Merrell v. Stuart

• Decision Date: 19 November 1941
• Docket Number: 110.
• Citation: 17 S.E.2d 458,220 N.C. 326
• Parties: MERRELL v. STUART.
• Court: North Carolina Supreme Court

17 S.E.2d 458

220 N.C. 326

MERRELL v. STUART.

No. 110.

Supreme Court of North Carolina

November 19, 1941

Civil action to recover on contract, heard upon demurrer to complaint.

Plaintiff in his complaint alleges that he and defendant are residents of Madison County, North Carolina; that defendant is an attorney at law engaged in the practice of his profession in said county; that prior to December 1, 1938, one Charley Chandler, a native and former resident of Madison County died domiciled in Kentucky, leaving an estate of the value of about $100,000; that "Charley Chandler was the putative father of a daughter born out of wedlock, whom he recognized and regarded as his child, and for whom he had contracted and agreed to make suitable provision out of his estate" that during his residence in North Carolina prior to moving to Kentucky, said Charley Chandler was a neighbor and friend of plaintiff, and plaintiff had some general knowledge of his plans and promises to provide for his said daughter; that upon the death of Chandler others laid claim to all of his property and refused to share it with his daughter who was compelled to sue for same.

Plaintiff further alleges:

"7. That plaintiff conferred with defendant in regard to instituting and prosecuting proper legal action to recover from the estate of Charley Chandler, and from those who had taken possession of all of his property, the share thereof which he had promised and agreed to give to his said daughter; and thereupon it was mutually agreed by and between plaintiff and defendant that the defendant would handle such legal action and for his professional services should receive one-fourth part of the amount recovered plus his actual expenses and that the plaintiff for his services in conducting the necessary and indispensable investigations to discover the facts and the names and whereabouts of witnesses and other services required in the preparation of said action for trial should receive one-fourth part of the amount recovered, less his share of expenses advanced and paid out by the defendant.

"8. That in pursuance of said agreement between plaintiff and defendant, and at the special instance, request, and solicitation of the defendant, plaintiff caused the daughter of the said Charley Chandler to call at the office of the defendant in Marshall and to sign the contract prepared by defendant authorizing and directing the institution and prosecution of said legal action and agreeing to pay one-half of the amount recovered therein as full compensation and settlement for services rendered therein by plaintiff and defendant.

"9. That more than a quarter of a century elapsed between the date of the birth of his said daughter and the date of the death of Charley Chandler, during most or all of which time he was absent from the State of North Carolina and residing in the State of Kentucky, and during which time many of the witnesses who knew of his promise and agreement to provide for his said daughter had died or moved away from Madison County, and it was therefore necessary for plaintiff to conduct an extended search and inquiry, to spend much time in travel and to question a large number of people in different sections of the country, and to make two or three trips to the State of Kentucky, in order to discover the facts upon which the defendant could rely in conducting said legal proceedings and prosecute the same to a successful issue, and plaintiff's said services represented the major part of all services rendered in said action and were reasonably worth, and plaintiff earned and was justly entitled to receive one-fourth part of the amount recovered in said action."

The plaintiff further alleges that upon the trial in Kentucky the daughter of Charley Chandler recovered judgment against his estate for $10,000, and later compromised it for $9,000 which defendant received "in his capacity as an attorney and in trust for the daughter of Charley Chandler and this plaintiff, and for himself, according to the respective rights and interests of each *** under the aforesaid contracts", and is indebted to plaintiff in the sum of $2,250.00, less $50 allowance for expense and advancements made.

Defendant in apt time demurred to complaint for that it fails to state a cause of action: (1) In that the contract alleged is contrary to good morals and the public policy of this State and is illegal and void under the laws of North Carolina (2) In that it appears upon the face of the complaint "that the services alleged to have been rendered were voluntary upon the part of the plaintiff, that the plaintiff had no interest in the matters in litigation, and that any acts plaintiff alleges he may have done in furtherance of said litigation or assistance to either of the parties thereto was champertous, and that if plaintiff rendered any of the services alleged in the complaint such services were in the nature of maintenance, and that the plaintiff cannot recover for such services if any he rendered".

The court below, upon hearing had by consent at chambers in the court house at Asheville, North Carolina, sustained the demurrer.

Plaintiff appeals to the Supreme Court and assigns error.

Jas. E. Rector, of Asheville, for appellant.

Smathers & Meekins, of Asheville, for appellee.

WINBORNE Justice.

That the complaint is subject to successful attack by demurrer, we are in accord with the court below.

At the outset it is appropriate to note that the common-law offenses of champerty and maintenance have been considered and condemned in this State, notably in these cases: Martin v. Amos, 1851, 35 N.C. 201, Barnes v. Strong, 54 N.C. 100, Munday v. Whissenhunt, 90 N.C. 458. Compare Smith v. Hartsell, 150 N.C. 71, 63 S.E. 172, 22 L.R.A.,N.S., 203.

A review of these cases is deemed pertinent.

In Martin v. Amos, supra, the court held that a bond executed by defendants for payment of $200 to plaintiffs conditioned that plaintiffs "break the will" of a deceased person of whom defendants were widow and next of kin, "or 'if they failed to break the will, should pay all the costs of the suit that shall be brought"', is void on the ground of maintenance and being against public justice. Nash, J., speaking for the court, said: "The object of all laws is to repress vice and to promote the general welfare of the State; and no one can be assisted by the law in enforcing demands founded on a breach or violation of its principles. Hence sprung the maxim at common law, 'ex turpi contractu non oritur actio.' It is the public good that allows a contract to be impeached for the illegality of the consideration. *** A defendant, therefore, *** may *** prove that the consideration upon which it was given is illegal, as being immoral or contrary to public policy. And among the latter the most prominent are contracts affecting the course of justice. They are the most prominent because every individual in the community is interested in the pure and upright administration of the laws", and, continuing, "Maintenance is an offence against public justice, and is defined by Justice Blackstone, 4th vol., page 134, to be 'an officious intermeddling in a suit that no way belongs to one by maintaining or assisting either party, with money or otherwise, to prosecute or defend it ***.' Champerty is a species of maintenance, being a bargain with a plaintiff or defendant to divide the subject in dispute, if they prevail, whereupon the champertor is to carry on the suit at his own expense. *** All contracts then founded upon either or both of these offences are absolutely void. In this case *** [there] was an officious intermeddling by the plaintiffs in a suit that no way concerned them, and assisting the obligors with money in carrying on a suit to be commenced. Such a contract is immoral and illegal, and a court of law cannot lend its aid to enforce it".

In Barnes v. Strong, supra, there was involved a contract between a father and son, made during the pendency of a suit against the father, whereby the son agreed to defend the suit for the father, in consideration of receiving a part of the property in controversy, in case of success. The court held the contract to be within the prohibition of the common law against champerty, and hence void. Battle, J., writing for the court, said: "Maintenance in a court of justice, is 'where one officiously intermeddles in a suit, the pending in any such court, which no way belongs to him, by assisting either party with money, or otherwise, in the prosecution or defence of any such suit.' 1 Hawk. P. C. ch. 27, Tit. Maintenance. 'Champerty is the unlawful maintenance of a suit in consideration of some bargain to have part of the thing in dispute, or some profit out of it.' Ibid. Tit. Champerty.

"These offenses are of the same nature, the latter being an aggravated species of the former."

And, continuing, it is said that from the authorities on the subject, champerty is an offense at common law, and prevails in this State, being retained under the common-law statute in 1 Rev.Stat. Chapter 22 (now C.S. § 970). The court further cited the case of Lathrop v. Amherst Bank, 9 Metc. 489, in which the Supreme Judicial Court of Massachusetts stated: "Maintenance and champerty *** are deemed illegal, not from the consideration that all the expenses of the litigation are to be borne by a stranger, but in reference to the evils resulting from officious intermeddling, and upholding another's litigation by personal services as well as money".

In Munday v....