Miller v. Anderson

• Decision Date: 15 January 1924
• Citation: 196 N.W. 869,183 Wis. 163
• Parties: MILLER v. ANDERSON.
• Court: Wisconsin Supreme Court

183 Wis. 163

196 N.W. 869

MILLER

v.ANDERSON.^a1

Supreme Court of Wisconsin.

Jan. 15, 1924.

Appeal from Circuit Court, Monroe County; E. C. Higbee, Judge.

Action by Fred W. Miller against T. E. Anderson. From a judgment for defendant dismissing complaint, and from an order denying a motion to vacate the judgment, plaintiff appeals. Reversed and remanded, with directions.

The plaintiff in this action was in the employ of the Interstate Packing Company, at Winona, Minn., from the 22d day of February, 1921, to the last day of February, 1922, as office manager and credit man. He was an experienced bookkeeper, and, as a part of his duties, supervised the bookkeeping. During the first six weeks of his employment, the superintendent of the packing company, during a conversation in which the superintendent criticized the business methods of the company and reflected upon its honesty and square dealing, told the plaintiff that the packing company owed a stock shipper at Tomah a large sum of money. After plaintiff left the employ of the company, he recalled this conversation, and conceived the idea that the stock shipper at Tomah might be willing to pay something for this information, but he did not know the latter's name. He went to Winona, called up the bookkeeper of the company, and ascertained the name of the stock shipper of Tomah to be that of the defendant. He went to Tomah, interviewed the defendant, and told him he knew of a party that was owing him a considerable sum of money. He at first stated that the party lived at La Crosse. Defendant replied that there was only one party in La Crosse who owed him money and that it did not exceed $300 or $400. The plaintiff then suggested that he could give him $400 for the claim and have enough left to pay him for his trouble. Upon this visit it was evidently the purpose of the plaintiff to purchase the account. During the negotiations the defendant sought to procure the name of the debtor, but this the plaintiff steadily refused to reveal. This was on Saturday, and nothing came of their negotiations. Plaintiff, however, returned to Tomah on Monday. Negotiations were resumed, and the defendant finally agreed to sell the claim against whomever it might be for $400, the same to be paid after plaintiff should make collection. They proceeded to a lawyer's office for the purpose of having an assignment of the claim prepared. During all this time defendant importuned the plaintiff to reveal the name of the debtor. Plaintiff persistently refused so to do. While in the lawyer's office defendant refused to execute the assignment. The attorney then suggested that they enter into a contract by which defendant was to pay plaintiff 50 per cent. of any amount which might be collected from the alleged debtor. This was agreed to. Plaintiff then stated that the debtor was the Interstate Packing Company at Winona. Defendant expressed the opinion that the Interstate Packing Company owed him nothing. A contract was drawn up, however, of which the following is a copy:

“Whereas, the said party of the first part has prior hereto had certain business dealings with the Interstate Packing Company, a corporation, of Winona, state of Minnesota, said business transactions consisting of shipping and selling hogs to the said Interstate Packing Company; and

Whereas, it is the belief of both party of the first part and the party of the second part that the said Interstate Packing Company of Winona, Minnesota, has not fully paid the said party of the first part for all merchandise sold by the party of the first part to the Interstate Packing Company; and

Whereas, the said party of the second part is an auditor and accountant and is desirous of making such investigation as he deems necessary in order to determine whether the said party of the first part has received all moneys rightfully due and owing the party of the first part for merchandise sold said corporation:

Now, therefore, it is agreed by and between the parties to this contract that the said party of the second part will make such investigation of shipments and such other investigation of sales made by said party of the first part of hogs to the Interstate Packing Company and if it is ascertained that there is a balance due the said party of the first part and the same can be collected from the Interstate Packing Company, that the said party of the first part and the said party of the second part will divide all moneys received from the Interstate Packing Company, owing to the said party of the first part, equally; that is, the said party of the first part is to receive fifty per cent. (50%) of the moneys received and the party of the second part is to receive fifty per cent. (50%); that all the money as it is received is to be divided equally.

It is further agreed by and between the parties that the said party of the second part will commence to make his investigation and audit as promptly as possible and that the said party of the first part will assist the said party of the second part by turning over to the said second party such account sales and other written memorandums of sales made by the first party to the Interstate Packing Company.”

Upon execution of this contract plaintiff and defendant went to the depot of the Chicago, Milwaukee & St. Paul Railway Company, at Tomah, for the purpose of examining the records to ascertain the number of carloads of stock that the defendant had shipped to the Interstate Packing Company. This information was obtained. It appears to have been the custom for the Interstate Packing Company, upon receipt of a carload of stock, to send the shipper a sales slip showing the weight of the stock at Winona, the price, and the amount due for the carload. They then commenced a search for these sales slips. They had not been preserved by the defendant in any orderly or systematic manner, and the search was instituted in the stock shipper's office at the railway station, at defendant's home, and through his old coat pockets. Eventually sales slips tallying with the records of carload shipments at the depot were found. They then repaired to the bank, of which defendant was president, at Tomah, and investigated the credits to defendant's account in that bank. Credits to his account corresponding to all sales slips except two were found. It thus appeared that Anderson had not received payment for two carloads of stock. They figured up the amount due for these carloads of stock, amounting to something over $3,200, added interest for 2 1/2 years, and made a draft on the Interstate Packing Company for the amount. When this was done, plaintiff returned to his home at La Crosse, defendant promising to send plaintiff a check for his portion of the amount realized on the claim. The draft was returned unpaid. Thereafter plaintiff again went to Tomah, canvassed the situation with the defendant, and discussed the means which should be adopted to secure payment. Plaintiff suggested that defendant place it in the hands of an attorney as a collection item. This was not favored by the defendant, who expressed the opinion that he could go to Winona and secure a settlement. It was agreed that within a couple of days defendant should go to Winona to endeavor to secure a settlement of the account. A number of days thereafter plaintiff called defendant on the telephone and asked him if he had been to Winona. He replied in the affirmative, and said that he had settled with the packing company for $3,750. Plaintiff then suggested that he send him a check for his share. Defendant demurred, and said that he wanted to see him first. It was agreed that plaintiff should go to Tomah on the next train. Anderson met him at the depot and offered him $500, stating that he had been advised that the contract was unenforceable and that he would not pay him any more. Plaintiff then commenced this action. It was tried before the court and a jury. At the conclusion of the evidence the court directed a verdict in favor of the plaintiff for $2,116. Upon this verdict judgment was duly entered in favor of the plaintiff. Thereafter the court by its order vacated the judgment so entered and rendered judgment in favor of the defendant, dismissing plaintiff's complaint. From this judgment, and order denying a motion to vacate the same, plaintiff brings this appeal.

John F. Doherty and Cowie & Hale, all of La Crosse, for appellant.

Grady & Farnsworth, of Portage, for respondent.

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

Defendant and respondent contends that the contract, by which he agreed to give the plaintiff one-half of what might be recovered upon the claim, is void as being contrary to public policy, in that: (a) It was champertous; (b) it held out an inducement to commit or induce the commission of fraud or perjury; and (c) it constituted an agreement whereby a person is to receive more than the statutory witness fees for appearing and testifying to facts within his knowledge.

[1][2][3] That a champertous contract is void, and will not be enforced, is a trite proposition. Contracts to pay for collecting and procuring testimony to be used in evidence, coupled with a condition that the contractee's right to compensation depends upon the character of the testimony procured, or upon the result of the suit in which it is to be used, have been uniformly condemned by the courts as contrary to public policy, for the reason that such agreements hold out an inducement to commit fraud or procure persons to commit perjury. Thus, a contract to pay a physician a percentage of the recovery for acting as an expert in a personal injury action is against public policy. Davis v. Smoot, 176 N. C. 538, 97 S. E. 488;Sherman v. Burton, 165 Mich. 293, 130 N. W. 667, 33 L. R. A. (N. S.) 87;Thomas v. Caulkett, 57 Mich. 392, 24 N. W. 154, 58 Am. Rep. 369. This principle was thoroughly considered and firmly established in Manufacturers' & Merchants' Inspection...