13 F. 317 | U.S. Circuit Court for the District of Western Missouri | 1881
The answer alleges that this suit is being prosecuted by one of the attorneys for plaintiff upon a champertous contract by which he is to pay the expenses of the litigation and receive as his compensation 40 per cent, of the sum realized, and the defendant moves to dismiss the suit for that reason. The proof sustains the allegation of champerty, the testimony of the defendant himself being quite conclusive upon that point. This makes it necessary for the court to decide the important question whether the plaintiff can be defeated in his action upon the note by the proof‘that he has made a ehampertous contract with his attorney. In other words, can the defendant, the maker of a promissory note, avoid payment thereof or prevent a recovery thereon upon the ground that the holder of the note has made a void and unlawful agreement with an attorney for the prosecution of a suit upon it.
The authorities upon this question are in conflict. Some courts have ruled that if the fact that a suit is being prosecuted upon a champertous contract comes to the knowledge of the court in any proper manner it should refuse longer to entertain the proceeding. Barker v. Barker, 14 Wis. 142; Webb v. Armstrong, 5 Humph. 379; Morrison v. Deaderick, 10 Humph. 342; Greenman v. Cohee, 61 Ind. 201.
Other courts have held that the fact that there is an illegal and champertous contract for the prosecution of a cause of action is no ground of defense thereto, and can only be set up by the client against the attorney when the champertous agreement itself is sought to be enforced. Hilton v. Woods, L. R. 4 Eq. Cas. 432; Elborough v. Ayres, L. E. 10 Eq. Gas. 367; Whitney v. Kirtland, 27 N. J. Eq. 333; Robinson v. Beall, 26 Ga. 17; Allison v. Railroad Co. 42 Iowa, 274; Small v. Railroad Co. 8 N. W. Rep. 437.
This latter view is in my judgment supported by the better reason. It is not necessary for the full protection of the client to go so far as to dismiss the suit, for he is in no manner bound by the champertous
The tendency in the courts of this country is stronger in the direction of relaxing the common-law doctrine concerning champerty and mainteúance, so as to permit greater liberty of contracting between attorney and client than was formerly allowed, and this for the reason that the peculiar condition of society which gave rise to the doctrine has in a great measure passed away. In some of the states the common-law rule is altogether repudiated, and it is hóld that no such contract is now invalid unless it contravenes some existing statute of the state. Sedgwick v. Stanton, 14 N. Y. 289; Voorhees v. Darr, 51 Barb. 580; Richardsons v. Rowland, 40 Conn. 572; Mathewson v. Fitch, 22 Cal. 86; Hoffman v. Vallejo, 45 Cal. 564; Lytle s. State, 17 Ark. 609.
The common-law doctrine, however, prevails in Missouri, according to the decision of the supreme court of the state in Duke v. Harper, 66 Mo. 55. While following that ruling, I am disposed, in view of the general tendency of American courts, to relax somewhat the rigor of the English rule, to apply it only to the champertous contract itself, and not to allow debtors to make use of it to avoid the payment of their honest obligations.
It follows that the defense of champerty in this case cannot be maintained, and that the motion to dismiss must be overruled.
This brings us to the consideration of the case upon its merits. The first defense, as set forth in the answer, is, in substance, that the
The evidence was, however, received, and may, perhaps, be considered as tending to support the other defense set up in the answer, which is that the note was without consideration. To establish this defense the defendant has attempted to prove—First, that the note was given to represent the interest of Winston in certain bonds which belonged to a partnership of which plaintiff and defendant, as well as Winston, were members, and which were at the date of the note turned over by Winston to the defendant; and, second, that said Winston had, in fact, no interest in said bonds, because he had previously drawn
Upon full argument it was held by this court that the defense to the note upon the facts stated in the bill should be made in equity. Mr. Justice Miller, in delivering the opinion of the court, said: “As to the general fact that equity has jurisdiction of the case, and that the transactions ought to be settled in equity without going to law, we have no question.” And again: “The whole question can and ought to be settled in a court of equity, and we have no hesitation in overruling the demurrer as a general demurrer. ” Notwithstanding this decision the defendant saw fit to dismiss his bill in chancery, and to. make his defense at law in this case. I must hold that want of consideration for the note, if it can be shown at all, can only be shown on a settlement of the partnership affairs between Burnes, Court-right, Winston, and others, who were interested in the contract for the construction of the railroad named in the answer, and that a court of law is not competent to supervise such settlement. It is argued that the evidence before the court in this case shows that upon such a settlement it would appear that Winston had no interest in the bónds for which the note was given. But I cannot assume that the other members of the partnership, who are not here, would not be able, if brought into a court of equity, to make other and further proof. I cannot take it for granted that Winston would be unable to show that he 'had an interest in said bonds if the opportunity was afforded him. I have, in considering the defense of want of consideration, assumed that the note sued on was given by defendant for the interest of Winston in the bonds above named, and was to be settled upon a settlement of the partnership affairs, and not to be a charge against the defendant personally. But whether this assumption is in
Judgment for plaintiff for the amount of the note and interest.
NOTE.
§ 1. General State on the Law Concerning Champerty in the United States. In the foregoing opinion the learned judge aptly draws attention to the fact that the common-law rules with regard to champerty and maintenance have been greatly relaxed in many of the American states, and in others repudiated altogether. Confining our attention to the subject of champerty, which is a species of unlawful maintenance, we shall find that the common-law rules and the early English statutes relating to this offense are not in force in Arkansas,
§ 2. Disagreement among the Courts as to what Champerty is. One of the most striking commentaries upon the subject of champerty is found in the fact that the decisions of the courts which recognize the common-law rules on the subject as being in force, are at utter variance as to what those rules are. The difference of opinion relates principally to the question whether the gist of the common-law offense of champerty is the unlawful maintenance of another’s suit, or the mode in which the maintenor is to receive compensation. According to the former class of cases the gist of the offense consists in the unlawful intermeddling with, and the support of another man’s lawsuit, without reference to the manner in which the intermeddler is to be paid for his trouble, or whether he is to be paid at all. The latter decisions do not consider whether the maintenor is an intermeddler, or whether he stands in such a relation to the litigation that he may lawfully support the suit; but they look chiefly to the mode in which he is to receive his compensation; and, if he is to get for his pains a part of the land, money, or other thing recovered, it is champerty, and unlawful. Applying these distinctions to the case of contracts between attorney and client, and considering that it is not unlawful for an attorney to render profesional assistance to a client, it results that, in the opinion of the courts which hold the former doctrine, in order to constitute champerty the attorney must not only have an agreement with his client' whereby the attorney is to get a part of the money or thing recovered, but the attorney must also support at his own expense, and take all the risks of, the litigation; while, in the opinion of the latter courts, it is champerty if he merely render his services as attorney upon an agreement to get a part of the money or thing recovered, without advancing any of the expenses of the litigation, or without indemnifying his client against costs and expenses. This , difference of opinion would not excite so much attention if it originated in the American decisions; hut it will he found that it has its origin in a difference of opinion among the most eminent authorities upon the common law. Lord Coke and Mr. Sergeant Hawkins are authorities for the former view, while
Contracts between attorney and client by which the former agrees, in consideration of having a part of the money or thing recovered, to support, at his own expense, the litigation of the latter,
§ 3. Mere Agreements for Contingent Eees do not seem to come within any of the ideas of champerty to he found in the books, if we except
§ 4. Champbrtods Contracts between Plaintiff and his Attorney ’NO Defense to an Action. The principal interest in the foregoing deeission lies in the ruling that, although a suit may be prosecuted in pursuance of a ehampertoús bargain between a plaintiff and his attorney, it does not lie in the mouth of the defendant to set up that fact for the purpose of avoiding the payment of an honest debt, or escaping a just liability. There is no doubt whatever of the correctness of this ruling. After having given attentive study to all the .cases I could find in the books on this subject of champerty and maintenance, I affirm with considerable confidence that there is blit one case where the contrary principle has been decided, and that is the case of Barker v. Barker.
An interesting application of this rule is also found in tho case of the selling of a pretended title to land, contrary to the statute of Hon. Y1II.,
So, coming back to the phase of the question we are considering, it would be equally absurd to hold that the plaintiff, by reason of having attempted, contrary to law, and by an agreement which has no validity in law, to convey a part of the subject of the suit to his attorney, has not only not succeeded in conveying it to his attorney, but has released it to the defendant.
§ 5. Effect of the LawW Place. In the foregoing opinion the learned judge intimates that he follows the ruling of the supreme court of Missouri,
Upon the general subject of the effect of the law of place upon champertous bargains, It may bo said that there is a presumption that the common law obi ains in other states of the American Union, until the contrary, is shown; and a cliampertous contract made and to be executed in one state, and sued on in a court of another state, will not he enforced, in the absence of proof of the law of the former on the subject,
St. Louis, Mo. Seymour D. Thompson.
Lytle v. State, 17 Ark. 608, 670.
Mathewson v. Fitch, 22 Cal. 86, 94; Hoffman v. Vallejo, 45 Cal. 564; Ballard v. Carr, 48 Cal. 74; Howard v. Throckmorton, Id. 483; Mahoney v. Bergin, 41 Cal. 423.
See Richardson v. Rowland, 40 Conn. 565, 572; Stoddard v. Mix, 14 Conn. 24.
Bayard v. McLane, 3 Harr. (Del.) 139, 216.
Schomp v. Schenck, 40 N. J. L. 195.
Bentinck v. Franklin, 38 Tex. 458; White v. Gay, 1 Tex. 384; McMullen v. Guest, 6 Tox. 275; Carder v. McDermott, 12 Tex. 553. See Clark v. Koehler, 32 Tex, 684; Hill v. Cunningham, 25 Tex. 25.
Danforth v. Streeter, 28 Vt. 490; Edwards v. Parkhurst. 21 Vt. 472. But compare Stacy v. Bostwick, 48 Vt. 192.
Jenkins v. Bradford, 59 Ala. 400; Holloway v. Lowe, 7 Porter, 488; Dumas v. Smith, 17 Ala. 305; Byrd v. Odem, 9 Ala. 755; Wheeler v. Pounds, 24 Ala. 472. Compare Walker v. Cuthbert, 10 Ala. 213. 219.
Ga. Code, 1873, §2750; Meeks v. Dewberry, 57 Ga. 263. Compare Stansell v. Lindsay, 50 Ga. 360; Robison v. Beall, 26 Ga. 17.
Thompson v. Reynolds, 73 Ill. 11, (explaining Newkirk v. Cone, 18 Ill. 449 ) Compare Fetrow v. Meniwether, 53 Ill. 275, 279; Gilbert v. Holmes, 64 Ill. 548; Walsh v. Shumway, 65 Ill. 471.
Scobey v. Ross, 13 Ind. 117; Quigley v. Thompson, 53 Ind. 317. See, as to deeds of land adversely held, Fite v. Doe, 1 Blackf. 127; Martin v. Pace, 6 Blackf. 99; Galbreath v. Doe, 8 Blackf. 366; Leslie v. Slusher, 15 Ind. 166; German Mutual Ins. Co. v. Grim, 32 Ind. 249, 257.
Boardman v. Thompson, 25 Iowa, 487, (overruling Wright v. Meek, 3 G. Groene, 472;) Adye v. Hanna, 47 Iowa, 264; S. C. 29 Am. 484. See Cooley v. Osborne, 50 Iowa. 526.
By statute. See Rust v. Larue, 4 Litt. 411, 417; Davis v. Sharron, 15 B. Mon. 64, 68; Harman v. Brewster, 7 Bush. 355.
Thurston v. Percival, 1 Pick. 415; Lathrop v Amherst Bank, 9 Met. 489. As to deeds of land adversely held, Sweet v. Poor, 11 Mass. 549; Brinley v. Whiting, 5 Pick. 348.
Duke v. Harper, 66 Mo. 51, (reversing S. C 2 Mo. App. 1.)
Key v. Vattier, 1 Ohio, 59. Compare Spencer v. King, 5 Ohio, 182.
Martin v. Clarke, 8 R. I. 389; Orr v. Tanner, 12 R. I. 94.
By statute. Floyd v. Goodwin, 8 Yerg. 484; Weedon v. Wallace, Meigs, 2 6; Webb v. Armstrong, 5 Humph. 379; Morrison v. Deaderick, 10 Humph. 342; Hunt v. Lyle, 8 Yerg. 142; Cross v. Bloomer, 6 Bax. 74.
Barker v. Barker, 14 Wis. 131; Miller v Larson, 19 Wis. 463; Martin v. Vedder, 20 Wis. 466; Stearns v. Felker, 28 Wis. 594; Allard v. Lamirande, 29 Wis. 502.
See the “New York Code of Remedial Justice.55 This Code is chapter 448 of the Session Laws of 1876. Attention is directed to sections 73, 74, 75, 76, and 77. See, also, the “ Penal Code of New York,55 (chapter 676, Session Laws 1881,) 5§ 130-142, inclusive.
Sedgwick v. Stanton, 14 N. Y. 289; Mott v. Small, 22 Wend. 425; Hoyt v. Thompson, 5 N. Y. 347, per Paige, J.; Ogden v. Des Arts, 4 Duer, 275, 283, per Oakley, C. J.; Richardson v. Rowland, 40 Conn. 565, (construing the New York law.)
Sedgwick v. Stanton, 14 N. Y. 2 9; Looney v. Second Ave. R. Co. 18 N. Y. 368; Ely v. Cooke, 28 N. Y 365; Benedict v. Stewart, 23 Barb. 420; Coughlin v. New York, etc., R. Co. 8 Hun, 136; Richardson v. Rowland, 40 Conn. 465. Compare Dawley v. Brown, 79 N. Y. 390, (reversing S. C. 9 Hun, 461.)
Stanton v. Haskins, 1 McArthur, 558.
а) Co. Utt. 3698.
2 Hawk. P. C. 463, § 1, (Curw. Ed.)
2 Chit. Cont. (11th Am. Ed. 996.)
4 Bl. Comm. 135.
Martin v. Clarke, 8 R. 1.389; Boardman v. Thompson, 25 Iowa, 487; Coleman v. Billings, 89 Ill. 183; Meeks v. Dewberry, 57 Ga. 263; Thompson v. Reynolds, 73 Ill. 11; Weakly v. Hall, 13 Ohio 167; Coquillard v. Bearss, 21 Ind. 479; Orr v. Tanner, 12 R. I. 94; Stevens v. Bagwell, 15 Ves. 139; Slade v. Rhodes, 2 Dev. & Batt. Eq.24; Grell v. Levy, 16 C. B. (N. S.) 73; S. C. 10 Jar. (N. S.) 210; Thurston v. Percival, 1 Pick. 415; Key v. Vattier, 1 Ohio, 59.
Adye v. Hanna, 47 Iowa, 264; S. C. 29 Am. 484. Compare Harrington v. Long, 2 Mylne & K, 690; Knight v. Bowyer, 2 De Gex & J. 445; Hunter v. Daniel, 4 Hare, 420; Tilton v. Gleed, 33 Vt. 405; Knight v. Sawin, 6 Me. 361.
Holloway v. Lowe, 7 Porter, 488; Elliott v. McClelland, 17 Ala. 206.
Stanton v. Haskins, 1 McArthur, 558.
Ryan v. Martin, 16 Wis. 57, (overruling, it seems, on this point, Barker v. Barker, 14 Wis. 131;) Allard v. Lamirande, 29 Wis. 502.
Moses v. Bagley, 55 Ga. 283.
Martinez v. Succession of Vives, 32 La. Ann. 305; Flower v. O’Connor, 7 La. 207.
j) Duke v. Harper, 66 Mo. 51.
Maybin v. Raymond, 15 N. B. R. 353. per Woods, J.
Stanton v. Embrey, 931 [U. S. 548, 556; Wriglit v. Tebbitts, 91 U. S. 252; Wylie v. Coxe, 15 How. 415.
Evans v. Bell, 6 Dana, 479; Ramsey v. Trent, 10 B. Mon. 336; Wilhite v. Roberts, 4 Dana, 172.
Thomp. & Steig. Tenn. St. § 1783. See Douglass v.Wood, 1 Swan, 393, 396; Dowell v. Dowell, 3 Head, 502.
Brinley v. Wliiting, 5 Pick. 348.
Elborough v. Ayres, L. R. 10 Eq. 367.
Hilton v. Woods, L. R. 4 Eq. 432.
Knight v. Bowyer, 2 De Gex & J. 421. 444.
Bent v. Priest, 10 Mo. App. 543; Million v. Ohnsorg, Id. 432.
St. 32 Hen. VIII. c. 9.
Brimley v. Whiting, 5 Pick. 348, 354; Williams v. Jackson, 5 Johns. 500; Wolcot v. Knight, 6 Mass. 418, 421; Redman v. Sanders, 2 Dana, 68.
That the courts have placed their conclusion substantially upon the grounds thus stated, will be seen by the language of Parker, C. J., in Brinley v. Whiting, 5 Pick. 348, 318.
Duke v. Harper, 66 Mo. 51.
See Barker v. Barker, 14 Wis. 131.
Thurston v. Percival, 1 Pick. 415; Elliott v. McClelland. 17 Ala. 216, 210.
Grell v. Levy, 16 C. B. (N. S.) 73; S. C. 10 Jur. (N. S.) 210.
Richardson v. Rowland, 40 Conn. 565.