Berman v. Coakley

• Decision Date: 04 January 1923
• Citation: 137 N.E. 667,243 Mass. 348
• Parties: BERMAN v. COAKLEY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

243 Mass. 348

137 N.E. 667

BERMAN

v.COAKLEY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 4, 1923.

Case Reserved from Supreme Judicial Court, Suffolk County.

Suit by Myer Berman against Daniel H. Coakley and others for an accounting respecting certain amounts paid by plaintiff to the defendant named as his attorney and received by such defendant for the pretended purpose of stifling certain criminal prosecutions. Reserved by a single justice on the bill and the demurrer of the defendant Coakley for the determination of the full court. Demurrer overruled.Wm. H. Garland, of Boston, for plaintiff.

W. Minot Hurd, of Boston, for defendants.

RUGG, C. J.

This suit in equity comes before us for decision by reservation of a single justice upon the bill and demurrer. The allegations of the bill are admitted to be true for the purposes of this discussion. Briefly summarized the allegations of the bill are that the plaintiff was the proprietor of a hotel in Boston and the defendant an attorney at law; that the defendant in October, 1916, conspired with one Corcoran to cheat and defraud the plaintiff and in execution thereof the defendant informed the plaintiff that complaint had been made to the district attorney of the Suffolk district charging the plaintiff as proprietor of his hotel with having suffered the wife of the complainant to resort to his hotel for purposes of unlawful sexual intercourse; that the defendant knew all the facts relating to the matter, and that evidence was about to be presented to the grand jury for Suffolk county and would result in an indictment against the plaintiff; that the plaintiff thereupon retained the defendant to act as attorney for him and to take such steps as seemed to the defendant expedient; that, pretending to act as attorney for the plaintiff, the defendant represented to him that Corcoran, the attorney of the injured husband, demanded thirty-five thousand dollars in consideration of the withdrawal of his complaint; that the defendant advised the plaintiff to comply with that demand; that the plaintiff, relying upon the pretended advice of the defendant, paid to him that sum of money upon the promise of the defendant to pay the same to Corcoran for withdrawing the complaint and for release and discharge of all claims of the complainant against the plaintiff, that these representations by the defendant were false and were pretenses fraudulently made for the purpose of extorting money from the plaintiff. A second series of allegations of the same general nature omitting reference to Corcoran relate to the extortion by the defendant from the plaintiff in July, 1917, of the sum of fifteen thousand dollars. The allegations in substance are that the representations by the defendant were false and fraudulent and that the plaintiff had committed no such crime.

The prayers of the bill are for an accounting as to the two sums of money alleged to have been paid to the defendant and for an order for payment to the plaintiff of the amount found to be due and for general relief.

The grounds of demurrer are (1) want of equity, (2) plain, adequate and complete remedy at law, (3) that the plaintiff does not come into court with clean hands, (4) that the bill shows that the sums of money were paid to stifle a criminal prosecution against the plaintiff, and (5) that the bill shows that the several sums of money were paid in furtherance of an unlawful agreement to compound a felony.

The last three grounds of demurrer may be grouped together for discussion because they all rest upon the illegal elements in the relations between the defendant and plaintiff in which the latter participated according to the allegations of the bill.

It is a doctrine so well settled as not to be open to discussion that courts will not aid in the enforcement, nor afford relief against the evil consequences, of an illegal or immoral contract. One branch of that general principle is that a private agreement made in consideration of the suppression of a criminal prosecution will neither be enforced nor abrogated by a court of equity. That doctrine is founded upon the public policy that the course of justice cannot be defeated for the benefit of an individual. Worcester v. Eaton, 11 Mass. 368;Jones v. Rice, 18 Pick. 440,29 Am. Dec. 612;Atwood v. Fisk, 101 Mass. 363, 100 Am. Dec. 124;Taylor v. Jaques, 106 Mass. 291; Partridge v. Hood, 120 Mass. 403, 21 Am. Rep. 524; Gorham v. Keyes, 137 Mass. 583;Traders' National Bank v. Steere, 165 Mass. 389, 43 N. E. 187. The general doctrine is subject to a qualification or exception as widely recognized and as thoroughly established as is the rule itself. That exception is that, where the parties are not in equal fault as to the illegal element of the contract, or, to use the phrase of the maxim, are not in pari delicto, and where there are elements of public policy more outraged by the conduct of one than of the other, then relief in equity may be granted to the less guilty.

The exception is stated in 1 Story, Eq. (14th Ed.) § 423, in these words:

‘And indeed in cases where both parties are in delicto, concurring in an illegal act, it does not always follow that they stand in pari delicto; for there may be, and often are, very different degrees in their guilt. One party may act under circumstances of oppression, imposition, hardship, undue influence, or great inequality of condition or age; so that his guilt may be far less in degree than that of his associate in the offense. And besides, there may be on the part of the court itself a necessity of supporting the public interests or public policy in many cases, however reprehensible the acts of the parties may be.’

This exception was recognized in the first case which arose in this Commonwealth for the application of the rule. Worcester v. Eaton, 11 Mass. 368, where at 376 it was said in substance that where the parties are in pari delicto, there could be no relief, but that--

‘A distinction is maintained between those cases, in which one of the parties has, by an illegal act, taken advantage of and oppressed the other, and those in which it is not possible to distinguish between the parties, as to the degree of their criminality.’

Reference is made to the recovery of usurious interest as an example where the law affords relief though both parties join in the wrong. In that case the general principle was applied.

In White v. Franklin Bank, 22 Pick. 181, however, the exception was applied. That was a case where a contract by a bank for the payment of money at a future day certain was prohibited. But it was held that, notwithstanding the prohibition, the person who made the contract with the bank could recover back his deposit from the bank. This exception to the general rule was followed in Atlas Bank v. Nahant Bank, 3 Metc. 581, where similar facts were in issue. Bryant v. Peck & Whipple Co., 154 Mass. 460, 28 N. E. 678.

The exception was applied again in Lowell v. Boston & Lowell Railroad Corp., 23 Pick. 24,34 Am. Dec. 33, where it was held that a town compelled to pay double indemnity to a traveler injured by a defect in the highway might recover single damages only against a railroad through whose negligence the defective condition of the highway arose. This principle was recognized and a large number of supporting authorities were cited in Lowell v. Glidden, 159 Mass. 317, 319, 34 N. E. 459. To the same effect are Holyoke v. Hadley Co., 174 Mass. 424, 54 N. E. 889, and Boston v. Coon, 175 Mass. 283, 56 N. E. 287. Another case of the application of the exception is Simpson v. Mercer, 144 Mass. 413, 11 N. E. 720, where the wrong of a constable in attaching property was involved. Although these highway cases are not strictly applicable to the case at bar, see Boott Mills v. Boston & Maine Railroad, 218 Mass. 582, at page 594, 106 N. E. 680, the principle on which they rest is closely analogous.

The case at bar is covered exactly by Belding v. Smythe, 138 Mass. 530. That was a case where the plaintiff executed two instruments to the defendant, an attorney at law, which were champertous in their nature, and the plaintiff brought action for the cancellation of the instruments. The court said:

‘The defendantin his brief contends that the plaintiff is not entitled to relief in equity, because, if the agreements are champertous, the parties are in pari delicto. No such contention appears in the defendant's answer. The defendant is an attorney at law, and, in dealing in this manner with one whom he makes his client, the parties are not regarded as in pari delicto.’

Champerty, like compounding a felony, is a crime at common law in this Commonwealth. Thurston v. Percival, 1 Pick. 415. The fact, if it be a fact, that one may be a felony and the other a misdemeanor cannot be any sound ground for distinction between the case at bar and Belding v. Smythe. Although pleading is mentioned in Belding v. Smythe, it is plain that the decision does not rest on that ground. A champertous agreement was also set aside in Gargano v. Pople, 184 Mass. 571, 69 N. E. 343,100 Am. St. Rep. 575, where there was no question of pleading, on the authority of Belding v. Smythe.

Several New York cases are illuminating on this point. In Ford v. Harrington, 16 N. Y. 285, a client, in order to secrete his property from his creditors, conveyed or assigned it to the defendant, his attorney, upon the advice of the latter for a grossly inadequate consideration. Action was brought by the representative of the client after his death to compel reconveyance. The court said, 16 N. Y. 290:

‘The facts disclosed present a case where the court whould be called upon to interfere between the defendant and the representative of his client, and compel the former to restore what he had obtained without consideration, were it not for the fact that in making the assignment the parties were both perpetrating a fraud, were both committing a crime; and the...