Summary
In Abrams v. Cureton, 74 N.C. 523, the plaintiff to whom the note had been endorsed was nonsuited on its being made to appear, that it was under a contemporary agreement that he should collect, retain compensation for his services, and pay over the residue to the endorser.
Summary of this case from Jackson v. LoveOpinion
January Term, 1876.
A voluntary assignment of a promissory note, without consideration and for the benefit of the assignor, has no legal effect except to constitute an agency to collect; and such assignee, not being the real party in interest, cannot bring a suit on such note in his own name.
A written contract as follows, to wit: "I do hereby agree to receive as agent or assignee the notes above described, upon the following condition and terms, viz: If I can collect the said notes or any part thereof, I am to pay over the same to John Bankston Davis, retaining to myself a reasonable compensation in these notes for my services," and the notes alluded to were also endorsed. "I assign the within note to R. S. A., (the plaintiff) for value received," is not such an assignment as will justify the assignee in bringing suit in his own name.
CIVIL ACTION to recover the amount of two promissory notes, tried in the Superior Court of POLK County at Fall Term, 1875, before his Honor, Judge Schenck, and a jury.
Battle, Battle Mordecai and Montgomery, for appellant.
Smith Strong, contra.
In his complaint, the plaintiff alleges that as assignee, he is the owner of two notes, made by the intestate of the defendant, one payable to John Bankston Davis, and by him endorsed to the plaintiff, and another payable to one R. H. Reid, also endorsed by said Davis as attorney for Reid. That these notes were made in South Carolina and draw interest at the rate of seven per cent, and are still due.
The defendant denies that the plaintiff is the owner of said notes, alleging that they were assigned without consideration, and that the plaintiff is only an agent to collect. There are other allegations in the answer as to assets, etc., not material to the point decided in this court, and therefore need not be stated.
(524) On the trial, the plaintiff in his own behalf testified, that the notes upon which the action is brought, were endorsed to him by J. B. Davis, and were in his possession when the action commenced. Upon his cross-examination he stated, that he considered himself the owner of said notes; that he paid no money for them, but that he agreed to collect the same, retaining a reasonable compensation for his trouble, and pay over the balance to Davis.
The following contract in writing was then offered in evidence. After a copy of the said notes, (set out in the complaint,) it read: "I do hereby agree to receive as agent or assignee, the notes above described, upon the following condition and terms, viz.: If I can collect the said notes or any part thereof, I am to pay over the same to John Bankston Davis, retaining to myself a reasonable compensation in these notes for my services. Witness my hand, seal, etc.," and signed by plaintiff.
The plaintiff also proved that the following endorsements on the notes were made at the same time of the signing of the foregoing contract: "I assign the within note to R. S. Abrams, for value received. Oct. 30th, 1869." Signed by said J. B. Davis.
The defendant offered in evidence a paper purporting to be a transcript of a suit in equity, pending in Spartanburg County, and State of South Carolina. To this the plaintiff objected; whereupon the defendant proposed to prove by parol testimony, that W. D. Johnston was Chancellor of Spartanburg County, S.C., on the 4th day of June, 1868, at the time the injunction purports to be signed by him. To this plaintiff again objected and the objection was sustained. To this ruling of the court the defendant excepted. His Honor allowed the bill and answer to be read, but refused to hear the injunction, for the reason that it was not signed officially, and there was no evidence that it was ever served on Davis and Reid. Defendant again excepted.
It was also in evidence that the courts of law and equity or (525) chancery, were consolidated in South Carolina, previous to the institution of this suit; and that the Clerk of the Superior Court is also the Clerk of the Equity or Chancery Court, and has control of the old chancery or equity papers and records.
The defendant asked his Honor to charge the jury, that upon the evidence offered, that the plaintiff was not entitled to their verdict on the first issue. Upon the second, that he was not the real party in interest in said notes, and that he has no such interest in said notes as would entitle him to bring an action in his own name.
The defendant asked his Honor to charge further, that as the notes upon which the action has been brought, were made in South Carolina and there was no evidence as to where the assignment was made, whether in North or South Carolina, the common law was presumed to prevail in South Carolina, in the absence of evidence to the contrary; and that according to the common law, said notes were not negotiable or assignable in that State, and that the plaintiff could not recover. The defendant further relied on Section 99, Code of Civil Procedure.
His Honor declined to give the instruction asked for by the defendant, and charged the jury that if they believed the evidence, they would find the issues in favor of the plaintiff. Defendant excepted.
The jury found for the plaintiff, who had judgment in accordance with their verdict.
From this judgment defendant appealed.
"Every action must be prosecuted in the name of the real party in interest." C.C.P., Sec. 55.
This provision is significant, and was necessary in order to let (526) in all defenses, as well equitable as legal, against the real party in interest, and save a resort to another action, so as to work in harmony with the provision of the Constitution. Art. II, Sec. 1. "The distinction between actions at law and suits in equity and the powers of all such actions and suits shall be abolished," etc. For instance, the holder of a note, without endorsement under the old system, sued in the name of the payee, and if the defendant had any defense, legal or equitable against the holder, who was the real party in interest, it could only be set up by a suit in equity.
In our case, Davis is the real party in interest, and to allow an action to be prosecuted in the name of Abrams, who is merely an agent or attorney for collection, would make this section of C. C. P. of no effect.
Not being able to stand the force of this battery, the counsel for the plaintiff yielded his first position and fell back upon Sec. 57: "An executor or administrator, a trustee of an express trust, or a person expressly authorized by statute, may sue without joining with him the person for whose benefit the action is prosecuted," and relied on Willey v. Gatling, 70 N.C. 410, to support his prosecution.
In that case Willey received the note as "a collateral" to secure a debt due to him. So the effect was to constitute him a trustee for himself to the amount of his debt, with a resulting trust to the grantor for the excess.
In this case there is no consideration whatever for the assignment of the note; it would seem the motive was to avoid the supposed bearing of certain proceedings of a court in the State of South Carolina.
Whether a Court of Equity in a "creditor's bill" has power to enjoin creditors, who are not parties, from suing an administrator, unless it be necessary for the protection of a fund which the court has taken into its keeping? Whether such an injunction, supposing it to be valid, would have the effect of preventing a creditor from suing in (527) another State? are questions into which we do not enter. We refer to them merely as tending to show that the assignment being voluntary, that is, without consideration, and for the benefit of the assignor, cannot be allowed any legal effect, save that of constituting an agency to collect.
Under C. C. P., as amended, see Battle's Rev., Sec. 68, Act of 1868-69, in transitory actions, the summons must be returnable either to the county in which the plaintiff or the defendant resides. If the party really interested in a note, can by a voluntary assignment for the purpose of collection, enable the assignee to sue in the county in which he resides, this provision of the statute amounts to nothing, and the summons may be returnable to any county which the party really interested, may choose to select.
Thus it is clear, that to allow this action to be maintained in the name of Abrams, will nullify Sec. 57, C. C. P., as to the real party in interest, and also Sec. 68, Act of 1968-69, which, instead of requiring the action to be brought in the county where the defendant resides (as under C. C. P.,) allows the plaintiff to bring it in the county in which he or the defendant resides. This the court is not at liberty to do True, in this particular case the action is localized by Sec. 68, C. C. P., Bat. Rev., that is, fixed in the county where administration is granted, but the principle is general, and would extend to transitory actions, and enable plaintiffs to select any county without reference to the residence of either the plaintiff or the defendant.
Judgment below reversed, and judgment that defendant go without day and recover his costs.
PER CURIAM. Judgment reversed.
Cited: Newsom v. Russell, 77 N.C. 278; Williams v. Williams, 79 N.C. 421; Alexander v. Wriston, 81 N.C. 194; Jackson v. Love, 82 N.C. 407; Wilcoxon v. Logan, 91 N.C. 452; Wynne v. Heck, 92 N.C. 416; Egerton v. Carr, 94 N.C. 653; Hartness v. Wallace, 106 N.C. 430; Boykin v. Bank, 118 N.C. 568; Morefield v. Harris, 126 N.C. 628; Chapman v. McLawhorn, 150 N.C. 167; Martin v. Mask, 158 N.C. 442; Bank v. Exum, 163 N.C. 202; Bank v. Rochamora, 193 N.C. 6.
(528)