SETZER v. ROBINSON

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

Abraham SETZER, Plaintiff and Appellant, v. Parker Lee ROBINSON, also known as Parker L. Robinson and also known as Parker Robinson, Defendant and Respondent.*

Civ. 18857.

Decided: June 27, 1961

Abraham Setzer, San Francisco, in pro. per. Rockwell & Fulkerson, San Rafael, for respondent.

Respondent and his stepmother Enna Y. Robinson owned two parcels of land in the Cascades, Fairfax, Marin County, California, in joint tenancy. On one of these lots the respondent built a small house costing about $1,000. One lot cost $600, the other $400. In March of 1947, respondent agreed in writing with his stepbrother Lionel Elwood Webster that if respondent survived his stepmother, he would deed the two lots to Webster, reserving to himself a life estate, and Webster would repair the house and do certain other things. In the first agreement, respondent neglected to name the county in which the property was located. This was corrected by a second agreement signed about a month later. Mrs. Robinson died shortly thereafter.

In 1950, respondent hired appellant, an attorney at law, to establish the fact of his stepmother's death and thus to terminate of record the joint tenancy, and to quiet his title against Webster's claims under the two contracts with the latter, referred to above. Appellant's contract provided for a retainer of $250 and 33 3/1 percent of the recovery in money, or in kind; the retainer was to be included in the 33 3/1 percent; appellant was given a lien on respondent's property for his percentage; and respondent was to pay the costs.

Appellant filed and completed a proceeding establishing the death of respondent's stepmother. He also filed a quiet title action against Webster, who defaulted, and, through his attorney, said he was not interested in the property and offered to clear the records with a quitclaim deed. Appellant was not willing to terminate the cause of action on this basis but took a default judgment against Webster.

At this time, respondent had no other assets, was not employed and no lending agency would advance him any money because he was incapable of repaying it. Appellant filed suit to enforce his contract by satisfying the lien created thereby on respondent's property and to quiet title thereto. Respondent cross-complained to quiet his title as against appellant. The trial court concluded that appellant's contract was void and gave judgment for respondent, quieting his title on his cross-complaint against appellant.

The court's findings include the following: ‘That on April 17, 1950, the defendant and cross-complainant, Parker Lee Robinson, consulted with and received advice from the said plaintiff and cross-defendant in his professional capacity; that the parties entered into an ‘Agreement Employing Attorney’ on the 23rd day of May, 1950 as alleged by plaintiff and cross-defendant in his Complaint * * *. That the approximate fair market value of said property at the time of entering into said ‘Agreement Employing Attorney’ was in the sum of Eight Thousand and no/100 ($8,000.00) Dollars; that said plaintiff and cross-defendant was familiar with land values in the vicinity of said real property and that the defendant and cross-complainant was ignorant of the value of said real property; that at the time the parties entered into said ‘Agreement Employing Attorney’ plaintiff and cross-defendant and not discuss with or advise defendant and cross-complainant of the value of said real property * * *. That said defendant and cross-complainant is susceptible to be influenced easily and at the time he entered into said ‘Agreement Employing Attorney’ he was incompetent to transact business, or otherwise properly conduct his business affairs; this fact was obvious to the plaintiff at that time; that the fair and reasonable value of services rendered by plaintiff and cross-defendant for defendant and cross-complainant in said former proceedings was, and is, the sum of Two Hundred Fifty and no/100 ($25.00) Dollars and that said sum has been paid in full.'

‘When a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence contradicted or uncontradicted which will support the finding of fact. [Citing cases.]’ Primm v. Primm, 46 Cal.2d 690, 693, 299 P.2d 231, 233.

Appellant urges that there is no evidence to support the court's finding that he was familiar with land values in the vicinity of respondent's real property. However, appellant testified he had been practicing law since 1924 and that he had practiced in Marin County. He lived in Fairfax in 1934, and owned property there at one time. He knew generally the nature of the property in question, and knew that respondent's attorney was a neighbor. He ‘felt it [respondent's property] really had value.’ Respondent testified that appellant inquired of him as to the value of the property. Respondent, not knowing, gave him the original cost.

‘The well-established rule requires an appellate court to resolve all conflicts in the evidence, * * * in favor of the judgment. It is only when the evidence, so viewed, is insufficient to sustain the finding of the trier of the facts that reversal upon this ground is warranted.’ People v. Hicks, 175 Cal.App.2d 556, 557, 346 P.2d 452, 453. Furthermore, this point is only material in connection with undue influence and has no bearing on competency.

‘An agreement between an attorney and his client by which the attorney receives any advantage is presumed to be void and the burden is upon the attorney to prove that the client freely entered into the agreement.’ Davis v. State Bar, 20 Cal.2d 332, 338, 125 P.2d 467, 470.

The appellant contends that there was no relationship of attorney and client between appellant and respondent prior to May 23, 1950, when the contract employing an attorney was signed by respondent. The evidence is that appellant first met respondent at appellant's office on April 17, 1950. Respondent presented the two agreements with Webster to appellant and left them with him. Appellant discussed the general factual situation, did some preliminary work, such as securing a certified copy of Mrs. Robinson's death certificate, and mailed it to respondent. Appellant's complaint in reciting the expenses lists—‘May 2, 1950, Certified copy of Death Certificate of Enna Y. Robinson $1.00.’ Appellant advised respondent concerning these two Webster documents and ‘gave Mr. Robinson the benefit of my legal research.’ ‘My advice to him [Robinson] was that he had entered into an agreement by which it was possible for Mr. Webster to enforce his right to the fee in the property, except for a life estate and that in turn also might be conditioned by the practical use being made by other members of the Webster family.’ On May 19, 1950, respondent came to appellant's office with a check for $274.50 which was the proceeds of respondent's bonds; gave the check to appellant and appellant gave back $24.50. On May 23, 1950, the contingent contract employing plaintiff was signed.

From these facts, the trial court could find that there was a relationship of attorney and client between appellant and respondent prior to May 23, 1950, and at the time of signing the contract. From this a presumption of undue influence arises. ‘It thus appears the contract was entered into while the relation of attorney and client existed and was advantageous to the attorney, Estudillo. This raised a presumption of undue influence and cast the burden on appellant to prove the transaction was fair and regular. Appellant failed to show that the transaction was fair and regular, or that the agreement was for a reasonable amount. Thus the presumption that it was entered into under undue influence was not rebutted. Under these circumstances the contract was voidable at the instance of respondents. Hence, the court could have found, as it did, what was a reasonable fee for the services performed. The finding is that an amount equal to such a fee had already been paid. It follows there was nothing more due to him, and the conclusion and judgment in favor of respondents must therefore be upheld.’ Magee v. Brenneman, 188 Cal. 562, 571, 206 P. 37, 40. ‘It is plaintiff's contention that the advantage gained by the fiduciary must be an unfair advantage before the presumptions of section 2235 [Civil Code] are properly in the case. We find no language in this section which imposes such an additional requirement. * * * When a fiduciary enters into a transaction with a beneficiary whereby a fiduciary's position is improved, or he obtains a favorable opportunity, or where he otherwise gains, benefits, or profits, it may fairly be said that an advantage has been obtained. To declare that the advantage obtained must be shown to be unfair, unjust, or inequitable before the presumptions arise would result in the imposition of a condition which is not required by section 2235.’ Bradner v. Vasquez, 43 Cal.2d 147, 151–152, 272 P.2d 11, 13.

Is there any evidence to support the trial court's finding that the respondent was incompetent to transact business, or otherwise properly to conduct his business affairs? Appellant relies on the court's memorandum opinion in which the court said, ‘In fact, in drafting the quiet title complaint against Webster, the plaintiff alleged that the defendant was not competent to enter into an agreement with his stepbrother. By the same token, he was not competent to make the agreement involved here.’ In this reference the trial court should have referred to the contract between appellant and respondent instead of appellant's quiet title complaint. In the contract employing appellant, it is recited that Parker Lee Robinson has represented to Abraham Setzer that the agreements with Webster ‘were executed by said Parker Lee Robinson by reason of undue influence practiced upon him by said Lionel Elwood Webster, and that the former was not competent to execute the same when purportedly signed by him * * *.’ The trial court, in its opinion also said, ‘It is obvious to anyone who looks at the defendant, or who hears him speak or observes his appearance and manner, that he is susceptible to be influenced easily. He is very anxious to please. He likes to agree with what people say and do what they want him to do. In my opinion, he is incompetent to transact business. This fact must have struck the plaintiff from his first meeting with the defendant.’

The appellant contends that the trial court based its finding of incompetency on the court's observations made eight years after the employment agreement, but the limits of time over which such evidence may range must depend on the circumstances of each case as to the probability of intervening changes and should be left within the discretion of the trial judge. ‘When the existence of an object, condition, quality, or tendency at a given time is in issue, the prior existence of it is in human experience some indication of its probable persistence or continuance at a later period * * *. Similar considerations affect the use of subsequent existence as evidence of existence at the time in issue. Here the disturbing contingency is that some circumstance operating in the interval may have been the source of the subsequent existence, and the propriety of the inference will depend on the likelihood of such intervening circumstances having occurred and been the true origin. [Footnote omitted.] * * * The matter should be left entirely to the trial Court's discretion.’ II Wigmore, Evidence, § 437, 3rd ed. 1940. Appellant himself had observed that respondent was somewhat out of touch with reality. On August 24, 1956, appellant wrote to respondent, ‘However, there finally comes a time when action becomes necessary in face of your unwillingness to see me compensated as you agreed. It will do you no good to act ostrich-like by figuratively burying your head in the sand and refusing to see the realities of the situation.’ The testimony showed that the respondent took a job with the Waterman Pen Company in 1925, and that after working at this job for 25 years, he was receiving the sum of $37.50 per week. He worked in this same position for 28 years and when the Waterman company moved its plant, he was out of a job and was not able to get any other work.

‘A conveyance or other contract of a person of unsound mind, but not entirely without understanding, made before his incapacity has been judicially determined, is subject to rescission, as provided in the Chapter on Rescission of this Code.’ Civ.Code, § 39. There are cases in which restoration is not required in connection with rescission. ‘Defendant urges several grounds for a reversal. He first claims that plaintiff was not entitled to rescind until he had restored or offered to restore to defendant whatever of value he had received. It is manifest that plaintiff could not restore to defendant the services defendant had rendered to him, nor was plaintiff by reason of his adjudicated incompetency in a position to set any value thereon.’ Nielsen v. Witter, 111 Cal.App. 742, 743–744, 296 P. 121.

A retainer fee is what the parties intend it to be: The contract having been voided the respondent was entitled to the return of the retainer fee unless the court, as in this case, decided it should be used to compensate appellant for the reasonable value of his services. Appellant contends that the respondent's execution of the contract was free and voluntary and that appellant fully performed the contract on his part. These matters, however, do not preclude the contract from being voidable by reason of undue influence or the respondent's incompetency, or both. He also contends that the respondent ratified the contract by having the property appraised, in 1954, and collecting one-third of the appraiser's fee from respondent. The appraiser's fee was $10 and appellant paid $3.34 of it. Appellant contends that this is ratification of the contract of employment, but respondent testified this was appellant's suggestion, and this argument overlooks the fact that the respondent was incompetent.

The judgment is affirmed.

HOYT, Justice pro tem.

TOBRINER, Acting P. J., and DUNIWAY, J., concur.