Lancy v. Havender

Illegal Contract—Champerty — Insolvency Court. An agreement by creditors, signed by them, to pay a person employed “ to collect or aid us in collecting our several claims ” one half of the amount collected, whether the debtor “shall settle with or without going into insolvency, — the undersigned to pay no expenses not even from their one half of whatever may be received,” — is unlawful and void for champerty.

Contract to recover $819.56, for breach of the following agreement, signed by the defendant and others: “Provincetown, January 17,1879. Having employed Benjamin Lancy, of Provincetown, to collect, or aid us in collecting, our several claims against the Union Wharf Company, of said Provincetown, we hereby agree to pay him fifty per cent of any amount received on our several claims, whether said company shall settle with or without going into insolvency, — the undersigned to pay no expense, not even from their one half of whatever may be received.” At the trial in the Superior Court, before Hammond, J., there was evidence that the plaintiff by his efforts, and through proceedings in the Court of Insolvency instituted by him, and at his own cost and expense, collected for, or caused to be paid to, the defendant, the sum of $1,639.13 of the latter’s claim against the wharf company. The judge ruled that the agreement was champertous, ordered a verdict for the defendant, and reported the case for the determination of this court. If the ruling was correct, judgment was to be entered for the defendant; otherwise, for the plaintiff.