Contract, Validity. Champerty. Attorney. Equity Jurisdiction. A contract by an attorney at law to prosecute an action for two thirds of the proceeds, with no indication that there is to be any compensation in case of failure, and where in case of success a debt for services is not in the contemplation of the parties, is void for champerty.
The fact that a plaintiff in equity could have set up the facts on which he relies as an equitable defence to an action at law does not deprive this court of jurisdiction in equity.
This court has jurisdiction in equity to set aside a contract void for champerty.
A client who has made with his attorney a contract in writing void for champerty is not barred as one in pari delicto from maintaining a suit in equity to set aside the contract.
The rule that one must come into equity with clean hands does not apply to a client bringing a suit in equity against his attorney to set aside as void for champerty a contract in writing to which the plaintiff is a party.
LORING, J.
The only exception to the master's report taken by the defendants Tebbetts and Dowd is that he erred in his finding of law that the agreement in question was void for champerty.
The master's finding is as follows: "Findings of Law. . . . I find that the said agreement is void for champerty. It is a contract by the defendants to prosecute a suit at law for a percentage of the proceeds. There is no indication that there was to be any compensation in case of failure, and in case of success a debt for services was not in the contemplation of the parties. The provision as to lien was inserted to give the defendants a more secure hold on the proceeds."
The parties reduced their agreement to writing, and we agree with the master in the construction to be given to that agreement. The cases are reviewed in Hadlock v. Brooks, 178 Mass. 425, and nothing need be added here.
Apart from the objection that the defendants waived their demurrer (if the part of the answer relied on be taken to be a demurrer) by going to a hearing on the merits, there is nothing in the objection that the facts relied on as entitling the plaintiff to relief could have been set up as an equitable defence. That does not bar the plaintiff from obtaining relief in a court of equity if the court has jurisdiction. Cook v. Richardson, 178 Mass. 125.
There is a jurisdiction in equity to relieve against a void contract made by a solicitor on the ground of constructive fraud, of which equity has jurisdiction. For an instance of the exercise of a similar jurisdiction see Reynell v. Sprye, 1 De G., M. G. 660. See also O'Brien v. Lewis, 32 L.J. Ch. (N.S.) 569.
Since St. 1877, c. 178, now R.L.c. 159, § 1, this court has full equity jurisdiction. The cases are collected in Niles v. Graham, 181 Mass. 41.
The allegation in the bill admitted by the answer "that at the time of the execution of said agreement . . . [these defendants] . . . were acting as attorneys for the plaintiff in the matter of her said claim against the [other] defendants" does not prevent this conclusion. The agreement covers the "services rendered and to be rendered."
The plaintiff is not barred of her remedy as one in pari delicto, or who has not come into equity with clean hands. The money has not been paid to the attorneys and therefore it is not necessary to go so far as the court went in Reynell v. Sprye, 1 De G., M. G. 660; Cox v. Donnelly, 34 Ark. 762; Hale v. Sharp, 4 Cold. 275.
Decree affirmed.