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185 Wis. 115

Wallach v. Rabinowitz

Wisconsin Supreme Court

Decided November 11, 1924

Wisconsin Supreme Court · decided 1924-11-11

Cited by 3 later decisions — most recently August 2001

1 federal appellate · 1 state decisions

Key passage — most relied on by later courts

“It has been held that an assignment of a chose in action to an attorney is valid where it is made in good faith and in consideration of a past indebtedness. Sampliner v. Motion Picture P. Co., 254 U.S. 233 , 41 Sup. Ct. 79. Under the facts in that case it was held to be a question for the jury to determine whether the transaction was made in good faith or not. See Sampliner v. Motion Picture P. Co., 255 Fed. 242 , where the matter of champertous contracts is dealt with at considerable length.”

quoted by 1 later decision, including 118 Wis. 2d 407 - Mohr v. Harris

Relies on Sampliner v. Motion Picture Patents Co. · Miles v. Mutual Reserve Fund Life Ass'n · Armstrong v. Morrow

Good law ✅— No negative treatment on recordhow we know

Decided 1924-11-11

View the full empirical analysis of this case →

Rosenberry, J.

¶1Under the law of this state, if the assignment made by IT. L. Wallach to the plaintiff is cham-pertous it constitutes a defense to the action. Blixt v. Janowiak, 177 Wis. 175, 188 N. W. 89; Miles v. Mutual R. F. L. Asso. 108 Wis. 421, 84 N. W. 159.

¶2It has been held that an assignment of a chose in action to an attorney is valid where it is made in good faith and in consideration of a past indebtedness. Sampliner v. Motion Picture P. Co. 254 U. S. 233, 41 Sup. Ct. 79. Under the facts in that case it was held to be a question for the jury to determine whether the transaction was made in good faith or not. See Sampliner v. Motion Picture P. Co. 255 *118Fed. 242, where the matter of champertous contracts is dealt with at considerable length.

¶3The trial court in this case disposed of the matter upon the theory that the contract between a client and attorney was champertous without regard to the nature of the consideration for the assignment. It appears here that the plaintiff, the assignee, is the son of the assignor and his attorney at law. While those near of kin were permitted at the common law to assist a party in presenting his causes of action without being guilty of the offense of maintenance, the reason of that rule does not apply to champer-tous contracts. It appears here by the allegations of the plaintiff’s complaint, by which his conduct must be judged, .that for $450 he accepted an assignment of claims amounting to $529.98 for commissions actually earned, and in addition thereto an unliquidated claim of $950 on sales made by others and $1,000 for damages for breach of con-bract. Whether a son and an attorney is in the exercise of good faith when he procured such assignment to be made to himself is a question of fact, and in this case one which should be found by the court. The highly fiduciary character of the relationship existing between attorney and client is intensified rather than weakened by the fact that in addition thereto the attorney is the son of the client. If the question were raised by the client who is the assignor, no doubt the transaction would be very closely scrutinized and the attorney would be required to sustain the burden of showing that the transaction was free from fraud and that no advantage had been taken of the client. Armstrong v. Morrow, 166 Wis. 1, 163 N. W. 179.

¶4Here the question is not raised by the client but by a third party. The question of good faith was not passed upon nor determined by the court below nor argued here. We feel that justice will be done if the judgment appealed from is reversed and the matter is remanded to the trial court for further proceedings according to law.

¶5By the Court. — It is so ordered.

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