Starke v. Wannemacher
| Decision Date | 05 February 1916 |
| Docket Number | 1915 |
| Court | North Dakota Supreme Court |
Appeal from a judgment and an order denying a motion for judgment notwithstanding the verdict of the District Court of Stark County, Crawford, J.
Defendant appeals.
Affirmed.
F. C Heffron (of record) and Newton, Dullam, & Young (on oral argument), for appellant.
Our statutes upon the question of right of an attorney at law to buy promissory notes with the intention to bring suit on them are practically declaratory of the doctrine of champerty. Comp. Laws 1913, §§ 9412, 9414, 9416 and 9417.
The purchase of the note in question with intent to sue, if necessary, was a criminal act, and void, and gives plaintiff no right to bring or maintain this action. Galbraith v Payne, 12 N.D. 164, 96 N.W. 258; Burke v Scharf, 19 N.D. 227, 124 N.W. 79; Mann v. Fairchild, 14 Barb. 548, 2 Keyes, 106; Arden v. Patterson, 5 Johns. Ch. 48; Browning v. Marvin, 100 N.Y. 144, 2 N.E. 635; Maxon v. Cain, 22 A.D. 270, 47 N.Y.S. 855; Dahms v. Sears, 13 Ore. 47, 11 P. 891; Miles v. Mutual Reserve Fund Life Asso. 108 Wis. 421, 84 N.W. 159.
Nor does the fact that the purchase was made with intent to sue only in case of contingency make any difference. Moses v. McDivit, 2 Abb. N. C. 47.
When payment and delivery are concurrent, there is nothing to be done by either party, and if nothing is done by either, neither is in default, and neither party can hold the other for breach of the contract. The contract and the note in suit had been abandoned and canceled by the parties to the original contract, and therefore the note had no existence,--was not the subject of sale. Bartlett v. Scott, 55 Neb. 477, 75 N.W. 1102; Haynes v. Brown, 18 Okla. 389, 89 P. 1124; Cole v. Swanston, 1 Cal. 51, 52 Am. Dec. 288; Barnard v. Houser, 68 Ore. 240, 137 P. 227.
T. F. Murtha, for respondent.
An order denying a motion for judgment notwithstanding the verdict is not an appealable order. Turner v. Crumpton, 25 N.D. 134, 141 N.W. 209; Houston v. Minneapolis, St. P. & S. Ste. M. R. Co. 25 N.D. 471, 46 L.R.A.(N.S.) 589, 141 N.W. 994, Ann. Cas. 1915C, 529.
A motion for new trial in the court below is necessary to secure a review of questions of fact in the supreme court. Comp. Laws 1913, §§ 7842, 7843.
The purchase of notes and choses in action by an attorney is not within the prohibition of the statute, and is not champerty; and appellant was not a party to the alleged champertous contract, and therefore cannot raise such question, even if it here existed. Hall v. Bartlett, 9 Barb. 297; Moses v. McDivitt, 88 N.Y. 62; Wetmore v. Hegeman, 88 N.Y. 73; West v. Kurtz, 16 N.Y. S. R. 696, 2 N.Y.S. 110, 15 Daly, 99, 3 N.Y.S. 14; Van Dewater v. Gear, 21 A.D. 201, 47 N.Y.S. 503; De Forest v. Andrews, 27 Misc. 145, 58 N.Y.S. 358; Wightman v. Catlin, 113 A.D. 24, 98 N.Y.S. 1071; Bulkeley v. Bank of California, 68 Cal. 80, 8 P. 643; Tuller v. Arnold, 98 Cal. 522, 33 P. 445.
In order to come within the statute, the purchase of the note must be for the very purpose of bringing suit on it. West v. Kurtz, 16 N.Y. S. R. 696, 2 N.Y.S. 110.
It is the settled law that conveyances made at judicial or official sales, or under decree of court, of lands held adversely, are not champertous, either at common law or under the statute. State Finance Co. v. Halstenson, 17 N.D. 149, 114 N.W. 724; 6 Cyc. 858, 974, and cases cited; Electric Lighting Co. v. Rust, 117 Ala. 680, 23 So. 751; Humes v. Bernstein, 72 Ala. 546.
At common law where personal property was in the adverse possession of another, the sale or assignment was champertous, as against public policy. 6 Cyc. 857, and cases cited.
This rule is held not to apply to judicial sales. 6 Cyc. 858; Hoyt v. Thompson, 5 N.Y. 345; Bluefields S. S. Co. v. Lala Ferreras Cangeloist S. S. Co. 133 La. 424, 63 So. 96.
The question of champerty in the purchase cannot be raised by one not a party to the alleged champertous contract, to defeat a just debt. Woods v. Walsh, 7 N.D. 376, 75 N.W. 767; Randall v. Baird, 66 Mich. 312, 33 N.W. 506; Isherwood v. H. L. Jenkins Lumber Co. 87 Minn. 388, 92 N.W. 230; Walsh v. Allen, 6 Colo.App. 303, 40 P. 473; Prosky v. Clark, 32 Nev. 441, 35 L.R.A.(N.S.) 512, 109 P. 793; Croco v. Oregon Short Line R. Co. 18 Utah 311, 44 L.R.A. 285, 54 P. 985; Pennsylvania Co. v. Lombardo, 49 Ohio St. 1, 14 L.R.A. 785, 29 N.E. 573; Taylor v. Gilman, 58 N.H. 417; Million v. Ohnsorg, 10 Mo.App. 432; Hart v. State, 120 Ind. 83, 21 N.E. 654, 24 N.E. 151.
This action was brought to recover upon a promissory note in the sum of $ 1,500, which it is alleged was executed and delivered by the defendant to the Missouri Slope Brick & Tile Company for a valuable consideration, on or about March 30, 1908, and thereafter sold and assigned to the plaintiff for a valuable consideration. The answer interposed the defenses of (1) want of consideration; (2) failure of consideration; (3) nondelivery of the note; and (4) that the plaintiff was an attorney at law, duly admitted to practice and practising his profession in the state of North Dakota, and that he purchased the note with other choses in action from the said Missouri Slope Brick & Tile Company for the purpose of bringing suit thereon, and that hence the purchase was champertous, and plaintiff barred from maintaining the action. The latter defense was first tried to the court without a jury. The court held that the plaintiff's purchase of the note was not champertous, and that plaintiff had a right to maintain the action. A jury was thereupon impaneled, and the other issues were submitted to the jury, which returned a verdict in favor of the plaintiff. Judgment was entered pursuant to such verdict. Defendant did not move for a new trial, but, some time subsequent to the entry of judgment, moved for judgment notwithstanding the verdict. The appeal is taken from the judgment and from the order denying defendant's motion for judgment notwithstanding the verdict.
Appellant makes no specification of insufficiency of evidence, but presents for our consideration certain errors of law. A number of such assignments, however, have been abandoned, and the only errors argued in appellant's brief, and, hence, the only ones which we shall consider are: (1) Was the plaintiff's purchase of the note in question champertous and void under the laws of this state? (2) Was defendant entitled to a directed verdict upon the grounds of nondelivery of the note or want or failure of consideration thereof? We will consider these propositions in the order stated.
(1) The note sued upon was given by the defendant to Missouri Slope Brick & Tile Company for fifteen shares of stock in such company. The stock was purchased through the agency of one Kalman. At the time the note was given, the defendant also purchased ten shares of stock in the same company, owned by Kalman. The defendant executed and delivered his two notes, one for $ 1,000 for the ten shares of stock purchased from Kalman, and one for $ 1,500 for the fifteen shares of stock purchased from the Missouri Slope Brick & Tile Company (the latter being the note involved in this action). Kalman testified that he sold the stock, prepared the note involved in this action, and that the defendant, Wannemacher, signed it in his presence.
He further testified:
Q. And what was that note given for?
A. For $ 1,500 worth of stock in the Missouri Slope Brick & Tile Company.
Q. Was there any understanding or agreement as to what was to be done with the stock?
A. The stock was to be held as collateral on the note.
Q. That is, Mr. Wannemacher was not to have the stock until he paid the note?
A. No, that says on the face of the note.
Q. I call your attention to some writing in the lower left-hand corner of the note as follows: 'Secured by Mo. Slope B. & T. Company stock No. --' and ask you in whose handwriting that is?
A. That's in my handwriting.
Q. And when was that put on there?
A. At the time this note was made.
. . . .
Q. At the same time that Mr. Wannemacher gave this "Exhibit F," the note for $ 1,500, did he purchase any other stock besides this of the Missouri Slope Brick & Tile Company?
A. He did.
Q. How many shares?
A. Ten.
Q. Who owned that ten shares?
A. I did.
Q. Did he give you a note for that?
A. I don't remember now which it was, but I think it was.
Q. Was it understood between you and Mr. Wannemacher that the stock could be issued and held as security for the note?
A. Yes, sir.
The defendant paid the thousand dollar note and received the canceled note and the ten shares of stock. Subsequently in 1910, the Missouri Slope Brick & Tile Company became insolvent and a receiver was appointed. On April 5, 1913, the receiver, pursuant to the order of the court, offered for sale and sold at public auction all the remaining assets of the company, consisting of twenty-four accounts, notes and judgments against various parties, including the note involved in this action, and 16,850 miscellaneous bricks. All of such assets were purchased by the plaintiff at such receiver's sale.
Appellant contends that defendant's purchase of the note was champertous and void under the provisions of §§ 9412 and 9417 of the Compiled Laws of 1913. These sections read as follows: "Every attorney who, either directly or indirectly, buys or is interested in buying any evidence of debt or thing in action, with intent to bring suit thereon, is guilty of a misdemeanor." Comp. Laws 1913, § 9412.
"The provisions of §§ 9412, 9414, and 9416 relative to the buying of claims by an attorney, with intent to prosecute them, or to the lending or advancing of money by an attorney in consideration of a claim...
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