CAMPBELL v. DEXTER

CAMPBELL v. DEXTER. Equity ; Assignments oe Ceaims eor Personae Injuries ; Champerty. Where one person in consideration of sums of money aggregating $ 100 advanced to him by another, assigns to the latter an interest of $1,000 in a claim against a foreign government for personal injuries, and the circumstances show that the assignee purchased the interest in the claim upon the champertous consideration of using his personal interest in its prosecution, equity will declare the assignment void at the instance of the vendor, upon condition that he repay to the vendee the money actually advanced. No. 966. Submitted April 24, 1900. Reargument ordered October 9, 1900. Reargued December 11, 1900. Decided January 18, 1901. Hearing on an appeal by the complainant from a decree of the Supreme Court of the District of Columbia, dismissing a bill in equity to cancel an assignment of an interest in a claim for personal injuries. Reversed. The Court in its opinion stated the case as follows: The appellant, Bernard Campbell, had a claim against the Government of Hayti for personal injuries sustained by him in the year 1889 as the result of a violent assault committed upon him by some adherents of the insurrectionary party, which soon afterwards succeeded in gaining control of the government of that country. The claim was made for the sum of $100,000 as compensation for the injury; and the United States, through the State Department, undertook to procure some allowance of the claim. It was subsequently settled in May or June, 1898, by the payment of the sum of $10,000. All of this sum, except $1,000, has been paid to Campbell. But the sum of $1,000 is retained by the State Department to await the settlement of the antagonistic claims of the appellant and appellee. For the appellee holds two several assignments of interest in the fund, each for the sum of $500, which have been filed in the State Department, and the validity of which the appellant contests. One of these assignments was executed on .December 20, 1897, and the other on March 18, 1898. The first of these was temporarily lost or mislaid by the appellee, and a substitute therefor was executed on February 17, 1898; but the original having subsequently been found, the substitute has become unimportant, except as a matter of evidence, so far as it may serve any purpose in that regard. On May 2, 1898, the appellant was notified by the State Department of the settlement of his claim by the agreement of the Government of Hayti to pay $10,000, in gold, — of which the sum of $5,000 was to be paid on June' 1, 1898, and the sum of $5,000 on June 1, 1899, with interest at the rate of 6 per centum from June 1,1898. And in a communication from the State Department under date of June 27, 1898, the appellant received the sum of $2,684.50, stated therein to be “the first instalment of $5,000 of the indemnity of $10,000 which the Haytian Government agreed to pay to the Government of the United States in two instalments of $5,000 each, in settlement of the claim.” Than this there is no more specific evidence of the actual time of payment or of the time at which the agreement to pay was reached. On May 19,1898, the substituted assignment of February 17, 1898, and the assignment of March 18, 1898, were filed in the Department of State. Subsequently protests were filed in the Department by the appellant against their allowance and payment; and thereupon the Department withheld payment of the assignments until the parties should come to an agreement in regard to them, or determine their rights by the judgment of a court of competent jurisdiction. The present proceedings were then instituted in the Supreme Court of the District of Columbia by the filing of a bill in equity by the appellant to cancel the assignments and to enjoin the appellee from receiving payment of them, in response to which the appellee interposed an answer and filed a cross bill to enforce the payment of the assignments. Upon the pleadings and the testimony adduced in support of them the Supreme Court of the District dismissed the appellant’s bill of complaint, sustained the contention of the appellee, and decreed that the latter should receive payment of the amount of the assignments. From this decision Campbell has appealed. After argument of the case in this court we directed that a reargument should be had on one of the questions involved; and such reargument was accordingly had. Mr. J. J. Darlington and Mr. Lorenzo A. Bailey for the appellant: 1. The allegation of the bill that the assignments were obtained, in part, upon appellee’s representation that he possessed influence with the Government to secure the allowance of the claim and upon his agreement to use that influence for the purpose, is sustained by the proof. This is fatal to his claim. Norris v. Tool Co., 2. Wall. 45. 2. Action for torts for injuries to the person are not assignable. Comegys v. Vasse, 1 Pet. 213 ; Hager v. Swayne, 149 U. S. 248; Ball v. Halzell, 169 U. S. 80. See, also, Grant v. Railway Co., 25 Fed. Rep. 789 ; Atocha v. United States, 6 Ct. Claims, 69; Zabriskie v. Smith, 13 N. Y. 322; Lawrence v. Martin, 22 Cal. 174; The People v. Tioga, 19 Wend. 73; North v. Turner, 9 Sergt. & R. 244; Hunt v. Conrad, 47 Minn. 557; Francis v. Burnett, 84 Ky. 23. The assignment of an interest in the proceeds is equally bad with the assignment of the thing itself. Peck v. Heurich, 167 U. S. 624. This objection, equally with the former one, rests upon grounds of public policy, and is therefore stronger in equity than at common law. Howard v. Crowther, 8 M. & W. 603; Rice v. Stone, 1 Allen, 566 ; Railroad Co. v. Ackley, 171 Ill. 100 ; 4 Black. Com. 135. 3. Equity will never decree the specific performance of an exorbitant or unconscionable contract, nor yield any aid in its enforcement, even though it be legally binding on the parties. Where, in addition to inadequacy of consideration, it appears that the party stood in a confidential relation to the other, or that the party from whom the contract was obtained was of weak mind, or under the pressure of urgent need, equity will not only refuse to aid, but will rescind, such a contract. Especially is this true where the contract is for an expectant interest, or property not reduced to possession. Ahearne v. Hogan, 2 Y. & C. 121 n.; Allore v. Jewell, 94 U. S. 506 ; Geiger v. Green, 4 Gill, 475; Kraft v. Egan, 7 8 Md. 40; Brown v. Hall, 14 R. I. 249; Talley v. Smith, 1 Colw. 290; M'Kinney v. Pinckard, 2 Leigh, 149; Howard v. Edgell, 17 Vt. 1; Scovill v. Barney, 4 Ore. 288 ; McCormick v. Malin, 5 Blackf. 509; How v. Weldon, 2 Ves. 517. Mr. Charles W. Needham for the appellee: 1.' No particular form is necessary for an equitable assignment. Anything that shows an intention on the one hand to make a present irrevocable transfer of a fund or of a specified part of a fund, and from which an assent to receive it may be inferred, will operate in equity as an assignment, if for a good consideration. 6 Am. & Eng. Encyc. of Law, 656, and cases cited; Christmas v. Russell, 14 Wall. 69; Spain v. Hamilton, 1 Wall. 604. A debt not in existence, but after-wards to accrue, is assignable in equity. Hassie v. Congregation, 35 Cal. 378; Outts v. Perkins, 12 Mass. 206; Field v. Mayor, 6 N. Y. 179. The assignments in this case are positive in form, for a valuable consideration, and were understood by the parties to pass an absolute right to the money specified when the same should be received by the Secretary of State. 2. Courts of equity recognize assignments of expectancies, of funds to be created by anj' lawful means, and when the fund described is created and exists, equity will, as between the parties and the fund holder, enforce the assignments as equitable assignments. While the law will not permit the assignee to become a claimant prosecuting or seeking to enforce the payment of damages for personal injuries, yet the money, when the amount is agreed upon and paid into the hands of a third and disinterested party, is in no sense more sacred than other money, nor less subject to assignment. The assignments in question are equitable assignments of a portion of a fund in expectancy, to become effective when that fund should exist in the hands of the Secretary of State. 3. The assignments in question were not void as against public policy. A judgment of a court fixing the amount to be paid for a personal tort, or the payment of an agreed sum into the hands of a disinterested third party, makes it a subject-of assignment at law; -inequity, the creation of such a fund maybe anticipated, and the expectancy or possibility of such a fund be assigned, and such assignments will be enforced in equity as between the parties when the fund is actually in existence. Wylie v. Cox, 15 How. 415; Stanton v. Embry, 93 U. S. 548; Taylor v. Bemiss, 110 U. S. 42; Jeffries v. Insurance Co., 110 U. 8. 305; McPherson v. Cox, 96 U. S. 404; Ball v. Halsell, 161 U. S. 80; Peugh v. Porter, 112 U. S. 737; Lewis v. Bell, 17 How. 616; Hutchinson v. Brown, 8 App. D. C. 157. 4. That the consideration for these assignments seems small, looking simply at the money now in the hands of the Secretary, all must admit; but it is not from this standpoint that we are to judge. Courts do not judge of the wisdom of contracts or make new ones for parties. The necessities of a case often make a sacrifice of a future asset for present funds necessary, and such agreements, if free from actual fraud, are upheld. “ Nor is the fact that a bargain is hard and unreasonable enough to induce even a court of equity to interfere. Every man'is supposed to be able to manage his own affairs, and ... no principle is better settled than that mere inadequacy does not form a distinct ground of equitable relief.” 6 A. & E. Ency. (2d Ed.), 697; Moffat v. Winslow, 7 Paige (N. Y.), 124; Coles v. Kennedy, 81 Iowa, 360. Where fraud is relied upon in connection with gross inadequacy of price it must be proven, and the burden of proof is upon the party alleging it. Hager v. Thompson, 1 Black, 80; Connor v. Featherstone, 12 Wheat. 199. [MAJORITY — Mr. Justice Morris] Mr. Justice Morris delivered the opinion of the Court: The first of the assignments in controversy, which bears the date of December 20,1897, is in the following terms: “Know all men by these presents, that I, Bernard Campbell, of the city of Washington, D. C., for valuable consideration in money, do hereby ássign an interest of five hundred dollars ($500) in my claim against the Haytian government, said five hundred dollars, with interest, to be paid without charges of any nature when the said claim is paid by Hayti and disbursed by the State Department of the United States. “The Secretary of State of the United States is hereby authorized and requested to pay said $500, with' interest, to the said James E. Dexter, his order or assigns, when the payment of said claim is received by the State Department of the United States. (Signed) “Bernard Campbell.” The one substituted in the place of this, under date of February 17, 1898, is in the following terms: “Know all men by these presents that I, Bernard Campbell, of the city of Washington, District of Columbia, United States of America, in consideration of one dollar in hand received and other valuable considerations, do hereby assign an interest of ($500) five hundred dollars in the claim of - Bernard Campbell against the government of Hayti, now pending in the Department of State, to James E. Dexter, of the city of Washington, D. 0., said five hundred dollars to be paid without charges of any nature when the said claim is paid by Hayti and disbursed by the State Department of the United States. “The Secretary of State of the United States is hereby authorized and requested to pay said five hundred dollars to' the said James E. Dexter or order when the money in payment of said claim is received by the State Department of the United States. “This is to justify a previous one that has been lost. (Signed) “ Bernard Campbell, “453 C St., N. W., Washington, D. C. “Feb. 17th, 1898.” The second assignment, bearing the date of March 18, 1898, is in the identical language of the substituted one of February 17, 1898, with the exception that it omits the last line. That all these -assignments are in contravention of the rule of the common law that a claim of compensation for a tort, such as an assault and battery, can not validly be assigned, is not an open question. To that effect are the cases of Comegys v. Vasse, 1 Peters, 193; Howard v. Crowther, 8 Meeson & Welsby, 603, and numerous other cases, many of which will be found cited and collated in the American and English Encyclopedia of Law, Yol. 2, p. 1017, all of which hold with great unanimity, that, in the absence of statute authorizing such assignment, “ mere personal torts, which die with the party and do not survive to his personal representatives, are not capable of passing by assignment.” This general doctrine is not controverted in the present case; but the contention is, that here the money advanced and paid for the assignments, which was only $50 for each, or $100 in all, was advanced for a meritorious purpose, namely, to enable the appellant to support himself while he was-prosecuting his claim; and that, while the assignments may not be valid at common law, they will be supported in equity. It is true, of course, that a contract, such as an assignment of a chose in action, may in proper cases be enforced in a court of equity when it could not be sustained in a court of common law; and that a possibility or an expectancy may be validly transferred in equity, when a court of common law would decline to recognize the transfer. It may be that the doctrine of equity in this connection has been as well stated by Lord Chancellor Westbury, in the case of Holroyd v. Marshall, 10 H. L. Cases, 189, as in any other adjudicated case. He said: “If a vendor or mortgagor agrees to sell or mortgage property, real or personal, of which he is not possessed at the time, and he receives the consideration for the contract, and afterwards becomes possessed of property answering the description in the contract, there is no doubt that a court of equity would compel him to perform the contract, and that the contract would in equity transfer the beneficial interest to the mortgagee or purchaser immediately on the property being acquired. This, of course, assumes that the supposed contract is one of that class of which a court of equity would decree the specific performance. If it be so, then immediately on the acquisition of the property described the vendor or mortgagor would hold it in trust for the purchaser or mortgagee, according to the terms of the contract. For, if the contract be in other respects good and fit to. be performed, and the consideration has been received, incapacity to perform it at the time of its execution will be no answer when the means of doing so are afterwards obtained.” The question, therefore, arises in all such cases whether the contract, in the language of Lord Westbury, is one fit to be performed, or of which a court of equity would decree the specific performance; and that question'compels our consideration in the present instance. What was the contract in the present case ? And what was the consideration moving from the appellee to the appellant upon which the assignments were made? It is conceded that no more than the sum of one hundred dollars was paid by the appellee for the assignments; and if this consideration, being merely one dollar for ten, be not grossly inadequate in view of the doubtful nature of the claim, and if the claim itself, being one for a personal tort, be not incapable of assignment, yet it is clear that the contract was champertous, and therefore not fit to be performed either at common law or in equity. The appellee claims that the money was advanced by him to the appellant for the purpose of enabling the latter to have the necessaries of life while prosecuting his claim, and that this was a meritorious purpose. If the advance had been a loan, for which the assignments were taken as a security,-as the appellant claims, there might be some plausibility in this theory of the appellee. But the appellee claims at the same time that the transaction was simply one of bargain and sale, of which the appellee took the risk and out of which he intended to make a profit; and it is not apparent, therefore, how the purpose to which the appellant applied the money could be regarded as in any manner affecting the character of the transaction. What the true character of the transaction was is fully evidenced by the effort of the appellee to seek out the appellant as far back as October 4, 1897, when he wrote a letter to the appellant, in which he very plainly contemplated to get an interest in the claim, and in which he stated that he had “been making strong efforts to have the claim pushed.” We may presume this statement to have been true, and it receives corroboration from the intimacy of the appellee with some of the officials of the State Department, who seem to have kept him quite fully advised of the progress of the claim. Coupling this assertion with the fact that the appellee soon afterwards sought out the appellant in New York or Brooklyn with special reference to the claim, and with the further fact that in a short time thereafter, and precisely as the prospects for the allowance of the claim by Hayti became brighter, he procured the assignments from the appellant, we can scarcely entertain a doubt that the appellee purchased his interest in the claim upon the champertous consideration of using his personal influence in its prosecution. Unless, therefore, we are prepared to disregard or ignore the statutes against champerty and maintenance, — and we have held that those statutes are yet in force in the District of Columbia (Johnson v. Van-Wyck, 4 App. D. C. 294; Peck v. Heurich, 6 App. D. C. 273), — we must regard them as applicable to the present case,' and as rendering the contract or contracts between the parties, in the language of Lord Westbury, as “one not fit to be performed.” We are of opinion, therefore, that the assignments in controversy are null and void, and ineffectual to convey to the assignee the interest which he claims. But, as it is clear from the record that the appellant is indebted to the appellee for various sums of money advanced to him on the faith of payment out of this claim when it should be realized, and for room rent, and perhaps on some other accounts; and as the appellant, in order to entitle himself to be relieved in equity from these assignments, should do equity by the payment of the amount of his indebtedness, which in fact upon the record he offers his willingness to do, the assignments should not be decreed to be canceled except upon the condition of the payment of such indebtedness. It would seem not to be difficult to determine the amount of this indebtedness. But if the parties can not agree between themselves as to this, the cause should be referred to an auditor to ascertain such amount, whereupon the appropriate decree may be entered. The decree appealed from will be reversed, with costs; and the cause will be remanded to the Supreme Court of the District, with- directions to vacate such decree, and for further proceedings in accordance with this opinion. And it is so ordered