Thompson Crane & Trucking Co. v. Eyman

Decision Date17 March 1954
Citation123 Cal.App.2d 904,267 P.2d 1043
CourtCalifornia Court of Appeals Court of Appeals
PartiesTHOMPSON CRANE & TRUCKING CO. et al. v. EYMAN et al. Civ. 4653.

Adams, Duque, Davis & Hazeltine, Los Angeles, Docker & Docker, Fresno, James S. Cline, Lawrence T. Lydick, Los Angeles, for appellant.

Thompson & Thompson, Harold V. Thompson, Fresno, for respondents.

BARNARD, Presiding Justice.

This action was commenced as one in interpleader. The plaintiff alleged that the defendants Eyman and Weller claimed adverse interests in the proceeds of a note given by plaintiff to Weller, and assigned by him to Eyman. By appropriate pleadings Weller and Eyman each claimed the money, Eyman relying on an assignment of the note and a claimed breach of contract and Weller claiming that the contract had been obtained through compulsion and duress. The money due on the note was deposited in court, it was stipulated that the plaintiff should have its judgment of interpleader, and the action was tried on the issues as to the respective rights of Weller and Eyman to the funds deposited.

Weller, who was in business in Coalinga, filed income tax returns for 1943, 1944 and 1945 upon a cash basis. In 1945, nearly all of his records were destroyed by fire. In 1946, he employed Eyman, a certified public accountant, to install a system of bookkeeping and to prepare his income tax return for 1946. While doing this Eyman examined Weller's returns for 1943 to 1945, and then filed the 1946 return upon an accrual basis without obtaining permission to change the basis of reporting. On Eyman's recommendation Weller also filed amended returns for 1943 to 1945, claiming a refund of $4,800. Eyman was paid for his work up to that time.

As a result of filing this claim of refund a large additional assessment against Weller was proposed by the treasury department. In 1948, Weller conferred with Eyman about handling this matter since he was familiar with the basis of the amended returns and claim of refund. Eyman told Weller the proposed assessment was asinine, and it was a simple matter to wind up. On April 14, 1949, they entered into an oral agreement by which Eyman agreed to handle the matter and Weller agreed to pay him a retainer of $1,000, and paid $250 on account thereof. Nothing was said in that conversation about a contingent fee, and Eyman later wrote Weller a series of letters repeatedly mentioning the $1,000 retainer but saying nothing of any contingency.

In July, 1950, the treasury department sent Weller formal notice of additional assessments amounting to about $118,000. These notices were delivered to Eyman who applied for a 60-day extension in which to file a protest, saying he had only eight days which was not sufficient. His request for 60 days was refused but he was given 30 days, extending the time to Monday, September 18. On September 15, Weller received a telegram from the treasury department stating that September 18 was the deadline. Eyman prepared the protest, completing it on Saturday morning, September 16. On the afternoon of September 16, in response to Eyman's request, Weller went to Eyman's office in Los Angeles to sign the protest. Eyman told Weller that he had completed the protest and that it would have to be mailed that night in order to be received in San Francisco by Monday, which was the deadline. He then produced a written contract, which he had prepared the day before, providing that Weller was to pay him 7 1/2% of any and all relief secured, in addition to the $1,000 retainer, and demanded that Weller sign it. When Weller refused to sign it, Eyman told him that if he did not sign it the protest would not be filed, and he would be liable for the assessment. It had taken Eyman more than a month to prepare the protest and after a couple of hours' discussion Weller signed the contingent fee contract, believing that if he did not do so he would be subject to this assessment which would result in his financial ruin.

Eyman mailed the protests on Sunday, September 17, 1950, and later attended five conferences in connection with this assessment matter, one of which was on February 19, 1951. On February 16, 1951, upon Eyman's insistence that he have some security, Weller assigned the note in question to Eyman for the purpose of securing the payment to him of any money due him for his services in this tax matter. On April 13, 1951, Eyman succeeded in having the claimed assessments reduced to about $2,500.

This action was brought in September, 1951. The court found that the plaintiff had deposited $9,212.79 with the clerk, and that it was entitled to have the note satisfied and to a reconveyance under the trust deed given to secure the note. With respect to the issues between the two cross-complainants, the court found most of the facts above stated and found, among other things, that Eyman had, without any request therefor, advised Weller to file amended returns for 1943 to 1945; that Weller did so upon Eyman's representation that he was experienced and learned in tax matters; that Eyman knew that most of Weller's records had been destroyed by fire, that he would have no adequate records to support his position, and that the filing of the amended returns would start an investigation of Weller's entire account; and that after preliminary discussions Weller and Eyman entered into an agreement on April 14, 1949, by which Eyman agreed to handle the tax matter and Weller agreed to pay him a retainer of $1,000.

In connection with the written contract for a contingent fee it was found that when Weller went to Eyman's office to sign the protests on the afternoon of Saturday, September 16, 1950, he was for the first time confronted with Eyman's demand for a contingent fee; that Eyman then refused to file the protest unless this contract was signed, and stated that a large assessment would be made against Weller unless the protest was filed; that the following Monday was the last day in which the protest could be filed in San Francisco; that most attorneys' and accountants' offices were then closed; that Eyman had taken considerable more than a month to prepare the protest, and Weller believed that an extension of time could not be secured to permit him to find another accountant or prepare new protests; that Weller was mentally 'in extremis' and convinced that unless he complied with Eyman's demand a judgment would be taken against him which would destroy him financially; that he signed the contract under this belief and to prevent said assessment; that Weller was taken by surprise and had had no warning of a possible demand for contingent fees prior to that date; that he believed that Eyman would abandon his case if he did not sign the contract; that he would not have signed it if Eyman had not stated that he would not file the protests and that the assessment would be made if he did not sign; that it was impossible at that late hour for Weller to secure the necessary assistance to prepare and file a protest before the deadline; that Eyman told Weller that if he did not sign the contract he would become liable for the total amount of...

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    • March 5, 1980
    ...P. 996; International Fishermen, etc. v. Stemland (1950) 97 Cal.App.2d Supp. 931, 934, 219 P.2d 554; Thompson Crane & Trucking Co. v. Eyman (1954) 123 Cal.App.2d 904, 910, 267 P.2d 1043; In re Air West (1977) 436 F.Supp. 1281, The record is also clear that use of the AFofM's contract form c......
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    • March 15, 1996 this rule may apply where the defrauded party is unable to rescind without prejudice. See Thompson Crane & Trucking Co. v. Eyman, 123 Cal.App.2d 904, 267 P.2d 1043, 1047 (D.Ct.App.1954). [Id. at 144, 165 A.2d 543 (emphasis Here, the record demonstrates that these plaintiffs could not hav......
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