M. Gilfillan - Dr. Lushingto - Busby v. A. P. Henderson - Solicitor General (Campbell) [1833] UKHL 6_WS_489

UKHL
M. Gilfillan - Dr. Lushingto - Busby v. A. P. Henderson - Solicitor General (Campbell)
[1833] UKHL 6_WS_489 · 1833-07-12
A secret agreement was entered into between a law agent in the country and a person who was about to practise before the Supreme Court, by which the former, in consideration of his advancing money for the business, stipulated that he should receive one third of the profits.—Held (affirming the judgment of the Court of Session), that such an agreement was pactum illicitum.On 17th October 1818 a minute of agreement was entered into between the appellant, a writer in the country, and the respondent, then a clerk in Edinburgh, whereby the former engaged to make an instant advance of 100 l . to enable the respondent to be admitted an agent before the Supreme Court, and to place at his disposal the sum of 400 l ., and such farther sums of money as from time to time might be required for conducting the business, engaging at the same time to promote the respondent's interests “as much as shall not interfere with the free exercise of his own profession;” and in return stipulated for one third of the profits to be realised from the business, which he was to be entitled “to retain from his own private and from his clients' accounts.” It was

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business: Finds that it was also part of the agreement that it should be kept secret: Finds that such an agreement was illegal; and therefore sustains the plea of pactum illicitum, assoilzies the defender from the conclusions of the action, and decerns: Finds the defender entitled to expenses, and allows an account thereof to be given in, and to be taxed by the auditor.”
“The Lord Ordinary having heard parties procurators and considered the closed record, finds that by the agreement libelled the pursuer, an agent in Glasgow, undertook to employ the defender, an agent in Edinburgh, in the business of his clients, and in return stipulated for a third part of the profits derived by the defender from that

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Against this interlocutor a reclaiming note was presented by the appellant, and the Court having adhered (12th May 1832) * Gilfillan appealed.Appellant .—The agreement of copartnery contains no stipulation to do any thing unlawful. The decision involves a principle that must strike at the root of many existing contracts of copartnerships between most respectable practitioners in both parts of the island, the lawfulness of which has never before been brought into doubt. The terms of the contract amount to nothing more than an ordinary contract of copartnery for five years between two professional men, and as far as concerns the relative interests of the parties is perfectly fair and legal. The appellant was not to conduct the business, but merely to advance the necessary capital, and use his influence in obtaining employment for the partnership. If there had been any thing in the contract by which it was stipulated that the appellant, without qualifying himself as an agent in the Court of Session, should have the power communicated to him of practising as an agent in that Court, the objection would have been obvious, as in that case the

Footnote

* 10 S. & D., p. 523.

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Respondent .—It was illegal for the appellant, who was not qualified or admitted to practise in the Court of Session, to stipulate for a share or proportion of the respondent's emoluments as a practitioner there in return merely for his assistance in obtaining business for him, —those emoluments, by law and by the regulation of Court, being appropriated exclusively to practitioners, and being calculated and fixed as suitable and necessary for maintaining their usefulness, independence, and respectability, and being thus ex suâ naturâ incommunicable to a stranger. It also was a fraud upon the public and his employers for the appellant, while he held himself out in the ordinary character of a writer in Glasgow, to attempt to form a secret compact for participating in the profits of the litigation that he might recommend or advise before the Supreme Court, thereby creating an influence and temptation inconsistent with his duty to his employers, and of which at least those employers were entitled to be publicly made aware, if it existed. The alleged arrangement would have been a violation of the revenue laws, by admitting the appellant to privileges which he was not with reference to those laws qualified to exercise. The secret agreement founded on is of a

Footnote

* Fac. Coll. 19th March 1820.

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Lord Chancellor .—My Lords, as I entertain no doubt whatever of the propriety of the decision which the learned Judges in the Court below have come to, I shall not delay your Lordships longer to consider this case, but shall move your Lordships now to affirm the interlocutors appealed from. My Lords, as to that part of the case which relates to the conduct of the party, Mr. Henderson, at whose instigation it is alleged that the arrangement was made, and who was undoubtedly as much a party to that illegal arrangement as was the other gentleman, Mr. Gilfillan, and with respect to that part of the case which relates to his conduct in availing himself of the objection,—your Lordships have nothing whatever to do with it. He may have reasons which would extenuate, or, it may be, would furnish a justification of his conduct; but, even if it were without extenuation or without justification, it must be remembered that those observations are applicable to all cases in which two parties enter into a contract in which one of them sets up that it is invalid in law as a defence against the other. The Court before whom the question is carried have nothing whatever to do with that; there is no reason whatever why the Court should express any opinion upon the conduct of parties. If they have by law a right to avail themselves of an objection, from that moment the Court before whom the question is brought has no choice, but it must of necessity relieve against a fulfilment of the unlawful contract.

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My Lords,with respect to the second ground; that seems to me to be quite sufficient to decide the case, even if the first were not enough. I entirely agree with the learned Judges in the Court below, that a contract is illegal between two parties which keeps their clients in ignorance of its purport. This being a contract of partnership under which the country solicitor acquired an interest in the profits of the town solicitor's practice, that, I should conceive, upon public principle would be sufficient to invalidate the contract. Therefore, my Lords, I entirely agree with the learned Judges of the Court below, that this is illegal in both respects: in respect of its being a contract in which one of the parties could not practise in the superior Court, and in respect of its being a contract in which there was an obligation of secrecy as against all the world, including the client. I humbly move your Lordships, therefore, that these interlocutors of the Court below be affirmed, with such costs as will cover the expenses.

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The House of Lords ordered and adjudged, That the said petition and appeal be and is hereby dismissed this House, and that the interlocutors therein complained of be and the same are hereby affirmed: And it is further ordered, That the appellant do pay or cause to be paid to the said respondent the sum of 201 l . 14 s . 6 d . for his costs in respect of the said appeal.Solicitors: A. Dobie— H. Hyndman, Solicitors.