Case 84 — Action by Administrator to Settle Estate of His Intestate

January 10.

#### Whitlow’s Admr. v. Whitlow’s Admr.

APPEAL FROM WABBEN CIRCUIT COURT.

Judgment Affirmed.

Witnesses — Transaction With Person Since Deceased — Attorney and Client — Contingent Fee — Construction of Contract as to Expenses.

Held: 1. To render a person incompetent to testify as to a transaction with a person since deceased, it is not necessary that he should he a party to the litigation, it being sufficient that he would have to reimburse the person for whom He offers to testify if the decision should be against him.

2. Where a contract with an attorney for a contingent fee provides that, in the event of recovery, the “necessary expenses” of the attorney are to be first paid, and his fee to be estimated on the balance, the fees of assistant counsel employed by the attorney can not be deducted as “necessary expenses.”

PROCTOR *&*HERDMAÑ, JOHN W. RAY, and WRIGHT & McEL-ROY, Attorneys for appellant.

The agreed compensation was for the personal services of Proctor. ' The other counsel was employed with the knowledge of and without objection from either administrator and by the express contract of one. Their services were valuable and were accepted, and the beneficiary wants the benefit of such service without paying for it. Oiir position is that the fees of the gentlemen should be borne equally by Proctor and the plaintiff in the action — that is, that it should be paid out of the fund recovered, and then Proctor’s fee fixed as per contract out of the balance of the fund.

JOHN M. GALLOWAY, Attorney for appellees.

1. The contract between Proctor and the administrator was a written one, and recites that Proctor is employed to prosecute suit against the L. & N. R. R. Co. for the killing of his son in Tennessee, Proctor to have absolute control of the case and to have one-third of the sum collected on judgment of the War*574ren Circuit Court, and if suit was filed and prosecuted in Tennessee, or was taken to the Kentucky Court of Appeals, one-half of the sum recovered, Proctor’s necessary expenses to be first paid out of said fund.

*1!.*There is nothing in this contract which authorized Proctor to employ attorneys to aid him at the expense of the estate, and such power can not be presumed or found by implication.

3. Proctor’s evidence as to transactions or conversations had between him and Whitlow’s administrator, who was then dead, was incompetent, and was properly excluded by the lower court. McDonald v. Same, 96 Ky., 209; Apperson’s Exr. v. Exchange Bank of Kentucky, 10 Ky. Law Rep., 943; Hopkins’ Admr. v. Father, &c., 86 Ky., 223.

Opinion op the court by

JUDGE O’REAR

Affirming.

One T. P. Whitlow sustained personal injury on the Louisville & Nashville Railroad, in Tennessee, prior to November, 1889, he being then a minor, and in the employ of the railroad company. From this injury he died. His father, Wyatt Whitlow, who claimed to inherit as sole heir at law of the deceased son, and who qualified as his administrator in Kentucky, contracted with B. F. Proctor, an attorney at law, to take charge of and prosecute the claim against the railroad company for damages resulting from the injury and death of the son. This contract, which w^s dated November 20, 1889, provided that Proctor was to have a sum equal' to one-third of the recovery if the claim was compromised, or if suit was instituted and successfully prosecuted in the circuit court of Warren county, Ky.; but if suit on the claim were required- to be and was instituted in Tennessee, or if in Kentucky and appealed, then the attorney was to receive a sum equal to one-half of the recovery; ana all compensation was contingent upon success. The contract further provided; “In event of recovery, the necessary expenses of said Proctor incurred in this behalf are to be first paid, and his fee is to be estimated on the balance, being equal *575to one-tbird or one-half of such balance as aforesaid.” Under this contract Proctor instituted an action on behalf of Wyatt Whitlow, as administrator of T. P. Whitlow, against the Louisville & Nashville Railroad Company in the Warren Circuit Court of Kentucky. He employed Judge R. Rodes to assist him in the prosecution of the case, who did participate in the trials below. The trials there finally resulted in a verdict and judgment for $2,000 in favor of Whitlow, administrator, against the railroad company. From this judgment 'the railroad company prosecuted an appeal to the superior court, and superseded the judgment. This appeal being dismissed, with damages, the railroad company then prosecuted an appeal to this court, which was affirmed. Proctor retained as assistants in the superior court and this court in that case Mr. E. W. Hines, of the Frankfort "bar, and subsequently, in the matter of appeal in this court, Judge W. S. Pryor. To these three attorneys Proctor agreed to pay, and did pay, a sum aggregating $400 for their services named. The railroad company paid Proctor, as attorney for the administrator, the full amount of this judgment, damages and costs, aggregating some $3,200.76. In the meantime Wyatt Whitlow had died, and L. R. Porter was appointed and qualified as administrator de *bonis non*of T. P. Whit-low, deceased, and C. C. Jones and George Franklin appear to have qualified as administrators of Wyatt Whit-low. This action seems to have been instituted in the Warren Circuit Court for the purpose of settling the estate of Wyatt Whitlow, and was referred to the commissioner for the purpose of settling with L. R. Porter as administrator *de bonis non*of T. P. Whitlow, Proctor appearing to have paid over to Porter the sums received by him on this claim from' the railroad company. The com*576missioner charged Porter with total amount paid above stated, and credited him by various items of costs and expenses incurred in the prosecution of the suit against the railroad company, including the fees of $400 to attorneys above named. To this report of settlement Jones and Franklin, as administrators of Wyatt Whitlow, filed exceptions as to payment of the $400 fees', and their allowance as credits to the administrator. The result of this was to require the payment of one half of these fees' by Wyatt Whitlow’s estate. The trial resulted in a judgment sustaining the exceptions, and directing L. R. Porter, as administrator of T. P. Whitlow, to pay to the court’s commissioner the balance in his hands as shown by the settlement, and in addition the sum of $200, the one-half of the fees paid to Rodes, Hines and Pryor. The court furthermore adjudged upon the issue1 as to whether the fund coming from Porter, administrator, belonged to Wyatt Whitlow’s estate, or to Nancy, his wife, that it all belonged to Wyatt Whitlow’s estate. The correctness of this last feature of the judgment is not now here for consideration, the sole questions presented on this appeal being whether the estate of Wyatt Whitl-ow is entitled to the money it was required to pay to Attorneys Pryor, Rodes and Hines, or whether the administrator should be credited by such payment as having been properly made under the authority of the contract with Proctor. Incidental to the determination of this question, the court is required to pass upon the competency of the testimony of Mr. B. F. Proctor concerning the alleged understanding between him and the decedent, Wyatt Whitlow, as to their sharing in the payment of the fees to the attorneys named. It is asserted by Proctor that he and Wyatt Whit-low agreed, subsequent to the written contract in evidence, *577tbat it was necessary to retain additional counsel in the prosecution oí the claim, and that fee's to be paid them were to be borne equally by Proctor and Whitlow. On the trial of the exceptions, Proctor attempted to testify to this oral transaction with decedent, Wyatt Whitlow, which was objected to by appellees, and the objection was sustained, to which appellant excepted.

Under section GOG, subsection 2, Civil Code Practice, it is provided that “no person shall testify for himself concerning any verbal statement of, or any transaction with, or any act done, or omitted to be done by, one who is . . . dead when the testimony is offered to be given,” etc. It is contended that inasmuch as Proctor was not a party to this litigation, the provision of the Code above did not apply. We are of the opinion that the court below ruled properly in rejecting this testimony. This court, in an opinion delivered by Chief Justice Pryor in Hopkins’ Adm’r v. Faeber, 86 Ky., 223, (5 S. W., 749), wherein this question was involved, said: “The. fact that the personal representative or the trustee may have an interest in the recovery does not affect the question involved, or make those interested with him competent witnesses. ... In testifying in this ease the witness was testifying for herself against the estate of the decedent, and her testimony controlled the extent of the recovery.” The same rule of construction is announced in the case of Apperson’s Ex’x v. Bank (Ky.), (10 S. W., 801). The court, in considering the section, said: “While we do not think it was intended to limit the application of that section to the testimony of a person a party to, and directly interested in, the result of a suit with a representative of one who is dead; yet, to render such testimony incompetent, *578it must appear that it will have the effect of directly or' indirectly benefiting the person giving it pecuniarily.” In this case Proctor collected the money from the railroad company, and paid part, or $100, of it to the attorneys named, and, after paying other expenses incident to the suit, deducted his fee of one-half of the remainder. There> fore, unless his testimony should prevail he would be compelled to reimburse the administrator by the amount thus paid the other attorneys named. We conclude that he was incompetent as a witness concerning this particular transaction with decedent.

This leaves, then, but one question to be determined on this appeal, and that is whether the part of the contract quoted above authorized the expenditure as “expenses” to the assisting attorneys. Unless the words, “the necessary expenses of said Proctor incurred in this behalf,” include such items, then they are not provided for in the contract. It will be noticed that the decedent was contracting for such legal services as were probably necessary to recover on his claim against the railroad company, and it must be admitted that he madie a liberal provision in this respect. The contract does not intimate that additional counsel would be required, but anticipates other expenses, for traveling and such items, as the contract contemplates that the action might have to be brought in Tennessee, or, if instituted in Kentucky, might have to be followed or taken to the court of appeals. The fact that Wyatt Whitlow was- present at the trial when Rodes participated, and made no objection to his so acting, is not a sufficient circumstance from which to draw a conclusion that he knew h'e was to pay for Rodes’ services. It is just as reasonable to presume that he expected Proctor to furnish all legal services needed under his contract, *579and .that he had made some arrangement with his co-ooun-sel; and this assumption is borne out by the testimony of Rodes, who says that his contract was with Proctor alone, and that Proctor settled with him the fee. It follows from the foregoing that the judgment must be affirmed, which is done, with damages.