Warner v. Flack

• Decision Date: 06 June 1917
• Docket Number: No. 10912.,10912.
• Citation: 278 Ill. 303,116 N.E. 197
• Parties: WARNER et al. v. FLACK et al.
• Court: Illinois Supreme Court

278 Ill. 303

116 N.E. 197

WARNER et al.

v.FLACK et al.

No. 10912.

Supreme Court of Illinois.

April 19, 1917.

Rehearing Denied June 6, 1917.

Error to Circuit Court, McDonough County; H. M. Waggoner, Judge.

Bill by Charles H. Warner and others against Charles W. Flack and another. A demurrer to the bill was sustained, and complainants sue out a writ of error to reverse the decree. Reversed, and cause remanded, with directions.

Millard R. Powers, of Chicago (James L. Clark, of Chicago, of counsel), for plaintiffs in error.

Chiperfield & Chiperfield, of Canton (Charles W. Flack and John C. Lawyer, both of Macomb, of counsel), for defendants in error.

DUNN, J.

The plaintiffs in error Mary A. Warner, Charles H. Warner, and John C. Warner filed a bill against the defendants in error Charles W. Flack and John C. Lawyer in the circuit court of McDonough county, to which the court sustained a demurrer, and the complainants sued out a writ of error to reverse the decree, which dismissed their bill for want of equity.

The bill alleged that Mary M. Harris prior to November 1, 1910, was possessed of certain real estate in McDonough county, together with upwards of $50,000 in money, notes, and mortgages; that John S. Warner was her brother, the husband of the complainant Mary A. Warner, the father of the complainant Charles H. Warner, and the grandfather of the complainant John C. Warner, who was a son of a deceased son of John S. Warner; that seeking to prevent his sister from disinheriting him he employed the defendants Flack and Lawyer, who were attorneys at law and partners, and entered into a written contract with them, whereby they engaged to render all legal services necessary or that might be required in controlling or advising with Mrs. Harris, or in prosecuting any suit or suits for the appointment of a conservator, or the setting aside of the will or any other legal document, or prosecuting any legal proceeding that might be necessary to secure the rights and interests of the said John S. Warner in and to the property of the said Mary M. Harris, whether said proceeding might be taken before her death or after her death, the compensation of the defendants to be one-third of whatever might be collected from the estate of Mrs. Harris; that the services so agreed to be rendered were continuous until after the death of Mrs. Harris, which occurred on September 7, 1915, and in part performance of their contract of employment the defendants procured from Mrs. Harris a trust deed conveying to James C. Hammond, trustee, her real estate, worth about $45,000, and money and securities amounting to about $51,000, to hold for the benefit of Mrs. Harris during her lifetime, and after her death for the use of certain other relatives, among them John S. Warner, whose proportion was to be one-seventh, which was worth about $14,000. Afterward, and while the said contract of employment was in full force, the defendants obtained from John S. Warner and his wife a warranty deed of all his interest in all of said real estate, and also an assignment of all his interest in and to all the real estate and personal property which he had acquired or might become entitled to under the said trust deed, the defendants taking the property in the proportion of one-third to Lawyer, and two-thirds to Flack. This instrument also purported to convey to the defendants all property that John S. Warner might inherit from Mrs. Harris or become entitled to by virtue of his relationship to her, and constituted the defendants his attorneys, in his name but for their sole benefit, to recover and receive all the lands and moneys that might become due and owing to the said John S. Warner from Mary M. Harris or James C. Hammond, the trustee in the said deed of trust, and any lands or moneys that John S. Warner might inherit from Mrs. Harris or become entitled to by virtue of his relationship to her.

While the consideration expressed in the said deed was $6,000, and in the said assignment $10,000, the actual sum paid by the defendants was only $3,500 for both of said conveyances, the defendants well knowing that the one-seventh part of said estate was worth at least $14,000. The relation of attorneys and client then existed between the said defendants and John S. Warner, who was 86 years of age, and was in a condition of mind to be easily influenced by his attorneys, and by reason of that relationship and the confidence reposed in said attorneys, and the inadequacy in the price paid him by the defendants, the said conveyances are fraudulent and void, and should be set aside.

John S. Warner died on June 12, 1914, leaving the complainants, his widow and only heirs at law. After the death of Mrs. Harris the defendants filed their bill in the circuit court of McDonough county for the partition of her estate, claiming the entire interest of the said John S. Warner, and the complainants, who were not made parties to the suit, filed a petition to be allowed to intervene and be made defendants, but the court refused to grant the petition, and rendered a final decree, adjudging that the defendants and the other persons (except John S. Warner) who were mentioned in the trust deed as beneficiaries were the owners of said estate as tenants in common. The complainants offered to repay the $3,500 paid by the defendants to John S. Warner, and prayed that the deed and assignment from him to the defendants be decreed null and void, and that it be decreed that the defendants have no interest in the property of the estate of Mary M. Harris, deceased, but that all interest which would have passed to John S. Warner had he survived the said Mary M. Harris is now vested in the complainants.

The contract for services to be rendered for the purpose of controlling or advising Mrs. Harris so as to prevent her from disinheriting her brother, and to secure by such means his rights and interests in her property, was contrary to public policy. All such contracts are clearly void, for they tend to the deceit and injury of third persons and encourage artifices and improper attempts to control the exercise of their free judgment in the disposition of their property. Story's Eq. Jur. § 265. No relief is asked in respect to this contract.

[2] The procuring of the conveyances to the defendants from their client was an independent transaction, entered into after the trust deed had been obtained. The demurrer admits that during the existence of the relation of attorney and client the defendants purchased their client's property. In such case it is not necessary to show fraud or imposition on the client, but the burden is thrown upon the attorney of proving the perfect fairness, adequacy, and equity of the transaction, and upon his failure to make such proof a court of equity will treat the case as one of constructive fraud. Mansfield v. Wallace, 217 Ill. 610, 75 N. E. 682;Willin v. Burdette, 172 Ill. 117, 49 N. E. 1000;Zeigler v. Hughes, 55 Ill. 288;Elmore v. Johnson, 143 Ill. 513, 32 N. E. 413,21 L. R. A. 366, 36 Am. St. Rep. 401. The bill therefore showed a good cause of action in John S. Warner, in his lifetime, to set the conveyance aside.

The defendants in error insist that this cause of action did not survive to the heirs of John S. Warner. Under the common law most personal actions were held to abate. Statutes passed from time to time have increased the number which survive, so that in this state the case is reversed and most causes of action now survive, including all actions for fraud or deceit. The rule has no application to cases of equitable cognizance, for remedies administered in equity do not die with the person.

The defendants in error argue that when they procured the deed from their client the title to the property passed to them; that the deed was not void, but voidable only; that the right to have it set aside was personal to the grantor, and could not be exercised by his heirs. Rickman v. Meier, 213 Ill. 507, 72 N. E. 1121, gives a complete answer to this contention. It is parallel in its facts to this case, the confidential relation existing in that case being that of parent and child. In regard to the same contention made here the court said:

‘The law is that where a deed or other conveyance has been procured by undue influence, if it be not ratified by the party making it after the undue influence has ceased to operate, it may be set aside after his death at the suit of those who succeed to his rights. Bigelow on the Law of Fraud, p. 268; Walker v. Smith, 29 Beav. 394; Le Gendre v. Goodridge, 46 N. J. Eq. 419 ;Lins v. Lenhardt, 127 Mo. 271 ;Prentice v. Achorn, 2 Paige [N. Y.] 30;Martin v. Bolton, 75 Ind. 275.’

Lewis v. McGrath, 191 Ill. 401, 61 N. E. 135, is another case essentially like the present. The deed was set aside at the suit of the grantor's heirs, and though their right to maintain the bill is not discussed in the opinion, the existence of such right was necessary to the relief granted. Again, in Ross v. Payson, 160 Ill. 349, 43 N. E. 399, conveyances of real estate by a client to his attorney were set aside at the suit of the heirs solely on the ground that the defendant had failed to establish the fairness, adequacy, and equity of the conveyances, though the evidence failed to show that the grantor was incapable of transacting ordinary business. It is true that these cases were decided upon evidence heard, and not upon the question of pleading, and that the bills alleged mental incompetency, but they were decided in each case, independently of the question of mental capacity, because of the failure of the defendant to show the fairness, adequacy, and equity of the transactions. If it was unnecessary to prove mental incapacity it was unnecessary to allege it. The bill now under consideration alleges that the instruments in question were obtained by undue influence, for an inadequate consideration. This is sufficient to require answer and proof...