Roberts v. Cooper (61 U.S. 467)/Opinion of the Court

8. The principles here indicated are fully sustained by a recent decision of the Supreme Court of Michigan, (vide Backus v. Byron, Appendix B.) The opinion given by Judge Green recognises and establishes the following propositions:

1. That the common law on the subject of champerty is in full force in Michigan, and makes all contracts tainted with it void.

2. That it is not necessary to constitute the offense, that the party should obligate himself to pay the taxable costs of a suit, or to contribute to the expenses of the litigation in cash.

3. That champerty as a crime at the common law is to be visited with pains and penalties under and by virtue of a statute of that State. (Revision 1846, tit. xxx, ch. 161, sec. 22.)

The learned judge was the revisor of the statutes of 1846, and is likely to know whether the Legislature intended to set aside or abrogate the law of champerty. The positions assumed in Backus v. Byron are so ably reasoned and so thoroughly sustained by authority, that it will be superfluous to add another word on the general subject. (For many authorities, both English and American, not hereinbefore quoted, see the opinion of Judge Green.)

9. If there ever was a case calling for a rigorous application of that law, it is this. The Minnesota Mining Company were in possession of the premises in good faith, relying on the construction given to the act of 1847 by the authorities of the United States, without the slighest suspicion that Michigan could or would advance pretensions under the school-land compact, and had made costly improvements on the same, when such premises were put up at auction at Lansing, behind their backs, and bid in for a song. Cooper must have been cognizant of all the facts. He knew the situation of the property, and that the claims of Bacon would meet with stern resistance. With his eyes open, after having consulted counsel, he deliberately entered into a copartnership of champerty with Bacon, and now asks the interposition of this court to enable him and his associate to realize the object and end of the corrupt arrangement. What is particularly aggravating in the case is, the certainty that Bacon could not secure his unjust acquisition by a suit in the name of Williams. His recent deed to the Minnesota Mining Company evinces pretty clearly what the course of the latter would have been, on being informed of the true character of the transaction. He would have arrogated equitable powers, and done justice to the parties.

10. If the deed from Williams to Cooper was void for champerty, then we have a perfect title, (even though we are overruled on other points,) by reason of the deed from Williams and wife to the company, of June 26, 1856, and it is submitted that the testimony offered should have been admitted, and the judgment below should be reversed for its exclusion.

The counsel for the defendant avoided a reargument of the points decided in 18 Howard, but upon the new matter made the following points:

Taking these facts in detail, the first question presented is, whether the deed from Williams to the Minnesota Mining Company was properly rejected.

This deed from Williams bears date since his deed to Cooper, and since the decision of this court affirming the validity of Cooper's title. The record also shows that Williams was a naked trustee of the legal title, and conveyed to Cooper, at the request of Bacon, who was in equity the owner of the land.

The subsequent conveyance, therefore, of Williams, without authority from Bacon, to the Minnesota Mining Company, who well knew the fact of the prior conveyance to Cooper, and the relation Williams sustained to the title, was in law a fraudulent act of both grantor and grantee, and could pass no title if his former deed was valid, and had conveyed the land to Cooper. (City of New Orleans v. De Armas, 9 Pet., 236; United States v. Arredondo, 6 Pet., 738.)

A grant is an extinguishment of the right of the grantor, and therefore he and all claiming under him are always estopped by the grant. (Fletcher v. Peck, 6 Cranch, 87; Terrett v. Taylor, 9 Cranch, 43; Pollard's Lessee v. Hogan, 3 How., 212.)2. The next fact offered in proof in connection with said deed from Williams to the Minnesota Mining Company was, that said company when Cooper purchased was in possession of the land, claiming title to it, and that he before and at the time of the purchase knew of such claim and occupancy.

It is not necessary to consider whether at common law a deed would be void for maintenance which conveyed land in the adverse possession of another, since the statute law of Michigan expressly recognises the validity of such conveyance.

The following provisions having a bearing on that subject will be found in the laws of Michigan:

'Conveyances of land or any estate or interest therein may be made by deed signed and sealed by the person from whom the estate or interest is intended to pass, being of lawful age, or by his lawful agent or attorney, and acknowledged or proved, and recorded, as directed in this chapter, without any other act or ceremony whatever.' (Revised Code of 1846, p. 262.)

'No grant or conveyance of lands or interest therein shall be void, for the reason that at the time of the execution thereof such lands shall be in the actual possession of another claiming adversely.' (Page 263.) And at page 490, title Ejectment, is the following provision:

'It shall not be necessary for the plaintiff to prove an actual entry under title, nor actual receipt of any profits of the premises demanded, but it shall be sufficient for him to show a right to the possession of such premises at the time of the commencement of the suit, as heir, devisee, purchaser, or otherwise.'

From these enactments it is plain that the possession of the Minnesota Mining Company, under claim of title and Cooper's knowledge of it when he purchased, cannot affect the validity of Williams's conveyance to him.

A short time prior to their passage, and which no doubt gave rise to them, the courts of Michigan had decided that a conveyance of land held adversely was void. (Buckner's Lessee v. Lawrence, 1 Doug. Mich. Rep., 38; Godfrey v. Desbrow, Walk. Mich. Ch. Rep., 266; Root v. Chapin, same vol., 79; Hubbard v. Smith, 2 Mich. Rep., 212.)

3. The remaining fact offered in proof in this connection was, that Bacon, being the owner in equity of the land, sold it to Cooper in trust for the National Mining Company, and that Williams, his trustee, by his direction, conveyed it to Cooper in trust for said company; and that he, Bacon, was also the owner of the whole capital stock of said National Mining Company, six-tenths of which he sold and transferred to Cooper, retaining the other four-tenths; and that when he took the conveyance of the land, he intended to bring suit against the Minnesota Mining Company for the benefit of the National Mining Company; and before the conveyance was delivered to him by Williams, he, in conjunction with Bacon, applied to counsel to employ such counsel in such suit.

When the statute allowed a purchaser to take a conveyance of land in the adverse possession of another claiming title, it, as incident thereto and by necessary intendment, gave to the purchaser a right to use all lawful means to obtain possession. There are various lawful means of doing this, and by suit is one of them, which, in such case, is by far the most common. It would be going a great length to hold that he must not, at the time he makes the purchase, intend to use this means; that if he was such intention, the purchase will be void; that the intention to sue must be formed at some time subsequent to the conveyance. It is deemed a sufficient reply to this to say, that no such condition is found in the law which allows the conveyance to be made. Such condition would have rendered the statute almost a dead letter, and given rise to a contest about the intention of the purchaser in almost every case.

The Legislature must have well known that in most cases where land was in the possession of another claiming title, the occupant would contest his right by law; and, as a general thing, that the purchaser would be obliged to establish his claim in that way. It is therefore reasonable to presume, that if the Legislature intended to impose such restriction on the conveyance, it would have been expressed in plain language.

But it may be said, in reply, that it was not the intention of the Legislature to license champorty.

Champerty is a species of maintenance; and if it be understood to embrace a conveyance of land held adversely by another claiming title, then the answer is, that to that extent it has been rendered lawful in Michigan; but if it be understood in its original and primitive sense, as being 'a bargain with a plaintiff or defendant to divide the land or other matter sued for between them if they prevail at law, the champertor to carry on the party's suit at his own expense,' it will be admitted that it was not the intention of the Legislature to license it.

This presents the question, do the facts which the plaintiff in error offered to prove, amount to such a bargain?

Was it agreed that Cooper should divide the land, in case the suit prevailed? and if so, with whom? This is the first essential ingredient in champerty.

That he was not to divide it with Williams, the grantor, is certain, nor with Bacon, who was the equitable owner and real vendor, because the conveyance transferred the whole interest in the land, both legal and equitable, to Cooper, in trust for the corporation called the National Mining Company. There was no agreement or promise that, in case the suit prevailed, or in any other event, either Cooper or the corporation should convey or give back to Bacon any part of the land.

Suppose Cooper, by direction of the National Mining Company, had, instead of bringing suit, immediately after the conveyance to him, sold and transferred the land to a stranger, would any promise to or agreement with Bacon have been violated? and if so, what promise?

Was there any agreement that, if the land was recovered, there should be a division of it between Cooper and the corporation for which he held it in trust? There was no proof of the kind offered. He held the naked legal title, and the corporation held the whole beneficiary interest in the land. In case of recovery, the whole beneficiary interest would belong to the corporation, and it could at any time compel him to convey and legal title to the company. In a word, he sues just as every other trustee sues, for the sole and exclusive benefit of the party owning the equitable estate.

There is then, in the proof offered, a total absence of a bargain that Cooper, or any one else, should divide the land sued for, or receive any part of the same as a consideration for carrying on the litigation, and that essential ingredient of champerty is therefore wanting.

Another essential ingredient to make a case of champerty is, that Cooper should have agreed to bring and carry on the suit, and that, too, at his own expense. (4 Black. Com., 135.)

He did not agree to do either of these things. The proof offered was, that he purchased the land in trust for the National Mining Company, and took the conveyance with the intention of prosecuting the title for the benefit of that corporation, and not for his own benefit. Was that intention obligatory upon him? Was he not at liberty to carry it out or not, at his pleasure? Did the proof offered show that he bargained to prosecute the suit at his own expense? Not at all.

Every trustee has a right, and it is oftentimes his duty, to sue in behalf of his beneficiary. In such case, unless there is proof to the contrary, the presumption is, the expense is borne by the beneficiary; and in this case the presumption as well as the fact is, that the expense is paid by the corporation.

Does the fact that Cooper owned a part of the stock in the corporation make the case on that account, so far as this question is concerned, any way different from what it would be if he held the title in trust for the corporation, and owned none of its stock?The individual members or stockholders of a corporation are entirely distinct from the artificial body endowed with corporate powers. They may contract with each other, sue or be sued, as individuals; and for these purposes the members and the corporation are regarded by law as strangers to each other. In a word, they are wholly distinct beings. The one is a natural person, the other an artificial invisible being, which (with its faculties and capacities) is created by law. (Dodge v. Woolsey, 18 How., 344, note; Curran v. State of Arkansas, 15 How., 308; Waring v. Catawba Company, 2 Bay., 109; Pierce v. Partridge, 3 Met. Mass., 144; Hill v. Manchester Water Works, 5 Adol. and Ell., 866; Dunstone v. Imperial Gas Company, 3 Bac. and Adol., 125; Geer v. School District, 6 Vermont, 187, 18 Vermont, 405; Marine Bank of Baltimore v. Beays, 4 H. and Johns., 388; Angell and Ames on Corp., secs. 193, 390; 5 Ohio, 205.)

It follows, as a necessary consequence from these principles, that the fact that both Cooper and Bacon held stock in the National Mining Company, for whose benefit the conveyance of the land was made to Cooper, had no more influence, either in law or equity, upon the operation and legal effect of the grant, than if that stock had been held by a total stranger to the sale of the land.

If a party who carries on a suit has any interest, legal or equitable, or possibility of interest in the land which is the subject of the suit, there is no In other words, where In other words, were there is a privity of estate, direct or indirect, present or remote, maintenance is justifiable. (Wickham v. Conklin, 8 John., 227; Wallis v. Pactland, 3 Ves., 503; 2 Ralls. Abr., 115; Bacon's Abr., title Maintenance, letter B.)

It is not deemed necessary to make further comment on the subject of champerty.

Mr. Justice GRIER delivered the opinion of the court.

Cooper, the plaintiff below, brought this action of ejectment to recover a part of section No. 16, in township 50 north, range 39 west, lying within the mineral district sould of Lake Superior, in the State of Michigan. He claimed under the State of Michigan, and the defendant for the Minnesota Mining Company, under a right of pre-emption from the United States. The case was tried in the Circuit Court, and a verdict and judgment rendered for the defendants. On a writ of error to this court, the judgment of the court below was reversed, and the record remitted for further proceedings, in pursuance of the judgment of this court. The report of the case in 18 Howard 173, exhibits a full statement of the facts, and of the questions of law arising thereon, as decided by the court, which it is unnecessary to recapitulate. On the last trial, the Circuit Court was requested to give instructions to the jury contrary to the principles established by this court on the first trial, and nearly all the exceptions now urged against the charge are founded on such refusal. But we cannot be compelled on a second writ of error in the same case to review our own decision on the first. It has been settled by the decisions of this court, that after a case has been brought here and decided, and a mandate issued to the court below, if a second writ of error is sued out, it brings up for revision nothing but the proceedings subsequent to the mandate. None of the questions which were before the court on the first writ of error can be reheard or examined upon the second. To allow a second writ of error or appeal to a court of last resort on the same questions which were open to dispute on the first, would lead to endless litigation. In chancery, a bill of review is sometimes allowed on petition to the court; but there would be no end to a suit if every obstinate litigant could, by repeated appeals, compel a court to listen to criticisms on their opinions, or speculate of chances from changes in its members. (See Sizer v. Many, 16 How., 173; Corning v. Troy Iron Company, 15 How., 466; Himely v. Rose, 5 Cranch, 515; Canter v. The Ocean Insurance Company, 1 Pet., 511; The Santa Maria, 10 Wheaton, 431; Martin v. Hunter, 1 Wheaton; and Sibbald et al. v. United States, 12 Pet., 488.)

We can now notice, therefore, only such errors as are alleged to have occurred in the decisions of questions which were peculiar to the second trial.

I. The first of these is an exception to the refusal of the court to permit the deposition of John Wilson to be read to the jury. This exception, though not waived, has not been much pressed, and cannot be supported. The deposition refers to no facts relevant to the issue. It tended to show that some of the officers of the land office and the Attorney General had expressed opinions on the questions of law arising in this case, different from those expressed in the opinion of this court. The practice of the land office and the opinions of the Attorney General may form very persuasive arguments to the court, but cannot be read as evidence to the jury of what the law is, or ought to be. It is the province of the court to instruct the jury as to the principles of law affecting the case, and counsel cannot appeal to a jury to decide legal questions by reading cases to them, or giving in evidence the opinions of public officers.

II. The only other exception to be noticed is founded on an offer of testimony overruled by the court, and an instruction refused, involving the same question. The evidence offered and overruled is as follows:

'The defendant then produced, and offered to prove, a deed of release from Alfred Williams and wife to the Minnesota Mining Company, dated June 20th, 1856, covering the lands in controversy; and further offered to prove, in connection therewith, that at the time when the said Cooper obtained the deed of the premises in controversy from Alfred Williams, the Minnesota Mining Company was in actual and open possession of the same, claiming title under their patent from the United States, and that the said Cooper knew of such claim and occupancy before and at the time of his purchase, and of said conveyance; that he obtained said title from Alfred Williams, he being the naked trustee of John Bacon, and that all the negotiations for the said purchase, and the purchase itself, were had between said Cooper and Bacon, the said Williams acting under the directions and for the benefit of said Bacon, and having or claiming no personal interest in said lands; that said purchase and conveyance were made for the following purpose, namely: that said Cooper should hold the same in trust for a corporation known as the National Mining Company, all of whose stock was held by said John Bacon; and by the conditions of said sale, the said Cooper was to receive, and did receive, with said conveyance, six-tenths of the stock aforesaid, and the said Bacon was to retain, and did retain, four-tenths of said stock. That the said Cooper purchased said stock and took said conveyance with a full knowledge of the claims and occupancy of the Minnesota Mining Company, and with the intention of prosecuting the title purchased by him, by legal proceedings in this court against the Minnesota Mining Company, for the benefit of the National Mining Company; and that before said conveyance was delivered to him by said Williams, the said Cooper, in conjunction with the said Bacon, applied to counsel in the city of Detroit to employ such counsel in the litigation aforesaid, which was to be had with the Minnesota Mining Company.'

The deed to the Minnesota Mining Company was for portions of the land not demanded in this suit, and by itself was not relevant. The purpose and object for which this testimony was offered is not stated; but it could have no relevancy, unless to show the title to the plaintiff below to be void, because purchased and obtained with full knowledge of an adverse possession, and support the following instruction, which was refused by the court: 'The defendant further requested the court to charge the jury, that if, when said Williams conveyed to said Cooper the premises in question, the said Minnesota Mining Company was in actual and open possession of said lands, claiming title thereto under their patent, the said conveyance was void in law against the said company and all claiming under them; which instructions the court refused to give, and to this ruling the defendant excepted.'

As the court had excluded the testimony offered to support this point of defence, the defendant could not expect that it would be submitted to the jury without evidence. We have therefore to inquire whether the testimony offered and overruled by the court ought to have been received to establish the defence of maintenance or champerty.

In this country, where lands are an article of commerce, passing from one to another with such rapidity, the ancient doctrine of maintenance, which makes void a conveyance for lands held adversely, is in many States entirely rejected. In some it has been treated as obsolete by the courts; in others it has been abolished by statute; while with some it appears to have found more favor.

The ancient policy, which prohibited the sale of pretended titles, and held the conveyance to a third person of lands held adversely at the time to be an act of maintenance, was founded upon a state of society which does not exist in this country. The repeated statutes which were passed in the reigns of Edw. I and Edw. III against champerty and maintenance, arose from the embarrassments which attended the administration of justice in those turbulent times, from the dangerous influence and oppression of men in power. (See 4 Kent Com., 477.)

The earlier decisions of the courts of Michigan seem to have adopted this antiquated doctrine as a part of the common law in that State. But so far as concerns its application to sales by one out of possession, the Legislature have annulled it. The Revised Code of 1846 (page 262) enacts that 'no grant or conveyance of lands, or interest therein, shall be void for the reason that at the time of the execution thereof such lands shall be in the actual possession of another claiming adversely.'

From this enactment it is plain that the possession of the Minnesota Mining Company, under claim of title, and Cooper's knowledge of it when he purchased, cannot affect the validity of the deed of Williams to him. Although the testimony, which is the subject of this exception, was evidently offered with a view only to raise the question as above stated, the counsel for the plaintiff in error have endeavored to maintain in this court that the court below erred in rejecting it, because if received it would have shown the contract between Cooper and Bacon, and the deed from Wilson, to be void for champerty. This offence seems to have been originated by the statutes passed in the time of Edw. I and Edw. III. (See 15 Viner's Abr., 149, tit. Maintenance.) It is defined (Hawkins's Pl., 84) as the 'unlawful maintenance of a suit, in consideration of an agreement to have a part of the thing in dispute, or some profit out of it;' and by Chitty as 'a bargain to divide the land (campum partire) or thing in dispute, on condition of his carrying it on at his own expense.' In some States these statutes are held to be obsolete. But it seems that the case of Backus v. Byron (4 Mich. Rep., 535) has declared that they still retain their force in Michigan. That was an action by an attorney against his client on a contract, by which the attorney agreed to carry on a suit for a share of the land in case of success, and in case of failure to have nothing.

But in this case there was no offer to prove that Cooper had agreed to carry on the suit in consideration of receiving a share of the land in case of success; on the contrary, the offer was to show that he 'purchased stock' in a mining corporation; that the legal title to the land was conveyed to him in trust for himself and the other stockholders; and as a consequence of the legal title being vested in him, the suit was necessarily brought in his name. It needs no argument to show that such a transaction has none of the characteristics of champerty, and that the court below was right in rejecting testimony which would not, if admitted, tend to show a valid defence, and was therefore wholly irrelevant.

The judgment of the Circuit Court is therefore affirmed, with costs.

Whilst I concur entirely in the conclusion just declared by the court, that the case now decided is in its features essentially the same with that of Cooper v. Roberts, formerly before us, and reported in the 18th of Howard, p. 173, I am unwilling to place my own opinion upon the fact of the identity of the two cases, irrespective of the reasons or principles on which the former of those cases was determined. That case was elaborately discussed by counsel; was, as the opinion of the court evinces, deliberately considered; the theory and objects of the system adopted by the Government for the distribution of public lands carefully examined, correctly expounded, and properly sustained by the decision. In the reasoning of the court, the cherished objects aimed to be secured by that theory, viz: the advancement of 'religion, morality, and knowledge,' as indispensable for the existence of good government, and for the happiness of mankind; the obligation for the maintenance of schools and the means of education as necessary for the ends proposed, as declared in the third article of the ordinance of 1787, are prominently and correctly set forth as guides in the interpretation and application of the policy and system of the Government in disposing of the public domain. It seems scarely to admit of rational doubt, that it was in pursuance of this policy, and as deemed best calculated for its successful accomplishment, that in the surveys made or to be made of the public lands, the sixteenth section of every township, being central, (and therefore more than any other section could be,) connected with the several interests of the township, was appropriated for the use of schools. Admitting these to be the policy and theory of the Government, designed as it has been declared to lay the foundation of social and political good, it would seem to follow that nothing short of the highest and most overpowering public considerations, or an absolute inability or want of power, should be permitted to defeat or in any degree to control them. Surely speculations for private emolument, and still less such as might be attempted through the exercise of irregular or doubtful authority, should not be permitted to affect them.

The power vested in the President to reserve from sale such portions of land as he should deem necessary for public uses, may be classed as one of those paramount considerations, constituting a public or national necessity, reaching even to the defence of the country by fortifications or arsenals. In the same category may be placed the sanctimony of the rights of property and possession existing and vested in territories anterior to their acquisition by the United States; rights guarantied by treaty stipulations. In the same light may be viewed the withholding temporarily from sale lands in which were minerals and salt springs. All these restrictions or reservations are exceptions merely, and should be carried no farther than their terms expressly or necessarily require. They can with no propriety be regarded as forming in themselves a system; much less as overturning a system designed to be as far as practicable general and uniform, and proclaimed from its origin to be founded in wisdom and in a solemn sense of public good, and as such to be fostered and sustained. Every new State has come and will come into the Union relying on the faith of this pledge; and even upon the concession of a power in the Government to violate that pledge, such a violation could be referred to no principle of justice, and should therefore never be imputed but upon proofs the most positive and unequivocal. The sixteenth section of each township could not, it is true, be specifically designated and possessed anterior to a survey of the public lands; but the right to that section and its appropriation existed in contract or pledge by virtue of the ordinance and the laws of the United States, and the right of possession and enjoyment was matured by the execution of the surveys. It cannot be supposed that this right, so important, was destroyed or impaired by an agreement for temporary occupancy, made without reference to any survey or division of the lands, made, too, without legitimate authority; nor can such right be affected by any ordinary allowance of pre-emption, because the pledge of the Government is pre-existing, is express, and therefore paramount.

The State of Michigan was admitted into the Union under the pledge given her by the general land system of the United States; her right to the sixteenth section of each township was under that pledge fully recognised. It could not therefore, consistently with good faith, be displaced by an arrangement irregular in its origin, and temporary in its character, in its tendencies and operation conflicting with a preceding, general, and beneficial system of policy. No effectual adversary rights could grow out of such an arrangement. Upon the views herein expressed, I am in favor of an affirmance of the judgment in this cause, not merely on the ground that this cause is essentially the same with that already decided between these parties, as reported in the 18th of Howard, p. 173, but also because the opinion of this court upon the law and the facts of the last-mentioned cause commands my entire approbation.