The opinion of the court was delivered by: GOURLEY
The plaintiff brought this action in equity for the cancellation of a deed, said proceeding having been filed in the Court of Common Pleas of Mercer County, Pennsylvania, on the 30th day of October, 1944. There being a diversity of citizenship between the parties, the defendant removed said cause to the United States District Court for the Western District of Pennsylvania, and although a proceeding was filed to remand to the Common Pleas Court of Mercer County, another member of this Court refused said request and ruled that jurisdiction existed. This member of the Court believes that said action was proper and, as a result thereof, proceeded to enter into a full hearing of all the facts pertaining to the issues joined in the pleadings.
In this case it appears that the claimant, Steve Popovitch, is a widower who is now past 78 years of age. He is illiterate, being unable to read or write in any language, although he is able to speak and understand the Rumanian, Hungarian, and English languages in an intelligent manner. He had been engaged in business as a retail grocer and from time to time would buy cattle and stock, although during the later years of his life he found it necessary to secure help since his activities were somewhat limited.
The defendant, Mary P. Kasperlik, is a daughter of the plaintiffs. She is 39 years of age, is able to read and write the English language fluently and is of marked intelligence.
Some twenty-five (25) years prior to the occurrence of the grievance now complained of, Steve Popovitch, the plaintiff, and his deceased wife, Mary Popovitch, became vested in fee simple to the real estate involved in this proceeding and maintained a home for themselves and their four children. As the children matured in age, for personal and variable reasons, they established homes for themselves but, at one time or another, one of said children continued to reside with the parents when the circumstances in the family so required.
At the time of the marriage of the defendant, Mary P. Kasperlik, she was a member of the family household, which was during the latter part of April, 1928. She and her husband resided at various places until 1934 when the defendant and her husband again established their residence with her parents. This relationship continued until a short time subsequent to the death of Mary Popovitch, wife of the plaintiff and mother of the defendant, which death occurred on or about the 9th day of November, 1941. During this period of time the defendant rendered services at the place of business conducted by the plaintiff, was paid in connection therewith and, in addition thereto, enjoyed privileges of the home. For some period of time prior to September 18, 1941, Mary Popovitch, wife of the plaintiff and mother of the defendant, became ill and was confined to her bed. At this time the defendant gave what attention was necessary to aid and assist her mother, and continued to render this service until the time of her death on November 9, 1941. After Mary Popovitch became ill, a discussion was held between the members of the family as to the support and maintenance of the plaintiff and his wife during the remainder of their lives, and as to the disposition to be made of the real estate which is involved herein. The plaintiff knew professionally an attorney by the name of Jarrett, and someone in the family a short time prior to September 18, 1941, requested Attorney Jarrett to come to the home. The plaintiff advised Jarrett as to his wishes, but due to limitations which existed on Jarrett's time, he recommended Attorney Armstrong. Within a few days Attorney Armstrong consulted with the plaintiff and defendant in the presence of each other.
Under the terms and provisions of said deed, the plaintiff and his wife, who was ill and bedfast, conveyed said real estate to the defendant, subject, however, to a life estate in favor of the plaintiff and his wife, for and during the term of each of their lives together with the right to the rents, issues and profits of and from said property as long as they or either of them shall live.
There does not appear to be any conflict as to the circumstances in connection with the signing of the instrument, the plaintiff having signed by an 'X' mark in the presence of the defendant and Attorney Armstrong, and the plaintiff's wife, Mary Popovitch, having signed the instrument in the presence of the defendant, Attorney Armstrong and a customer who was in the store during this period of time; the plaintiff was not present when his wife placed her 'X' mark on the instrument.
There is a conflict as to whether or not a notary public came to the home of the plaintiff and his wife to acknowledge the instrument in behalf of Mary Popovitch, or as to whether or not the plaintiff, Steve Popovitch, went to the office of the notary public to acknowledge the instrument.
The plaintiff contends that he intended to execute a will, that he had so advised the defendant and explained to the attorney his intention in this respect. The plaintiff asserts that due to the actions of his daughter and his attorney, the trust which he had reposed in them had been betrayed and, as a result of the existing fraud, the conveyance should be set aside and declared void.
The defendant contends that the plaintiff and her mother were fully aware and understood the nature of the transaction involved, and it was their wish and desire that the property be conveyed to the defendant, subject to a life estate in favor of her mother and father.
Subsequent to the execution of said deed and during the month of September, 1941, the exact date of which is not known, the plaintiff again consulted Attorney Armstrong, and as a result thereof, a supplemental agreement was executed by the parties. It was set forth therein that the defendant, Mary P. Kasperlik, was to have the right to occupy said premises with the plaintiff and his wife, if she so desired, together with her husband; that the taxes on said property, the necessary repairs, insurance charges and like charges were to be paid by Mary P. Kasperlik. It also provided that part of the rental for the premises was to be paid to Mary P. Kasperlik and part to the plaintiff. Furthermore Mary P. Kasperlik agreed to provide the necessary care and maintenance for the plaintiff and his wife during their lifetime.
After the death of Mary Popovitch on November 9, 1941, the plaintiff went to make his home with the defendant and her husband at Youngstown, Ohio. The plaintiff resided with the defendant and her husband for a period of three days, and he returned to Sharon, Pennsylvania, where the real estate in question is situate, to reside with a son. After the return to Sharon and the establishment of his residence with a son, the plaintiff contends that he first realized that he had signed a deed rather than a will.
Due to Attorney Armstrong having represented both the plaintiff and the defendant in the former matters of business which have been referred to, he elected to withdraw from the consideration of the differences which existed and, as a result thereof, the plaintiff secured the services of other legal counsel.
Through the guidance of his new legal counsel, Attorney Marks, an agreement was executed on the 5th day of June, 1942, between the plaintiff and the defendant, whereby it was intended and believed that the differences between the parties were settled and adjusted. It was agreed, inter alia, that the agreement which was executed in September, 1941, which was subsequent to the execution of the deed, but the exact date of which is not recalled by any person, should be cancelled and declared null and void. It was set forth that the full provisions of the deed were to be reinstated. The plaintiff was to have all the income, issues and profits from said real estate for and during the term of his life, and was to be responsible for the upkeep and repairs of said premises, and make payment of the taxes and insurance. The other provisions of the agreement are not pertinent as far as the real estate transaction is concerned, but had to do generally with the payment of moneys by the defendant to the plaintiff, and in consideration of which together with the reinstatement of the provisions of the deed executed on September 18, 1941, a full and complete settlement and satisfaction of the claims of the plaintiff and defendant were to be effected.
The attorneys who represented the plaintiff were called as witnesses by the defendant and testified in the trial of this proceeding. Attorney Armstrong stated, in substance, that the plaintiff was fully aware of the nature of the instrument which he executed on September 18, 1941, and that he had prepared the deed after a conversation had been previously had with the plaintiff in the presence of the defendant. Prior to the time that the deed was executed, he either read or explained the contents of the deed. That the plaintiff placed his mark on the deed in the presence of Attorney Armstrong after said attorney had written the name of the plaintiff on the deed. Attorney Armstrong personally took the deed to the bedside of Mary Popovitch, and she placed thereon her 'X' mark in his presence. In other words, Attorney Armstrong testified that both the plaintiff and his wife were fully aware and informed as to the nature of the instrument which they were executing, that it was their desire and intention to vest the title to said real estate in their daughter or the defendant, and to reserve for themselves a life estate. Attorney Armstrong also stated that an agreement was prepared at the request of the plaintiff and defendant a short time after the deed. The exact date in September of 1941 was not recalled but he incorporated in this agreement what he was advised by the plaintiff and the defendant.
It would appear that Attorney Armstrong was acting as attorney or in a confidential capacity for both, the plaintiff and the defendant, during the discussions about the deed and agreement due to the fact that each of them considered the matters with him prior to the time that the instruments were drawn.
One of the most settled rules of law which confronts courts is -- that confidential communications between an attorney and client are to remain inviolate, and it is only where a client waives this privilege that an attorney is permitted to testify as to any facts or circumstances which came to his attention or knowledge while acting in a confidential relationship. Alexander v. Queen, Appellant, 253 Pa. 195, 203, 97 A. 1063.
However, where an attorney at law is the legal advisor of both parties to a transaction, and in the preparation of the papers, at the instance of both, receives communications from each in the presence of the other, such communications are not privileged from disclosure between the parties. Doll, Exr., Appellant, v. Loesel et al., 288 Pa. 527, 533, 136 A. 796.
Furthermore when the question of the integrity of a reputable member of the bar arises, the attorney should be entitled to explain the circumstances, since for him to keep silent would justify inferences being drawn that some act or deed was committed on his part that was not legal or in accordance with the direction of his client. Thomas v. Herring, Appellant, 244 Pa. 550, 91 A. 500.
The agreement executed on the 5th day of June 1942, purported to adjust all differences existing between the plaintiff and the defendant. Although Attorney Marks prepared the agreement as counsel for the plaintiff, he was called as a witness by the defendant. No objection was made by the plaintiff or his counsel, or was the question of privileged communication raised, and in addition thereto plaintiff's counsel cross-examined Attorney Marks. Under the doctrine of privilege, if it had been exercised, Attorney Marks would not have been permitted to testify. Since the question of privilege was not exercised, the testimony of Attorney Marks is considered by the Court in the adjudication of the issues joined herein.
There is no question in the mind of the Court but what the relationship existing between the plaintiff and the defendant was of a confidential nature, and due to the severe illness of the wife of the plaintiff, he was reposing absolute faith, reliance and trust in his daughter. I further believe, from personal observation of the plaintiff during the trial of this proceeding, that the plaintiff understands the English language. He was able to answer the question propounded to him with sufficient intelligence to be responsive, and little or no difficulty was experienced by him at any time during the course of his direct or cross-examination. Although he could be termed illiterate, as far as his ability to read or write English, Hungarian or the Rumanian languages, I believe that his intelligence was such that he could understand English as generally used in common parlance. I have also considered the fact that for a number of years he was engaged in business and, as a result thereof, he had the occasion and opportunity to deal generally with the English speaking people.
The first problem before the Court is, therefore, the orientation of the facts in this case into the law applicable in federal court. Federal jurisdiction is invoked solely on account of diversity of citizenship of the party litigants; there is no independent federal question involved before the Court in any of the claims. As a result thereof, the substantive law to be applied is the law of the Commonwealth of Pennsylvania, and the Court must, therefore, determine, by all of the available decisions which might exist, what rules of law have been accepted and established in the Commonwealth of Pennsylvania since it is the duty of the federal court to ascribe to the Acts of Assembly laws and decisions as made by the highest courts in this Commonwealth. Madden v. Kentucky, 309 U.S. 83, 60 S. Ct. 406, 84 L. Ed. 590, 125 A.L.R. 1383; Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, 114 A.L.R. 1487; Mitchell v. Ottinger, 3 Cir., 105 F.2d 334; Guaranty Trust Co. v. York, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079, 160 A.L.R. 1231; Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477.
Where the relationship existing between the contracting parties appears to be of such a character as to render it certain that they do not deal on equal terms, but that on the one side from overmastering influence or, on the other side, from weakness, dependence, or trust justifiably reposed, unfair advantage in a transaction is rendered probable, it is incumbent on the party in whom such confidence is reposed to show affirmatively that no deception was used, and that all was fair, open, voluntary and well understood. Oko v. Kryzyzanowski, Appellant, 150 Pa.Super. 205, 27 A.2d 414; Smith v. Cleveland et ux., appeallnts, 152 Pa.Super. 306, 312, 32 A.2d 38.
The burden, therefore, rests on the defendant to establish that no questionable circumstances existed in connection with the execution of the deed by the plaintiff and his deceasd wife to the defendant. Also to show that the transaction was fair, open, voluntary ...