
    Case 57 — Action of Besvvick’s Admb. against Smick’s Admb. to Enforce an Alleged Trust.
    May 21.
    Smick’s Admr. v. Beswick’s Admr.
    APPEAL FROM BOYLE CIRCUIT COURT.
    Judgment for Plaintiff and Defendant Appeals.
    Reversed.
    Witnesses — Attorney and Client — Privileged Communication— Transaction with Persons Since Deceased — Constructive Trust.
    Held: 1. Civ. Code Prac. section. G06. subsection 5, providing that “no attorney shall testify concerning communications made to him in his professional character by his client, or his advice thereon, without the consent of the client,” does not prohibit an attorney, in a controversy between his clients, from testifying as to statements made by one of them in the presence of the other.
    2. Under Civ. Code Prac. section 606, subsection 2, providing that no person shall testify for himself concerning any transaction with one who is dead when the testimony is offered to he given, an'attorney, whose fee is wholly contingent upon the establishment of his client’s claim, is not a competent witness for his client as to a transaction with one who is dead when the testimony is offered.
    3. Where the grantor in a deed lived near the grantee’ for nearly thirty years after the execution of the deed, and took no steps to have a trust declared in her favor, a court of equity will not declare a trust in an action brought by her administrator after her death, and after the death of all the parties who may be presumed to know the facts, the claim being stale and improbable.
    ROBT. HARDING & E. V. PURYEAR, foe appellant.
    On July 6, 1869, appellee’s intestate, Elizabeth Beswiek, conveyed one hundred acres of land in Washington county, Kentucky, to appellant’s intestate, Isaac Smick, in consideration of $1,000, paid by Smick to Beswiek, by deed duly signed, acknowledged and recorded September -15, 1869, in Washington county court clerk’s office.
    Appellee claims, not by any pleading but by affidavit and deposition, that at the time and before the deed was executed, a verbal agreement was made by which, (contrary to the terms of the deed) the land was conveyed to .Smick and by which verbal agreement Smick was to pay oif an execution of $216 then in the sheriff’s hands against Beswiek; to rent out and sell the land and reimburse himself and reinvest the balance of the proceeds in land for Beswiek; that in 1889 Smick sold the land for $1,000, and the reasonable rental value thereof from July, 1869 to 1889, with interest, is $1,545.85, and the purchase price of the sale of the land with interest is $2,018.25, the two sums aggregating $3,663, to be credited by $511.06 and $25, leaving a balance of $3,127.55 for which balance appellee recovered judgment below. We contend that the judgment is radically wrong on the following grounds to-wit:
    1. Because the court erred in overruling the demurrer to appellee’s cross-petition.
    2. Because the court erred upon final hearing in not applying the statutes of limitation and dismissing the cross-petition.
    3. Because the deed of Beswiek to .Smick dated July 6, 1869, is the only legal evidence of the agreement between them in regard to the land, and until that deed is set aside, reformed .or attacked for fraud or mistake, it alone must be looked to for the agreement between the parties, and the court erred in not so holding.
    4. Because the court erred in not sustaining appellant’s exceptions to the depositions of C. Terhune, Bettie Lynch, Lydia Good, J. B. Good, Bull, Phillips, Graham and Prewitt, and in considering the testimony excepted to in making the judgment.
    5. Because $1,545.35 of the judgment is for rent, and there is no proof of Smick ever having received a dime or dollar of rent from the land.
    
      AUTHORITIES CITED.
    Green v. Page, &c., 80 Ky., 370; Powers v. Tyler, 4 •Reporter, Feland, 9 R., 105; Saur v. Sayers, 2 R., 229; Hansford v. Dugan, 10 R., 360; ¡Corbin v. Oldham, 1 R., 327; Williams v. Rogers, 14 Bush, 776; Castleman v. Southern Mutual Life Ins. Co., 14 Bush, 202; 1 Greenleaf, sec. 275; Wright v. Shelby R. R. Co., 16 B. Mon., 6; Mutual Benefit Assn. v. Hickman, 86 Ky., 258.
    W. C. BELL & CORNELL TERHUNE, fob appellee.
    For several years prior to-1869, Elizabeth Beswick owned a •tract of land in Washington county, Kentucky, on which she ¡resided with her two sons, George and Philip, and daughter Phoebe. Her two sons at the outbreak of the ¡Civil War went into the Confederate army. Her neighbors were • loyal to the Federal side and on account of the prejudice then existing in her neighborhood, shei removed to Mercer county near her brother, Isaac Smick. At the close ¡of the war, her son Georgé returned, to¡ find the home dismantled and the mother banished; his brother ' Philip had been captured and died in ¡prison. George was not capable of managing the farm, and on account ■of the prejudice still existing in the neighborhood, Mrs. Beswick was unwilling to return to her farm. A judgment had been obtained against lier and she. had no means to pay it and her home was ¡in danger of being sacrificed. Her bachelor brother, Isaac Smick had the money to save the land from sacrifice, and she determined to make him a deed to the land, reciting as a consideration therefor $1,000, and it was agreed that he should take the deed to the land, rent it out, reimburse himself for the money he would'.expend in satisfying the execution and other expenses, sell-the land, collect the proceeds and invest it in a home for her in Mercer county.
    Thus was created a verbal trust' sure, distinct and certain, in which Isaac Smick, standing in close blood relationship to her, took' an absolute deed to himself, which was one of the incidents in the creation of the, verbal trust upon the conclusion ¡of all the parties that the trust' could the better be effected by Mrs. Beswick not appearing upon the record as the real beneficiary.
    Isaac Smick rented or occupied the land for some twenty years, and in 1889 sold it for $1,000, collected all the purchase money except $350 which balance has been collected and is now held by appellant.
    During all these years, Mrs. Beswick and her son, George paid the taxes on this land and the proof abundantly shows thi.': Isaac Smick repeatedly admitted after he sold the land that he held the money for Mrs. Beswick.
    On February 14, 1900, appellant filed his bill for a settlement of the estate of Isaac Smick, there not being sufficient personal estate- to pay his debts, and sought to sell his real estate to pay said indebtedness and in this suit he made appellee a party defendant, and the appellee by an informal answer filed his claim with the proper proof, which was allowed by the court, and from which judgment this appeal is prosecuted.
    We contend that having established a verbal trust by the evidence, the statute of limitation does not run- against it, and the only question is, as to the amount of Smiek’s indebtedness to the estate of Mrs. Beswick.
    AUTHORITIES CITED.
    Pant v. Turner, 96 Ky., G34; Kentucky Statutes, sec. 209, 2543; Helm’s Exr. v. Rogers, 81 Ky., 568, Civil Code, sec. 606, subsec. 5; Story’s Eq. -Jurisprudence, sec. 162; Adams’ Equity, side page, 86; Williams v. Williams, 8 Bush, 251; Gamer v. Gamer, 4 R., 824; Ferguson v. Rafferty, 6 L. R. A., 33; Yeten v. Cammack, 20 L. R. A.,. 113; Beach v. -Cummins, 13 R., S81; Roach v. George, 93 Ky., 609; Monarch v. Jones, S R., 612; Bush v. Walker, 9 R., 777; Gossman v. Gossman, 13 R., 243.
   Opinion op the court by

JUDGE BURNAM

-Reversing.

On tlie 24th of February, 18G4-, Joseph McCloskey and wife conveyed to Elizabeth Beswick a tract of 100 acres ■of land in Washington county in consideration of $1,000, the receipt of which was acknowledged in the deed. On the 6th of July, 1869, Elizabeth Beswick conveyed the same tract of land by general warrant}’ deed to her brother, Isaac Smick, for the recited consideration of $1,000, paid to her by her brother. The deed was written by O. Torlmne, an attorney at law, in the presence of the grantor and grantee and Phoebe Smick and Phoebe and George Beswick. After the execution of the deed Smick took possession of and rented the land for some 20 years, a’ part of the time to the claimant, George Beswick, and in January, 1889, sold it to Galvin Vest in consideration of $100 paid in cash and $900 to be paid in three equal installments, due, respectively, in one, two and three years, for which promissory notes were executed, without interest. Elizabeth Beswiek died in 1898, at the advanced age of 92 years, and her brother followed her in about 12 months thereafter. On the 14th of February, 1900, his administrator instituted this suit in the Boyle circuit court for a settlement of his estate, alleging that the personal estate of decedent was insufficient to pay his debts, and that it would be necessary to have certain real estate sold for this purpose. H. C. Smith, administrator of Elizabeth Beswiek, was made a defendant, and filed the following claim against the. estate:

To rent of her place in Washington Co., from July, 1869, to January, 1889, at $50 per year ' for 19 years and 6 months, the whole aggre-

gating .................................... $ 975 00

To interest on each annual rent for same period.. 570 35

Total ..................................... $1,545 35

Credits.

By execution of Joseph McOloskey, issued from Mercer circuit court against her, and paid by said Smick July 13, 1869 .............................. $216 08

By interest on same to January 16, 1889 ......... 252 72

Taxes paid by Smick for 1S73 on said land, paid April 7, 1875............. 11 70

By interest to January 16, 1889 (see tax receipts hereto attached)........... 9 65

By tax paid by him for 1874 on same land, paid April 17, 1875............ 11 40

By interest on same to January 16, 1889

(see tax receipt hereto attached).... $9 50

Total credits to that date.......... $ 511 05

By balance due him on January 16, 1889......$1,084 30

To amount of sale of land to Calvin Test, January 16, 1889, $1,000 of which was paid in cash ...........-.......................... 100 00

Balance due January 16, 1.889................. $1,134 30

Interest on this sum to Smick’s death, 1899.... 686 25

To cash on land January J.6, 1.890.............. 300 00

Interest on same to February, 1899............ 162 00

To cash on land January 16, 1891.............. 300 00

Interest on same to February, 1899............ 144 00

To cash on land January 16, 1892 ............. 300 00

Interest on same to February, 1899............ 126 00

Balance due.February, 1899................. $3,152 55

By her burial expenses........;.............. 25 00

Balance ................................... $3,127 55

' This claim is mainly based upon the affidavit of C. Ter-Ihune, the attorney who wrote the deed from Elizabeth Beswiek to Isaac Smick in July, 1889. He says, in substance, that at the date of the execution of that deed Mrs. Beswiek still owed $210.80 to Joe McCloskey upon the purchase price of the land, upon which he obtained judgment, and that it was agreed between Mrs. Beswiek and her brother that he should pay olf the debt, and that she should make an absolute conveyance of her Washington county land to him, which he was to rent until he found a ¡suitable purchaser, and was then to sell, and, after repaying' to himself the money advanced to pay off the debt due to McCloskey, to invest the balance of the fund in a home for Mrs. Beswick. The affiant states that he paid no further attention to this matter until Smick sold the land to Vest in 1889, at which time Smick employed him to write a deed to Vest, and he says that at that time he advised Smick to have the cash payment larger, so that he could at once buy some land for his sister in Mercer county; that Smick responded that when he got all the money he would make the investment for her; that he paid no further attention to the matter until Smirk’s death in 1899. Affiant filed this claim as one of the attorneys of George Beswick under a contract that they were to receive for their services a fee equal to 00 per cent, of the amount recovered. He testifies that all the parties who were present at the time the deed was prepared, including the attesting witnesses, were dead, except himself and George Beswick, in whose name the claim was being pros'ecuted; that Mrs. Beswick and her brother lived near each other during the balance of their lives. Mrs. Lynch, who was in the employe of Mrs. Beswick as a cook and wash woman, testifies that while she was living there she heard Mrs. Beswick ask her brother for money, but that he in*ver gave it to her; and that two days before her death Mrs. Beswick requested her to ask Smick for some of “her” money, and that she did so, and he responded that “'she didn’t need it; to let her son George get her anything she wanted.” And one J. B. Layne testifies that some seven or e:ght years before the death of Smick, at a tiine when he was in his employ, he remarked to Smick that he ought to get His nephew George Beswick to live with him; that Smick responded that when he got The balance of the money on the Washington county farm he was going to buy them a place to live on. Upon cross-examination this witness says that he did not speak of this conversation to any one until he made his affidavit in April, 1900, when he was informed by the attorney Terhune that he was wanted as a witness in the ease. There are filed in the record a number of receipts, of which the following is a specimen: “Washington Co., Dec. 10, .1882. Received of George JBeswick the sum of $3.90 in full of revenue taxes, and county levy for the year 1881, including railroad taxes. Taken out of rent, Washington county farm. Sidney Green, Sheriff, by John Burton, Deputy.” Appellants, in their reply controverted the alleged, claim, and also relied upon the lapse of time and the statute of limitation. Appellees responded that Smick, shortly before-bis death, had admitted the trust, and that limitation did not run. Appellants excepted to the deposition of Terhune, which was overruled, and upon final, submission the chancellor allowed appellees' entire claim, from which judgment defendant appeals, and it is insisted that the testimony of the attorney Terhune is incompetent, under subsections 2 and 5 of section 000 of the Code.

Subsection 5 provides that: “No attorney shall testify concerning communications made to him in his professional character by his client,- or his advice thereon, without the consent 'of the client.” But this rule does not apply in this case. Here the controversy is between: parties, both of whom occupy the relation of clients to the witness, and their statements were made in the presence of each other,, and may be proved by him, because such statements are not in their nature confidential, and can not be regarded as privileged communications. We think the reason of the rule has no application in such cases. See Rice v. Rice, 53 Ky., 336. But the other ground presents a much more formidable question. Subsection 2 of section 606 of the Code provides that: “No person shall testify for himself concerning any verbal statement of or' transaction with . . . one who is dead when the testimony is offered to be given, except for the purpose and to the extent of affecting one who is living and who, when over fourteen years of age and of sound mind,' heard such statement, or was present when such transaction took place.” This witness admits that he has a large pecuniary interest in this suit, which is dependent upon the establishment of the ■claim about which he testifies. If his client fails to recover, he gets nothing; if he succeeds, he and his associate counsel will receive a sum equal to one-half of such recovery. In Apperson’s Ex’x v. Bank, 10 R., 943 (40 R. W., 801), this court held that it was not necessary that a witness should be a party to or directly interested in the result of a suit against the representative of one who is dead in order to render such testimony incompetent as to a transaction with the decedent; that to do so it must appear that it would have the effect to directly or indirectly benefit the witness pecuniarily. This wetness has a pecuniary interest in the result of the suit, and it can not be denied that his testimony is the main prop upon which the claim of appellee's rests. The facts of this case distinguish it from Haydon v. Easter (15 R., 597) (24 S. W., 626). In that case it w-as held that Kendel, the attorney for the plaintiff, wras not incompetent, because-the statute gave him a lien for a reasonable fee upon the recovery, there being no proof that ■ho had any other interest, and the plaintiff was primarily liable for his fee, and the statute merely secured this fee by a lien upon the recovery. In this case the client is not liable at all unless there' is a recovery, and the witness’ interest in that event equals that of the client himself. We ihink that the witness had such pecuniary interest in the result of the suit as to render him incompetent to testify ns to statements made by Smiek, and without this testimony the proof wholly fails to support a recovery. But the principle expressed in the maxim, “Vigilantibus non dormhniibus aequitas subvenit,” is an effectual bar to recovery on this claim. The courts of equity will not enforce stale demands where a party has slept on his rights and. acquiesced for an unreasonable length of time. Lord Camden, in Smith v. Clay, 3 Brown, Ch., 640, announces the' principle in these words: “The court of equity has always, refused its aid to stale demands, where the party has slept upon his rights and acquiesced for a great length of time. Nothing can call forth this court into activity but conscience, good faith, and reasonable diligence. 'Where these' are wanting, the court is passive, and does nothing.” This quotation has been frequently quoted, and generally approved. The same principle is announced in 18 Am. & Eng. Ency. Law (2d Ed.), p. 105, in these words: “'Where, from delay, any conclusion at which the court may arrive must at most be conjectural, and the original transactions have become so-obscure by lapse of time, loss of evidence, and death of parties or witnesses as to render it difficult, if not impossible, to do justice, the plaintiff will, by his laches,, be precluded from relief, and it is not even necessary that the court .should be satisfied that the original claim was unjust, or had been satisfied.” In Harrod’s Heirs v. Fountleroy, 26 Ky., 548, it was held that after a lapse of 30 years and the death of both parties to an assignment of a plat and certificate for land the chancellor would not sanction an investigation of the genuineness of the assignment unless the delay be satisfactorily accounted for. And in Taylor’s Adm’r v. Morrison’s Exr’s, 37 Ky., 242, which was a suit to settle a partnership, it was held that after a lapse of 14 years and the death of two of the partners, rendering just settlement difficult, if not impossible, the lapse' of time alone, without being pleaded, as a> conclusive bar, would present an imposing obstacle to any prayer for such settlement of the old partnership accounts. And in Helm’s Kx’r v. Rogers, 81 Ky., 568 (5 R., 569), it was held that where; the relation of trustee was denied, or time and acquiescence had obscured the nal lire and character of (he trust, or the acts of the parties authorized a presumption! unfavorable to its continuance, relief would be refused on the ground of tin* lapse of time and inability of the chancellor to do justice between the parties. And in Bettis v. Allen, 73 Ky., 40, the court refused to enforce1 a- stab1 claim not barred by the statute1 of limitation on the ground of laches. Many other cases might be cited in wliiedi the doe-trine of laches has be>en applied by this court to defeat stale ed'ahns, and none of them more strongly dennande'd its applie-ation than does this case. Mrs. Bes wick lived in the1 immediate neighborhood of Isaac Bniick for nearly 30 years after the execution of the deed, and took no steps to emfeu-e-e the alleged trust, and after her death and the death of her brother and of all the parties who were1 present at its execution, and who may be presumed to have known of the alleged contemporaneous parol agreement, this suit is brought. The claim is stale and improbable, and upon the showing-made the e-hancellor should have declined to allow it against the estate of dee-edent.

For reasons iudicateel, the judgment is reversed, and» cause remanded, with instruction to reject the claim, and for other proceedings consistent herewith.

Whole court sitting.

Petition for rehearing by appellee overruled.  