Fetters v. Oil Gas Properties

I am not in accord with opinion of Mr. Justice SHARPE. Defendants may not use in their defense the champertous agreement between plaintiff and a third party, not a party thereto, and to that point only, the following, from 11 C. J. p. 270:

"Except in one State (Wisconsin), the rule is well settled that the fact that there is a champertous contract in relation to the prosecution of the suit between plaintiff and his attorney, or between plaintiff and another layman, in no wise affects the obligation of defendant to plaintiff. It is the champertous contract and not the right of action itself which the contract avoids, and therefore defendant cannot avail himself of the champertous agreement as a defense to the action."

From Foley v. Railway Co., 157 Mich. 67:

"Even if the rule is still in force as to agreements (champertous) with laymen, we think the better rule is that the contract is only void as between the parties, and does not affect the obligation of the defendant to the plaintiff."

In Isherwood v. H. L. Jenkins Lumber Co., 87 Minn. 388 (92 N.W. 230), it is said:

"If the plaintiff has a cause of action against the defendant on the merits, he is entitled to a speedy and certain remedy in the laws for the wrongs he has suffered. And to permit the defendant to escape liability therefor by showing that the plaintiff had made a champertous agreement which is void would be as unjust and unreasonable as it would be to permit the defendant to escape liability by showing that the plaintiff, if such were the case, was a bad man."

And in Allison v. Railway Co., 42 Iowa, 274, 280:

"We are unable to perceive upon what principle a defendant can, as a defense, avail himself of the fact that a champertous contract has been entered into between the plaintiff and his attorneys for the maintaining of the suit. Such champertous contract is against public policy and void. Neither party to it can enforce it against the other. By the Roman law such contracts were severely condemned, and by the common law they were punished as misdemeanors. But how can a party exonerate himself from his agreements, or escape the consequences of his torts by showing that the opposite party is prosecuting his remedy through such agreement? If he could do so an unheard of effect would be given to a void agreement."

And in Woods v. Walsh, 7 N.D. 376, 385 (75 N.W. 767):

"It seems to us that there is no sound reason nor just principle in a rule which would allow a party to defeat a just cause of action because the opposite party has made a contract with his attorney which is entirely void, and which, therefore, cannot be enforced by either of the contracting parties."

And in Hilton v. Woods, L. R. 4 Eq. 432:

"But no authority was cited, nor have I met with any, which goes the length of deciding that where a plaintiff has an original and good title to property, he becomes disqualified to sue for it by having entered into an improper bargain with his solicitor as to the mode of remunerating him for his professional services in the suit or otherwise."

Divorce cases are not in point, as they involve the marriage relation, to which the law affords special protection.Attorney General v. Marital Endowment Corp., 257 Mich. 691.

No distinction between cases at law and in equity is attempted; it being considered that equity will not favor a ruling condemned as unjust.

Defendant Wittmer Oil Gas Properties is a common-law trust of Pittsburg, Pa., and, being regarded as a corporation, comes under the provision of the statute that, to do business in this State, it must obtain from the secretary of State a certificate of authority for that purpose. 2 Comp. Laws 1929, § 10118;Hemphill v. Orloff, 238 Mich. 508 (58 A.L.R. 507). Such defendant obtained no such certificate. It, however, carried on its business in this State, which fact is so obvious on this record that it calls for no discussion. A part of that business was obtaining from plaintiffs and many others so-called oil and gas leases. See Republic Acceptance Corp. v. Bennett, 220 Mich. 249; 14A C. J. p. 1308.

2 Comp. Laws 1929, § 10120, provides:

"No foreign corporation shall be capable of making a valid contract in this State until it shall have fully complied with the requirements of the laws of this State with respect thereto, and at the time holds an unrevoked certificate to that effect from the secretary of State."

The so-called lease is, as stated in 40 C. J. p. 1047:

"A lease to mine oil or gas is a mere incorporeal right to be exercised in the land of another; a profit a prendre, which may be held separate and apart from the land itself; and ordinarily it is a mere option or right to drill and extricate oil or gas if found."

See, also, 18 Rawle C. L. p. 1210.

The lease or contract is executory, 14A C. J. p. 1305, and is affected by the statute quoted, and is therefore void and unenforceable. Flint v. Le Heup, 199 Mich. 41. Nor is plaintiff estopped by having accepted certain payments, called rentals. This statute was enacted for the benefit of the general public, and its purpose cannot be bargained away by individuals. D. M.Osborne Co. v. Shilling, 74 Kan. 675 (88 P. 258, 11 Ann. Cas. 319); 14A C. J. p. 1307.

There being no contract, and hence nothing to rescind, tender as upon rescission is not required. Rott v. Goldman, 236 Mich. 261.

The attempted assignment of the contract is of no effect; there being nothing to assign.

It follows that decree should be affirmed, with costs.

FEAD, J., concurred with CLARK, C.J.