Opinion
12-3-1953
BRADNER v. VASQUEZ et al. * Civ. 19580.
Michael F. Shannon, Thomas A. Wood, Los Angeles, for appellant. Burke, Williams & Sorensen and Landon Morris, Los Angeles, for respondents.
BRADNER
v.
VASQUEZ et al. *
Dec. 3, 1953.
Rehearing Denied Dec. 28, 1953.
Hearing Granted Jan. 27, 1954.
Michael F. Shannon, Thomas A. Wood, Los Angeles, for appellant.
Burke, Williams & Sorensen and Landon Morris, Los Angeles, for respondents.
VALLEE, Justice.
Action for money alleged to be due on a contract of employment between an attorney at law and his clients. Plaintiff appeals from a judgment for defendants. The cause was here before on a question of the construction of the contract. Bradner v. Vasquez, 102 Cal.App.2d 338, 227 P.2d 559.
On November 14, 1941, B. J. Bradner, an attorney at law, and the defendants entered into the following written contract: 'Mr. & Mrs. Anselmo M. Vasquez 3161 Winter Street Los Angeles 'Dear Mr. & Mrs. Vasquez: 'Relative to our conversation of recent date, it is my understanding that we agreed as follows: 'I am to attend to all of your business affairs connected with the Ohio Oil Company and Havenstrite Operator, together with preparing income tax returns and advice as to investments, for 10% of all the moneys received by you from the Ohio Oil Company and Havenstrite Operator for oil and from casinghead gasoline and dry gas. 'It is realized by me that my compensation in the near future will be rather small, but as more wells are developed, I will be more adequately compensated. 'It is understood that this arrangement shall cease and determine upon my death. 'Will you kindly sign the duplicate copy of this letter and return it to me. 'Very truly yours, B. J. Bradner B. J. Bradner 'Accepted: Anselmo M. Vasquez Anselmo M. Vasquez Bertha R. Vasquez Bertha R. Vasquez'
On August 9, 1949, defendant, Anselmo M. Vasquez, and on August 31, 1949, defendant Bertha R. Vasquez, discharged Mr. Bradner and notified him they were no longer bound by the contract and would no longer make the payments therein provided. All sums which had accrued up to the time of the discharge were paid. The action is for 10% of $124,187.28 which defendants received thereafter. Mr. Bradner commenced the action, but died on September 7, 1950, prior to the trial.
The court found that: 1. At the time the contract was made, the Vasquezes had complete trust and confidence in Mr. Bradner. 2. Mr. Bradner procured the contract from them without sufficient consideration and by undue influence in that at the time of its execution the relation of attorney and client existed, and Mr. Bradner obtained an advantage by it.
Plaintiff-appellant contends the findings are not supported by the evidence.
From 1924 to the time the contract was made, Mr. Bradner did whatever legal work defendants had to be done. In 1937, defendants entered into an oil and gas lease with Ohio Oil Company. Mr. Bradner represented defendants in the transaction. Prior to the making of the contract in suit, one well had been placed on production. Mr. Bradner had done other legal work for defendants shortly prior to the making of the contract.
Defendant, Bertha Vasquez, testified that in November, 1941, she made an appointment with Mr. Bradner to see him in his office; that she and Mr. Vasquez went to the office and had a conversation with Mr. Bradner. Mr. Bradner asked them if they still wanted to retain him as their attorney, and they said, 'Yes.' Mr. Bradner asked them how they wanted to compensate him; he asked them whether they wanted to give him a per cent of their interest in the wells or pay him 10 per cent. They told him, 'We will pay you ten per cent. That way you will take more interest in seeing that more wells are drilled on the property.' Mrs. Vasquez further testified she was the one who suggested they would rather give him 10 per cent so that he would take more interest in seeing that more wells were drilled, and that Mr. Bradner said it was agreeable. They discussed the amount of oil the property was producing. She could not remember any other part of the conversation. She also testified that Mr. Bradner did not say anything to them about going to see another lawyer or tell them to get advice from anyone else about signing the contract, or say anything to them about what the reasonable value of the services that he agreed to perform would be.
Mrs. Bradner, who was Mr. Bradner's secretary at the time of the conversation referred to by Mrs. Vasquez, testified that she was present at the conversation; it took place on November 7, 1941; Mr. Vasquez said to Mr. Bradner, 'We are very well satisfied with the work that you have done for us and in the past we haven't been able to pay you very much for it. Mrs. Vasquez and I would like to make an arrangement with you whereby you handle all of the affairs, that is, the business affairs in connection with the Ohio and Havenstrite leases, making up income taxes and giving advice as to investments. In time that will give you--and we pay you out of the oil. * * * In time this will give you something for the work that you have done in the past as well as for work to come.' Mr. Bradner said in some cases like that some of his clients had assigned a one per cent royalty to him. Mrs. Vasquez said, 'Mr. Bradner, we don't want to do that because if you died we don't want a stranger in there.' Mr. Bradner said, 'Well, suppose then you give me ten per cent for life of all the oil, gas, and casinghead gasoline, and that would amount to just about the same thing.' Mr. and Mrs. Vasquez said that would be 'Okay.' Mr. Bradner said, 'Of course, I realize at first I won't be very well paid for my work but as more wells are developed, I will be better paid. * * * I will draw up an agreement and I will send it out for your acceptance.'
A few days later defendants received the contract in the mail from Mr. Bradner, signed by him. They signed a copy and returned it to him, retaining a copy.
Civil Code, section 2235 provides: 'All transactions between a trustee and his beneficiary during the existence of the trust, or while the influence acquired by the trustee remains, by which he obtains any advantage from his beneficiary, are presumed to be entered into by the latter without sufficient consideration, and under undue influence.' Section 2219 provides that any one who voluntarily assumes a relation of personal confidence with another is deemed a trustee. If the circumstances stated in the section are present, the contract is voidable. Magee v. Brenneman, 188 Cal. 562, 571, 206 P. 37; Brydonjack v. Rieck, 5 Cal.App.2d 219, 223, 42 P.2d 336. The section applies to all cases of attorney and client where any contract is made whereby the attorney obtains any advantage from his client. Magee v. Brenneman, supra, 188 Cal. 567, 206 P. 37; Estate of De Barry, 43 Cal.App.2d 715, 728, 111 P.2d 728. The burden is on the client to show that the attorney obtained an advantage from him by the contract. Carlson v. Lantz, 208 Cal. 134, 139, 280 P. 531; Magee v. Brenneman, supra, 188 Cal. 568, 206 P. 34; Bryan v. Prescott, 57 Cal.App. 779, 782-783, 207 P. 1028.
A contract in writing is presumptive evidence of a good and sufficient consideration. Code Civ.Proc. sec. 1963, subd. 39; Civ.Code, secs. 1614, 1615. To overcome the presumption of consideration evidenced by a writing, it is not sufficient to show merely that the confidential relation existed, but is must be made to appear that the relationship was used to obtain an unfair advantage. In Estate of Roberts, 49 Cal.App.2d 71, at page 80, 120 P.2d 933, at page 938, the court stated: 'In support of the judgment respondent relies entirely on the presumption of undue influence which, as he claims, arises from the relationship of the parties, and cites section 2235 of the Civil Code in support of his argument. * * * Here we have a written instrument, a promissory note, which erects a counter-presumption of a sufficient consideration (Code Civ.Proc., sec. 1963, subd. 21; Civil Code, secs. 1614, 3105); and the burden of showing a want of such consideration is on the party seeking to invalidate the instrument. Civil Code, sec. 1615. The presumption created by section 2235 of the Civil Code does not overcome this other presumption unless it is shown that the relationship was used by the trustee to obtain an unfair advantage. Dimond v. Sanderson, 1894, 103 Cal. 97, 101, 103, 37 P. 189; Cole v. Wolfskill, 1920, 49 Cal.App. 52, 55, 192 P. 549; Estate of Mallory, 1929, 99 Cal.App. 96, 102, 278 P. 488.' Mere negative conduct 'on the part of an attorney dealing with his client is not sufficient 'to overcome the presumption of fraud and unfair dealing which is automatically raised by the law as a protection to a client.' Estate of Witt, supra [198 Cal. 407, 245 P. 197]. The attorney must go further and show that his client was given the information which, under similar circumstances, a disinterested legal adviser would have given.' Thornley v. Jones, 96 Cal.App. 219, 229, 274 P. 93, 97.
If the attorney obtains an advantage from his client in the transaction between them, the burden of showing that the contract was acquired by the attorney for a sufficient consideration and not by undue influence is on the attorney. In Metropolis Trust & Sav. Bank v. Monnier, 169 Cal. 592, at page 598, 147 P. 265, at page 268, it was said: 'The relation of attorney and client is of a fiduciary character, and the Civil Code (section 2235) clearly provides that all transactions between a trustee and his beneficiary during the existence of the trust, by which he obtains any advantage from his beneficiary, 'are presumed to be entered into by the latter without sufficient consideration, and under undue influence.' This does not mean that a trustee may not deal with his beneficiary. But, if he does deal with him in such manner as to obtain an advantage, the trustee has the burden of showing by evidence that the transaction was fair. Certainly the obtaining of a note for $20,000, secured by mortgage, is an advantage, and the attorney, or those claiming under him, cannot safely rest, as they did in this case, without affirmative proof of the facts surrounding the transaction.' See, also, Allen v. Meyers, 5 Cal.2d 311, 315, 54 P.2d 450; Lady v. Worthingham, 57 Cal.App.2d 557, 135 P.2d 205.
The finding that the contract was obtained by Mr. Bradner without sufficient consideration and by undue influence must find support in evidence introduced or in the presumption created by section 2235. Since there was no evidence showing insufficient consideration or undue influence, defendants invoke the presumption.
Whether Mr. Bradner obtained an advantage by the contract, and whether the Vasquezes entered into the contract without sufficient consideration and by undue influence, must be determined on the situation as it fairly appeared to the parties at the time the contract was entered into, and not as subsequent events revealed it to be. Swanson v. Hempstead, 64 Cal.App.2d 681, 688, 149 P.2d 404.
There was evidence from which the court could reasonably conclude that Mr. Bradner obtained an advantage from the Vasquezes by the contract at the time it was made. From 1924 to November 10, 1941, the date of the contract, Mr. Bradner had been their attorney handling their legal matters. During that period, because of their financial condition, 'he charged them the minimum, or just enough to cover the overhead.' He did some work for them 'for which he didn't charge them at all.' At the time the contract was made, the lease with Ohio was in force; one well was producing; Ohio and Havenstrite were obligated to drill 23 wells. Under the contract, Mr. Bradner was to receive 10% of all moneys received by the Vasquezes from Ohio and Havenstrite for life. The Vasquezes were to receive a one-eighth royalty from Ohio and Havenstrite. They were receiving $300 or $400 a month from Ohio at the time. Prior to the contract, Mr. Bradner was subject to discharge at any time, with or without cause. After the contract, he could only be discharged for legal cause. The facts in the present case are not essentially different from those in Brydonjack v. Rieck, 5 Cal.App.2d 219, 42 P.2d 336, in which it was held that the trial court was warranted in finding that the attorney had obtained an advantage from his client. We think it manifest the court could reasonably infer that Mr. Bradner obtained an advantage from the Vasquezes by the contract.
It having been shown that Mr. Bradner obtained an advantage from the Vasquezes by the contract, the presumptions arose that the contract was entered into by the Vasquezes without sufficient consideration and by undue influence. The mere fact that the contract was in writing did not repel these presumptions, as plaintiff argues. As said in Estate of Roberts, 49 Cal.App.2d 71, 80, 120 P.2d 933, 938, 'The presumption created by section 2235 of the Civil Code does not overcome this other presumption [sufficient consideration for a written contract] unless it is shown that the relationship was used by the trustee to obtain an unfair advantage.' (Emphasis added.) In other words, if the contract is written, and if there is no proof that the attorney obtained an advantage from the client by the contract, the presumption that there was sufficient consideration for a written contract overcomes the presumption of insufficient consideration created by section 2235; but if there is proof that the attorney obtained an advantage from the client by the contract, the presumption of insufficient consideration remains and the burden is on the attorney to overcome the presumption by evidence. The fact that the contract is written has no effect on the question of undue influence other than that the court might under certain circumstances infer a want of undue influence from the contract itself.
The burden was thus on plaintiff to overcome the presumptions--i. e., establish by the evidence that the contract was entered into by the Vasquezes with sufficient consideration and not by undue influence. Brydonjack v. Rieck, 5 Cal.App.2d 219, 223, 42 P.2d 336; Lady v. Worthingham, 57 Cal.App.2d 557, 560-561, 135 P.2d 205. Plaintiff relied on the testimony of Mrs. Vasquez and of Mrs. Bradner to rebut the presumptions. The presumptions were evidence and they are sufficient to support a finding. Westberg v. Willde, 14 Cal.2d 360, 365, 94 P.2d 590. They have probative force and may outweigh positive evidence adduced against them. Scott v. Burke, 39 Cal.2d 388, 395, 247 P.2d 313. Section 2061, subd. 2, of the Code of Civil Procedure provides that jurors are not bound to decide in conformity with the declarations of any number of witnesses which do not produce conviction in their minds, against a presumption. Section 1961 provides: 'A presumption (unless declared by law to be conclusive) may be controverted by other evidence, direct or indirect; but unless so controverted the jury are bound to find according to the presumption.' These rules apply to a judge sitting without a jury. 10 Cal.Jur. 745, sec. 64. Whether the evidence introduced to controvert the presumptions had sufficient weight to effect that purpose was a question of fact for the trial court to determine. Halloran v. Isaacson, 95 Cal.App.2d 357, 360-363, 213 P.2d 19. The presumptions on the one hand and the opposing testimony on the other present a conflict in the evidence, and the finding of a trial court in accord with the presumptions will not be disturbed on review. French Bank v. Beard, 54 Cal. 480, 484; Cox v. Schnerr, 172 Cal. 371, 378-380, 156 P. 509; Standard Oil Co. v. Houser, 101 Cal.App.2d 480, 488, 225 P.2d 539; Schurman v. Look, 63 Cal.App. 347, 358-361, 218 P. 624; Lady v. Worthingham, 57 Cal.App.2d 557, 561, 135 P.2d 205; Fowler v. Enriquez, 56 Cal.App. 107, 109, 204 P. 854; Piercy v. Piercy, 18 Cal.App. 751, 755-756, 124 P. 561.
We cannot say as a matter of law that the positive evidence overcame the presumption. The findings that the Vasquezes entered into the contract without sufficient consideration and by undue influence is supported by the evidence--the presumptions. Those findings are adequate to support the judgment.
We are constrained to say that there was no evidence of intentional or actual undue influence on the part of Mr. Bradner. We have no doubt that had he lived to the time of trial he might have given a satisfactory explanation of the transactions with defendants and completely dispelled the severe but essential effects of section 2235.
Affirmed.
SHINN, P. J., and WOOD, J., concur. --------------- * Subsequent opinion 272 P.2d 11.