Court Opinion

ID: 8654502
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:14:31.746951+00
Date Added: 2024-06-11T16:56:38.669743
License: Public Domain

Baskin, J.
The facts disclosed by the record show, in several respects, a violation of professional ethics on the part of the respondents. It is stated in their brief that “Evans & Rogers did not employ Alfred H. Nelson, the latter employed the former on behalf of the widow and minor children of his deceased brother.”
■ If it be conceded that the widow for herself and minor children, had the right to authorize Alfred H. Nelson to employ Evans & Rogers as attorneys, when so authorized he could not, under that agency, legally make a contract with them for the payment of a fee one-third of which he was to receive as assistant attorney in the case. No contract for his compensation as attorney could be legally made except with his clients. No one can be both principal and agent in making a contract. A transaction "of that kind is against public policy. Harris, et al., v. Lynde & Hough, 49 Cal. 290; San Diego v. S. D. & L. A. R. R. 44 Cal. 113.
The stipulation in said contract,, for the payment of the costs of the litigation by Evans & Rogers, was against public policy and rendered the contract champertous, illegal and void. An attorney who, in the pursuit of his profession, makes an agreement which is so against public *378policy, as the contract herein, is guilty of a flagrant breach of professional duty. ,
When Alfred H. Nelson was appointed administrator his duties as assistant attorney were within the scope of his duties as administrator, and after his appointment as such, he was only entitled to such compensation for his services in the case as the court issuing the letters of administration to him, might, upon a proper showing, allow. Yet notwithstanding this fact, after he had become involved and left the state and ceased to act as assistant attorney in the case, the contract between Thomas Nelson and Evans & Rogers was entered into, not for the benefit of Thomas Nelson but for the, express purpose of securing to Alfred H. Nelson his share of the fee provided for in his contract with Evans & Rogers.
At the date of the former contract Alfred H. Nelson had not performed the stipulations of his contract, and did not propose to do so. It does not appear that either the widow of Charles A. Nelson, or any one legally authorized to act for the minor children, ever knew of the existence of the contract with Thomas Nelson. Evans & Rogers state in their answer that when Thomas Nelson failed to perform his contract “it became and was necessary for the widow of the deceased Charles A. Nelson to secure and advance money for their attendance.” Evans & Rogers did not, as they had contracted to do' with Alfred H. Nelson, pay the costs of the litigation. For what they contracted to do in the premises they wei’e to receive only two-thirds of one-half of the amount which might be recovered from the railroad, yet notwithstanding they failed to do all they promised, on the distribution of the funds, they not only put into their own pockets the whole of the fee which they, under the contract, were to receive, but also the fee which Alfred H. Nelson was, under the agree*379ment to receive through Thomas Nelson, amounting to $1,793.33, although the services for which one-third of one-half of the recovery was to be paid were never rendered. Certainly Evans & Rogers were not entitled to more than the amount of the fee, which they, by the contract,. were to receive. They were not entitled to more than that sum on a quantum meruit, as in an action to recover on a quantum meruit, notwithstanding their said contracts were void as against public policy and also void for champerty, their recovery would have been limited to the valuation which they themselves attached to their services in said contracts. Weeks on Attorneys, p. 702 and n. 1.
Neither Alfred H. Nelson or Thomas Nelson were entitled to receive any part or the amount recovered under said contract; therefore, as under the provisions of Sec. 2912 Rev. Stat. the widow and minor children of Charles A. Nelson were the beneficiaries of the action against the railroad company, they were entitled to the sum of $1,793.33 which Evans & Rogers received as an addition to their legitimate fee. This fact is now conceded in the following language of respondent’s brief, to-wit: “If Thomas Nelson did not perform the consideration he promised, viz.: secure the attendance of the non-resident witnesses, then Evans & Rogers, who by that contract were made trustees of one-third of one-half of the recovery, would have been grossly derelict in duty, violating the rights of their clients, the real beneficiaries, had they paid said Thomas.”
It appears from the record that Alfred H. Nelson, the administrator, was absent from the state when the order of distribution was made, and while it does not in express terms appear that Evans & Rogers obtained the order of distribution, it is inferable that they did. Whether *380they did or did not procure that order, they knew its provisions and received one-half of the recovery, with full knowledge of all the facts in the case. Neither does it appear that the widow or any one legally qualified to act for the minor children appeared or was represented in the proceeding in which said order was granted, or that Evans & Rogers advised the widow, or any representative of the minor children, that the widow and minor children were entitled to $1,793.33 more than allowed them in the order of distribution.
In support of the demurrer to the complaint m the case of Thomas Nelson v. Evans & Rogers, on the appeal in this court, A. G. Horne, as attorney of David Evans, presented on the argument a brief in which was cited, among other cases, Croco v. Oregon Short Line Ry. Co., 18 Utah, 321, and Lyon v. Hussey, 31 N. Y. Supp. 281.
In the former case this court decided that “Under Sec. 3683 (C. L. U.) it was competent for an attorney and client to agree upon the attorney’s compensation, and such compensation may be made contingent upon success, and payable by percentage or otherwise, out of the proceeds of the litigation. But it was not competent for the attorney in consideration thereof, to agree to pay the advance fees and costs of suit thereafter to be commenced. ”
The contract upon which this decision was based was one made by Evans & Rogers in which they' had agreed, in consideration of receiving forty per cent, of the recovery in that case, to render their services as attorneys, -and in addition thereto to pay the costs required to be advanced to the clerk, and to the sheriff for serving the summons, ^nd whatever might be necessary to pay the fare of witnesses from Idaho to the place of trial.
By this citation this court’s attention was directly called to the fact that the present instance is not the only onedn *381which the respondents have made champertous contracts in the pursuit of their profession as attorneys. ■ ,
■ In the last-mentioned case of Lyon v. Hussey, 31 N. Y. S. 181, Mr. Justice O’Brien, in his opinion at special term, said:
“It is true that champerty and maintenance are abolished in this state except so far as preserved by the Revised Statutes, and what remains would not literally touch an agreement such as is here sought to be enforced. Apart, however, from any statutory prohibition, there can be no question but that such an agreement would have been void at common-law; and, in addition to the illegality under the early statutes in this state relating to' maintenance and champerty, such an agreement was made a crime. The penalty with the offense having been repealed, and no express statute existing which in terms decrees that an agreement of the character alleged is illegal, it yet remains to be determined whether such an agreement can be enforced. Having in mind- the fact that it is void at common law, I do hot see upon what ground its legality can be placed, unless some express sanction or authority can be found in some statute or decision which would give it support. Such agreements directly tend to promote litigation, to disturb the peace of individuals, and are directed to subverting the settled policy of this state, which, as shown by the history of the enactments on the subject, more particularly those applicable to attorneys (sections 73 and 74 of the Code) has sought to prevent the stirring up of strife and litigation. Hence, concededly, an entire stranger to the transaction obtruded himself into it, and not only instigated a suit, but agreed to procure counsel and maintain the suit, the fruits of which, if successful, he was to share; and more than this, he undertook to furnish the evidence upon which the recovery was *382to be assured. Such an agreement is repugnant to every instinct of propriety and justice, and the portion of it which provides for pay as a consideration for procuring evidence . should be regarded as immoral, illegal and void.”
And Mr. Justice Van Brunt, on the appeal of the case from the special term, said, “It may not be necessary to add anything to the opinion which was handed down upon the decision of the demurrer in the court below; but it may be proper to call attention to the fact that part of the contract, damages for breach of which this action was brought to recover, was to furnish evidence to establish the claim of defendant in a litigation to be commenced. It is clear that such a contract is against public policy. The recognition of contracts of this character would be the introduction of all sorts of fraud and deception in proceedings before courts of justice, in order that parties might receive compensation out of the results of their successful manufacture of proofs to be presented to the court, thus holding out a premium upon subornation. The mere statement of the proposition seems to show that such contract should never be recognized in any court of justice The judgment should be affirmed, with costs.”
In the above case the champertous contract was made by a layman with the plaintiff. Such contracts when made by an attorney at law, in pursuit of his profession, are still more obnoxious.
On the authority of the two cases thus cited, and others of the same import, cited in said brief, we sustained the demurrer. If the respondents had refused to pay the claim made by Thomas Nelson and defeated a recovery for the purpose of protecting the interests of the widow and minor children, it would have been a strong mitigating circumstance in their favor. But such was not their *383intention. The facts in the case conclusively show that they resisted the claim of Thomas Nelson in order that they might retain for themselves the amount sought to be recovered. In respondent’s answer they failed to state that it was their intention to protect their clients, or that even now they intend to pay them the amount withheld from them in the disbursement heretofore mentioned. The declaration in the respondent’s brief that they were made trustees of that amount for their clients, the real beneficiaries, was evidently an afterthought. At the argument before us, when the attention of respondent’s counsel was called to that declaration, one of them, in the presence of one of the respondents, and in the face of the patent facts disclosed in the case, and notwithstanding his name was attached, as an attorney, to said brief, disputed that declaration, and declared that the respondents were entitled to retain the whole sum distributed to them; and although the respondent, who was present, had personally appeared and made an argument on the demurrer to the information, he failed to interpose any objection to the claim of his attorney, or declare that it was then, or ever had been his intention, or the intention of his co-respondent, to pay to their clients said amount of $1,793.33, withhold from them in the distribution of the funds.
It appears from the evidence, and the referee found that Alfred H. Nelson and Thomas Nelson were brothers of the deceased Charles A. Nelson. These facts were not disclosed in the case of Thomas Nelson v. Evans & Rogers, but were presented to this court, for the first time, in the answer and evidence of respondents in .the pending matter, and they now contend that these additional facts show that this contract with Thomas Nelson was not champertous. If this were conceded, then the respondents stand before this court, confessing that they *384induced this court to render a final judgment in their favor on the ground of having, been guilty of champerty, when they knew they were innocent. The impropriety of such an attitude is indefensible.
As a general rule, no one will be permitted to plead his own wrong in defense of an action; but in transactions which are prohibited by law, or are against public policy such a defense, as it tends to discourage such transactions, is permissible. Such a defense, however, when sustained, does not condone the wrong, but merely leaves the parties in statue quo, and prevents either of the guilty parties from obtaining any relief in the courts of justice. “Champerty renders an attorney amenable to the summary jurisdiction of the court” (Weeks Attorneys, Sec. 87-88, 350), notwithstanding it may be effective as a defense to the enforcement of a contract.
We are of the opinion that notwithstanding Alfred H. Nelson and Thomas Nelson were brothers of the deceased, under the facts disclosed the contract between Thomas Nelson and Evans & Rogers is champertous.
While it is permissible for a near kinsman of a poor suitor, out of charity to assist him in the maintenance of his suit, such kinsman cannot do so as a speculative venture, based upon an agreement to share in the proceeds of the litigation in case the suitor should recover. Both the law of maintenance and champerty forbid the meddling by any person, not a party to the suit, whatever may be his relation to the suitor, for the purpose of speculation or profit.
It is clear that the contract with Thomas Nelson was entered into for the benefit of Alfred H. Nelson, the administrator. Its object was to indirectly obtain for Alfred H. Nelson a share of the fruits of the litigation as an attorney’s fee, which it was not intended he should *385earn. The transaction was an attempt on the part of Alfred H. Nelson and Thomas Nelson to secure a profit from the death of their brother to the detriment of his widow and minor children. The widow and minor children were not parties to the contract, and it does not appear that they were ever informed or knew of its existence.
This contract was not only champertous, but also obnoxious because it was against the interests of the widow and minor children, and was entered into by their attorneys, whose obligations as such, required them to guard the interests of their clients with strict fidelity.
The .respondent David Evans testified that he knew nothing about the demurrer until Mr. Rogers, or some one else, told him that it had been sustained.
Mr. Rogers testified that he knew the demurrer was interposed, but supposed that “it was a time server;” that after it had been sustained he learned from Mr. Williams that the district court had sustained it on the ground that the contract on its face was champertous; that he thereupon stated to Mr. Williams that he did not want to make that defense, but would rely on the nonperformance of the contract by Thomas Nelson.
It further appears from the evidence that afterwards Mr. Rogers proposed to Mr. Williams, who was the attorney for Thomas Nelson, that the judgment on the demurrer should be vacated, the demurrer withdrawn, and an answer should be made raising an issue on the merits, ■ and that a stipulation to that effect, in which Mr. Evans was willing to join with Mr. Rogers was drawn up and presented to Mr. Williams, who declined to enter into the proposed stipulation. When the case was reached in this court on appeal, A. G. Horne, the attorney for the respondents, at the request of Mr. Rogers, withdrew his appear-*386anee for him, but not for Mr. Evans. Both of the respondents were aware that the only tenable ground of the demurrer was the champertous character of the contract, in the form in which it was set out in the complaint.
The respondent Rogers must have been aware that the said withdrawal would not withdraw the question of champerty from consideration, but that that could only be done by the joint action of both respondents. Both respondents are able attorneys, and of long experience in-the practice of law, and if the question of champerty presented by their attorney was contrary to their wishes, and was made in the first instance without their knowledge, and they were still desirous of withdrawing the question from further consideration, and having the judgment set aside for the purpose of trying the case on its merits, this end could have readily been accomplished by stating to this court, either through their attorney, or personally, that the contract, on account of facts not disclosed by the complaint, was not in fact champertous, and that their attorney had raised that question without their knowledge and against their wishes, and requested a reversal of the judgment. If this had been done this court would not have hesitated to grant the request. But even if this course had been pursued it would not have changed either the character of the contract or the acts of the parties, which the evidence before us has fully disclosed.
The relation of attorney and client is confidential. The attorney by his obligation is bound to discharge his duties to his client with the strictest fidelity. He is not permitted to do anything himself, or permit anything to be done in the pursuit f his employment, which he is able to prevent, against the interests of his client. He is amenable to the summary jurisdiction of the court for dereliction of duty. Not for the purpose of punishment, *387“ but for the protection of the court, the proper administration of justice, the dignity and purity of the profession, the public good, and the protection of clients.” State ex rel. v. Finn, 52 Pac. Rep. 756; Ex parte Wall, 107 U. S. 273.
He is presumed to know what the duties of an attorney are, and cannot plead ignorance, or that in violating a plain duty he did not intend to commit a wrong. The summary proceeding of disbarment is civil and not criminal. 6 Ency. Pl. & Pr. 709; Matter of Randall, 159 N. Y. 219; State v Clark, 46 Ia. 155. In that proceeding, however, more than a preponderance of the evidence is required. The guilt of the attorney must be clearly established.
Thomas Nelson stated, and the referee found that he instituted these proceedings with the hope that it would force the respondent to pay his claim. While this fact might detract from or neutralize the'force of his testimony, it cannot excuse the wrongful acts of the respondents.
There is no conflict in the testimony regarding the facts found by the referee, except No. 16, or the additional facts enumerated and found by us. These facts conclusively show that the respondents have violated their duties in the several respects mentioned in this opinion.
In Bradley v. Fisher, 80 U. S. 355, Mr. Justice Field, in the opinion, said: “Admission as an attorney is not obtained without years of labor and study. The office which the party thus acquires is one of value, and often becomes the source of great honor and emolument to its possessor. To most persons who enter the profession, it is the means of support to themselves and their families. To deprive one of an office of this character would often be to -decree poverty to himself and destitution to his family. A removal from the bar should therefore never be *388decreed where any punishment less severe — such as reprimand, temporary suspension, or fine — would accomplish the end desired.”
In view of the facts thus stated, and the facts that the respondents have for a long time maintained good standing before the courts of this State, and - are men of good morals, we do not think they should be absolutely disbarred, but that a judgment similar to that rendered in In re Tyler, 71 Cal. 358, 78 Cal. 307, under a statute relating to attorneys, of which the statute of this State, on that subject, is a transcript, and similar to the one under which the case of Slemmer v. Wright, 54 Ia. 164, was rendered, should be entered.
It is therefore ordered and adjudged that each of the respondents be deprived of the right to practice as attorney or counselor at law in any and all of the courts of this state until they shall have deposited, or caused to be deposited with the clerk of this court, subject to the order of this court, the sum of $1,793.33, with interest thereon, at the rate of eight per cent, per annum, from the 28th day of December, 1898, up to the date of the deposit, for the use and benefit of the widow and minor children of Charles A. Nelson, and pay the costs of this proceeding, including the special piaster’s fee of $175, and the stenographer’s fee of $54.40. And if they fail, within sixty days from the date of the entry hereof, to show to this court that they have made such deposit, and paid the costs, that then an order be made and entered permanently disbarring each of the respondents and directing that their names be stricken from the roll of attorneys and counselors at law.
Miner, J., concurs.
*389I concur in the judgment herein, the same, so far as it goes, being in accord with my views. I am of the opinion, however, from an examination of the brief, filed on behalf of the respondents, and of the record, the infliction of some punishment, other than the mere payment of money, by the respondents, which, as now appears from their brief, is admittedly due from them, would be warranted and justified. Where an attorney is guilty of deliberately violating the confidence reposed in him by the court, and his duty to his client, the punishment ought to be commensurate with his wrongdoing. The dignity of the court, the purity of the profession, the peace of individuals, the protection of clients, and the public good alike demand this.
Bartch, C. J.