Gilman v. Jones

• Decision Date: 10 April 1889
• Citation: 5 So. 785,87 Ala. 691
• Parties: GILMAN ET AL. v. JONES ET AL
• Court: Alabama Supreme Court

5 So. 785

87 Ala. 691

GILMAN ET AL. v. JONES ET AL

Supreme Court of Alabama

April 10, 1889

Appeal from city court of Montgomery; T. M. ARRINGTON, Judge.

Stone C.J., dissenting.

For dissenting opinion, see 7 So. 48.

Brickell, Semple, & Gunter, for appellants.

Roy & Pettus, for appellees.

SOMERVILLE J.

The action is one of trover, brought by the appellants against the appellees for the alleged conversion of 58 bonds, of $1,000 each, issued by the New Orleans & Selma Railroad Company. There are also two counts, added by way of amendment, in case, based on the alleged unlawful use of the bonds, and of the decree of the chancery court in which they were merged.

The main point of controversy in the case is whether the contract of August 16, 1879, between the plaintiffs, Gilman Son & Co., on the one side, and the defendants, A. W. Jones and D. S. Troy, as trustee, on the other, is void for champerty. Under this agreement, which was made in the state of New York, Jones purchased from the plaintiffs these bonds, for which a suit, by cross-bill, was then pending in the city court of Selma, Ala., sitting in equity. Morton v. Railroad Co., 79 Ala. 590. They were to be held in trust by the defendant Troy, who then had custody of them as an attorney of the appellants, and were not to be delivered until the termination of the suit, and the payment of the agreed price. The litigation was to be continued in the name of the sellers, and the purchaser was to pay the attorneys' fees, and "legal expenses incurred and to be incurred," except a retainer fee of $250 due by the present plaintiffs to their attorneys in that suit.

It is shown that in the state of New York, where this contract was entered into, there was no law of champerty which would render it illegal. The contract consequently was legal when tested by the law of that state. Sedgwick v. Stanton, 14 N.Y. 289; Thallhimer v. Brinckerhoff, 3 Cow. 623. But as the agreement of the parties was to be carried into effect in the state of Alabama, where the suit was pending, the question of its legality would probably be governed by the laws of the latter state, according to the authorities, and we shall so consider it. 1 Add. Cont. (Morgan, Amer. Ed.) § 257, p. 391; Grell v. Levy, 16 C. B. (N. S.) 73; Richardson v. Rowland, 40 Conn. 565.

Champerty is a species of maintenance, which at common law was an indictable offense. Maintenance was an officious intermeddling in a lawsuit by a mere stranger without profit. Champerty involved the element of compensation for such unlawful interference by bargain for part of the matter in suit, or some profit growing out of it, or, according to some of the authors, as well also for the whole of the thing in dispute. 1 Hawk. P. C. 462, 463; 3 Amer. & Eng. Cyclop. Law, 68, 69; Holloway v. Lowe, 7 Port. (Ala.) 488; Poe v. Davis, 29 Ala. 683; Ware v. Russell, 70 Ala. 174. It would accomplish no good to quote at length the numberless definitions of these offenses given in the old books. Sir James Stephen, in his Digest of Criminal Law, (note 8,) alludes to the vagueness with which these crimes are defined by the ancient common-law writers, and discusses the reasons why they have long since become obsolete. The ground of their origin is found in the familiar principle stated by Lord Coke: "Nothing," he says, "in action, entry, or re-entry, can be granted over; for so, under color thereof, pretended titles might be granted to great men, whereby right might be trodden down and the weak oppressed." Co. Litt. 114 a. It was a part of the law of maintenance that no chose in action, which included all rights not reduced to possession, could be assigned or transferred. This was on the ground, as said by Mr. Chitty, that "such alienations tended to increase maintenance and litigation, and afforded means to powerful men to purchase rights of action, and thereby enable them to oppress indigent debtors, whose original creditors would not, perhaps, have sued them." Chit. Bills, *6, *7. It is common knowledge, however, that this rule, refusing to sanction or give effect to the assignment of choses in action, was never adopted by courts of equity either in England or in this country, and that courts of law, yielding to the growing exactions of commerce, finally allowed the assignees of such rights to maintain suits in the name of their assignors. 2 Story, Eq. Jur. § 1050. Such assignments are now expressly authorized by the statutes of this state. Code 1886, §§ 1762, 1763, 2594.

The peculiar state of society out of which such a law grew carried it to the most absurd extremes. Men were held indictable for aiding a litigant to find a lawyer; for giving friendly advice to a neighbor as to his legal rights; for lending money to a friend to vindicate his known legal rights; for offering voluntarily to testify in a pending suit; and other like offices of charity and friendship. 3 Amer. & Eng. Cyclop. Law, 71. It is not surprising, therefore, that the law on this subject had gradually undergone a great change, which is recognized universally by jurists, judges, and law-writers everywhere. This change has been called for by the new conditions of modern society, considered in its varied relations, commercial, political, and sociological. In many of its phases it has been, both in America and England, emphatically discarded as "inapplicable to the present condition of society, and obsolete." Sedgwick v. Stanton, 14 N.Y. 289, 296; Master v. Miller, 4 Term R. 320; Thallhimer v. Brinckerhoff, 3 Cow. 623; Richardson v. Rowland, 40 Conn. 565; 2 Whart. Crim. Law, (8th Ed.) § 1854, note.

It is accordingly asserted on high English authority that no one has been punished criminally for the offense of maintenance or champerty within the memory of living man. 3 Steph. Crim. Law, 234. Public opinion in England has advanced so far on this subject that the criminal law commissioners many years ago recommended very earnestly that the offenses of maintenance and champerty be abolished, observing of them that they "are relics of an age when courts of justice were liable to intimidation by the rich and powerful and their dependents." Steph. Dig. Crim. Law, note 8.

There is much reason, it thus seems, for the relaxation of the old doctrines pertaining to this subject, so that they may be adapted to the new order of things in the present highly progressive and commercial age. Necessity and justice have, accordingly, forced the establishment of recognized exceptions to the doctrine of these offenses. Among these may be enumerated the following instances: Relationship by blood or marriage will often now justify parties in giving each other assistance in lawsuits; and the relation of attorney and client; or the extension of charitable aid to the poor and oppressed litigant; and especially is an interference in a lawsuit excusable when it is by one who has, or honestly believes he has, a valuable interest in its prosecution. It is especially with the last-mentioned exception we are concerned in the present case, which, in our judgment, is controlled by it.

The principle is thus generally stated in 3 Amer. & Eng. Cyclop. Law, 76: "It has been seen that the gist of the offense of maintenance is that the interference is officious. Where, therefore, a party either has, or honestly believes he has, an interest, either in the subject-matter of the litigation, or in the question to be determined, he may assist in the prosecution or defense of the suit, either by furnishing counsel or contributing to the expenses, and may, in order to strengthen his position, purchase the interest of another party in addition to his own. The interest may be either small or great, certain or uncertain, vested or contingent; but it is essential that it be distinct from what he may acquire from the party maintained." In Thompson v. Marshall, 36 Ala. 504, this principle was applied to a case where one co-defendant, in a suit pending to rescind a conveyance for fraud, purchased the interest of such co-defendant in the property in litigation, and assumed a liability for his vendor's share of the costs and expenses of suit. The contract of purchase was held not to be champertous, because the interference was to protect a valuable interest, and was not, therefore, either an unlawful or officious intermeddling. So, in McCall v. Capehart, 20 Ala. 521, where certain persons, erroneously believing that they had an interest in a piece of land then in litigation, purchased the interest of the defendant, and indemnified him against the cost and damages of suit, the court held the transaction free from the taint of champerty, on the ground that the assistance was rendered by the defendants "under the honest belief that they were interested in the result of the suit, and not for the purpose of fomenting litigation."

The modern and better definitions of "champerty" incorporate this idea fully. Mr. Wharton says "Maintenance is support given to a litigant in any legal proceeding in which the person giving the assistance has no valuable interest, or in which he assists from any improper motive." 2 Whart. Crim. Law, (8th Ed.) § 1854. In 2 Bouv. Law Dict. (14th Ed.) 90, it is defined to be "a malicious, or, at least, officious, interference in a suit in which the offender has no interest, to assist one of the parties to it against the other with money or advice to prosecute or defend the action, without any authority of law." So Mr. Addison involves in the definition the idea of agreeing to assist in the prosecution of a lawsuit, "in which the party making the agreement is in nowise interested, and with which he has no just or reasonable ground for interference." 1 Add. Cont. § 256. Of course, it is necessarily true that, if the offense...