Manheim v. Woods, 213 Mass. 537

213 Mass. 537 | Mass. | 1913

Bbaley, J.

The original plaintiff, Jacob Manheim, after bringing suit, died testate, and it was prosecuted by his executor until the beneficiary who claims the proceeds of the policy was substituted as plaintiff. It will be necessary to a clear understanding of the controversy to refer to the parties as they stood at the filing of the bill, for the right to relief depends upon the validity of the transfer by Manheim to the defendant Woods.

The plaintiff having been dissatisfied with the provisions of his wife’s will, which had been offered for probate, employed the defendant, an attorney at law, as his legal adviser to protect his interests in the estate, though the evidence seems to warrant the inference that he did not desire an actual contest. By negotiations with the principal legatee the defendant effected a compromise whereby upon receiving a substantial amount of money the plaintiff released all rights in the estate and withdrew his opposition. During the proceedings for a settlement covering practically four months the plaintiff appears to have needed pecuniary assistance, and consulted the defendant. The defendant testified that he appeared to have the full confidence of the plaintiff, and the fiduciary relation of attorney and client plainly existed, which upon ' the defendant’s own evidence did not terminate until some time after the transaction in question. This relation of trust and confidence requires a court of equity to scrutinize with the greatest care business dealings between them. The transfer of property from a client to his attorney is not to be viewed as a mere commercial transaction where ordinarily each must beware of the trading ability of the other, and the advantage would remain with the-more skilful bargainer. As was said in Manning v. Hayden, 5 Sawyer, 360, 381, “this rule is alike necessary to preserve the dignity and integrity of the legal profession, and to protect the interests of a dependent and confiding clientage; and in the enforcement of it courts will not hesitate, because the injury to the client does not fully appear, or a positive intention on the part of the attorney to gain an advantage is not shown.” In the application of the rule the burden rested on the defendant of proving that the assignment of the policy to him not only was absolute, but had been fairly and honestly consummated. Hill v. Hail, 191 Mass. 253. Kelly v. Allin, 212 Mass. 327. Dunn v. Record, 63 Maine, 17. Dunn v. Dunn, 15 Stew. 431. Nesbit v. Lockman, 34 N. Y. 167, 171, 172. Manhattan Cloak & Suit Co. v. Dodge, 120 Ind. 1, 3. Newcomb v. Brooks, 16 W. Va. 32. Willin v. Burdette, 172 Ill. 117. Rogers v. R. E. Lee Mining Co. 9 Fed. Rep. 721, 724, note. Carter v. Palmer, 8 Cl. & F. 657, 706. Wright v. Proud, 13 Ves. 136. Story Eq. Jur. (13th ed.) § 310.

By its terms the policy on the plaintiff’s life for $10,000 was payable to his wife if she survived, but if she predeceased him, his executors or administrators, or whomsoever he might designate as beneficiaries, were to receive the insurance. Acting at his request the defendant obtained from the company on April 13, 1909, a loan for the plaintiff on the policy of $2,343, being less than the “cash surrender value” at that date. The defendant knew if the policy remained in force it would mature five years later when if surrendered its value in money would be approximately $8,159.70, aud moreover he knew that upon the decease of the insured the full insurance could be collected. The plaintiff assigned the policy to the defendant on May 22,1909, and, the company having accepted the assignment, the defendant had acquired the right to this amount at least, if he continued the payment of the annual premium of $440, the yearly interest of $116 on the loan, and paid the loan at maturity of the policy. The premium and interest were payable semiannually in advance, and the loan could have been discharged when the premium became due. But if the evidence leaves no uncertainty as to the defendant’s knowledge of the plaintiff’s needs, the value of the policy, and the profit reasonably to be anticipated, it also shows that the plaintiff had endeavored unsuccessfully to dispose of the policy before soliciting his attorney to purchase. The entire consideration as recited in the assignment included an agreement to pay to the plaintiff an annuity for life of $300 in equal monthly payments, and the likelihood of the plaintiff’s death within less than twenty-five months does not seem to have been within the contemplation of the parties. From his declarations put in evidence under R. L. c. 175, §, 66, and subsequent correspondence, the plaintiff intended the transfer to be conditional, and upon repayment of all advancements with interest the assignment was to be cancelled, and the policy returned. It is stated in the bill, and the declarant’s evidence tends to support the averments, that the agreement to pay the annuity was to be reduced to writing in an independent instrument, and duly executed. The defendant while not denying the oral promise testified that nothing further was done. If the transaction had been between strangers it is hardly conceivable, that he would have advised his client to rely on the assignment, which by the terms of the policy must be transmitted to and retained by the company, as satisfactory evidence of a contract for the payment of an annuity which might run for years and extend beyond the life of the promisor. Cahill v. Maryland Life Ins. Co. 90 Md. 333. Compare Berry v. Doremus, 1 Vroom, 399. The consideration shows such inadequacy as to make the contract decidedly disadvantageous to the plaintiff if he could have carried the policy and had not been in want of ready money. He was, however, of mature age and of much business experience. The inference would not be unwarranted that he was afforded ample opportunity to consider the contract and did not act hastily.

It also appears from the testimony of witnesses apparently disinterested, that soon after it had been completed he expressed himself as being satisfied with the terms of the transaction.

Although falling short of the definiteness which would have made his narrative of what he claimed had occurred more consistent and satisfactory, yet if the defendant, who was a witness in his own behalf, is believed, the parties dealt on an equal footing. No material facts were suppressed, or misleading representations were made. Where fraudulent conduct is charged the appearance of the party implicated and his manner of giving evidence are of great importance in passing upon his credibility. The defendant’s hesitation in the recollection of details, and his lack of certainty, where certainty even if not imperative was most desirable, may have been attributable to an honest failure of memory rather than to an intention to withhold information which might have discredited him and imperilled his professional standing. The judge of the trial court who saw and heard him accepted his evidence as convincing, or he could not have made the.ninth, tenth and eleventh findings found in the memorandum of decision.

A careful examination of the record, while revealing circum- • stances which have a very strong tendency to warrant a different result, does not show that the findings were plainly wrong, and accordingly they must stand. Revere Water Co. v. Winthrop, 192 Mass. 455, 459.

The assignment having been absolute and not conditional the subsequent sale and transfer of the policy by Woods to the defendants Hathaway and Macomber need not be considered. If the assignor is exonerated, their title is not open to inquiry. King v. Cram, 185 Mass. 103, 104. Stewart v. Joyce, 201 Mass. 301. But the decree dismissing the bill must be modified by the omission of costs, and when so modified it is affirmed.

Ordered accordingly.