Brock v. Barnes

By the Court, Bockes, J. If the decision of this case depended solely on the question whether the signature to the paper was genuine, there should be no hesitation in directing an affirmance of the judgment. There is a most decided preponderance of evidence in favor of its genuineness. On that point the proof is very satisfactory and conclusive. As the case is presented, we canngt doubt but that the signature to the paper is in the handwriting of Doct. Barnes. The difficulty in the case is in another direction. The recovery was obtained against the executor on a claim evidenced by a singular and extraordinary instrument. The paper is made the foundation of a claim, which without it is wholly or substantially groundless. It was executed by an aged, infirm and feeble man, who had been the client of the plaintiff for many years, and for whom the plaintiff then acted as general agent. The instrument was not witnessed, although under seal; nor is there any evidence of value, apart from the paper itself, to strengthen the claim. The plaintiff's case, as presented to us, rests solely, or as we look upon it, substantially, on the force, strength and legal effect of the paper itself. Regarded as a transaction between strangers, or between persons in no relations of confidence to each other, proof simply of the due execution of the instrument would be sufficient to establish the demand, the agreement being neither unlawful nor immoral in its terms or provisions. But the case is quite different when the agreement sought to be enforced is made between principal and agent, or client and attorney, giving benefits and advantages to the agent and attorney. In such a case the right of action is not deemed to be established on the instrument, without clear proofj outside the paper, of its integrity and entire fairness. The legal presumption is against its validity, and the onus is on the agent and attorney to show that all was fair, and that the client acted freely and understandingly. So if an attorney bargain with his client, the burden is on him of establishing its perfect fairness, adequacy and equity; and if no proof be — 528 — given, or if the proof be insufficient to meet this requirement, the court must hold the case one of constructive fraud. (Story’s Eq. Juris. § 311.) The rule is the same as to dealings between principal and agent as between client and attorney. (Id. § 315.) This is a rule of propriety and public policy. Judge Story has well said that the “ law with a wise providence, not only watches over all the transactions of parties in this predicament; but it often interposes to declare transactions void, which between other persons would be held unobjectionable.” He adds, “ it does not so much consider the bearing or hardship of its doctrine upon particular cases, as it does the importance of preventing a general public mischief, which may be brought about by means secret and inaccessible to judicial scrutiny, from the dangerous influences arising from the confidential relation of the parties.” It was decided in Evans v. Ellis, by the court of errors, (5 Denio, 640,) that where the relation of solicitor and client exists, and a security is taken by the solicitor from his client, the presumption is that the transaction is unfair, and the onus of proving its fairness is on the solicitor. In this case Senator Spencer says in substance, that transactions between solicitor and client are to be looked on with no favor, and should be scrutinized with the utmost rigor; and Beardsley, J. says that no “ security given by a client to his solicitor should be allowed to stand in any case, unless its fairness in every respect is shown by the solicitor. The presumption in such cases is against the fairness of the transaction, and the burden of proof to repel the presumption is on the solicitor. He must show he- gave value for it.” In Sears v. Shafer, (6 N. Y. Rep. 268; 2 Selden,) Judge Gridley holds the following language : “ A court of equity interposes its benign jurisdiction to set aside instruments executed between parties standing in the relation of parent and child, guardian and ward, physician and patient, solicitor and client, and in various other relations in which one party is so situated as to exercise a controlling influence over the will and conduct and — 529 — interests of another. In some cases undue influence will he inferred from the nature of the transaction alone: in others from the nature of the transaction, and the exercise of occasional or habitual influence.” In Howell v. Ransom, (11 Paige, 538,) it. was held that it was not necessary to show actual fraud in order to invalidate transactions between attorney and client. And the chancellor remarked, “ if the court is not bound to set aside the sale, [a sale by a client to his attorney] as a matter of course upon the application of the client in such a case, the whole burden of establishing the fairness of the sale, and that it was made upon a full or adequate consideration is at least cast upon the attorney.” There are many other cases to the same effect. (9 John. 253. 10 Paige, 352. 2 Denio, 607. Story’s Eq. Juris. §§ 308 to 324. 7 Sim. 539. 27 Eng. Law and Eq. 168. 3 Cowen, 537. 13 Barb. 524. 31 id. 9. 39 Law and Eq. Rep. 569. 35 id. 100. 16 N. Y. Rep. 285.) In Savery v. King, the lord chancellor said that when a solicitor obtains a benefit from a client, a court of eqnity expects him to be able to show that he has taken no advantage of his professional position. He adds: this duty exists on the part of the solicitor in all cases where he is dealing with his client. This rule is to have full vigor, whether the client be more or less a man of business. (39 Eng. L. and Eq. Rep. 569.) In this case there can be no dispute in regard to the fact, that the relation between the plaintiff and Doct. Barnes was one of confidence. If not that of attorney and client, it was that of principal and agent; and in either case the principles of law applicable to the case are the same. According to the authorities, therefore, the presumption is against the integrity of the instrument on which the plaintiff relies for a recovery. The right of action on it can only be sustained by establishing its fairness, and the onus of proof is on him. If the instrument be deemed to provide a remuneration for past services, then the services must be proved; and further, — 530 — that there existed at the time of giving it, if not a legal, binding indebtedness, at least a just and moral obligation to pay; and still further, that the instrument was fully understood by the testator, and was made in pursuance of, and in accordance with, a well considered, definite and settled purpose. The paper itself, having been executed by a principal and client to his agent and attorney, affords no presumption on these points. Consequently without direct proof, clearly establishing each of these requirements, the paper is, according to the authorities, of no value whatever as the basis of a recovery for past services. An instrument executed between parties standing in no relation of confidence to each other is itself evidence of the matters therein stated, admitted and agreed upon, on proof simply of its due execution. Not so, however, when the instrument is executed- by a principal and client to his agent and attorney, giving to the latter benefits and advantages. In such case the relation the parties occupy to each other raises a presumption of unfairness, which must be met and repelled by proof, before the instrument can be relied on as a basis of recovery. Without such repelling proof the law pronounces it a case of constructive fraud. Keeping in view these well established principles,, how stands the case under consideration ? The evidence, considered together as a whole, militates against the probability of any previous intention of the testator to acknowledge a liability of the kind or character described in the instrument. The paper was made February 15, 1859, and extends back in its operation to September, 1836, and gives an annuity to- the plaintiff of one hundred dollar’s for each year during that time, and puts it on interest. Yet settlements were repeatedly made between the parties during this period, and numerous receipts were given by the plaintiff, being in terms receipts in full of all claims and demands. In 1848, the plaintiff gave the intestate a receipt in full of all demands of every nature, to that — 531 — date. In 1849, he also gave another, in full of all accounts and' demands; another in 1850, in full of all demands of every nature; another in 1851, in full of all dues, debts and demands. In 1858 he also gave still another receipt of a bill amounting to $36, and added “ which is all the account I have against him up to this day,” excepting a certain bill for foreclosing a mortgage. At the same time he gave the testator a due-bill as follows: “ Due Doct. M. Barnes on settlement as per receipts this day passed, seventy-four dollars and eighty-seven cent's, with interest, on demand.” Thus it seems that down to within about eight months of the time of giving the paper relied on as the basis of a recovery, the plaintiff held no just or legal claim against the testator. These numerous evidences of settlements and payments seem to have been purposely accumulated, and unexplained, preclude the idea of any purpose or intention on the part of the testator to acknowledge an indebtedness, such as the paper of February 15, 1859, declares and provides for. True, these receipts were open to explanation; but it requires strong and very pointed and significant oral proof to overcome these separate written acknowledgments of satisfaction of all prior claims and demands. Nothing less than the most direct and unequivocal evidence against them would suffice. We are unable to find such evidence in the case. If we regard the benefits and advantages conferred by the instrument in the nature of a bequest or gift, the paper is wholly -without consideration and void. (Harris v. Clark, 3 N. Y. Rep. 93.) If it be deemed to provide a recompense for future services, then it is to ■ be regarded, in view of the relation which existed between the parties to it, with the same suspicion, and must be held subject to the same rules as if it provided remuneration for past services merely, and can be upheld only on the clearest proof that its contents were well understood by the testator, and that it was made by him to be enforced acccording to its terms. But the paper was not intended to. evidence a bequest; nor is it to — 532 — be regarded in the nature of a gift. According to the plain import of the instrument, it provided a remuneration for both past and future services. In this regard it was precisely like the instrument in Dent v. Bennett, (7 Sim. 539. S. C. 4 My. & Cr. 269. 3 Jur. 99,) which case bears a strong ' analogy to this. Bennett was the medical attendant of Dent, who was quite aged. After Dent’s decease, Bennett produced an agreement signed by both parties, wherein Bennett agreed to give Dent his medical attendance during the remainder of his, Dent’s, life; and Dent in consideration thereof, and out of gratitude and respect, and for past services, promised Bennett that he should have and be entitled to £25,000, which Dent directed to be paid him six months after his decease. The paper had an indorsement on it signed also by Dent, declaring that the transaction was bona fide. The court set the agreement aside, and held the principle upon which courts of equity relieve against securities taken by an attorney from his client to apply to all cases in which confidence is reposed by one party in the other, and therefore the court would relieve against an agreement taken by a medical adviser from an aged patient, by which the former, in consideration of his future and past services, was to be paid a large sum of money after the death of the latter. In this case the vice chancellor stated that he proceeded on the supposition that the signature of Dent to the agreement, as well as to the indorsement, were genuine; and he added: “taking it to be so, I ought at once to set my face against a transaction which is fraught with all the mischief that this court can ever set itself to prevent in the case of solicitors and clients.” In this case Bennett gave an explanation of the circumstances under which the agreement was made and executed, which tended to show that its execution was fair, without persuasion, and deliberate, yet the court set it aside and spoke of the transaction in the severest terms of censure. An attorney may bargain with his client, and an agent — 533 — with his principal, but in such case the attorney and agent, before he can enforce the agreement in his favor and for his benefit and advantage, must show that as regards that transaction he dealt with entire fairness and that no advantage was taken of his .position. This is the doctrine of all the cases, both in this country and in England, and accords with that sound morality which forms the basis of an enlightened public policy. But it is insisted that there is evidence sufficient to repel all presumption against the validity of the instrument. It is true there is proof that the plaintiff acted as the agent, attorney and counsel of the testator during the time specified in the agreement. The extent and value of those services are not however very clearly established. Perhaps these points ought to be regarded as - covered in this case, on this appeal, under the ruling demanded by the defendant on the trial, and adopted by the referees at his request. On first examination I was inclined so to hold. To the extent of the ruling demanded and taken by the defendant on the trial he must of course be held and concluded. But on a careful examination it will be seen that the defendant did not ask to have excluded a part of what was necessary .to make up the plaintiff’s case. Ho competent evidence was offered by the plaintiff, or excluded on the defendant’s request, going to show that the instrument was understood by the testator, and that it was intended to stand as evidence of a well considered purpose, and to be enforced according to its terms. We have seen that under the circumstances of this case, this was not to be intended, as in ordinary cases, simply on proof of the execution of the instrument. It does not appear that the body of the paper was in the testator’s handwriting. If it had so appeared this would have afforded the best and most conclusive evidence of the requisite understanding and purpose. If there had been a witness to its execution who could state the circumstances of the transaction, from which it could be seen that it was well considered; or if it could — 534 — be shown that the instrument had ever been a subject of conversation by the testator, such evidence would have gone far towards establishing its fairness, against the legal presumption of its invalidity. The testimony of Mr. Town, of Mr. Miller and of Mr. Eichardson bear in some degree on the question. That of Mr. Eichardson seems of very little moment. The substance of the testimony given by Mr. Miller is that the plaintiff ‘was a trusty and faithful agent. The testimony of Mr.' Town is more to the point. He says the testator told him the plaintiff had always done his business well; that he had never paid him any thing, but calculated to pay him; that he calculate^ the plaintiff should have his pay in the end. It will be observed that no intention is expressed of ever giving the paper; nor indeed is any allusion whatever made to it by the testator, first or last, so far as is disclosed by the evidence. . In answer to the statements or admissions of the testator sworn to by Mr. Town, and with a view to countervail them, the defendant urges, first, the statements and admissions of the .plaintiff, sworn to by Mr. McMasters and Mr. McKinney, and secondly, the receipts given from time to time, in full of all accounts, claims and demands. The declarations of the plaintiff, as sworn to by McMasters and McKinney, made at the time they represent them to have been made, are not a little remarkable. But if these declarations are laid out of the case where is the evidence to explain the numerous receipts ? Is the evidence of Town,- or his evidence with that of Miller and Eichardson, or considered in connection with any other proof in the case, sufficient to explain and limit their clear import? Of those receipts there are five, not to mention the legal presumption arising from the giving of the note for $74.84. The first was given in 1848, the last in 1858; each in express terms, being in full of all demands. Ho explanation of these receipts is attempted by any direct reference to them or — 535 — to either of them. But it is said the testator admitted he had not paid for the services, and stated that he calculated to pay him. This admission and statement to one or at most to two persons, is substantially all we have to repel and overcome the solemn assertion in writing, made on five different occasions by the plaintiff, to the effect that he had no demand for those services. Bay more, such oral admission is substantially all we have to overcome, not only those five written statements and assertions, but also to repel the presumption of settlement arising from the giving of the note in 1858, (6 N. Y. Rep. 461; 5 Denio, 304,) as well as also to repel the presumption declared by law against the vahdity of the instrument which constitutes the basis of the plaintiff’s claim. Is this not asking too much for an oral admission, always regarded as the weakest and most unreliable evidence P We think it is. The usual mode of explaining a receipt is to show precisely what it was intended to witness, by giving evidence of the transaction to which it related. If a receipt in full of all demands is sought to be limited to a particular matter, there must be proof showing that it related to nothing else; that no general settlement in fact took place; and that it was not intended as evidence against claims other than those at the time considered and covered by it. Let us examine these receipts. The one of Bovember 6,1848, is under a bill of $>1.50, for drawing a bond and mortgage. It reads thus : “ Bec’d payment in full on the above acc’t, and also in full of all demands of every nature up to this date.” Here it is plain that not only was payment admitted of the bill of #1.50, but of all other demands. There is manifested a plain purpose that it should have that effect. The receipt of October 2, 1849, also that of May 10, 1850, and also that of May 24, 1854, are receipts in the usual simple form, of payment in full of all accounts, dues, debts and demands. There is no evidence whatever showing the circumstances under which they were given, or to what transactions they had particular reference; therefore they remain wholly unexplained. The — 536 — receipt of J une 12, 1858, is under a MU comprised of several items, and reads as foUows: “ Received of Doct. Melvin Barnes in fuU of the above account, which is all the account I have against him ujp to this day, excepting the foreclosure of the Francis McOadden mortgage.” This clause seems to have been purposely introduced, with a view to its legal effect as evidence, against any claim which might thereafter be presented by the person signing it. There is no evidence in the case which can fairly be said to explain away the effect of this receipt. And indeed the same remark will apply to each and every of them. [Warren General Term, July 14, 1863. In every view of the case, except as to the genuineness of the signature to the instrument, we regard the decision and judgment as clearly against the evidence here presented. The case must go back for re-trial, where the plaintiff will have the opportunity of showing such facts as wiU repel the presumption which now rests against his case.. But inasmuch as a new trial is ordered on the ground that the decision is against evidence, it must be on condition that the defendant pay the costs of the former trial and of the appeal. Judgment reversed, report of referees set aside, and new trial ordered; but on condition that the defendant pay the costs of the former trial and of appeal, (a) Rosekrans, Potter, Bockes and James, Justices.] Footnotes [(a)] This case was re-tried before the referees, in pursuance of the above decision, and they again reported in favor of the plaintiff. Judgment having been entered on the report of the referees, a second appeal was taken, to the general term. At the January term, 1864, that judgment was affirmed. On the second trial evidence was given which, in the opinion of the referees, answered the requirements of the law as declared in the foregoing opinion. It is understood that the defendant has appealed to the court of appeals, from the judgment of affirmance, as well on the ground that the case was not changed, in any respect, by the second trial, as on questions in regard to the admissibility of evidence. Reporter.