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Chancellor Walworth, in announcing the opinion of the Appellate Court, affirming the judgment of the Supreme Court, took particular pains to say that the court would not express any opinion upon the question whether an advocate could, without an express agreement with his client, maintain an action on an implied promise merely, or could recover anything more than the infinitesimal statutory fees mentioned in the opinion. Of course, this intimation that an advocate or counsellor could not recover for his services, on an implied contract, is no longer pertinent, for in all the States of the Union, with the exception of New Jersey, implied contracts and express contracts for the payment of lawyers' fees are placed on the same footing, and one is as serviceable as the other in all the forums, State and Federal, throughout the United States.
This address would be incomplete without a discussion of the contingent fee—that modern and strictly American form of contract which has been the source of so many conflicting and irreconcilable decisions in the State and Federal jurisdictions of this country. At common law, agree· ments between attorney and client, for a fee contingent upon the successful issue of the litigation, have always been and are now absolutely void in England, on the ground of champerty. This encroachment upon the ancient and venerated common law was first introduced into genteel society in Kentucky by our Court of Appeals in June, 1836, in the case of Wilhite v. Roberts, 4 Dana, 172. The opinion of the court in that case was delivered by Judge Ephraim M. Ewing. The question involved was, whether or not a contract between a lawyer and his client, by the terms of which the client obligated himself to pay the lawyer, in the event of success, a sum equal to one-half the value of the land in controversy, was in contravention of the Act of 1824, which, with certain modifications, constitutes Sections 209 and 211 of the Kentucky Statutes.
According to Section 209, all contracts made in consideration of services to be rendered in the prosecution of any
suit, by any person not a party of record to such suit, whereby the thing sued for, or any part thereof, is to be paid or received by such person for his services, are declared to be null and void; and under the provisions of Section 211, all contracts to prosecute a suit for the recovery of any lands in this Commonwealth, in the adverse possession of another, for the whole or any part of the profits thereof, shall be null and void. The original of the Act of 1824, of course, is not exactly expressed in this language, but this is the substance of that act. In the case cited, the court expressly held that a contract between a lawyer and client, which provided that the attorney should receive as his compensation for his services an amount equal to one-half the value of the land or other thing in controversy, was not prohibited by the Act of 1824 denouncing champerty. The reasoning of the court in the Wilhite case is very illuminating. Indeed, it is the very refinement of subtlety. Notwithstanding the language of this legislative enactment, the court held in that case, that it was as competent for a litigant to regulate the amount of his attorney's fee by the value, or one-half the value, of the property in controversy, as to regulate it by the value, or one-half the value, of any other piece of property, and further held that whether he regulated it by one, or the other, or whether he agreed to pay a contingent fee in money agreed upon by the parties at the time, he is not subject to the denunciation of the statute, provided he did did not agree to give a part of the very thing itself, or a profit out of the actual thing in contest.
The learned Judge in delivering the opinion of the court in this case, after thus disposing of the question, uses this language:
"Champerty is the most odious species of maintenance and was an offense at common law, and has been denounced by various highly penal statutes, in aid of the common law. It always has been regarded as an offense against the peace of society, the administration of impartial justice, and tending to the encouragement of litigation and the oppression of the weak. And the courts have been uniformly vigilant, where the peace and quietude and justice of the country are regarded, not only in enforcing their penalties but in declaring void all contracts made in derogation of their provisions. If the contract contained any stipulation on its face, in derogation of their provisions, we should find no difficulty in treating it as a nullity, and refusing all aid from the law and the courts in enforcing it, or any stipulation in it, however, lawful.”
The substance and effect of the decision of the court in this case, and the language used by the court, after having delivered itself of this decision, are here cited as a vivid illustration of what the law books style differentiation; in other words, the court in that case, which seems to be the parent case in Kentucky on the subject, with extraordinary lucidity of expression differentiates a contingent fee providing that an attorney may accept an amount equal to one-half the value of the thing sued for, from a contingent fee providing that an attorney shall receive for his services one-half the thing sued for. The “odious species of maintenance” as defined by the court in that case, consists in the litigant agreeing to pay, and the lawyer agreeing to receive, a part of the actual thing in controversy, as compensation for his services, instead of the litigant agreeing to pay, and the lawyer agreeing to receive, as such compensation an amount equal to a certain percentage of the value of the actual thing in controversy. Whether this is a distinction without a difference is no longer an open question in Kentucky, as our court of last resort has decided that is not.
This case was expressly opproved by the Court in Ramsey v. Trent, 10 B. M. 336, decided in July, 1850, Chief Justice Marshall delivering the opinion of the Court. Judge Marshall uses this language in citing with approval the Wilhite case:
"The contract in that case is contained in the following words: 'Now if the said Rudd and Roberts shall succeed in recovering possession of said lot of ground on the demise aforesaid, then I obligate myself to pay them to the amount of one-half of the value of the above-mentioned ground. The court was of the opinion that this was not an agreement to give part or profit out of the thing in contest, and, therefore, not champertous. And it further said in that case that the litigant might regulate his attorney's fee by the value, or one-half the value, of the property in contest, as well as by the value of any other property. The only material difference between the contract then before the court, and that now under consideration consists in the fact that in the present case the attorneys are to wait for their fee until the employers sell the land. All else relates merely to the quantum of the fee. The terms of the contract show that the fee was to be regulated by the value of the recovery compared in a certain manner with the costs and expenses. It does not show that the attorneys were to have part or profit out of the thing in contest, or that the contract was made in its actual form in order to secure to them such part or profit in evasion of the statute. The contract, therefore, is not, in our opinion, champertous within the statute, and the plea should have been adjudged bad on the demurrer."
These two decisions are to the effect, that if the client has $10,000.00 on deposit to his credit in the National Bank of Kentucky, and also has $10,000.00 standing to his credit in the National Bank of Commerce, and becomes involved in litigation affecting the money in one of these banks, he will be permitted to contract with his lawyer to pay him one-half of the deposit in the other bank, as compensation for his services, in the event of success, or he may agree to pay him a sum equal to one-half of the $10,000.00 actually in controversy. To agree to pay one-half of the $10,000.00 in suit, is champerty. To agree to pay one-half of the $10,000.00 not involved in the suit, is not champerty. This reasoning reminds one of Gilbert A. Becket in the Comic Blackstone, when he states that when an act of Parliament is repealed, and thereafter the repealing statute is repealed, the repealed act is thereby revitalized and put in operation, on the theory that if “A” kills “B” and “C” kills “A,” “B” is thereby instantly restored to life.
I feel perfectly unafraid thus to animadvert upon these two decisions of our court of last resort, for the reason that I am sure I am not in contempt of the court in doing so. The judges who delivered these opinions have been dead for many years, and besides, the Court of Appeals is not now in session. These two opinions, however, have
long been a source of profound interest, not unmixed with amusement, to many lawyers of this State. In any effort to analyze the reasoning of the Court, as exemplified in these judicial utterances, the most acute intellect will stagger and grow faint. That the Legislature of Kentucky, by the passage of the Act of 1824, intended to prohibit the common law of offense of champerty, that this statute was designed to be declaratory of the common law on that subject, no one will gainsay. The history of the enactment and the abuses which inspired its adoption, as well as the singularly concise and lucid phraseology employed in its preparation, very clearly indicate this. It is the opinion of some very eminent lawyers, who admire and revere the memories of both Ewing and Marshall, on account of their great learning, that the doctrine laid down by Ewing nearly a century ago, and approved by Marshall a quarter of a century thereafter, and which obtains in Kentucky today, is intrinsically unsound and unsupported by either reason or authority.
The retainer and the “refresher” are forms of compensation which have been developed by the exigencies and complexities of modern professional life. Both are innovations. Of the retainer, nothing need be said; but the “refresher" has some instructive and entertaining features not unworthy of mention. This fee originated in England. It made its first appearance upon the trial of the celebrated case of The Queen v. Thomas Castro. This prosecution grew out of the famous Tichborne case, wherein Arthur Orton, alias Thomas Castro, undertook to establish his right to the vast estate of Sir James Tichborne. Upon the inglorious collapse of this civil suit, Orton was indicted for perjury and Mr. Kenealy, a London barrister, defended him. His speech to the jury on that occasion lasted six weeks. During the progress of this extraordinary argument, he was frequently regaled with “refreshers," a species of compensatory stimulant designed to give him strength to stand the strain. The record does not disclose the exact