Opinion
34040.
DECIDED JUNE 20, 1952.
Money had and received; from DeKalb Superior Court — Judge Guess. February 20, 1952.
Hal Lindsay, Travers Hill, Stanley P. Meyerson, for plaintiff in error.
H. O. Hubert Jr., Walter McCurdy, contra.
1. One who undertakes to perform the professional services of an attorney at law and to engage in the practice of law thereby holds himself out as being authorized by law to do so; and one who accepts employment in such a confidential relationship and a fee for such services without disclosing his lack of qualification and authorization under the law to perform the services contracted for, has practiced a fraud upon his principal which warrants recovery by the principal of the fee paid, where the services which may have been rendered do not appear to have been of any material benefit to the principal.
2. Where one person assumes a relation of confidence to another, such as the relationship of attorney and client, without disclosing his lack of qualification and authorization under the law to perform the legal services contracted for, the principal's cause of action for a rescission of such contract and for the recovery of fees paid to the agent, where no benefits have been received by the principal from such services as may have been performed by the agent, arises when the principal discovers the agent's lack of qualification and authorization under the law to act as an attorney at law; and, according to the allegations of the petition, the fraud practiced upon the plaintiff by the defendant was a continuing fraud, on account of the confidential relationship of the parties, and was not discovered until a time less that four years from the time the action was begun.
3. As the petition set out a cause of action which was not barred by the running of the applicable statute of limitations, it was error to sustain the defendant's general demurrers and to dismiss the petition.
DECIDED JUNE 20, 1952.
Wallace W. Lowe brought an action on October 10, 1951, for money had and received against F. D. Presley, and made substantially the following allegations in his petition: On August 21, 1947, the plaintiff, acting through his daughter, Mrs. Ruby Lowe Henley, paid $2000 in cash to the defendant, for which sum the defendant gave the following receipt:
"Income Tax by F. D. Presley
2015 Presley Way, N.E.
Atlanta, Ga.
Phone CR 2601 Apartments August 21, 1947. Received of Mrs. Ruby Low Henley for services rendered in settling case the sum of $2000 which also pays for services rendered and to be rendered until the case of W. W. Low is settled which includes tax case. s/ F. D. Presley." The plaintiff paid this amount as the fee required by the defendant to represent the plaintiff and his daughter in all matters arising out of a Federal grand jury indictment charging wilful evasion of Federal income tax. The defendant held himself out to the plaintiff and represented himself as being qualified to handle all phases necessary in the preparation, counseling, and the defense of the pending criminal action, with respect to all auditing work as well as all legal representation necessary in the premises, all of which the plaintiff believed and relied upon. In fact, the defendant was not qualified to represent anyone before the Treasury Department; the defendant was not a qualified auditor to do the necessary auditing work in the plaintiff's case; he was not a certified public accountant, was without formal training as an accountant, and had not had any type of accounting experience sufficient to have qualified him to audit the plaintiff's accounts in order to defend the tax case and to advise the plaintiff of the amount of tax which he owed, if any. The defendant did not make an audit of the plaintiff's accounts, as was required in the preparation and defense of said case. The defendant was not an attorney at law authorized to practice law in the State of Georgia or elsewhere, and he had no legal training such as would qualify him to advise the plaintiff as to the nature of the charges against him or as to the plaintiff's making a plea of guilty or not guilty, nor was he otherwise qualified to represent the plaintiff in said criminal case. Prior to the arraignment of the plaintiff, the defendant undertook to counsel the plaintiff and advised him to plead guilty to the indictment, although the plaintiff at all times asserted his innocence of the charges. The defendant further counselled the plaintiff that the only way to have the indictment dismissed against his daughter was for the plaintiff to plead guilty, and the plaintiff relied upon such counsel. The defendant had assured the plaintiff that an agreement had been made whereby his entry of a plea of guilty would result in a dismissal of the indictment against his daughter, and that the plaintiff would receive a sentence of probation and only a nominal fine because of the defendant's connections in the Treasury Department, the District Attorney's office, and with the judge of the court. Although the plaintiff was not guilty of wilful tax evasion, he was confused and uninformed as to his true tax liability, if any, because of poorly kept records and the defendant's failure to audit his accounts. Because of the defendant's counsel, the plaintiff entered a plea of guilty on September 12, 1947, and on October 17, 1947, the plaintiff was sentenced to a year and a day in the Federal Penitentiary. At a hearing on December 22, 1947, before said sentence was to go into effect, the point was made that there was an error in the audit of the Treasury Department, and that the plaintiff wished to withdraw his plea of guilty. The Federal district judge asked the defendant if he had an audit of the plaintiff's accounts, and the defendant advised the judge that he had not made an audit, whereupon the judge allowed the plaintiff 30 days in which to present such an audit. After this hearing, the defendant told the plaintiff that he was not competent or qualified to make such an audit, and it was then that the plaintiff realized that the defendant was not qualified in any respect to represent him, and had not rendered any services as agreed. The defendant never did submit or make the audit report as requested by the judge in the hearing of December 22, 1947. The plaintiff then hired an accountant and attorneys to prepare the audit and to make a formal motion for withdrawal of the plea of guilty. The motion was made and granted, and the sentence was set aside by the court. Accordingly, the defendant rendered no service to the plaintiff, as agreed, for the $2000 paid him by the plaintiff; but, on the contrary, has misled the plaintiff and caused him serious detriment and expense. Demand for the return of the $2000 has been made upon the defendant, but he has refused to return the same.The defendant demurred to the petition on the grounds that it did not set out a cause of action, and that it affirmatively appeared from the petition that the plaintiff's cause of action, if he had one, was barred by the statute of limitations. Special demurrers were also filed, but they were not passed upon by the court. Both grounds of general demurrer were sustained and the case was dismissed. The plaintiff excepted to that judgment.
1. It is alleged in the petition that the defendant held himself out to the plaintiff and represented himself as being qualified to handle all phases necessary in the preparation, counseling, and the defense of the pending criminal action, with respect to all auditing work as well as all legal representation necessary in the premises, all of which the plaintiff believed and relied upon. It is alleged that the defendant was not an attorney at law authorized to practice law in this State or elsewhere, nor was he a qualified auditor or certified public accountant. However, the petition shows that the defendant engaged in the practice of law, for it is alleged that the defendant advised the plaintiff to plead guilty to an indictment for wilful evasion of Federal income taxes and, after sentence was imposed on the plaintiff, appeared for him and made a motion to withdraw the plea of guilty.
The practice of law includes not only representation of litigants in court but also giving legal advice. Code (Ann.), § 9-401; Boykin v. Hopkins, 174 Ga. 511 ( 162 S.E. 796). Such unauthorized practice of law by an individual subjects him to a fine of $500. Code, §§ 9-402, 9-9903. As was said in the case of Taliaferro v. Moffett, 54 Ga. 150, 153: "The general rule of law is, that where the license required by the statute is for the protection of the public, and to prevent improper persons from acting in a particular capacity, and is not for revenue purposes only, the imposition of the penalty amounts to a positive prohibition of a contract made in violation of the statute." Chapter 9-4 of the Code defines and regulates the practice of law, and is intended to protect the public against exploitation by incompetent and unqualified practitioners. 7 C.J.S. 727, Attorney and Client, § 16. Contracts in violation of similar statutes regulating a business or profession have been held voidable in cases involving a druggist ( Taliaferro v. Moffett, supra); a physician ( Murray v. Williams, 121 Ga. 63, 48 S.E. 686); real-estate brokers ( Padgett v. Silver Lake Park Corp., 168 Ga. 759, 149 S.E. 180; Pratt v. Sloan, 41 Ga. App. 150, 152 S.E. 275); an insurance carrier ( Jalonick v. Greene County Oil Co., 7 Ga. App. 309, 66 S.E. 815); a peddler ( Singleton v. State, 14 Ga. App. 527 (3), 533, 81 S.E. 596); and a salary buyer ( McLamb v. Phillips, 34 Ga. App. 210, 129 S.E. 570). The public is also entitled to protection against unauthorized practitioners of law.
While money voluntarily paid may not ordinarily be recovered back, nevertheless, this rule has no application where the payment is induced by misplaced confidence, artifice, deception, or fraudulent practice on the part of the person to whom the money is paid. Code, § 20-1007. The relationship of attorney and client is confidential, and it has been said with regard to it: "The law making the relationship of attorney and client confidential is a salutary one, and it is the duty of the courts to strictly enforce it. That relationship makes it imperative that the client rely implicitly upon the acts and words of his attorney, and he is entitled to the protection of law in reposing this confidence." Lewis v. Foy, 189 Ga. 596, 600 ( 6 S.E.2d 788). One who undertakes to perform the professional services of an attorney at law and to engage in the practice of law thereby holds himself out as being authorized by law to do so; and one who accepts employment in such a confidential relationship and a fee for such services to be performed, without disclosing his lack of qualification and authorization under the law to perform the services desired, has practiced a fraud upon his principal which warrants recovery by the principal of the fee paid, where the services which may have been rendered do not appear to have been of any material benefit to the principal. The only services rendered by the defendant to the plaintiff, according to the petition, were to advise him to plead guilty, which the plaintiff did, and then, after a prison sentence had been imposed upon the plaintiff, to attempt to withdraw the plea of guilty on the ground of an erroneous audit. It is alleged that the defendant never made an audit of the plaintiff's accounts, either by himself or by hiring someone competent to do so, although such an audit was necessary and was requested by the judge of the Federal court. The petition does not show that the plaintiff received anything for his $2000, and therefore set out a cause of action for the recovery back of this sum from the defendant.
2. The second ground of the general demurrer ruled upon asserts that the action is barred by the statute of limitations. Both parties concede that the four-year limitation of actions brought upon implied promises is applicable. Code, § 3-706. The present suit was filed more than four years from the time the fee was paid to the defendant, but less than four years form the time the plaintiff is alleged to have first learned of the defendant's lack of qualifications; and the question is, at which time did the statute begin to run?
"If the defendant, or those under whom he claims, shall have been guilty of a fraud by which the plaintiff shall have been debarred or deterred from his action, the period of limitations shall run only from the time of the discovery of the fraud." Code, § 3-807. "Concealment per se amounts to actual fraud where for any reason one party has a right to expect full communication of the facts from another." U.S. Fidelity c. Co. v. Toombs County, 187 Ga. 544 (7 a) ( 1 S.E.2d 411). Where the fraudulent concealment of the cause of action is in breach of a confidential relation involving a duty to make full disclosure, the statute does not begin to run until the discovery of the fraud. Universal Garage Co. v. Fowler, 57 Ga. App. 668 ( 196 S.E. 198). Where one person assumes a relation of confidence to another, such as the relationship of attorney and client, without disclosing his lack of qualification and authorization under the law to perform the legal services contracted for, the principal's cause of action for a rescission of such contract and for the recovery of fees paid to the agent, where no benefits have been received by the principal from such services as may have been performed by the agent, arises when the principal discovers the agent's lack of qualification and authorization under the law to act as an attorney at law. According to the allegations of the petition, the fraud practiced upon the plaintiff by the defendant was a continuing fraud, on account of the confidential relation of the parties, and was not discovered by the plaintiff until December 22, 1947, less than four years from the time the action was begun. In this connection, see and compare Persons v. Jones, 12 Ga. 371 (2), 375; Hoyle v. Jones, 35 Ga. 39, 43; Kirkley v. Sharp, 98 Ga. 484 ( 25 S.E. 562); Larkins v. Boyd, 205 Ga. 69 ( 52 S.E.2d 307); Herrington v. City of Dublin, 50 Ga. App. 769 ( 179 S.E. 845).
3. As the petition set out a cause of action which was not barred by the running of the applicable statute of limitations, it was error to sustain the defendant's general demurrers and to dismiss the petition.
Judgment reversed. Felton and Worrill, JJ., concur.