Blixt v. Janowiak

• Decision Date: 09 May 1922
• Citation: 177 Wis. 175,188 N.W. 89
• Parties: BLIXT ET AL. v. JANOWIAK ET AL.
• Court: Wisconsin Supreme Court

177 Wis. 175

188 N.W. 89

BLIXT ET AL.

v.JANOWIAK ET AL.

Supreme Court of Wisconsin.

May 9, 1922.

Appeal from Circuit Court, Oconto County; William B. Quinlan, Judge.

Action by Aggie Blixt and others against John Janowiak and others. Judgment for the plaintiffs, and the defendant Janowiak appeals. Modified and affirmed.

Prior to February, 1914, one Joseph Skinkis had owned and lived on a farm of 140 acres in Oconto county, Wis. On said date he with his wife, the plaintiff Aggie, now Blixt, conveyed the said farm and sold certain personal property thereon to a Mr. and Mrs. Pirek in exchange for certain real estate in Chicago where the Pireks lived. In May, 1914, Joseph Skinkis and his wife commenced an action in the circuit court for Oconto county against the Pireks to rescind such transfer of real and personal property on the ground of fraud. On June 26, 1915, a judgment was rendered in said action restoring title to the farm to the plaintiffs and for the value of the personal property. On June 29, 1918, by an instrument purporting to be a quitclaim deed, a conveyance of the real estate in question, together with a sale of the personal property, appear to have been made by the plaintiffs to one Stanley Grochocki and such instrument recorded on July 5, 1915. Neither plaintiff Joseph Skinkis nor his wife tried to take possession of said farm after their conveyance in February, 1914.

On October 14, 1915, said Grochocki conveyed by warranty deed to the defendant John Janowiak reciting a consideration of $9,500, made up, it was claimed, of the assumption of then outstanding mortgages of about $4,000 and the then payment of the balance in cash and by check. Stanley Grochocki remained in possession after the quitclaim to him in June, 1915, until his alleged sale to defendant Janowiak in October, 1915, and then continued in possession as an alleged tenant of Janowiak, being succeeded by George and Helen Gill, who were in possession at the trial.

In March, 1920, a contract was drawn and executed by Joseph Skinkis and his former wife, the plaintiff Aggie Blixt (they having been divorced in 1918 and she having again married), reciting the former ownership of and the proceedings with reference to the said real estate, and then provided that said Joseph consented to the commencement of a further action to be instituted to again recover possession and title to said farm, he quitclaiming to his former wife all his interest in the land with a provision that she would pay to him 5 per cent. of the value in excess of $3,000 of the land if so recovered.

On March 15, 1920, an agreement was made with Aggie Blixt and her now husband, Alfred Blixt, for the employment of an attorney in Chicago, Ill., for the prosecution of such lawsuit. It was further agreed that she would pay the sum of $100 toward defraying the necessary costs and expenses of instituting and prosecuting such lawsuit, and, in case the employment of local counsel in Wisconsin were necessary, she would contribute 50 per cent. of the fees of such local counsel. and further provided that, in case of a recovery through said lawsuit of such farm, an undivided one-half interest therein should be conveyed to the Chicago attorney as additional compensation for his services.

On March 25, 1920, this action was commenced against the parties in possession of said farm, Stanley Grochocki, to whom the same had been conveyed by Joseph Skinkis and Aggie, his then wife, John Janowiak, to whom said Grochocki had conveyed, and one John A. Rybiczinski, who, it was contended by plaintiffs, had been the confidential agent and trusted adviser of Mr. and Mrs. Skinkis during the various proceedings and through whose effort, it was alleged, plaintiffs had been induced to execute the quitclaim deed to Grochocki in June, 1915. The Pireks were also interpleaded as defendants and asserted by counterclaim their right to certain relief. Their claim, however, was denied by the court, and, no appeal being taken, the questions involved are not here considered.

During the trial the existence of the contract between the Chicago attorney and the plaintiffs was called to the attention of the court.

The contesting defendants then moved that the action be dismissed on the ground of the champertous nature of said contract. It clearly appeared that the attorneys in Wisconsin representing plaintiffs were in no wise parties to said contract and did not know of the same until it was brought to their attention on the trial.

After such motion was made, the said attorney from Chicago and the plaintiffs agreed and in writing to rescind and abrogate the contract of March 15, 1920, so alleged to be champertous, and there was refunded to the plaintiffs the money they had advanced pursuant to the same. A new agreement was then made between the attorney and the plaintiffs as against which no objection is made. Upon such facts the trial court denied defendants' motion to dismiss and permitted the action to proceed.

The court gave judgment in favor of the plaintiffs, the substance of the findings being that gross fraud had been perpetrated by the defendants Rybiczinski, Janowiak, and Grochocki, whereby the plaintiffs Joseph Skinkis and Aggie Skinkis, his then wife, had been induced to convey the property recovered by them by the judgment in 1915 to the defendant Grochocki; that no consideration had been paid by defendant Janowiak to Grochocki for the conveyance by the latter to the former and that such transaction was also a fraud upon the plaintiffs; that, during the time while plaintiffs had been out of possession, there had been paid as rent to the defendant John Janowiak by those in possession the sum of $1,550. The plaintiffs having alleged in their complaint that the defendants Rybiczinski and Janowiak during their possession of the farm had the rents, issues, and profits therefrom and that the fair cash rental value has been $500 per annum, and asking for the sum of $2,500 for the rent of said farm, the court gave them judgment for the said $1,550.

It was further found that during the same period there had been paid by defendant Janowiak $484.71 for taxes lawfully assessed against said premises and the further sum of $550 for accrued interest on mortgages then outstanding, the validity of which mortgages has not been questioned by plaintiffs. The trial court refused to allow him said two items aggregating $1,034.71 out of said sum of $1,550.

From the judgment entered in accordance with such findings the defendant Janowiak has appealed.

Crownhart and Owen, JJ., dissenting in part.John B. Chase, of Oconto, and William J. Dillin, of Chicago, Ill. (Minahan, Minahan, Minahan & Duquaine, of Green Bay, of counsel), for appellant.

Classon & Whitcomb, of Oconto, and C. C. H. Zillman, of Chicago, Ill., for responddents.

ESCHWEILER, J. (after stating the facts as above).

The appellant, defendant Janowiak, challenges the findings of the court below on its determination that fraud was perpetrated by him and defendant Rybiczinski and for which fraud the court reinstated plaintiffs Aggie Blixt and Joseph Skinkis in the title to and possession of the farm.

We have not set out the details of the evidence in the record because it presents such a clear and convincing picture of gross fraud, taking advantage of gross credulity, that no useful purpose would be served by spreading them upon our record. It is enough to say that the evidence amply supports the conclusions of the trial court in that regard and they are confirmed.

It is contended by appellant that, under the established doctrine of this court, the contract between the Chicago attorney and the plaintiffs for the prosecution and carrying on of this lawsuit being champertous and called to the trial court's attention, it was his absolute duty to dismiss this lawsuit on the ground of public policy.

On the other hand, it is contended by plaintiffs that, if such be the heretofore recognized rule of this jurisdiction, it is not in accord with the doctrine on the same subject elsewhere and should be now repudiated, or, in case that be not done, still it was a proper exercise of judicial discretion to permit the parties to such champertous agreement to rescind the same and proceed from that point on with the same litigation upon a new and legitimate contract for its conduct.

[1] That a contract savoring of champerty or maintenance at common law cannot form the basis for a cause of action between the parties to such a particular contract is well recognized by a universal line of authorities and needs no further consideration. The rule is declared in such cases as Miles v. M. F. L. Ass'n, 108 Wis. 421, 433, 84 N. W. 159;Ellis v. Frawley, 165 Wis. 381, 161 N. W. 364.

[2] But this court stands practically alone in holding that, where it appears in the trial of a civil action that either party thereto has a contract savoring of champerty or maintenance with his attorney or some third person, such party's complaint or counterclaim, as the case may be, shall be dismissed, irrespective of the merits and solely because public policy forbids a court to continue hearing a cause where there is such an apparent stain upon the record. See note to Prosky v. Clark, 32 Nev. 441, 109 Pac. 793, in 35 L. R. A. (N. S.) p. 515; 5 R. C. L. p. 284; 11 C. J. p. 270.

Elsewhere the recognized rule seems to be that the taint of champerty or maintenance only affects the litigation between parties to such contract itself. It is the rule in Illinois where this particular contract was made (Elser v. Village of Gross Point, 223 Ill. 230, 240, 79 N. E. 27, 114 Am. St. Rep. 326), and elsewhere (Euneau v. Rieger, 105 Mo. 659, 682, 16 S. W. 854;Reichert v. Sheip, 204 Ala. 86, 85 South. 267;Cress v. Ivens, 163 Iowa, 659, 145 N. W. 325;Harness v. Baltimore & O. R. Co., 86 W. Va. 284, 103 S. E. 866;Irons v. Croft Hat & N. Co., 86 W. Va. 685, 104 S. E. 111;Young v. Young, 196 Mich. 316, 162 N. W. 993;...