Mr. JUSTICE GUNN delivered the opinion of the court:
Appellee, Owen Gaffney, filed suit in the circuit court of Morgan County against Robert E. Harmon, an attorney at law, to have a trust declared in certain real estate that had been sold on execution under a judgment against appellee and redeemed by appellant, and title taken in the name of the latter. The court declared such a trust to exist and ordered appellant to convey the land to appellee by a day fixed in the decree, and to make an accounting of the rents and profits arising out of the land. A freehold is involved and, hence, there is a direct appeal to this court.
In 1937 appellee was the owner of a life estate in eighty acres of land in Morgan County, the whole fee-simple interest in which was then of the fair value of from $175 to $200 per acre. He was about fifty-four years of age at that time, and had very little education. He became indebted,
It is admitted that in the past appellant had represented appellee as an attorney at law, but that the latter had not paid appellant for all of the services rendered. Appellant redeemed the land at a total cost of $217.41, and in October, 1938, obtained a deed from the sheriff to the interests that appellee had in said land. Appellant proceeded to rent the land and to collect the income therefrom, made some improvements upon the premises, and, about a little over a year after he had obtained the deed, and at a time when he had certainly received at least $240 in rents, made out a deed from himself to appellee, as grantee, but apparently never signed it or executed the same. He testified that he told appellee to come and get the deed, but the appellee
It is not denied by appellant that he had in the past been attorney for appellee, and, in justifying his refusal to reconvey the property, claims that he had not been paid his attorney fees which he had earned in procuring the redemption. He also concedes that he told appellee that the land could be redeemed by him, but upon a condition that appellee would refrain from drinking, and that the latter did not cease the use of intoxicating liquors, and that thereupon appellant relinquished all dealings with appellee, but he makes no pretense that he suffered any financial or other loss by failure of appellee's alleged promise to cease drinking liquors, independent of the expenditures that he had made for redemption.
The ultimate facts growing out of the transactions were adequately set forth in the complaint and answered by appellant. As suggested above, the court found in favor of appellee, and to reverse such decree the appellant contends: (1) that the court erred in not finding that a fiduciary relationship of attorney and client, or the influence arising from the same, had terminated after appellant advised appellee he would have nothing further to do with him; (2) that the court erred in finding that the redemption of the real estate was for the benefit of appellee and that the
The facts as pointed out above, and which are substantially conceded by both appellant and appellee, require only the application of well-settled principles pertaining to the fiduciary relationship existing between an attorney and client, not only with respect to the burden of proof, but also as to the duty owed by the attorney to his client. In the first place a fiduciary relationship exists as a matter of law between attorney and client, which requires all transactions between them, growing out of such relationship, to be subject to the closest scrutiny. (People ex rel. Chicago Bar Ass'n v. Charone, 288 Ill. 220.) In Oil, Inc. v. Martin, 381 Ill. 11, where a similar question was involved, we held that where the relation of attorney and client exists, and the attorney receives anything of benefit thereby contrary to the interests of his client, either by purchase from the client or by acquiring interests adverse to his client, the burden is upon the attorney to show the fairness, adequacy and equity of such transaction. Many cases cited in that opinion support this proposition.
It is admitted in this case that appellee had formerly been a client of appellant; that he was still owing him some small amount on fees; that he went to his office and consulted with him with reference to his right or power to have redemption made after his period to do so had expired. His interests had not entirely ceased in the property because of his failure to redeem in twelve months, (Hruby v. Steinman, 374 Ill. 465; Harper v. Sallee, 372 Ill. 199,) and he was advised by appellant how redemption could be accomplished, after which appellee gave a note to appellant, which was admittedly in excess of the amount owing on previous fees.
It seems to be the theory of appellant that, although the relationship of attorney and client existed at the time he agreed to make the redemption, he had the right at any time in the future to terminate that relationship and profit from the redemption. In Oil, Inc. v. Martin, 381 Ill. 11, we said: "The rule is settled that a lawyer cannot purchase or acquire the subject matter of litigation, or any interest therein, and hold the title adversely to the client." And recently, in the case of Vrooman v. Hawbaker, 387 Ill. 428, we reaffirmed what we said in the Martin case, saying: "Where this relation of attorney and client exists and the attorney receives anything of benefit thereby, either by purchase from the client or by acquiring interests contrary to the interests of his client, the burden of proof rests upon the attorney to show the fairness of the transaction, that it was equitable and just, that it did not proceed from undue influence, and that the property so acquired does not belong constructively to the client."
It is, however, contended that a part of the consideration for the making of the advance of money to redeem the property was a promise upon the part of appellee to refrain from the use of intoxicating liquors, and that this was the condition upon which the money was advanced. Aside from the question that the burden is upon the appellant to prove such a condition, which is denied by appellee, no authorities have been cited to show that such would constitute a valid consideration to support appellant's claim
It is next contended that appellant was acting lawfully in acquiring the tax title of a third party in his own name, and thus acquired a perfect title as against appellee. It does not appear that appellant ever invested any money from any source not derived from rentals from this farm in making such tax redemption. The title he obtained through the sheriff's deed was a life estate. The duty is upon the life tenant to pay the taxes. If appellant held it as trustee for appellee, and the taxes were paid from proceeds of the land, what he acquired was also for the benefit of the cestui que trust. Under such conditions we have held that a tax title so acquired is not one that ripens into a title that can be sustained by the trustee. In Ross v. Payson, 160 Ill. 349, this precise question was before the court, and we held there that even though such purchaser was in possession and had color of title, and had paid taxes, his color of title was not made in good faith, which is necessary to establish a title under the seven-year statute of limitations. Ill. Rev. Stat. 1947, chap. 83, par. 7.
Appellant also claims that the plaintiff should not recover because of laches. This defense cannot be sustained. The evidence shows that from time to time appellee was paid small sums of money by appellant, the last amount being in the neighborhood of $20, which he was under no obligation to pay unless he recognized his liability to appellee.
During all of the time the appellant has held this property the rents have been adequate to reimburse him and pay him a reasonable fee for his services, and to take care of the tax obligations, to which he succeeded as the owner of appellee's title. There are no circumstances pointed out in the case by which he would be injured other than that he will not retain the fruits of the transaction, which have been acquired by a grossly inadequate consideration. In a case where an attorney acquired a title adverse to his client, Justice Schofield says: "Such a practice would open a door to endless wrongs and villanies, and bring great and just reproach upon the profession." Gibbons v. Hoag, 95 Ill. 45.