Case ID: ohio-st_49/html/0001-01.html
Source: Caselaw Access Project
Author: {"author": "MiNSHAil, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Pennsylvania Company v. Lombardo.
    Champerty— When does not affect plaintiff.
    
    Whilst a champertous agreement between a plaintiff and his attorney for the prosecution of a certain suit, is against public policy and void, it does not affect the right of the plaintiff to prosecute his action against the defendent in the suit, for the prosecution of which, the champertous agreement was made.
    (Decided January 19, 1892.)
    Error to tbe Circuit Court of Mahoning county.
    
      J. R. Cary and W. C. Boyle, for plaintiff in error.
    1. There is no statute against the offense of champerty in this state. Nor is the common law in relation to the punishment of crimes and misdemeanors in force here. But our Supreme Court has always held that such contracts are against public justice, and injurious to the peace and happiness of the community, and, for these reasons, void. The punishment meted out to the champertor is the denial of relief under the illegal contract. Key v. Vattier, 1 Ohio, 58; Weakly, etc., v. Hall, etc., 13 Ohio, 167; Stewart v. Welch, 41 Ohio St., 483.
    But we here raise a different, and, so far as this state is concerned, a new question. The plaintiff sues on a tort, and it is discovered, incidentally, in the midst of the trial, that the case is being prosecuted under and in pursuance of a champertous contract between the plaintiff and his attorney. The court is at once asked to punish the champertous act by dismissing the action.
    Did the facts in this case show champerty? 4 Blackstone’s Com. 135; Keys}. Vattier, 1 Ohio, 60; Weakly, etc., v. Hall, etc., 13 Ohio, 167; Scobey v. Ross, 13 Ind., 117; Quigley v. Thompson, 53 Ind., 317; Thurston v. Percival, 1 Pick., 415; Byrd v. Odem, 9 Ala., 755; Lathrop v. Amherst Bank, 9 Met., 489; Backus v. Byron, 4 Mich., 535; Martin v. Clarke, 8 R. I., 489.
    2. As to the policy of punishment, there c.an be no doubt. But the duty of the court is only half accomplished by confining the punishment to suits brought on champertous contracts. It is just as much an offense against justice; just as much contempt of court, where it appears in the prosecution of a suit not based upon such a contract. If such acts are encouraged, and greater opportunities thereby given to the unscrupulous attorney, the courts will be clogged with suits which are brought for no other purpose than extortion. The disposition to settle controversies will be thwarted. There will be two claimants to satisfy instead of one, and the champertor the greedier of the two. The old-fashioned honor and dignity of the profession will be cast aside, and he will go forth to solicit business. Purity in the administration of justice requires that such acts be punished, whenever and however discovered. Stewart v. Welch, 41 Ohio St. 483; Greenman v. Cohee, 61, Ind., 201; Barker v. Barker, 14 Wis.,.142; 29 Wis. 502; Hunt v. Lyle, et al, 8 Yerg., 142; 
      Webb v. Armstrong, 5 Hump. (Tenn.) 379; Morrison v. Deaclerick, 10 Humph., 342.
    
      Geo. F. Arrel, Frank Jacobs and W. S. Anderson, for defendant in error.
    The plaintiff only complains pf the refusal of the trial court to dismiss the action on the ground of champerty, and of the refusal of the trial court to charge its 5th request. The motion to dismiss was addressed to the court, and unless the court was satisfied from the evidence that the alleged champertous contract was made out, the court was not required, in any event, to dismiss .the action. The question as to whether or not the alleged champertous contract was made, was a question of fact, to be determined in the first instance by the trial court, and the evidence failed to satisfy that court that such contract was in fact made, and the evidence failed to satisfy the circuit court that .such contract was made, or at least the circuit court was not satisfied that the common pleas committed manifest error in refusing to dismiss the action on that ground. As we understand the rule, this court will not look into the record with a view of determining any disputed question of fact from the evidence.
    Therefore, We insist that, upon the ground stated, the judgments of the courts below shall not be disturbed by this court.
    But how stands the evidence on the question as to whether or not a champertous contract was made by the attorney with his client? The evidence is that Jacobs was to receive one-half of the amount recovered. This does not establish such contract; it only shows an agreement on the part of the client to pay his attorney a contingent fee, and hence falls short of showing a champertous contract.
    In order to render a contract champertous it .must contain a stipulation on the part of the attorney to carry on, or pay the expenses of the litigation.
    Again, it is claimed that the contract between Eombardo and his attorney was champterous because the attorney in his affidavit for the arrest of his client states that Eombardo bound himself not to settle except through his attorney, assuming that the law would hold a contract containing such stipulation champertous.
    The proceeding which resulted in the arrest of Eombardo may have been and was ill-advised, but it certainly should not be permitted to defeat him in his efforts to collect a claim, which is now substantially conceded to be just, against the plaintiff in error.
   MiNSHAil, J.

It appears from a bill of exceptions, taken at the trial, that, during its progress, it was developed by an examination of the plaintiff, that the cause was being prosecuted by him under an agreement with his attorney, whereby the latter was to have one-half of the recovery as a compensation for his services; and that evidence was also offered by the defendant tending to prove, that the attorney was to pay all costs and expenses, and that no settlement or compromise should be made by the plaintiff without his consent. .Thereupon the defendant moved the court to dismiss the action on the ground that it was being prosecuted under a champer-tous agreement between the plaintiff and his attorney. The motion was overruled and exception taken.

Exceptions were also taken to the rulings of the court on the admission and rejection of testimony, and to certain parts of its charge, and its refusal to charge as requested; but as the assignments based on these rulings are not relied on in argument, no further notice need be taken of them, than to say, they show no grounds for a reversal of the judgment.

The principal question argued to the court, and the one we propose to notice, is that raised by the motion to dismiss the action, on the ground that the- evidence disclosed, that the action was being prosecuted under a champertous contract between the plaintiff and his attorney.

It seems well settled by the previous decisions of this court, that a contract between an attorney and client by which the former is to prosecute the action at his own expense, and receive for his compensation a part of the recovery, is against public policy, and cannot be enforced; and it seems that this would be the case in a contract by which the attorney is simply to receive a part, coupled with a stipulation that no compromise or settlement is to be made without his consent. Key v. Vattier, 1 Ohio, 132; Weakley v. Hall, 13 Ohio, 167, and Stewart v. Welch, 41 Ohio St., 483. In all the cases in which the question has heretofore arisen in this state, an illegal or champertous agreement was sought to be enforced or relied on for relief. Thus in Key v. Vat-tier, a recovery was sought for a breach of the covenants of a champertous agreement; in Weakly v. Hall, to a plea of release since the last continuance, the terms of such an agreement were interposed by a reply in avoidance of the plea; and in Stewart v. Welch, the plaintiff’s title to the chose and his right to maintain the action, rested upon his agreement with the assignor, which the court found and held to be champertous: The plaintiff, Welch, was to prosecute the suit in his own name and at his own expense, and account to the assignor for a definite part of the recovery. But, in the case under review, the facts are wholly different in this regard. It is not based upon any agreement between the attorney and the client in regard to compensation'of the, attorney for his services. It is a suit to recover damages resulting to the plaintiff from the the tort of the company, and the agreement between the plaintiff and his attorney is wholly extraneous to its prosecution and is in no way relied upon for relief. The question as now presented, is a new one in this state, as counsel for the plaintiff in error, is frank enough to admit. It is, whether the courts should not merely defeat any claim based upon the illegal agreement, but should go further, and by way of, punishment, also defeat the right of the plaintiff to recover in the action, touching the prosecution of which he has made a champertous agreement with his attorney? Some cases are cited in support of this view; but they are contrary to the greater weight of authority, and seem unsupported by satisfactory reasons. It would seem that the law, on grounds of public policy, goes quite far enough, when it defeats any advantage that may be sought by an enforcement of the agreement, without visiting upon the plaintiff a forfeiture of his right of action in the suit, for the prosecution of which, the attorney has been employed. This is in analogy, to our law in regard to usurious contracts, which simply defeats the usurious agreement, without affecting the right of the usurer to recover the,principal loaned with interest at the legal rate — champerty, like usury, not being an offense punishable by indictment in this state.

It is stated by the author of a well written article on the subject, contained in 3 American and English Encyclopaedia of Law, 68, 86, that, “The better opinion would appear to be that the defense of champerty can only be set up when the. champertous contract itself is sought to be enforced, and that the existence of a champertous agreement between the plaintiff and his attorney, or the fact that the plaintiff is prosecuting the case upon a contingent interest in the sub-, ject-matter of the litigation dependent upon success, is no defense to the action against the defendant.” An examination of the citations fully sustains the statement. . In one of the cases cited, Hilton v. Woods, L. R. 4 Eq. Cas. 432, Malins, V. C. said: “I have carefully examined all the authorities referred to in support of this argument (.that the agreement between the plaintiff and his attorney being champer-tous, required the suit to be dismissed), and they clearly establish that whenever the right of the plaintiff, in respect of which he sues, is derived under a title founded on champerty or maintenance, his suit will on that account necessarily fail. But no authority was cited, nor have I met with any, which goes the length of deciding that when a plaintiff has an original and good title to property, .he becomes disqualified to sue for it by having entered into an improper bargain with his solicitor, as to the mode, of remunerating him for his professional services in the suit, or otherwise.”

So that it is immaterial whether a champertous contract was shown by the evidence or not; for, admitting the agreement between Rombardo and his attorney to have been as claimed by counsel for the defendent, it whs not sought in the action against the company to enforce it, or derive any benefit from it.

Judgment affirmed.