Kisling v. Shaw

33 Cal. 425

• Court: California Supreme Court
• Decided: October 15, 1867
• Status: Published

Opinions

By the Court,'Rhodes, J.:

The plaintiffs, claiming as the devisees of John W. Kisling, deceased, seek to set aside certain deeds conveying several lots in the City of San Francisco, which were executed by John W. Kisling and wife to the defendant in the years 1853, 1854 and 1859. The grounds upon which they proceed are that during all the time from 1853 to 1859, inclusive, the defendant was the attorney and confidential friend and adviser of Kisling; that by his artful practices he gained an undue influence over Kisling; that by false suggestions and fraudulent concealment of facts, and generally by a violation of his duties toward his client, he induced and persuaded Kisling to execute and deliver the several conveyances ; that the deeds of 1853 and 1854 were executed without any consideration, and were really made in order that the lots might be held in trust for Kisling, and that the lots conveyed by the deeds of 1859 were conveyed upon a greatly inadequate consideration. The Court found that the defendant was the attorney and adviser of Kisling, as alleged in the complaint, that the several parcels of land were conveyed to the defendant at the time alleged, but the other material facts were found for the defendant.

The Court found that the “ defendant did not receive the conveyances of any portion of the real estate described in the pleadings in trust for the said John W. Kisling, or his wife or children—that is, neither upon any express or implied trust.” There can he no question as to the correctness of the finding, so far as regards the express trust. The interest in the lands conveyed was the separate property of Kisling, and therefore no trust in favor of the wife or children of Kisling could arise by implication of law in consequence of the execution of the deeds in the manner and under the circumstances alleged in the complaint. It is a conclusion of law rather than of fact whether an implied trust in favor of Kisling arose out of the facts attending the execution and delivery of the deeds. The determination of this point depends upon the solution of questions which will now be considered.

The rule, applicable to transactions between an attorney and client, such as contracts, sales, gifts, etc., is that the attorney who bargains in a matter of advantage to himself with his client, is bound to show that the transaction is fair and equitable; that he fully and faithfully discharged his duties to his client, without misrepresentation or concealment of any fact material to the client; that the client was fully informed of his rights and interests in the subject matter of the transaction and the nature and effect of the contract, sale, gift, etc., and was so placed as to be able to deal with his attorney at arms-length. (1 Sto. Eq. Juris., Sec. 810; Gibson v. Jeyes, 6 Ves. 266; Newman v. Payne, 2 Yes. 199; Howell v. Ransom, 11 Paige, 538; Evans v. Ellis, 5 Den. 640; Ford v. Harrington, 16 N. Y. 288; Whelan v. Whelan, 3 Cow. 537; Cuts v. Salmon, 12 E. L. and Eq. 316; Greenfield Estate, 14 Penn., S. R., 490; Wright v. Proud, 13 Ves. 137; Hunter v. Atkins, 3 Myl. and K. 113.) The rule is not limited to the case of attorney and client, but applies, as well, to transactions between principal and agent, trustee and cestui que trust, guardian and ward, parent and child, and generally to cases where a relation of confidence exists between the parties. The general principles governing this class of cases and forming the basis of the rule is, that if a confidence is reposed, and that confidence is abused, and the other party thereby suffers an injury, the Court will grant relief. An essential element of the rule is, that the attorney, in the language of Lord Eldon, in-Gibson v. Jeyes, supra, “ bargains in a matter of advantage to himself,” or, what amounts to the same thing, that the client has suffered injury through the abuse of confidence by the attorney. This fact must be both alleged and proven. It is not enough to show that the relation of attorney and client existed, and that during the existence of the relation the parties entered into a contract, the client being induced thereto by the abuse of confidence by the attorney. If this were so it would follow either that the contracts of an attorney and client are voidable, like those between a trustee and cestui que trust, which is not true (1 Sto. Eq. Juris., Sec. 311); or that a party is entitled to relief on the ground of fraud, without showing that damage resulted from the fraud— which is contrary to the undoubted principles of law. (Id., Sec. 203.) The very general language of some of the cases is broad enough to lead to the opposite conclusion; but when the pleadings and the facts are looked into, it will be found in every case, that the element of damage to the client forms an important feature. In the cases we have cited this is very apparent. In Gibson v. Jeyes the defendant who granted the annuity was eighty years of age, and he secured its payment only by his bond; and the Court was satisfied from the evidence that the annuity was too small, in view of the age and health of the grantor, for the consideration paid. In Neivman v. Payne, 2 Ves. 199, the attorney, in addition to bonds taken from time to time to secure the payment of costs, and which the Court regarded as injurious to the client, had procured the client’s bond for the payment of one thousand pounds as a gift. In Howell v. Ransom, 11 Paige, 538, action was brought to set aside a sale by a client to his attorney of a judgment for seven hundred and one dollars and seventy-seven cents, which was sold for seventy-five dollars. In Evans v. Ellis, 5 Denio, 640, the complainant sought to set aside a mortgage of real estate executed to an insolvent attorney in consideration of his personal bond for a like amount. In Ford v. Harrington, 16 N. Y. 288, it appears that the client assigned to his attorney a contract for the conveyance of a tract of land for a grossly inadequate consideration. The examination need not be proceeded with further, for the eases show the advantage obtained by the attorney, or, what amounts to the same thing, the injury sustained by the client, unless it be those in which the contract is set aside as illegal or opposed to public policy—as contracts tainted with champerty, etc. In view of the rule we have indicated the plaintiffs charged that the lands conveyed in 1853 and 1854 were conveyed without consideration, and that the lands conveyed in 1859 were conveyed for a sum which was “ greatly inadequate and disproportionate to the real and true market value of said land at the time.”

The plaintiffs, as we have remarked, aver that the parcels of land which Kisling conveyed to the defendant by the deed dated July 7th, 1853, and that of April 8th, 1854, were conveyed without any consideration whatever. The Court found that Kisling never had, and the defendant did not, acquire the title to or possession of the one hundred vara lots described in the deed of 1853, and that the real consideration of the conveyance of the other parcels described in the deed —Blocks Forty-three and Forty-four—was a covenant of the defendant to Kisling, to protect a portion of the lands claimed by Kisling against the Peter Smith title; and that such covenant was valuable and equalled the value of the estate conveyed by Kisling to the defendant. The Court found that the consideration of the conveyance of Block Seventeen (conveyed in 1854) was two thousand dollars, paid by the defendant to Kisling; and that that sum was the full cash value of the land at that time. The findings as to the value of the lands sold and of the consideration given cannot noAV be disturbed. The ascertainment of the value of the property in controversy is peculiarly within the province of the jury, or the Court below sitting in the place of a jury, and their determination Avill not be reviewed, unless it is clearly against the evidence. When the evidence is conflicting the verdict or finding must stand.

We can readily conceive of cases in which the sale of a parcel of property might be attended with injury to other property with which it Avas in some way connected, or in which the property sold possessed some peculiar value to the holder above its market value. But nothing of the kind is shown in this case. Kor does it appear that Kisling was unwilling to sell. When the case is free from these questions the only matter injuriously affecting the client is the want or inadequacy of the consideration. The consideration being found to be adequate, no purpose is subserved in pursuing the inquiry whether the attorney has fully, faithfully and honestly discharged his duties to his client, for his failure in this respect is not attended with injury to the client. True, it is not impossible that a price in excess of the market value might have been obtained from some third person, but the presumption is the other way, and some e-vidence is required to remove it. The attorney could not prove that no one would have given more than the market value of the property.

We come now to the property sold in 1859.

The plaintiffs contend that the fact that a portion of the lands conveyed to the defendant in 1853 and 1854 were included in the conveyances of 1859, taken in connection Avith the fact that the east half of Block Eighteen, Block Forty-six and the unsold portion of Block Eight, was all that Kisling intended to sell at that time, is evidence of fraud on the part of the defendant. The purpose of the parties or either of them in including in the deeds Blocks Kumbers Seventeen, Forty-three and Forty-four, does not appear from anything that is developed in the case—either in the evidence or the findings. It does not appear that Kisling acquired or held any right, title or interest therein after his conveyances, executed in 1853 and 1854, and therefore the inclusion of those blocks in the deeds of 1859 ivas productive of no injury to Kisling. And as the defendant had already acquired Kisling’s title, the second conveyance by Kisling was of no benefit to the defendant. But conceding that the defendant procured the insertion of those lands in the deeds of 1859 without the knowledge of Kisling, the result would not. be changed, for the plaintiffs are not entitled to relief on the ground of fraud unless the fraud is coupled with damage. The allegation of fraud in this respect, however, is negatived by the finding that Kisling understood the contents and effect of those deeds. We shall consider the deeds (as they were treated by the Court below) as conveying the east half of Block Eighteen, Block Forty-six, and the unsold portions of Block Eight. As to the conveyance executed by Maria Kisling alone, it need only be said that it was void, as she was then the wife ,of John W. Kisling.

There would appear to be no doubt from the evidence that Kisling was willing to sell these lands. But it is contended that the desire or willingness to sell was brought about by the artful suggestions of the defendant, by exciting-in his mind apprehensions and fears of impending loss of his lands. This charge is not sustained by the evidence, nor is it found by the Court to be true; but, on the contrary, it is found that he did not practice any fraud or imposition upon Kisling, nor make any false statement, or suppress or conceal any matter or thing from Kisling for the purpose of procuring the execution of the deeds.

With respect to the valué of these lands and the adequacy of the price' paid, the Court found that they were .purchased by the defendant from Kisling at the price of six thousand dollars; that the defendant paid a part of the purchase money at the time- of the delivery of the deeds, and executed his promissory note to Kisling and wife for the balance, and secured the same by his mortgage ; that he afterwards paid to Kisling and wife the amount of the note and interest; that the price at which the lands were sold was the full and fair cash value thereof at the time of sale; that Kisling, after diligent efforts to sell, failed to effect a sale on as favorable terms for himself as those upon which the defendant purchased, and that the defendant paid—including the sum paid in hand and his note—“ more than any other person would have paid or agreed to pay for the interest of said John W. Kisling thereto and therein.” The finding as to the price, its adequacy and payment, cannot be disturbed, for the evidence tends to prove those facts.

The plaintiffs complain of the length of credit given and the rate of interest reserved. Those matters, as we understand, were taken into the account by the Court in ascertaining whether the price was fair and adequate. A credit extending from three to twelve months, with interest at one and one quarter per cent per month, may have been unusual at that time, in cases where the title of the lot was regarded as good or marketable; but it would be neither unusual or unreasonable to give longer terms of payment with lower rates of interest, on the sale of a doubtful title. The Court was justified in finding that in September, 1859, it had no marketable value. That was prior to the decision in Hart v. Burnett, the confirmation of the title of the city, the final rejection of the “ Bolton and Barron Claim,” or the determination of the leading questions arising under the Van Hess Ordinance; and it was testified that property with the title in that condition, was seldom offered for sale in the real estate houses in San Francisco.

The rental is hot an unerring criterion of the value of land, even in case the title is perfect; and it is less certain in case of a doubtful title. It is a matter of everyday experience in this State, that rents are paid to landlords having nothing in the lands but naked possession. It may properly be taken into consideration, in connection with the estimates of witnesses, in finding the value of the land, but cannot be regarded as more conclusive evidence of the value than the latter.

The price being found to be fair and adequate, it becomes unnecessary, under the principles already announced, to inquire into the correctness of the finding that “ the defendant did not at any time practice any fraud or imposition upon said John W. or his said wife, or make to them or either of them any false statement, to induce them or either of them to execute and deliver the said conveyances of September, A. D. 1859, nor did he suppress or conceal any matter or thing within his knowledge from the said John W., or his said wife, for the purpose of procuring the execution and delivery of said deeds of September, 1859.”

"We will notice some of the other points presented by the plaintiff, which have a bearing on the questions on which the case turns.

One of the plaintiffs, Maria Hayes, formerly the wife of Kisling, now deceased, was called as a witness to testify to matters transpiring before the death of Kisling, and upon-the objection of the defendant, her testimony was excluded. Her claim of title to the property in controversy was derived through the will of her deceased husband. A question of filiis character was presented in Davis v. Davis, 26 Cal. 34, and it was held that the term “ representative of a deceased person,” in section three hundred and ninety-two of the Practice Act, as amended in 1863 (Stats. 1863, p. 701), “was intended by the Legislature to designate the executor or administrator of a deceased person, and also the person or party who had succeeded to the right of the deceased, whether by purchase or descent, or operation of law.” We are satisfied with this decision, and our plain duty is to give effect to the statute according to our interpretation of its terms, without narrowing or enlarging the limitations that the Legislature has marked out for its operation. The Legislature, if they had thought proper, might have permitted both parties to testify, when both were “ representatives ” of the same deceased person; or have excluded the testimony of the “ representative ” when the adverse party was not also a “ representative ” of the same deceased person ; or have narrowed the limits of the rule of exclusion so as not to include facts transpiring before the death of the deceased, unless at the time they transpired the deceased was interested in the. matter to which they related. But it is the province of the Legislature to prescribe the rule, and' the function of the Court is simply to enforce it.

The exclusion of the evidence of what lands Kisling pointed out as being in his possession, though erroneous, was of no injury to the plaintiffs, because the Court found that before 1853 Kisling reduced to possession the lands in controversy.

We cannot see how the plaintiffs were prejudiced by the admission of the tax receipts and certificates of redemption from tax sales, or the mortgage in which the defendant claims to have been interested, or the evidence of Hawes as to the services rendered by the defendant for Kisling, for they have no bearing upon the issues on which the action must be decided.

Judgment affirmed.