Sutherland v. Reeve

1. Attorney—purchase of matter in litigation. A solicitor can not secretly purchase the subject-matter in litigation, or any interest therein, and hold the same adversely to his client. Such a purchase is voidable as to his client. 2. If he does so purchase, he will be held to be a trustee for his client as to the property or interest so purchased. The purchase of the subject-matter of litigation is forbidden as against public policy, and because it places the solicitor under temptation to be unfaithful to his trust. 3. Same—procuring a decree for himself on his client's claim. Where an attorney, without notice to his client, procured an order or judgment that the claim in litigation belonged to the attorney, and that the suit proceed for the benefit of the latter, it was held the decree or order finding the attorney to be the sole owner of the claim, was improperly and fraudulently entered. 4. Trust and Trustee—defenses by beneficiary. In a court of ■equity, a cestui que use may avail himself of all the defenses of which the trustee could. 5. Chose in Action—purchase—title acquired. A purchaser of a ■claim, which is not negotiable, can only acquire such interest as the vendor has. He will take the claim subject to the equities between the vendor and a third person claiming the equitable title. 6. Hot only does any purchaser of a chose in action take it subject to all equities of the original parties thereto, but a second or subsequent assignee takes it subject to all equities existing between any prior assignor and assignee. 7. Fraud—concealment of material facts by a purchaser. An attorney concealed material facts respecting his client’s claim, and thereby obtained an assignment of the claim, which, if known to the assignor, he would not have obtained: Held, that concealment, under the circumstances, vitiated the assignment as much as misrepresentation or actual fraud. S. Limitation—in equity—bill to set aside fraudulent judgment. The statute of limitations is applied in equity only by analogy to the limitations at law, and a court of equity will not apply the statute when it would be inequitable to do so. The limitation of five years will not be applied to a bill to set aside an order obtained by fraud, while the original cause is still pending. 9. Laches—ignorance of the material facts. The defense of laches, by reason of lapse of time and inaction of the party seeking relief, will not be permitted where the party was in ignorance of the material facts connected with the transaction which is attacked, or of his rights in relation thereto.

Appeal from the Appellate Court for the First District; —heard in that court on writ of error to the Circuit Court of Cook County, the Hon. M. F. Tuley, Judge, presiding.