Story v. Satterlee

Charles P. Daly, Chief Justice. The case of Sail v. Gird (7 Hill 586), is directly in point. It was held in that case, that the purchase of a demand by an attorney for prosecution in violation of the statute, does not annul the demand itself; that it constitutes no defense to the debtor, who is not, for that cause, to have a verdict. The agreement in that case was set up as a defense to an equitable action for the foreclosure of a mortgage; but the ground upon Avhich the decision was placed, does not limit its application to actions equitable in their nature; but applies equally to actions brought to enforce a contract, or to recover damages for a tort. Even the qualification which was recognized in Hall v. Gird, would not apply, as the provisions in the Revised Statutes (2 R. S. 288 §§ 75, 81) creating it have now been repealed; and even were they in force, they would not apply to the present action, which is not one for debt, covenant or assumpsit, which were the only actions in which such a defense was available under the repealed provisions. The unlawful nature of such an agreement is a defense to an action brought to enforce the agreement; or it is available where, as in the case of Coughlin v. New York Central &c. R. R. Co. (71 N. Y. 444), the cause of action is sought to be enforced, after the plaintiff has settled the suit, solely for the purpose of enabling the attorney to obtain the benefit of his agreement. Where such an agreement is made, the attorney subjects himself to the penal consequences provided by the Code, § 75, and the agreement, as such, cannot be enforced; but the attorney and the plaintiff [171] entering into such an agreement, does not take away from the plaintiff the right to prosecute any cause of action he may have against the defendant (Courtright v. Burnes, 13 Fed. Rep’r 317, and note, p. 326). The order sustaining the demurrer should therefore be affirmed. Van Hoesen, J., concurred. Order affirmed.