Cress v. Ivens

163 Iowa 659
CourtSupreme Court of Iowa
DecidedFebruary 12, 1914
StatusPublished
Cited by7 cases

This text of 163 Iowa 659 (Cress v. Ivens) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cress v. Ivens, 163 Iowa 659 (iowa 1914).

Opinion

Evans, J.

The plaintiff, as assignee of five assignors, brought this action upon the five separate causes of action of his assignors, respectively. The original transaction involved is the same as that involved in Cress v. Ivens et al., 155 Iowa, 17. The claim on the part of the plaintiff is that the defendants, acting together, induced ten others to join them' in the purchase of a large tract of land, consisting of 14,883 acres, in Minnesota, near the city of Duluth, at a stated price of $5.25 per acre. The proposed purchase was made. Each of such ten persons took a one-fifteenth interest in the enterprise. and the defendants the remaining five-fifteenths. The purchase was made from the Boston & Duluth' Farm Land Company. The purchase was made by executory contract; one-sixth of the purchase price being paid down-and the remainder to be paid in five equal annual installments. At the time of such purchase, each of the defendants had a contract with the seller for a commission of fifty cents an acre, making a total of $1 an acre for both commissions. This commission was also payable in installments out of the corresponding installments of the purchase price. It is contended for plain[661]*661tiff that the /defendants falsely represented to their ten associates that they were to receive no commission, and that their associates stood on an equality with them in the purchase.

The former action was brought by five of such associates. That suit was brought in equity and was in the nature of an accounting as for money received by the defendants from or on behalf of their joint associates; each associate claiming a one-fifteenth share thereof. The parties to that suit recovered the full amount claimed, and the judgment in their favor was affirmed here. In the present suit the rights of the remaining five associates are involved. The present action is brought on the law side but was tried to the court without a jury. The petition is indefinite in its allegations. It does not indicate whether it claims relief as for damages or as for money had and received. The distinction is perhaps not very material. And yet some stress is laid upon it in appellee’s argument as bearing upon the question whether the causes of action now sued upon were covered or included by the settlements pleaded by the defendants and hereinafter referred to. Generally speaking, the theory of the plaintiff is that the false representations of the defendants caused each of their associates to pay more than they otherwise would have paid, and that the defendants received such excess in the form of commissions and are accountable therefor to their associates. There was no misrepresentation in any other sense as to the price of the land. The evidence is undisputed that the price quoted was the minimum price upon the tract. The evidence on behalf of the plaintiff shows that the selling company had a large acreage of land other than the land in question; that it classified its lands and fixed uniform prices upon lands of the same class; and that these were not and could not be deviated from without destroying the market for other unsold lands. The commission of $1 per acre was also the regular and usual commission paid. The alleged false representations, therefore, are confined to the question of commissions received, and the measure of recovery of each associate, if any, [662]*662is the excess amount paid by each associate by reason of the inclusion of such commission in the purchase price. Such is the theory on which the case was tried, and it bears upon the nature and extent of the settlements hereinafter to be considered. Some of plaintiff’s present assignors were named as parties in the original suit. In pursuance of settlements had by them with the defendants, they withdrew therefrom. After the trial of the former suit, the plaintiff herein, who was also a plaintiff in the former suit, obtained from his assignors written assignments of their respective causes of action arising out of the same transaction; these assignments being obtained in the summer of 1910, shortly prior to the beginning of this action on August 26, 1910.

1 ChAmpertous agreements : who may raise objection. I. The interest of the plaintiff resting solely upon the assignments referred to, the first affirmative defense urged by the defendants is that each of the contracts, under which the assignments were made, was tainted with champerty and maintenance. It is claimed under the evidence that the plaintiff, being a layman and without any interest in the litigation, solicited such assignments and agreed .to run the risk and bear the expense of the litigation for a consideration of fifty per cent, of the recovery. It is urged, therefore, that the assignments should all be deemed null and void, and that the plaintiff’s petition should on that ground be dismissed. For the appellee, it is contended that the question of champerty, as between the plaintiff- and his assignors, cannot be made an issue in this case.

The trial court did not pass upon the question of fact. Because of our conclusions about to be expressed, we find it unnecessary to pass upon it. There are some features of the contracts in question that are not fragrant. For the purposes of the argument, we may assume them to be champertous. It is the contention of appellants that when the taint of champerty is made to appear, and that plaintiff’s title to the cause of action rests thereon, it becomes the duty of the court to [663]*663refuse all relief and to dismiss the petition on that ground. There is some authority for this contention. Miles v. Insurance Co., 108 Wis., 421 (84 N. W. 159). The weight of authority, however, is with the contrary view. In Vimont v. Railway Co., 64 Iowa, 513, and s. c., 69 Iowa, 296, and in Small v. Railway Co., 55 Iowa, 582, the contrary view was adopted by this court. Such contrary view is that a champertous contract between an assignee plaintiff and his assign- or is not available to the defendant as a defense to the main action. To the same effect are Foley v. Grand Rapids Railway Co., 157 Mich. 67 (121 N. W. 257); Bick v. Overfelt, 88 Mo. App. 139; Prosky v. Clark, 32 Nev. 441 (109 Pac. 793, 35 L. R. A. (N. S.) 512); Woods v. Walsh, 7 N. D. 376 (75 N. W. 767); Taylor v. Gilman, 58 N. H. 417; Connecticut Fire Insurance Co. v. Way, 62 N. H. 622; Hart v. State, 120 Ind. 83 (21 N. E. 654, 24 N. E. 151); Davis v. Settle, 43 W. Va. 17 (26 S. E. 557); Elser v. Village of Grasspoint, 223 Ill. 230 (79 N. E. 27, 114 Am. St. Rep. 326).

The following excerpts from some of the cited cases is a sufficient indication of their holding:

Even if the rule is still in force as to agreements with laymen, we think the better rule is that the contract is only void between the parties, and does not affect the obligation of the defendant to the plaintiff. (Foley v. Grand Rapids & I. Ry. Co., supra.)

The trial court evidently was of the opinion that the contract of assignment of the notes was champertous and for that reason could not be enforced by the assignee, who had the notes under the champertous agreement. Conceding that the contract of assignment was champertous, the respondent was not a party to that contract, and for that reason was in no position to avail himself of its illegality. . . . This is now the settled rule in Missouri and is supported by a decided weight of authority elsewhere. (Bick v. Overfelt, supra.)

In a suit by Prosky v.

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