Case Name: Johnson, Administrator, v. Rolf
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1945-03-19
Citations: 208 Ark. 554
Docket Number: 4-7153
Parties: Johnson, Administrator, v. Rolf.
Judges: 
Reporter: Arkansas Reports
Volume: 208
Pages: 554–569

Head Matter:
Johnson, Administrator, v. Rolf.
4-7153
187 S. W. 2d 877, 188 S. W. 2d 137
Opinion delivered March 19, 1945.
Ward Martin, for appellant.
John M. Lofton, Jr., and Owe,ns, Ehrman & Mc-Eaney, for appellee.

Opinion:
Griffin Smith, Chief Justice.
We are asked to reverse tke Chancellor's finding that certain writings were not the voluntary acts of appellee; that their terms should not be enforced as contracts because appellee was overreached when his signature was procured in circumstances rendering the transaction unconscionable.
When suit was filed in mid-1942, payments aggregating $3,350 had been made for legal services it is contended had originally been evaluated at $1,000 cash.
The controversy leads back to the act of Few York Life Insurance Company in discontinuing disability bene fit payments guaranteed to William A. Rolf, auxiliary to luis $10,000 life policy of March 2, 1927. Upon proper proof that the insured had become totally and presumptively permanently disabled, the Company would pay $100 per month and waive subsequent policy premiums. If death occurred as a result of an accident the sum payable was $20,000.
In 1935 Rolf became disabled within the meaning of the policy and payments were begun, with waiver of premiums. During the latter part of May of the following year the Company was advised that Rolf had made material misrepresentations in his application for insurance. It was recognized that the contestable period as to death benefits had expired; hence, contention was that disability commitments, having been fraudulently procured, were not binding. The Company returned that portion of the annual premium of $481.90' apportionable to disability and demanded payment of premiums on the life policy proper.
Upon receipt of the Company's letter of August 21, 1936, in which its views and purposes were expressed, Rolf called on Tom Poe at his law office in Little Rock. Appellee testified that Poe agreed to represent him for $1,000 in cash, or in the alternative the fee should be $2,000 payable from half of benefits as recovered.
Appellee admitted that he signed a so-called agreement dated September 2,1936, by the terms of which Poe was employed ". . . to prosecute the claim for money due by reason of insurance, . . . [Poe's compensation to be] fifty percent of all sums hereafter collected, whether by suit, compromise, or otherwise."
November 27, 1936, New York Life filed suit in the United States District Court at Little Rock for cancellation of the disability contract and the provision relating to accidental death. The Company demanded return of $600 it claimed had been erroneously paid Rolf.
December 14, 1936, Rolf and his wife signed another writing whereby Poe was employed. Mention was made of the Federal Court suit and other matters affecting Rolf's rights. The attorney's compensation was stipulated to be fifty percent of all sums thereafter collected as disability payments, ". . . and also twenty-five percent out of all sums heretofore collected or otherwise obtained . on account of waiver of premium, and accidental or natural death indemnity, paid under the provisions of such policy, whether by suit, compromise, or otherwise."
Rolf's motion to dismiss was sustained in Federal Court. Meanwhile the insured had sued in Pulaski Circuit Court. This proceeding was dismissed by agreement, and payments were resumed.
June 25, 1937, Rolf assigned to Poe half of the monthly disability payments and a fourth of any amounts that might become due because of accidental or natural death. Rolf's wife joined in this instrument.
Poe died May 8,1941, and C. E. Johnson qualified as administrator and has continued as such.
There is no appeal from that part of the decree denying appellee's prayer for recovery of $1,550—the amount collected in excess of $2,000. It is conceded that claim for this item was not filed with the administrate v within the statutory period of one year.
Attorneys for appellee say in their briefs that appellee's signature was obtained while he was suffering from extreme illness, "and was in no mental condition to understand what was being done." It is asserted that he relied solely on the integrity of his attorney, and that Mrs. Rolf acted on instruction of her husband.
It is axiomatic that an attorney occupies a position of trust respecting business and matters entrusted to him and communications made. Although prior to creation of the relationship each deals with the other in his own interest, their positions ordinarily are unequal. While the client is presumed to be competent to protect his rights in making arrangements with his attorney— and in that respect the attorney is not acting for the person who is about to become a client—still (with but rare exceptions) the lawyer's knowledge respecting probabilities of success, his understanding of the work involved, and his ability to appraise with reasonable accuracy the elements of 'time, effort, risk, and research—these things are peculiarly within the attorney's province.
No rigid rule can be laid down to circumscribe the bounds beyond which the attorney may not go. It is sufficient to say that in the vast majority of cases clients receive the highest degree of consideration and are not coerced, deceived, or overreached. Perhaps in the instant controversy there was no intent to do so: merely an error in calculating the full return. It is difficult to believe that if Poe had survived he would have insisted upon full execution of the letter of the contract. We prefer to assume that after receiving $2,000—double the amount originally asked, because payment was contingent—the account would have been satisfied, and the transaction would not be treated as insurance for the benefit of the attorney.
There is no doubt that Rolf signed the papers. His signature, per se, is admitted; and if he .was not overreached the payments should be upheld, and effect would be given the agreement of September 2nd, to the exclusion of oral understandings. It cannot be said that essentials of the discussions relating to a fee were not merged with the writing of September 2nd. If it were necessary to decide whether the contract of September 2nd, or that of December 14th, controlled we would hold in favor of the former.
There is testimony-—and we think it preponderates —that Poe's written proposals were read to Rolf. This, in the absence of relationships that were subject to the closest scrutiny, would justify a holding that the insured voluntarily subscribed and understood what the terms were.
Rolf's contention is that because of physical afflictions and bodily pain, he was mentally or emotionally disabled to an extent which deprived him of capacity to appreciate (if he understood) the full significance of his act. The plea is that having been told by Poe that a cash fee of $1,000 (or $2,000 contingent upon recovery) would be appropriate, he did not observe the changes. While the agreements were being read to hiiñ. he assumed, they substantially embraced the terms verbally agreed to. The clear inference to be drawn from appellee's' testimony is that he did not say or do or indicate anything that would justify the attorney in believing that a continuing obligation, indeterminable as to amount, was to be substituted. In the absence of any conduct on appellee's part justifying Poe in believing that substituted terms would be satisfactory, appellee says he had a right to think that no greater burden was being imposed than possible payment of $2,000.
We recognize and emphasize the principle that an unambiguous contract, entered into by competent parties, and relating to matters as to which there is no statutory interdiction, is binding upon those who make it, provided it is not contrary to public policy. Certainly, when such parties engage in preliminary discussions regarding their purposes, and seemingly reach an agreement, then reduce their accord to writing, parol testimony will not be heard in contradiction.
In Norfleet v. Stewart, 180 Ark. 161, 20 S. W. 2d 868, Chief Justice Hart expressed the views of the Court regarding the relationship between' attorney and client [after the contract had been entered into] as one forbidding the attorney, to misrepresent any fact. On the contrary, said the Chief Justice, there must be an entire absence of concealment or suppression of any facts within the attorney's knowledge which might influence the client, and the burden of establishing fairness of the transaction under investigation rests upon the attorney.
Approved principles are stated in Thweatt v. Freeman, 73 Ark. 575, 84 S. W. 725, a qiiotation being: "Equity regards the relation of attorney and client much in the same light as that of guardian and ward, and will relieve a client from hard bargains or from an undue advantage secured over him by his attorney. And the client, in order to secure sucli relief, is not bound to show that there has been any imposition or fraud, nor is the transaction necessarily void; but if it is a transaction in which the relation between the parties exerted, or might reasonably have exerted, any influence in the attorney's favor, then the burden of establishing its perfect fairness is thrown upon the attorney. ' '
We think that in preliminary discussions which have for their purpose creation of the relationship of attorney and client, good faith is likewise demanded. The attorney belongs to a profession recognized by law. His conduct is impliedly avouched by the authority which certifies his qualification to enter the field and to continue in the practice.
In the case at bar strong circumstantial evidence supports Bolf's contention that after Poe had accepted employment to reinstate disability payments, under a contract Poe wrote, which fixed compensation at half of the recovery of $100 per month, he obtained signatures to the contract of December 14th, and to the assignment. The Second contract allowed an additional fee of twenty-five percent of the death benefits. This occurred at a time when the Insurance 'Company admitted incontestability of the principal policy.
The fact that Poe prevailed upon Bolf to sign an agreement vastly increasing his interest after the attorney had stated what his fee to conduct the litigation would be, discloses imposition of the attorney's will to the exclusion of Bolf's capacity to act with discretion. The Chancellor seemingly thought Bolf had been overreached, and believed in the circumstances of the case there was want of accord. In fact, the attorney's control was such as to vitiate the contracts and assignment, and relegate appellant to a quantum meruit basis.
Affirmed.