Vimont v. Chi. & N. W. Ry. Co.

• Decision Date: 21 June 1886
• Citation: 28 N.W. 612,69 Iowa 296
• Court: Iowa Supreme Court
• Parties: VIMONT v. CHICAGO & N. W. RY. CO.

69 Iowa 296

28 N.W. 612

VIMONT

v.CHICAGO & N. W. RY. CO.

Supreme Court of Iowa.

June 21, 1886.

Opinion on rehearing. S. C. 22 N. W. Rep. 906.

ROTHROCK and ADAMS, JJ., dissenting.

BECK, J.

1. A rehearing was allowed in this case upon the petition of defendant. After reargument it has been again submitted. Counsel for defendant, on the petition for rehearing, argue at length the question of defendant's right to remove the cause to the federal court, which is identical with the question determined by us in a prior case of the same title. See 64 Iowa, 513;21 N. W. Rep. 9. But no such question is in this case, and counsel correct the error into which they had fallen in a brief filed upon the rehearing.

2. In addition to the question expressly determined in the foregoing opinion, upon which we have no occasion to say more, and with the disposition whereof we remain well satisfied, other questions urged upon the rehearing seem to demand further brief attention. These questions arise upon defendant's answer, a demurrer to which was sustained, pleading, substantially, these defenses: (1) The assignment of the claim to plaintiff was “collusive, colorable, and fraudulent,” in that it was made to deprive defendant of the right to a removal of the cause to the federal courts, and the assignor is the real party in interest, and it is to receive the entire benefit of the claim. (2) The assignment is champertous, and is “unlawful maintenance.”

It will be observed that defendant pleads (1) that the assignment is “collusive, colorable, and fraudulent,” on the ground that it was made to defeat defendant's right of removal of the cause to the federal court; (2) that the assignor is the real party in interest, and is to receive the entire benefits of the claim; (3) the assignment is champertous.

3. The contract between the assignor and assignee, and the assignment itself, are substantially like, if not identical, in form with, the instruments set out in the opinion upon the rehearing of another case of the same title heretofore decided by us. See 64 Iowa, 513;21 N. W. Rep. 9. The question presented in the second defense above stated, is sufficiently discussed in the foregoing opinion.

4. The first defense above specified may be disposed of upon the following considerations: If the assignment was lawful to defeat the transfer to the federal court, though made for that purpose, it cannot be alleged that it was “collusive, colorable, and fraudulent,” because of that motive. The law, recognizing it as lawful notwithstanding the motive that prompted it, will not pronounce it void by reason of the existence of that motive. It is settled by the decision of the United States supreme court and this court that a transfer to the United States court cannot be made on the ground that the motive of the assignment was to defeat the transfer. See Provident Sav. Life Assur. Soc. v. Ford, 114 U. S. 635;S. C. 5 Sup. Ct. Rep. 1104;Vimont v. Chicago & N. W. Ry. Co., 64 Iowa, 513; S. C. 21 N. W. Rep. 9. In this case the assignment was sufficient to pass to plaintiff the legal title to the claim. He is vested with property therein, and, by virtue of that property right, clothed with authority to maintain an action upon the claim.

It is not alleged that the assignment is “collusive, colorable, and fraudulent” for any reason other than the purpose to prevent the renewal of the action brought upon the claim to the federal court. The plaintiff is the real party in interest, required by the statute to bring suit on the claim. Defendants have no ground of complaint against the assignment, except that it defeats their right of removal, which the courts held it lawfully does. Now, if the defense under consideration is sufficient to defeat the action, the plaintiff cannot have a remedy at all by suit. The assignment would be as nothing, and any action on the claim must be brought by the assignor in the United States court, or, if brought in the state court, it would be transferred to the federal court. The law never does by indirection what it will not do directly. It declares that the motive of the assignment is not sufficient to give the federal court jurisdiction, in a direct application made for a transfer. In an indirect manner, such jurisdiction is not conferred on the ground of the motive of the assignment. The defendant, as has been said, claims on no other grounds than that plaintiff is not the real party in interest, or that, for any other reason than that the motive of the assignment was to defeat a transfer, it was void and fraudulent.

5. Counsel for defendant, upon the rehearing, again argue the proposition that the assignment under which plaintiff prosecutes this action is void by reason of the fact that it is champertous. They insist that this objection is not disposed of by Vimont v. Chicago & N. W. Ry. Co., 22 N. W. Rep. 906, cited in the foregoing opinion as having that effect. We will briefly discuss this question, and present considerations which, to our minds, support the conclusion that the assignment is not invalidated by champerty.

It has been before stated that the questions for our consideration arose upon demurrer to defendant's answer. To attain a proper understanding of the precise question presented by the record, it becomes necessary to state more particularly the pleadings in the case than is done in the foregoing opinion. The petition sets out the assignment of the claim to plaintiff, which is in writing. It is signed by the assignor alone, and purports to be “for value received,” and contains no contract, covenant, or expressed obligation binding the assignee. There is nothing in it upon which the charge of champerty can be based. It is simply, in effect, an assignment of the claim, and nothing more. The defense of champerty is pleaded in the fourth count of the answer, which is in the following language:

“For further defense herein defendant says that said alleged assignment was executed, delivered, and accepted by plaintiff, and its acceptance took effect, in the state of Illinois; and that at the time of the delivery and acceptance thereof by plaintiff, and as a part of the same transaction, the plaintiff executed and delivered to said Darby Carr an agreement in writing, in words and figures as follows, to-wit:

‘In consideration of the assignment to me by Darby Carr of his claim for damages against the Chicago & Northwestern Railway Co., [describing it,] I hereby agree to dispose of the entire amount realized on said claim, as follows: For my own compensation in and about the prosecution of said claim, and for the use of any advance of money I may make, I am to retain thereof the sum of fifty dollars. I am also to retain all sums of money that I may advance in the prosecution of said claim. Next, I agree to pay out of the proceeds of such recovery the reasonable fee of the attorneys and agents employed to prosecute said claim, or such fee therefor as may be agreed upon, if an...