A party who joins the opposing party in requesting the district
court to instruct peremptorily upon the ground that the evidence
entitles him to a verdict as a matter of law may reserve his right
to go to the jury if the court should regard the facts as disputed,
and where such reservation is properly made, the court cannot
ignore it and assume to find the facts from the evidence as though
the case had been unconditionally submitted. P. 254 U. S.
that adequate and timely reservation of the right
was made in this case.
255 F. 242 reversed.
Page 254 U. S. 234
The case is stated in the opinion.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
The opinion below is reported in 255 F. 242, 168 C.C.A. 202.
By an assignment executed in Ohio December 28, 1911, the Lake
Shore Film & Supply Company, a corporation of that state,
undertook to convey to plaintiff in error its claim and right of
action against defendants for damages resulting from their
violations of the Sherman Act. Relying upon the assignment, he
brought suit for $750,000 January 16, 1917, in the United States
District Court, Southern District of New York. The defendants
denied liability, and set up the following as a separate and
"The plaintiff at the time of his alleged purchase of the claims
in controversy set up in the complaint herein, was an attorney and
counselor at law of the State of Ohio, practicing as such before
the courts of that state. . . . That, at the time of such alleged
purchase. it was, and is now, the law of the State of Ohio that an
attorney who purchased a demand with full knowledge and notice that
the same was contested and would be litigated, and with the intent
and for the purpose of bringing an action thereon, was guilty of
maintenance and champerty, and got no title to such demand by such
Page 254 U. S. 235
which could be enforced either at law or in equity, and that the
same was at said time, and still is, the law of the State of New
York. . . . That the plaintiff purchased the demand set forth in
the complaint with full knowledge and notice that the same was
contested and would be litigated, and with the intent and for the
purpose of bringing action thereon."
All parties agreeing, the court directed a separate trial before
a jury upon the issues of fact and law arising under the special
defense. Plaintiff in error testified in his own behalf and called
two other witnesses -- none was called by the defendants. The
essential facts as well stated by the circuit court of appeals
"The assignment states that"
" For value received, the Lake Shore . . . Company . . . hereby
sells, assigns, and transfers to J. H. Sampliner all of its rights
and interests in and to any and all damages which it has sustained
and suffered by reason of injury to its business because of the
unlawful combination and monopoly in restraint of interstate
commerce, and in violation of the Sherman Anti-Trust Act, brought
about, engaged in and as a result of the unlawful agreement by and
between the Motion Picture Patents Company, . . . all of said
parties having conspired together for the purpose of ruining and
destroying the business of the Lake Shore . . . Company, and
contrary to and in violation of the Sherman Anti-Trust Act. . .
"The testimony shows that the plaintiff had rendered legal
services to the assignor as its general counsel in connection with
the difficulties in which it found itself with the defendants, and
that those services extended over a period from July, 1910, to
December, 1911. The plaintiff regarded the reasonable value of his
services as worth from $8,000 to $10,000. On December 10, 1911, he
was asked by the president of the Lake Shore Company whether he
would be willing to bring suit against the defendants,
Page 254 U. S. 236
and that he replied that he would bring the suit, being
satisfied that the company had a valid claim, and that it would
cost from $8,000 to $10,000. He was informed by the president of
the company that it had been losing money very heavily, and it was
absolutely impossible for it to undertake any litigation of that
kind. He was asked what the company already owed him, and replied
in the neighborhood of $9,000 or $10,000. He was told the company
did not have the money, and could not pay him, and thereupon he
said, that, if the company would pay him $5,000 in cash, he would
cancel the indebtedness. After some reflection, the president, Mr.
Mandelbaum, told him that the corporation would transfer to him all
rights it had against the defendants if he would be willing to
accept it as a satisfaction of the company's indebtedness to him.
The plaintiff told him that he would think it over and give him an
answer. After a few days' reflection, the plaintiff expressed a
willingness to accept the assignment, and was told that the board
of directors wanted to know whether, if they made an assignment,
the plaintiff would, as a part of the consideration, defend the
company and its officers in case any suit was brought against them
in matters growing out of their difficulties with the defendants.
He agreed to do this, and the assignment was executed."
"It appears, therefore, that the assignment originated not with
the plaintiff, but with the Lake Shore Company, and that the
consideration for the agreement involved the payment of a past
indebtedness, as well as for future services of a professional
character. It is also to be noted that the invalidity of the
assignment is set up not by the client, the assignor, who has at no
time sought to repudiate it, but by third parties, between whom and
the plaintiff no fiduciary relations have existed."
At the conclusion of the evidence, the defendants asked a
"on the ground that the plaintiff has
Page 254 U. S. 237
not shown title to this cause of action, and it now
affirmatively appears from the evidence that the agreement under
which the plaintiff assumes to bring this suit is champertous, and
Thereupon the following occurred, Mr. Rogers representing the
"Mr. Rogers: If your honor is going to grant the motion for a
direction of a verdict, I will take a formal objection to it, but
my request is that, if your honor is going to find for the
defendant, that it be a nonsuit to the plaintiff's cause of action.
I think that is as far as your honor can go."
"The Court: You may be right, but the defendant has rested, and
moves for the direction of a verdict, and I am going to pass on
"Mr. Rogers: But, your honor, I submit there aren't any
questions of fact on which to go to the jury; I submit the matter
is purely a matter of law for your honor to determine, and I think
the question whether the agreement is or is not champertous is one
of law for the court."
"The Court: Well, Mr. Rogers, you may either rest on the motion
of the defense and take an exception to such ruling as I make, if
it should be adverse, or you can ask to go to the jury. That is
entirely for you to determine."
"Mr. Rogers: Well, if there are any questions of fact to be
disposed of, your honor, I ask to go to the jury upon the questions
"Mr. Seabury: I think he should specify, and not put a
"The Court: I cannot have any 'ifs.' If you think, under § 973
of the Code, the court has no right to make a direction, and you
are right about it, you will have a good exception; if, on the
other hand, the court is right, your exception will be addressed
Page 254 U. S. 238
the question of practice, but to the substantive questions in
"Mr. Rogers: Then, your honor, may I state my position on the
"The Court: Yes, certainly."
"Mr. Rogers: The defendant having moved for a direction in order
to preserve the plaintiff's rights, I beg leave to state my
position on the record with the permission of the court."
"My understanding is that the question is one of law to be
passed upon by the court from the facts adduced . If, however, it
is necessary in order to preserve the plaintiff's rights that I
make a request to go to the jury, I ask to go to the jury upon the
question as to whether or not the plaintiff took an assignment of
the cause of action for the intent and purpose to begin an action
thereon, and whether the assignment to him was bona fide
for an antecedent indebtedness."
"The Court: The court cannot take conditional offers. Counsel is
at liberty, if so advised, to request to go to the jury, and the
court will rule."
"Mr. Rogers: Then I move for a direction, your honor, for the
plaintiff, upon the issue framed under your honor's order on the
ground the defendant has failed to make out the defense set up in
the answer, to-wit, that the plaintiff purchased this cause of
action -- that is, the defense that is set up -- and I desire to
call you honor's attention particularly to the form of the defense
as pleaded. The defense that this plaintiff's title is void because
he purchased this cause of action with the intent to sue thereon.
It now appears uncontradicted, from the evidence, that, instead of
having purchased this cause of action, it was assigned to him under
a bona fide
assignment for an antecedent indebtedness
owing to him for services which he had performed for the
"The Court: Both sides having moved for a direction
Page 254 U. S. 239
of a verdict, I find as a fact that the plaintiff purchased this
cause of action with intent to sue thereon."
"I find,as a fact also that the so-called assignment,
Plaintiff's Exhibit No. 1, was executed by the Lake Shore Company,
through its officers, pursuant to action at a special meeting of
the board of directors."
A verdict for the defendants was directed, and judgment entered
thereon. The circuit court of appeals declared itself concluded by
the trial court's finding "that the plaintiff purchased this cause
of action with intent to sue thereon," and held:
"We must dispose of this case upon the theory that the plaintiff
did not in fact take this assignment to extinguish a precedent
debt, but that he purchased it for the purpose of suing upon it;
that he, an attorney at law, purchased from his client for $5,000 a
cause of action which he values at $750,000. The question we must
answer, therefore, is whether the law sanctions such a transaction
between parties standing in the confidential relation of attorney
and client. We are satisfied that the common law does not sanction
Among other things, counsel for plaintiff in error now insist
"if there were any questions of fact to be decided or divergent
inferences of fact to be made, the district court erred in not
submitting them to the jury."
The point is well taken.
statements by plaintiff's counsel made it sufficiently plain
that, while he sought an instructed verdict, he also requested to
go to the jury if the court held a contrary view concerning the
evidence. In the circumstances disclosed, we think the request was
adequate and timely under former opinions of this Court. Empire
state Cattle Co. v. Atchison, Topeka & Santa Fe Ry. Co.,
210 U. S. 1
210 U. S. 8
Sena v. American Turquois Co., 220 U.
, 220 U. S. 501
Schmidt v. Bank of Commerce, 234 U. S.
, 234 U. S. 66
Williams v. Vreeland, 250 U. S. 295
250 U. S. 298
It should have been granted. Clearly some substantial evidence
Page 254 U. S. 240
tended to show that the assignment was taken in extinguishment
of an existing indebtedness, and not for mere speculation upon the
outcome of intended litigation.
The judgment below must be reversed, and the cause remanded
to the district court for further proceedings in conformity with