Opinion
No. 27334.
October 22, 1928. Suggestion of Error Overruled November 19, 1928.
1. CHAMPERTY AND MAINTENANCE. Alleged champertous contract for prosecution of suit for additional salary as circuit clerk was not available as defense to action ( Laws 1922, chapter 160).
An alleged champertous contract between circuit clerk and public accountant relating to prosecution of suit for additional salary as circuit clerk by reason of unconstitutionality of Laws 1922, chapter 160, held not to affect right of action therefor against county, and was not available as a defense thereto, whether or not the contract was void as between parties.
ON SUGGESTION OF ERROR.2. CHAMPERTY AND MAINTENANCE. Public accountant had right to contract with public official for prosecution of suit for additional salary, in consideration of percentage of recovery ( Hemingway's Code 1927, section 511).
Under Hemingway's Code 1927, section 511 (Hemingway's Code 1917, section 497; Laws 1916, chapter 134), relative to a transfer or assignment of interest in chose in action before or after suit, public accountant had right to contract with public official to assist in prosecution of suit for additional salary, in consideration of certain percentage of recovery, and suit could thereafter be prosecuted in name of official.
APPEAL from circuit court of Calhoun county, HON. T.E. PEGRAM, Judge.
Creekmore Creekmore, for appellant.
The rule seems to be in a majority of states, that a champertous contract in relation to the prosecution of a suit between the plaintiff and another layman in no wise affects the obligation of defendant to plaintiff. This rule seems to be based on the idea that the champertous contract is the thing avoided and not the right of action itself. However, the contrary rule to this proposition is well established in Mississippi, Wisconsin, Tennessee, Ohio and Indiana. See Barker v. Barker, 14 Wis. 131; Kelly v. Kelly, 86 Wis. 170, 56 N.W. 637; Miles v. Mutual Reserve Life Association, 108 Wis. 433; Hunt v. Lyle (Tenn.), 8 Yerg. 142; Weedon v. Wallace, Meigs 286; Webb v. Armstrong, 5 Humph. 379; Greenman v. Cohee, 61 Ind. 201; Stewart v. Welch, 41 Ohio 483; The Clara A. McIntyre, 94 Fed. 552 (N.C.); 11 C.J. 271; Rives v. Weaver, 36 Miss. 374.
J.H. Ford, for appellee.
Appellant admits that it is absolutely immaterial to it so far as the recovery is concerned whether the agreement between appellee and Smith was champertous or not as if appellee should be denied recovering in this suit he could turn around and recover in another of the same character, for there can be no doubt that appellant owes him the amount sued for. The county is not interested in what appellee may do with the money it justly owes him when he gets it. The question whether the verbal agreement with Smith was champertous is collateral to the claim here sued on. On that question, the rule is that the defendant cannot defend on that ground. See 11 C.J. 270, sec. 103; Wood v. Walsh, 7 N.D. 376-385, 75 N.W. 767; Isherwood v. H.L. Jenkins Lbr. Co., 37 Minn. 388, 390, 92 N.W. 230; Allison v. Chicago, etc., R. Co., 42 Ia. 274, 280; Foley v. Grand Rapids, etc., R. Co., 157 Mich. 67-69, 121 N.W. 257; Hall v. Deaton (Ky.), 68 S.W. 672; 5 R.C.L. 284, par. 14; Prosky v. Clark, 32 Nev. 441, 109 P. 793, 35 L.R.A. (N.S.) 512; Robertson v. Blewett, 71 Miss. 409, 14 So. 33.
The case of Rives v. Weaver, 36 Miss. 374, is not authority for appellants in this case. In that case it was apparent to a court of equity that the very purpose of the appointment of Weaver as administrator of the estate to which he was a stranger, was to enable him to practice fraud on the court by the recovery in such capacity of certain property as the assignee of certain heirs who could not justly and legally recover same in their own right. The suit there was not being brought by the party who was entitled to recover, if a recovery could be had at all, but was being brought in the name of the assignee for the very purpose of practicing fraud and circumventing the law in the recovery of property which his assignors could not recover either in law or equity. See Moore v. Tunica County, 107 So. 659; Claiborne Co. v. Moorehead, 111 So. 372; De Soto Co. v. Wood, 116 So. 738; Hodnet v. Yalobusha Co., 128 Miss. 772, 91 So. 454.
Creekmore Creekmore, on suggestion of error, for appellant.
Calhoun county, appellant, respectfully suggests that the court fell into error in rendering the opinion in this case in that the court apparently overlooked the case of Rives et al. v. Weaver, Administrator, 36 Miss. 374, wherein the court follows the minority view as to the effect of a champertous agreement between a plaintiff and a third person, other than defendant, and does not follow the general rule laid down in 11 C.J. 270, cited by the court in its opinion.
Our point is that, where it appears that the proceedings are founded in a collusive agreement and for an illegal purpose of using the forms and remedies of the law to enable a party to reap the fruits of a speculation in litigation, his conduct is a fraud upon the law and will not be tolerated; and that a suit tainted with champerty will not be entertained.
We do not believe this court intends, or intended to overrule the Rives case in the opinion of the case at bar; but the effect of the court's opinion is to overrule this case, which has stood for all these years as the rule in this state.
Plaintiff, appellee here, instituted suit against defendant, Calhoun county, appellant here, for four hundred fifty-eight dollars and forty-two cents claimed as salary for services as circuit clerk of said county from January 1, 1924, to April 12, 1924.
The suit was predicated on a decision of this court in Moore v. Tunica County, 143 Miss. 821, 107 So. 659, holding that chapter 160, Laws of 1922, was unconstitutional. This chapter attempts to change the compensation of county officers from a salary system, as fixed by chapter 122, Laws of 1920, to the fee system. The court, in the same opinion, held that section 33, chapter 122, Laws of 1920, was unconstitutional, but, being separable from other portions of the act, salaries of clerks, as fixed by other sections thereof, could continue to be collected until a valid act changed it. Chapter 207, Laws of 1924, effective April 12, 1924, was designed to change the compensation from a salary basis to another plan. It repealed all laws in conflict with it.
Appellant chiefly relies upon the contention that the action was conceived in champerty, and was being prosecuted under a champertous agreement.
The point was developed as follows: Appellee served as circuit clerk from January 1, 1924, under the erroneous impression that the fee system was then in effect. Some time thereafter he was approached by one Leland S. Smith, a public accountant, who advised appellee of his right to a salary for the fraction of the year from January 1, 1924, to April 12, 1924, and proposed that, if appellee would pay him (said accountant) a certain per cent of the recovery, he (said accountant, Smith), would assist in the prosecution of the suit and pay the court costs if the case should be lost.
An account was made up for the salary, and filed with the board of supervisors for allowance, but same was disallowed and payment refused. The account showed a credit for all fees collected by the clerk for the time covered by the suit.
To the special plea of the county raising this point, a demurrer was sustained.
We think the trial court was right. It will be unnecessary to hold whether or not the alleged champertous contract was void as between the parties. Conceding, but not deciding, this to be true, it would not affect appellee's right of action against the county. This principle of law is clearly stated in 11 C.J., section 2, p. 270, reading:
"Except in one state, the rule is well settled that the fact that there is a champertous contract in relation to the prosecution of the suit between plaintiff and his attorney, or between plaintiff and another layman, in no wise affects the obligation of defendant to plaintiff. It is the champertous contract and not the right of action itself which the contract avoids, and, therefore, defendant cannot avail himself of the champertous agreement as a defense to the action. Conversely the law against champerty and maintenance cannot be used as offensive weapons against defendant."
With the single exception of Wisconsin, this rule has been followed in every jurisdiction where the courts have had it under consideration, including the supreme court of the United States. See authorities collated under note 78 of the above citation.
We find no merit in the other assignments of error. The judgment of the court below will be affirmed.
Affirmed.
ON SUGGESTION OF ERROR.
Appellant, in its suggestion of error, insists that the opinion rendered on a former day of this court is in conflict with Rives et al. v. Weaver, Adm'r, 36 Miss. 374; that this court there followed the minority of the authorities to the effect that a champertous agreement between plaintiff and a third party other than the defendant will defeat the action, and that the Weaver case does not follow the general rule laid down in 11 C.J. 270, cited and followed by the court in its opinion.
In the Rives case, supra, Weaver purchased from some of the heirs of Sarah Robinson, deceased, an interest in a disputed claim to certain slaves, and had himself appointed administrator ad colligendum of the estate of said Sarah Rives, deceased. There was no necessity for this administration, and it seems that Weaver procured his appointment as such in order to be in better position to prosecute the suit against the executors of one Moore, claimed to be the owner of the slaves. The court, in strong language, condemned the action of Weaver, and denied his right to recover, basing its decision on the ground that to admit such practice would be against "sound policy and established principle." This was a case of purchasing an interest in a chose in action, and suing on same in the name of the purchaser, which the court held could not be done. This doctrine has since been changed by statute. Chapter 134, Laws of 1916 (section 497 of Hemingway's 1917 Code; section 511 of Hemingway's 1927 Code), provides, in part:
"In case of a transfer or an assignment of any interest in such chose in action before or after suit brought, the action may be begun, prosecuted and continued in the name of the original party, or the court may allow the person to whom the transfer or assignment of such interest has been made, upon his application therefor, to be substituted as a party plaintiff in said action."
Under this statute, if the assignment be in writing, the assignee may prosecute the suit in his own name. We think this statute clearly creates a right to purchase an interest in a chose in action before or after suit, and thus changes the policy of the law enunciated in the Weaver case, supra. Under this statute Smith had the right to make the contract with Cooner, and the suit could be prosecuted in the name of the latter. See, also, Grace v. Floyd, 104 Miss. 613, 61 So. 694.
The suggestion of error is overruled.
Overruled.