Court Opinion

ID: 6484151
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:07:43.296445+00
Date Added: 2024-06-11T15:54:15.878988
License: Public Domain

DISSENTING OPINION OF
GALBRAITH, J.
This^is one of the series of disbarment proceedings growing out of the recent litigation concerning the proceeds of the sale of the John K. Sumner reef property to the Oahu Railway and Land Company.
It is charged in the information filed by the Attorney General that J. Alfred Magoon, a member of the bar of this court, “has been guilty of professional improprieties, malpractice and 'gross misconduct,” setting out specific charges. It will be necessary here to consider only the specifications that find support in the evidence.
*254These are as follows: 1. “That on or about the 4th day of •September, 1902, one Maria S. Davis brought an action before a judge of the Circuit Court of the First Circuit, of the Territory of Hawaii, to declare her brother, John K. Sumner, non compos mentis, and to put him under guardianship, as an insane person; that on the trial of said action, said J. A. Magoon appeared as one of the attorneys for Maria S. Davis; that there.after, and on or about the 13th day of October, 1902, the said action was compromised and settled by the said Maria S. Davis receiving from John K. Sumner the sum of ten thousand dollars for herself, and five thousand dollars for the payment of her attorneys. That the said J. A. Magoon, for his services in said action, received the sum of two thousand five hundred ■dollars.”
2. “That the said John IL Sumner was a man of upwards of the age of 84 years, with little or no knowledge of business, •or the value of money, and, by reason of his great age and lack ■ of knowledge, w'as easily influenced and controlled, all of which facts were well known to the said J. A. Magoon.”
The information after reciting that-subsequent to the settlement of the guardianship suit Magoon was employed by Sumner as one of his attorneys in the Hopert-Sumner case, a suit in •equity in the First Circuit Court, involving the construction of the trust deed from Sumner to the Bishop and the ownership of the $48,025, the remainder of the proceeds of the sale of the reef property, and that on January 12, 1903, that suit was decided in favor of Sumner by the Circuit Judge and that on appeal to this court that decision was affirmed on June 25, 1903, -charges further,
3. “That on or about the 26th day of June, 1903, said’ • J. A. Magoon persuaded and induced said John K. Sumner, although well knowing his weakness and inability to understand financial matters, to pay him a fee for his services in the aforesaid case of Ropert v. Sumner the sum of four thousand dollars, he, the said J. A. Magoon, well knowing that said John K. Sumner had paid George A. Davis the sum of two thousand -dollars as associate counsel with said J. A. Magoon in said case, •and that he, the said J. A. Magoon, and the said George A^ Davis had just prior thereto, and on or about the 13th day of •October, 1902, obtained from the said Sumner the sum of five *255"thousand dollars for legal services in the suit of Maria S. Davis .above named.”
“And complainant charges that said fee was grossly excessive, in view of the services rendered, and the amount of money recovered, as well as the amount of money previously paid hy said John K. Sumner to said J. A. Magoon and George A. Davis, and that said Magoon, in inducing said Sumner to pay said fee and in taking advantage of his age and infirmities as .aforesaid to charge and obtain such fee, was guilty of gross professional impropriety and misconduct.”
The respondent admits the allegations made in the first charge as above set out but attempts to justify his conduct on the ground that the services rendered by him in that case were reasonably worth $2,500, and that that suit had “absolutely no connection” with the Ropert-Sumner case in which he appe'ared for Sumner and charged the $4,000 fee.
The only evidence on the question of the reasonableness of the fee charged in the first suit is the testimony of the respondent that it was reasonable and the record in the case, so far as the record shows there was no intricate or difficult questions of law involved in the guardianship suit. It appears to have been a simple probate case and although the trial extended over nine or ten days I could not find as a matter of law or fact that five thousand dollars was a reasonable fee for two firms of attorneys appearing for the petitioner in that case. While the guardianship and Eopert-Sumner suits were separate and distinct actions I cannot find that thev were absolutely disconnected. The attorneys’ fees in each case were paid by J. K. Sumner and from the same fund, namely, the one hundred and ten thousand dollars paid for the reef property. So far as the attorneys’ fees and John K. Sumner are concerned the suits were intimately ■connected.
As to John K. Sumner’s mental and physical condition and inability to take care of his own as charged in the second allegation of the information the “respondent admits that John K. Sumner is a man of upwards of the age of eighty-four years, but denies that he has little or no knowledge of business or the *256value of money; and further denies that by reason of his great age and lack of knowledge, he is easily influenced and controlled. On the other hand respondent affirms that said John K. Sumner is a man of large business experience for one in his walk of life, and with his education and opportunities. Respondent believes that J. K. Sumner has a keen appreciation of the value of a dollar, is economical and saving, but respondent further believes that said J. K. Sumner is sometimes inclined to be too credulous to those who hold out flattering offers to him. That said J. K. Sumner is a man of strong will and firm purpose, and cannot be easily influenced by threats or promises to do that which he has set himself against, or which he thinks is improper.” This quotation is made from the sworn answer of the respondent. It is supported by the testimony of the respondent at the hearing and is opposed. 1. By allegations made by the respondent in certain sworn pleadings filed in the Circuit Court of the First Circuit, namely, in the bill of John II. Sumner, a non compos mentis, by his next friend, Maria S. Davis, v. M. P. Crandall filed February 18, 1895, and offered in evidence in this case, wherein it is alleged “That the mind and memory of the plaintiff have for sometime been failing and that he is now and for some months last past has been unable to understand his affairs and to intelligently transact business.” This bill is signed “J. Alfred Magoon, Solicitor for the plaintiff.” Further support is found- in the allegation in the petition in the guardianship case filed September 4, 1902, wherein the respondent appeared for the petitioner, and received a fee of $2,500 for so doing. “That John K. Sumner is of unsound mind and has been for several years past and has been and is unable to transact any business or in any way care for and control his property.”
2. By the finding of this court in the decision rendered in the Ropert-Sumner case, the very case wherein the respondent charged the fee of $4,000 for his services, that “Sumner was an old man, weak-minded and easily influenced.” There is other evidence that supports the correctness of this finding but *257tbe foregoing is ample to sustain tbe allegation of tbe information tbat Sumner was, on tbe 26tb day of June, 1903, a very old man, “with little or no knowledge of business, or tbe value of money, and, by reason of bis great age and lack of knowlr edge, was easily influenced and controlled all of which facts were well known to tbe said J. A. Magoon.”
Tbe respondent denies tbe allegations made in tbe third count above set out and recites in detail in bis answer tbe services rendered, tbe difficulties encountered and overcome in tbe litigation and tbe great value of bis services to Sumner and alleges tbat tbe $4,000 fee was voluntarily and cheerfully paid by Sumner and that $5,000 would have been,^paid if be bad insisted on it and tbat $4,000 for bis services in the Ropert-Sumner case alone “would be a very fair and moderate fee, low feetbat this fee was not only for bis services in tbe Ropert-Sumner case but was in full for services rendered and to be rendered in other cases pending in court against John K. Sumner and in which tbe respondent was of record as counsel, namely, an assumpsit suit for $2,700 tried in tbe Circuit Court and in which judgment was rendered for $1,500, and now pending on excejrtions to this court, and a suit of Willie Ellis to have a guardian appointed for Sumner and an application for an injunction in tbat proceeding; that on motion tbe injunction was denied and tbe petition for guardian was dismissed by the Circuit Judge and that appeals are.now pending to this court, also for services rendered in conferring with certain of Sumner’s creditors and for many other services tbat be cannot now recall.
Tbe following receipt was given in evidence:
“July 26, 1903.
Received from J. K. Sumner Eour Thousand Dollars. In full for professional services in all matters of litigation now pending in which I appear of record as counsel and all past services.
$4000. (Signed) J. Aleeed Magoon."
*258The information against the respondent in this matter was filed and served on July 24th, 1903, two days prior to the date of this receipt. The respondent claims that the date of the receipt was an error; that be wrote “July” for “June;” that be gave no receipt on the 26th of June when the $4,000 was paid and that about a week prior to the filing of the information Sumner and E. W. Davis called at bis office and asked for a receipt and that the above receipt was then written and delivered to Sumner. In this testimony the respondent is corroborated by the evidence of E. W. Davis.
Aside from the date of this receipt there are circumstances that strongly indicate that the claim that this $4,000 fee was for services rendered and to be rendered in other cases as well as in the Ropert-Sumner case, was an after-thought due to publicity 'and the threatened investigation, and to justify the inference that the respondent charged this fee for the Ropert-Sumner case alone. In tbe book which the respondent purchased and opened for Sumner on June 26, 3903, intended to show his disbursements of the $48,025 are two entries, relative to this $4,000 fee, the first is: “To cash paid J. A. Magoon a/o Services 2,000.” Tbe second is: “To cash paid J. A. Hagoon by cheque, 2,000.” There is nothing in these entries to indicate that Sumner or tbe party making tbe entries for him understood that the $4,000 paid the respondent on this day was in full of services rendered even. However, tbe question of what services' this fee was to cover, being in doubt, I am inclined to tbe opinion that tbe respondent is entitled to tbe benefit of tbe doubt and am willing to allow that tbis fee was paid to cover services rendered in other cases as well as in tbe Eopert-Sumner suit. Tbe other cases pending were tbe assumpsit suit of Ah In and the guardianship and tbe injuction proceedings. It is claimed that $250 would be a reasonable fee in tbe former suit and although tbe respondent did not fix tbe amount of tbe fee that be believed should be allowed in tbe other proceedings we assume that $250 would be ample compensation for all services rendered and to be rendered in that proceeding. That leaves *259$3,500 for the fee in the Ropert-Snmner case and the services-of preparing papers and consulting with creditors of Sumner and passing their claims. Among the scale of charges the respondent gives to cover a part of the amount is $50 or $100 for drawing a power of attorney from Sumner to himself wherein it was provided that the respondent should be paid a commission of 5% on the gross amount of all money passing through his hands and $500 for preparing a trust deed from Sumner toR. W. Davis.
It seems that the respondent from the time of his employment in October, 1902, until'the day of payment, June 26, 1903, said nothing about a fee and he was therefore entitled to charge what his services were reasonably worth not what he thought they were worth or as much as he could induce Sumner to pay him. Reynolds v. McMillian, 63 Ill. 46-47; In re Dorland, 63 Cal. 281, 282.
After the decision of this court in the Ropert-Sumner case and the $48,025 had been turned over to Sumner and deposited in the bank, Sumner was, as a matter of course, in a very pleasant frame of mind towards the respondent and it was then in the quiet of respondent’s office that Sumner was asked about the fee. The respondent testifies that he had in mind to charge a fee of $5,000 but he thought that possibly Sumner would give him more so he asked Sumner what he was willing to pay and Sumner replied that he thought $2,500 about right. At this the respondent claims to have been surprised and recounted to Sumner what he had done and intended to do for him and the great value to him of respondent’s services and said that he thought that $4,000 would be a proper fee. Sumner acquiesced and paid the $4,000.
Sumner testifies that while he thought $2,500 was a reasonable fee he paid the $4,000 because he thought the respondent would sue him if he refused to pay it and he did not want another law suit. The fact that Sumner after the payment expressed himself as satisfied and did not make complaint against the respondent cannot materially affect the issue in *260tbis case between tbe court and one of its officers wherein the propriety of the conduct of an officer of the court is questioned.
The question is not whether or not Sumner is satisfied but whether or not respondent was guilty of gross impropriety and misconduct in accepting a fee of $4,000 under the circumstances in this case.
The charge in the information is that this fee was grossly ¡excessive and that the respondent in inducing Sumner to pay it took advantage of his age and infirmities and was therein guilty of professional impropriety and misconduct.
If this were a suit in equity'between the client and the attorney to set aside this transaction or to recover excessive fees there can be no question as to the equitable rule that should be applied. The relation of attorney and client existed at thp time of the payment of this $4,000 fee between the respondent and John K. Sumner.
“The courts of England have uniformly watched all the dealings between attorneys or barristers and their clients with the closest scrutiny, and have established very rigorous rules .¡concerning them. ***** The presumption always arises against the validity of a purchase or sale between the client and attorney made during the existence of the relation. The attorney must remove that presumption by showing affirmatively the most perfect good faith, the absence of undue influence, a fair price, knowledge, intention, and freedom of action by the client, and also that he gave his client full information and disinterested advice.” Pomeroy’s Eq. Jur. Sec. •960.
“A solicitor may purchase from his client, although the bargain would be subject to the most rigid scrutiny, and the onus of showing its fairness lies on the former; but a gift from client to counsel is absolutely void.” * * * * “The general rule of public policy which discountenances transactions between persons who are situated in a confidential relation towards each other, applies with particular force to the case of attorneys at law who are officers of the court, and are, on that ground as well as on account of the powerful influence which they exercise over the minds of their clients, restrained from dealing *261with those whose interest they have in charge.” Bispham’s, Prin. of Eq. Sec. 256.
In discussing a written instrument executed between attorney' and client the Supreme Court of New York said, “In such a case the right of action is not deemed to be established on the instrument, without clear proof, 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 given, or if the proof be insufficient to meet this requirement, the court must hold the case as one-of constructive fraud. (Story’s Eq. Juris. Sec. 511.) The.rule is the same as'to dealings between client and attorney (icL 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 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.” Brock v. Barnes, 40 Barb. 521, 527, 528.
*262In Tyrrell v. Bank of London, 10 H. L. Cas. 26, 43, the Chancellor said, “My Lords, there is no relation known to society, of the duties of which it is more incumbent upon a court of justice strictly to require a faithful and honorable observance, than the relation between solicitor and client; and I earnestly hope that this case will be one of the many which vindicate that rule of duty which has always been laid down, namely, that a solicitor shall not, in any way whatever, in respect of the subject of any transaction in the relation, between him 'and his client, make gain to himself at the expense of his client, beyond professional remuneration to which he is entitled.”
I know of no reason why this equitable principle that looks upon the transactions between attorney and client with suspicion and that casts the burden on the attorney of showing the same to be just and fair and that he rendered full remuneration for the fee received should not be applied in this case.
The respondent has particular reasons for familiariity with this principle since this court not long since applied it in setting aside and annulliúg a transaction with another one of his clients, also an aged man, whose “mind works slowly,” and who “was somewhat dull and simple,” wherein the court found that “Mr. Magoon was acting for both parties.” (Christley v. Magoon, 13 Haw. 402, 405, 409.) .
Has the respondent sustained the onus cast on him by this principle 'and shown that the transaction was just and fair and that the services rendered and to be rendered John K. Sumner were reasonably worth the sum of $4,000? I think that he has failed to do this.
I cannot escape the conclusion that, on the 26th day of June, 1903, the respondent knew that he was dealing with his client, “an old man, weak-minded and easily inflluenced” by a person in whom the client had confidence and that the respondent then knew that he possessed the full confidence of John K. Sumner and that he was in a position where he could exercise great influence with and over John K. Sumner.
*263Tlie respondent selected a most opportune time to make a satisfactory arrangement (to himself) for his fee, at the successful termination of a rather protracted suit and immediately after the fruits of the victory had been deposited in the bank subject to the client’s order, and the place was also favorable for the exercise of undue influence of the attorney over his client, alone in the privacy of respondent’s oflice, no witness being present, (except possibly one of respondent’s partners), even Sumner’s recent close friend and partaker of his bounty, K. W. Davis, was not there. At such a time and place the respondent induced his client John K. Sumner, to pay him a fee of $4,000. The respondent did not suggest to John K .Sumner that he take time to think about the reasonableness of the charge or consult with his friends or some disinterested person who was acquainted with the usual and customary charges for legal services in the community but seems to have hastened the consummation of the transaction. The respondent saws in his evidence “I had to go away so soon, rush up to the court from my oflice. I partly ran, I think to get here just at ten o’clock when court opened.” The money was deposited in the bank between 9 :30 and 10 o’clock. The respondent after the money was deposited, went with Sumner to his oflice, arranged for and collected his fee of $4,000 and was at the court by ten o’clock. This did not leave much time for deliberation. The respondent, possibly thought,
“If it were done, wlien ’tis done, tlien ’twere well,
It were done quickly.”
To establish the fairness and reasonableness of his fee the respondent gives his own testimony that it was so. He does not offer the evidence of any other member of the bar to prove that fact or to show the usual and customary charges for legal services in this community. He does refer to some particular fees allowed by the courts in certain cases but none of these are a vindication of the transaction in question. We had the record in the Hopert-Sumner case before us for some time and are Tather familiar with it and from the record we can form some *264reasonable idea of the value of the services rendered by the respondent in that case. It is possible that my standard of fees for legal services is not as high as that of some members of the bar. At any rate I do not place the same value on respondent’s-services in this case that he does. I am inclined to the opinion, that it is not improbable that much of the acrimony and bitterness and many unpleasant features of the Ropert-Sumner suit and its unfortunate connections might have been avoided if the respondent had been less reckless and more cautious in his method of obtaining the money from the Bishop and in the destruction of the Will and attempted cancellation of the trust deed.
In view of the fact that the respondent and another attorney were paid a $5,000 fee by John K. Sumner in a probate case for a few days work in October, 1902, and his associate counsel in this case was paid a fee of $2,000, this $4,000 fee does seem exorbitant and excessive. It at least calls for more convincing, evidence than that offered by the respondent to prove that he acted “honestly and in good faith” and that this last fee was fair and reasonable and that he “gave value for it.”
What punishment should be administered to the respondent for this gross “misconduct and professional impropriety” is a difficult question. To strike the name of an attorney from the rolls and debar him from following an honored profession is a very serious matter — one that gives the court no little difficulty to determine. There is scarcely a more unpleasant duty that can come before a judicial tribunal than passing on charges of misconduct against an attorney. In such a proceeding the court owes a duty to the community no less than that to the bar; to the former protection against those who violate the obligation of the profession and misuse the office of an attorney and coun-sellor at law and to the latter that its fair name is not brought in to reproach by the conduct of unworthy members. The community, however, does not need protection so much against the attorney who fights in the open, even if he does happen, some time, to get on both sides of the same litigation, as against *265tbe attorney who, when proceedings for disbarment are brought against him, expresses gratitude to tbe Attorney General for bringing them and casts flowers at tbe court which sits in judgment upon him. The attorney with “the candied tongue” is-the real menace to the community and a reproach to the profession. Such an attorney is liable to deceive the credulous and to prey upon the weak and helpless.
I do not believe that the respondent, in collecting the $4,000 fee from John K. Sumner, under the circumstances above set forth, acted “honestly and in good faith.” His desire was to get all he could out of Sumner without offending him, without regard to the value of the services rendered. Taking, advantage of an old man in the condition of John K. Sumner, is a serious offense and certainly deserves reproof and punishment at the hands of the court. The judgment of, the court sends the respondent forth “unwhipp’d of justice.”