised or referred to in its former presentation to us. Indeed, the burden of defendant's argument was on the question of the full, accurate, and just accounting made upon the trial, and it is now too late to say that the pleadings did not justify it. It is not contended by the appellant that specific performance of the contract sued on should have been decreed, and we turn our attention to the one controlling question in this case,--that of the accounting between plaintiff and defendant. On the 6th day of January, 1886, the plaintiff was the owner of a certain claim against one John Lyle, which was then in suit in the United States district court in Des Moines, and on that day she assigned all right and title thereto, and to any judgment recovered thereon, to this defendant. At the same time the defendant executed to her a written agreement, which recites the assignment of the Lyle claim to him, and in consideration thereof promises, when the claim is collected, to deed to the plaintiff his homestead in Newton, and provides that the balance of the amount collected shall be applied as follows: “One thousand dollars as atty.'s fees in said case, to be paid to plaintiff's attys.” “The sum of money due from me to my sureties as admx. of estate J. S. Long.” “Any remainder to be in full of all other accounts between said Ryan and Loretta Shropshire and A. C. Shropshire.” We set out this much of that contract to enable a better understanding of what follows. It is all that is pertinent to the issue before us. The contract of February 15, 1890, referred to in the statement of the case, is claimed by appellee to be supplemental to that of January 6, 1886. It provides that D. Ryan and Ryan Bros. shall receive from the collection of the Lyle claim “all sums of money now due or owing them or either of them, whether in note or due on book account, * * * and this shall include any sums due from Loretta Shropshire to the sureties on her bond as admx. of estate of J. S. Long; and it is further agreed that D. Ryan shall receive as his personal atty.'s fees in recovering said judgment vs. John Lyle sixteen (16) per cent. of the same when collected.” The defendant is an attorney, and the relation of attorney and client had existed between plaintiff and him for a number of years prior to the transactions before us. The Lyle claim was placed in his hands for collection by the plaintiff, and suit brought thereon by him in Jasper county in 1883, and from there it was removed to the federal court in Des Moines. It also appears beyond question that the assignment of the Lyle claim to him was really in trust for the plaintiff, so that he sustained the dual relation to the plaintiff of trusted counsel and trustee of her property. Because of this confidential relation, the plaintiff now asserts that the contract sued on and the one set out in the answer are both void. The former has been adopted by the plaintiff, and her right to certain land is asserted thereunder. Nowhere in her pleadings has she intimated that it is a contract which should not be recognized, and she cannot now sustain such claim. That the relations existing between these parties required the utmost fairness and good faith on the part of the defendant is elementary, and conceded by the defendant. The confidence reposed in the attorney by the client, or in the trustee by the cestui que trust, is so carefully guarded by the law that it places the burden of proving the entire fairness of the pecuniary transactions between them upon the attorney or trustee; and where a contract is entered into between them it is presumed to be fraudulent. Ryan v. Ashton, 42 Iowa, 365;Leighton v. Orr, 44 Iowa, 679; Pol. Cont. 525; 3 Greenl. Ev. (13th Ed.) § 253. Under this rule the burden is upon the defendant to provide the validity of the supplemental contract of February 15, 1890, and also the validity of the...