DENISON, Circuit Judge.
This case involves the construction and effect of the Kentucky statutes regarding champerty and maintenance. Section 209 invalidates all contracts made in consideration of services to be rendered in' litigation by any person, not a party of record, whereby any part of the thing in controversy is to be given as compensation. Section 210 invalidates all conveyances of lands which at the time are possessed adversely by the grantor. Section 211 is quoted in the margin.1 Section 212 permits the person in adverse possession to defend that possession upon the ground that the plaintiffs’ claim is ehampertously held.
The meaning and effect of these sections, and particularly of section 211, are presented by these facts: Several persons, heirs of Smith and Baum, grantees of the state, owned by descent and conveyance five-eighths of the Smith and Baum title. The Southern Trust Company, an Oklahoma corporation (hereinafter called the “Southern”), had purchased tax titles upon the property and owned an interest therein, or.at leaist a lien thereon. It became financially involved and the W. C. Belcher Land Mortgage Company, a Texas corporation (hereinafter called the “trustee”), being a large stockholder and creditor of the Southern, it was by the latter company voted “that the business ’affairs and properties of this company be placed in the hands of said [trustee] to be managed and controlled,” etc. It was provided that, when the indebtedness to the trustee should have been worked out and paid, all the business affairs and properties should be returned to the Southern. Thereupon a plan was devised that the interests of the Southern and of the heirs should be assembled for joint management by the trustee. To carry this plan into effect, several identical contracts were drawn up, the pertinent portions of one of which are printed in the margin.2
Eacb of tbe beirs joined, in tbe form indicated. It does not appear wbetber -tbe trustee did much or little towards carrying out this trust between December, 1919, and January, 1923; but on tbe latter date it began in tbe court below tbe ejectment suit at law now under review. In its petition tbe trustee, though appearing as sole plaintiff, describes itself in tbe caption as trustee for tbe beirs, and made averments as to tbe citizenship of [483]*483each of the heirs. Copies of the trust deeds and contracts were filed as exhibits. To this petition a general demurrer was filed, which the court sustained upon the ground that the deeds from the heirs were invalid under seetion 211. Plaintiffs then moved for leave to file an amended petition, substantially like the original, except that it set out the arrangement with the Southern, above recited, made the Southern and the heirs (including the owners of an additional one-eighth) parties plaintiff, and made several additional coal companies defendants. The court, observing nothing new in this arrangement save what it thought the immaterial relationship to the Southern, and without making reference to the change of parties, denied this petition; and upon the assumption, which for the purposes of this opinion may be accepted, that plaintiff did not desire to plead over, finally dismissed the petition. This writ of error was brought by the trustee, the Southern, and the heirs, as several plaintiffs in error, joining in one writ.
The provisions of section 211 are extraordinarily harsh. Indeed, so harsh is the lat[484]*484er portion providing for forfeiture to the state for the benefit of the adverse holder that in some early decisions the Kentucky Court of Appeals doubted or denied its validity; and, so far as the briefs inform us, it has been a dead letter during the 100 years of its existence. Act Jan. 7, 1824 (Laws 1823-24, e. 709). While the first clause of the section does not involve a forfeiture, it is harsh enough in declaring complete invalidity, no matter what the circumstances or equities may be. Contracts should not be construed to make them contrary to law or public policy if the other result may be reached by some reasonable construction. U. S. v. Central Pac. R. R., 118 U. S. 235, 240, 6 S. Ct. 1038, 30 L. Ed. 173. Indeed, the Kentucky Court of Appeals has said with reference to this very section: “The statute is a highly penal one, and should be construed' to apply to that class of eases only to which the legislative intention, elearly expressed, has been directed, and to no others.” Smith v. Paxton, 4 Dana (Ky.) 391, 395.3 In the fight of this principle, the present contract must be studied.
Each deed from the heirs conveyed the legal title, but the contract and the deed make up one agreement, the effect of which is to make the grantee the holder of that title merely as trustee, and with only the powers specified to be exercised for the benefit of the heirs.
Passing by the point that the contract does not show that it has to do with lands in adverse possession of another (for this omitted statement may be of an undisputed fact), we see at once that it does not purport to be the statutably denounced contract. If it is such contract, it is so only because the forbidden intent can be inferentially developed; so we observe how this is done. It is said, that, if the lands were adversely held, it would be the legal duty of the trustee accepting this trust, to bring suit for the possession. Perhaps so; and yet that would depend upon the facts as to each parcel. It need bring no suit surely doomed to failure. It could hardly have a duty in this respect, except to. exercise an honest discretion. Still more uncertain is the inference that the trustee, for its services in prosecuting such suit, is to receive part of the land. It has a variety Of services to perform, entitling it to compensation. If suit is brought, the prosecution of it may be a small part of the service for which it is paid. All the land is to be put into quasi corporate form, the interests being represented by certificates, and for all its services the trustee is to receive 1 per cent, of the certificates for each one of the first five years. It would result that, if the service during the first five years included bringing suits, the trustee would receive as its apportionable compensation for that service some fraction of 5 per cent.; while, if the suits were not prosecuted until after five years, the contract provides for no compensation by way of certificates.
We have found no Kentucky case making application of this section, excepting as to contracts where the prosecution of the suit was the substantial thing agreed to be done and a large share of the property involved was to be paid therefor — in other words, where the champertous element of the agreement was overwhelming, or at least dominant. The statute seems never to have been applied to a case at all resembling this one.
The vital distinction between other cases and this may well be illustrated by the one upon which the defendants largely rely (Johnson v. Van Wyck, 4 App. D. C. 294), and in which there was a somewhat analogous quasi corporate arrangement;4 but that case was of the plainest type. A half interest was to be given in exchange for the recovery, the prosecution of the suits for recovery was the only thing involved, and the prosecutor was to pay the entire expense.
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DENISON, Circuit Judge.
This case involves the construction and effect of the Kentucky statutes regarding champerty and maintenance. Section 209 invalidates all contracts made in consideration of services to be rendered in' litigation by any person, not a party of record, whereby any part of the thing in controversy is to be given as compensation. Section 210 invalidates all conveyances of lands which at the time are possessed adversely by the grantor. Section 211 is quoted in the margin.1 Section 212 permits the person in adverse possession to defend that possession upon the ground that the plaintiffs’ claim is ehampertously held.
The meaning and effect of these sections, and particularly of section 211, are presented by these facts: Several persons, heirs of Smith and Baum, grantees of the state, owned by descent and conveyance five-eighths of the Smith and Baum title. The Southern Trust Company, an Oklahoma corporation (hereinafter called the “Southern”), had purchased tax titles upon the property and owned an interest therein, or.at leaist a lien thereon. It became financially involved and the W. C. Belcher Land Mortgage Company, a Texas corporation (hereinafter called the “trustee”), being a large stockholder and creditor of the Southern, it was by the latter company voted “that the business ’affairs and properties of this company be placed in the hands of said [trustee] to be managed and controlled,” etc. It was provided that, when the indebtedness to the trustee should have been worked out and paid, all the business affairs and properties should be returned to the Southern. Thereupon a plan was devised that the interests of the Southern and of the heirs should be assembled for joint management by the trustee. To carry this plan into effect, several identical contracts were drawn up, the pertinent portions of one of which are printed in the margin.2
Eacb of tbe beirs joined, in tbe form indicated. It does not appear wbetber -tbe trustee did much or little towards carrying out this trust between December, 1919, and January, 1923; but on tbe latter date it began in tbe court below tbe ejectment suit at law now under review. In its petition tbe trustee, though appearing as sole plaintiff, describes itself in tbe caption as trustee for tbe beirs, and made averments as to tbe citizenship of [483]*483each of the heirs. Copies of the trust deeds and contracts were filed as exhibits. To this petition a general demurrer was filed, which the court sustained upon the ground that the deeds from the heirs were invalid under seetion 211. Plaintiffs then moved for leave to file an amended petition, substantially like the original, except that it set out the arrangement with the Southern, above recited, made the Southern and the heirs (including the owners of an additional one-eighth) parties plaintiff, and made several additional coal companies defendants. The court, observing nothing new in this arrangement save what it thought the immaterial relationship to the Southern, and without making reference to the change of parties, denied this petition; and upon the assumption, which for the purposes of this opinion may be accepted, that plaintiff did not desire to plead over, finally dismissed the petition. This writ of error was brought by the trustee, the Southern, and the heirs, as several plaintiffs in error, joining in one writ.
The provisions of section 211 are extraordinarily harsh. Indeed, so harsh is the lat[484]*484er portion providing for forfeiture to the state for the benefit of the adverse holder that in some early decisions the Kentucky Court of Appeals doubted or denied its validity; and, so far as the briefs inform us, it has been a dead letter during the 100 years of its existence. Act Jan. 7, 1824 (Laws 1823-24, e. 709). While the first clause of the section does not involve a forfeiture, it is harsh enough in declaring complete invalidity, no matter what the circumstances or equities may be. Contracts should not be construed to make them contrary to law or public policy if the other result may be reached by some reasonable construction. U. S. v. Central Pac. R. R., 118 U. S. 235, 240, 6 S. Ct. 1038, 30 L. Ed. 173. Indeed, the Kentucky Court of Appeals has said with reference to this very section: “The statute is a highly penal one, and should be construed' to apply to that class of eases only to which the legislative intention, elearly expressed, has been directed, and to no others.” Smith v. Paxton, 4 Dana (Ky.) 391, 395.3 In the fight of this principle, the present contract must be studied.
Each deed from the heirs conveyed the legal title, but the contract and the deed make up one agreement, the effect of which is to make the grantee the holder of that title merely as trustee, and with only the powers specified to be exercised for the benefit of the heirs.
Passing by the point that the contract does not show that it has to do with lands in adverse possession of another (for this omitted statement may be of an undisputed fact), we see at once that it does not purport to be the statutably denounced contract. If it is such contract, it is so only because the forbidden intent can be inferentially developed; so we observe how this is done. It is said, that, if the lands were adversely held, it would be the legal duty of the trustee accepting this trust, to bring suit for the possession. Perhaps so; and yet that would depend upon the facts as to each parcel. It need bring no suit surely doomed to failure. It could hardly have a duty in this respect, except to. exercise an honest discretion. Still more uncertain is the inference that the trustee, for its services in prosecuting such suit, is to receive part of the land. It has a variety Of services to perform, entitling it to compensation. If suit is brought, the prosecution of it may be a small part of the service for which it is paid. All the land is to be put into quasi corporate form, the interests being represented by certificates, and for all its services the trustee is to receive 1 per cent, of the certificates for each one of the first five years. It would result that, if the service during the first five years included bringing suits, the trustee would receive as its apportionable compensation for that service some fraction of 5 per cent.; while, if the suits were not prosecuted until after five years, the contract provides for no compensation by way of certificates.
We have found no Kentucky case making application of this section, excepting as to contracts where the prosecution of the suit was the substantial thing agreed to be done and a large share of the property involved was to be paid therefor — in other words, where the champertous element of the agreement was overwhelming, or at least dominant. The statute seems never to have been applied to a case at all resembling this one.
The vital distinction between other cases and this may well be illustrated by the one upon which the defendants largely rely (Johnson v. Van Wyck, 4 App. D. C. 294), and in which there was a somewhat analogous quasi corporate arrangement;4 but that case was of the plainest type. A half interest was to be given in exchange for the recovery, the prosecution of the suits for recovery was the only thing involved, and the prosecutor was to pay the entire expense. In the present case it is expressly agreed that the trustee shall pay nothing on account of any expense involved, save in the remote way that, if he becomes entitled to the 5 per cent, interest, that interest would be somewhat depreciated, because he would have joined with the other 95 per cent, in raising the expense money on the security of the whole property.
Applying the rule of 118 U. S. and 4 Dana, we conclude that the contracts of competent parties should be invalidated under this section 211 only when the forbidden element is both clear and characterizing, not where it is only obscure and contingent, and that this arrangement between the trustee and the heirs cannot be held obnoxious to either the letter or the spirit of the Statute.
Two other considerations seem to lead to the same result. It is expressly held in Kentucky that these champerty statutes do not reach a ease where the one who is to prosecute already holds an interest and makes arrangements with the others interested in the title that his fractional interest shall be in[485]*485creased if lie succeeds. In Russell v. Doyle, 84 Ky. 386, 1 S. W. 604, one tenant in common was to sue for the lands, for himself and his cotenants, and to receive part of their shares of the recovery. The court held that the reason of the statute failed, such an arrangement made fewer lawsuits, instead of more, and that the language of the law must be restricted to the evil at which it was aimed. Nor it it important that the interests of those who thus agree among themselves are adverse to each other. The court, in Waller’s Adm’r v. Marks, 100 Ky. 541, 38 S. W. 894, said: “Suppose that A. and B. were both claiming an interest in a tract of land, and had.reasonable ground to so claim, and that C. and others were claiming the same land, no one being in possession; would,not A. have a right to contract with B. to relinquish his claim, and aid B. in his contest with A. and others, upon the condition that, if B. succeeds, B. would convey 50 acres of the land to him (A.) ?”
From this point of view, it is seen that the Southern had an interest in or a lien upon the land. Its contract with the trustee to handle its affairs involves no champerty; the trustee would have had a right to bring a suit to recover this interest, whether brought in the trustee’s name or in the beneficiary’s name; and hence it may forcefully be claimed to have a right to take from the heirs an interest in the recovery and expand its share, if it would proceed for the benefit of all. Indeed, if cotenant B. may convey to eótenant A. and give up an interest as compensation for the necessary litigation, why not to a trustee for A.? However, the definite decision of this question does not seem to be necessary.
The consideration remains: The conveyances and contracts between the heirs and the trustee (and also a similar arrangement with the Southern, if there was one) were either valid according to their purport or null and void under section 211, or probably, considered as conveyances, void under section 210.5 If they were good, as we think they were, that is the end of the matter; if they were “null and void,” then the Southern and the heirs could be plaintiffs in this suit, in their own right, as they attempted to be by their tendered amended declaration. The Kentucky Code (section 21) permits a trustee to sue without joining his beneficiaries, but the next section of the Code provides that all parties in interest may be parties of record. We see no reason why the heirs, suing substantially in their own right, might not join the trustee, possessing an uncertain right which should be brought in for adjudication, or why the trustee, suing in his right, might not join his beneficiaries. It would certainly seem consonant with proper theories of pleading, that all parties might join in one suit and, if the difference turned out to be important, the final judgment might decide just which plaintiffs should succeed, although we do not perceive how this makes the slightest difference to the defendant. We do not know of any principle, and we find no Kentucky rule, which requires that when the defendant finds himself facing a double-barreled legal shotgun, he may insist that both barrels shall be fired, not at once, but successively, in order that he may change his position after the first one misses him. True, Kentucky holds that the vendor in a deed void under section 210 must rescind in some formal way before he sues in his own name (Scott v. Wolford, 150 Ky. 64, 149 S. W. 1140, and cases cited),6 though it seems an anomaly that a contract “null and void” by reason of public policy needs formal rescission by a party, for any purpose; but in none of these cases did the grantors and the grantee come into court together by amended petition and in effect say: “We believed the grant to be valid, so that the grantee alone might sue; but the court thinks us wrong in that legal theory, so we bring in the grantor, in order that final judgment may be for the right party.” This seems to us commendable practice, consistent with the Kentucky Code, and tending to lessen litigation and hasten the end.
We think the judgment must be reversed) and the case remanded for further proceedings under the first proposed amended petition, save that the informality of the effort to join an additional eighth, and the propriety of so doing by an amendment, are for the District Court to consider.