#### Reading *v.*Bentley.

The action of the court in striking off a discontinuance, at the instance of the equitable plaintiff, is not reviewable in the supreme court, although the question of a settlement, by the legal plaintiff with the defendant, is involved. It is not a final judgment, and therefore not reviewable on writ of error.

Feb. 1, 1889.

Error, No. 199, Jan. T., 1888, to C. P. No. 4, Phila. Co., to review the action of the court in striking off a discontinuance, in an action on the case, by B. Stewart Bentley and John K. Fredericks, assignees in bankruptcy of Peter Herdic, for the use of Frank L. Herdic, against John G. Reading,' at March T., 1884, No. 45. Motion to quash writ because the order of the court was not a final judgment.

The petition to strike off the discontinuance, filed Jan. 15,1887, is not given in the paper-book of plaintiff in error; but it is stated in the book of defendant in error that the petition averred that the petitioner was the equitable plaintiff, set forth the circumstances under which the entry “ satisfied, discontinued, settled and ended ” was marked upon the docket; and prayed “said settlement to be annulled and said discontinuance to be stricken off the record.”

The facts are briefly summarized as follows, by the master (appointed “ to take testimony ”), W. Herbert Washington, Esq.:

“ Peter Plerdic’s assignees in bankruptcy offered for sale an unsettled claim against John G. Reading, the defendant herein. The bankrupt bought the claim in the name of Frank L. Plerdic, his nephew, for $3,000. Frank L. Herdic paid this sum to the assignees, received their bill of sale, and gave to his uncle, Peter Herdic, a paper stating that, out of the proceeds of the claim, Frank should receive $3,000 with interest, and $3,000 bonus, while Peter should receive the balance. It is upon this claim that this suit was brought in 1884. On Dec. 18, of that year, Frank Herdic came to Philadelphia, had *716interviews with Mr. Reading and his counsel, and, on Dec. 19, had the case marked ‘ settled and discontinued.’ Frank Herdic received from Mr. Reading $3,000 in settlement. This was the sum for which he had purchased the claim. The bills of particulars, in the suit, averred an indebtedness by Reading to Frank Herdic, as successor in the claim of Peter Herdic against Reading, of over $369,000. The settlement was effected without the knowledge and acquiescence of Peter Herdic, and against the protest of Mr. Archer, the counsel of record for the plaintiff. Technically, he represented Frank Herdic, although, in fact, he represented Peter Herdic.

“In January, 1887, Peter Herdic obtained this rule. He contends that the defendant settled with Frank with full knowledge of what may be called the latter’s declaration of trust in favor of Peter; that the defendant knew the claim really was owned by Peter, subject only to the return of Frank’s advance, interest and bonus; and that it was made againt the protest of the counsel of record in the cause.

“ The defendant contends that he had the right to settle as he pleased with Frank L. Herdic, the plaintiff of record; that knowledge of a trust for Peter could not affect him, especially in view of the fact that, when the existence of an interest in Peter Herdic was first known, and the defendant claimed a set-off against Peter, his request to have the case marked to the use of Peter was not complied with; that, while he believed that Peter had had an interest, the existence of that interest at the time of the settlement was denied, for he was told, by the plaintiff authorized to settle according to the record, that Peter had no interest. And he contends that the plaintiff’s case is absolutely without merit.”

The master, in an elaborate opinion, reported that Frank L. Herdic had been placed by his uncle, Peter Herdic, in such a position that he could and did assume to be the absolute owner of the cause of the claims, and that Mr. Reading so believed; wherefore, the master reported that the discontinuance should not be stricken off.

Exceptions were filed to the master’s report. The opinion of the court below was as follows, by Thayer, P. J.:

“ The master’s careful and well-digested report of the evidence establishes, in our opinion, beyond a reasonable doubt, these facts :

“ 1. [That Frank L. Herdic, while owning an interest in the claim of his uncle, Peter Herdic, against the defendant, Reading, was, in fact, a mere trustee for his uncle for the principal part of the claim.] [4]

“ 2. [That this suit was commenced by Peter Herdic through the instrumentality of his counsel, Mr. Lloyd and Mr. Archer, and without the knowledge or participation of Frank L. Herdic.] [5]

“ 3. [That the settlement and discontinuance of the suit effected by Frank L. Herdic, without notice to Peter Herdic, who had brought the suit, and who was the owner of much the larger part *717of the claim involved in it, was plainly unwarranted and in derogation of the just rights of Peter Herdic.] [6]

“ 4. [That the defendant, Reading, had notice, before the settlement and discontinuance, that Peter Herdic was joint owner of the claim in suit with Frank L. Herdic.] [7] This satisfactorily appears from the letter of defendant’s counsel to Mr. Archer (Peter’s counsel), dated Dec. 12, 1884, his letter of Dec. 18, 1884, stating that he had informed the defendant, Reading, that they could make no settlement except through Mr. Archer, and requesting Mr. Archer to participate in the proposed settlement, and Mr. Archer’s reply thereto, declining to have anything to do with it, and distinctly informing Reading’s counsel that Frank L. Herdic had no authority to settle the case. We are also of opinion that there is sufficient evidence, particularly in the testimony of Frank L. Herdic, to warrant the conclusion that Mr. Reading had actual personal notice of the true condition of affairs relative to the ownership of the claim.

“ In view of these facts, we are clearly of the opinion that the discontinuance should be stricken off, and [that Peter Herdic, the equitable plaintiff, who commenced the suit, should be permitted to continue the prosecution of it for the recovery of whatever claim he may j ustly have against the defendant.] [8] The equitable plaintiff is, for all questions of substance and justice, the real plaintiff. He is responsible for costs, and the court will interfere to prevent the nominal plaintiff from discontinuing the action, or releasing it: Jones *v.*Martins, 13 Pa. 616. In this state, the person having the beneficial interest is considered as the substantial plaintiff, though his name does not appear in the record: Canby *v.*Ridgway, 1 Bin. 496; Bury *v.*Hartman, 4 S. & R. 184. The court will look beyond the nominal party and protect the interests of the cestui que use: Peterson *v.*Lothrop, 34 Pa. 223,.a case which has received a very recent recognition by the supreme court in Smith *v.*Stockdale, 20 W. N. C. 358.

. “ Rule absolute.”

The defendant then took this writ.

*The assignments of error*specified the action of the court, 1, in making absolute the rule to strike off the discontinuance; 2, in reversing the master’s report; 3, in not sustaining the exceptions of John G. Reading, the plaintiff in error and defendant below, and, subject to said exceptions, in not confirming the master’s report; 4-7, in deciding as in brackets, quoting the extracts respectively, as above; 8, in deciding as in brackets (quoting it), “ because no right of action passed from the assignees in bankruptcy of Peter Herdic to their vendee, Frank Herdic, and they had no right to sell the claim. The right to sue thereon was destroyed by virtue of § 5,057 of the revised statutes of the United States.”

*James W. M.*Newlin, for plaintiff in error.

The action of the court below, in setting aside the discontinuance, in the particular *718circumstances of this case, was not a matter of purely judicial discretion, and it is therefore the subject of review by writ of error. It is admitted that, ordinarily, questions looking to the details of pleading, and the method of disposing of a cause, such as the granting of a new trial, or even the allowance of a discontinuance, or, as was done in the case at bar, the setting aside of a discontinuance entered without leave of court, are all matters of judicial discretion merely, and are therefore not subject to review in this court. But this all presupposes that the court can exercise its judicial discretion without determining any substantial rights of either the plaintiff or defendant. Where such a decision must be made before the so called judicial discretion can be exercised, then the order made is subject to review. To illustrate: Suppose, instead of the case having been settled between Frank L. Herdic and the defendant, that Frank L. Herdic had discontinued without the consent of the defendant, who objected to the discontinuance on the ground that he expected not only to disprove the plaintiff’s demands, but also to obtain a certificate that the plaintiff was largely indebted to him. In such a case, if the defendant applied to have the discontinuance stricken off, and to be allowed to compel the cause to be tried, we would have the case of a purely judicial discretion. The court, after examining the matter, might say to the defendant: We are not willing to disturb the discontinuance ; if you have any cause of action against the plaintiff, you can yourself become plaintiff, and try your right in your own action. On the other hand, the court might say to the plaintiff: We will set aside the discontinuance, because you have trifled with the court and with the defendant; the case is at issue and ready for trial, and you must go ahead and take the consequences. No matter which way the court were to decide in this supposititious case, there would be nothing for the appellate court to review, because the court below would have exercised a purely judicial discretion. The court would simply have been dealing with methods of procedure and convenience, but no one’s rights would have been, adjudicated, and both sides would have been just where they were before the discontinuance.

But, in the case in review, the facts are wholly different. The record showed that the suit was prosecuted by Bentley, assignee of Peter Herdic, for the use of Frank L. Herdic against John G. Reading, and the record also showed that the use plaintiff had marked the cause to the use of Joseph M. Gazzam, who had thereupon discontinued the action. Who objected? Not the defendant, because he insists that the discontinuance shall stand; not the assignees in bankruptcy, for they had sold the claim to Frank L. Herdic; and not Frank L. Herdic, for he had settled the case. Who then moved the court below ? The answer is Peter Herdic. But, what has Peter Herdic to do with it? The record on its face shows that the use plaintiff is the successor of the assignee of Peter Herdic, and is, therefore, Peter Herdic, so far as the defendant is *719concerned; and, so far as the record goes, Peter Herdic has no possible connection with the case.

But the court below answers that the record does not disclose the real condition of the parties, and that court undertakes to contradict the record, and to adjudicate, upon the testimony taken upon the rule herein, and against the finding of the master, four separate and distinct questions of mixed law and fact, viz:

I. As to Frank L. Herdic and Peter Herdic:

*(a)*As between himself and Peter Herdic, had he not a right to settle for $3,000? — Peter Herdic having failed to repay him that sum.

*(J?)*If this point be negatived, had he not a right, as owner up to $6,000, and as trustee for Peter Herdic only for the proceeds in excess of $6,000, to settle for $3,000 if he thought the case could not be won, and that $3,000 was all that could be got out of it?

II. As to defendant:

*(a)*Had not Peter Herdic placed Frank L. Herdic in such a position of legal owner that defendant might lawfully settle with him without his, Peter’s, consent even if the true relations of Peter and Frank had been fully known to the defendant ?

(1b) Upon the whole evidence, is it not clear that, at the time the settlement was made, defendant believed that Frank had a right to settle, and was not this belief justified by the position in which Peter and his counsel had placed Frank?

The court found all these questions against the appellant, and, as a mere method of putting in force its judgment on these four questions, it makes absolute a rule granted to show cause why the discontinuance should not be set aside.

It is mistaking words for things to say that, in such a case, the court was merely exercising a judicial discretion. The court was, in fact, deciding the question of ownership of the claims against John G. Reading — adjudicating rights of property; and the disposition of the rule was simply the *channel*used to put the judgment of the court into practical operation, in view of the position in which the pleadings left the parties.

A peculiar illustration of the condition of the parties is shown by what has since taken place. Peter Herdic is dead, and his estate has not intervened herein, nor is it necessary that it should, because the order appealed from, by setting aside the discontinuance, did not make Peter Herdic a party of record, but thereby the court simply adjudged that Peter Herdic had an equitable interest. If the record were formally amended, it would have to read, “ Bentley, assignee of Peter Herdic, a bankrupt, for the use of Frank L. Herdic, for the use of the executors of Peter Herdic, deceased.”

The court below therefore have determined that a case which had been settled between the parties of record may be carried on by a stranger to the record whom that court finds to be the owner thereof and authorizes this stranger to carry on the suit which the *720defendant had settled with the person whom he considered his adversary. The judgment is certainly a final one, because, whilst it puts C in the position which A originally occupied and authorizes him to continue the litigation, yet, so far as the rights of B are concerned, it is a final judgment that he took nothing by this purchase from A. Now, if this determination is merely the exercise of a judicial discretion and cannot now be reviewed, neither can it be reviewed at any future time for the like reason. And so Peter Herdic’s estate could go on with this suit in the court below, and, on the trial, no objection could be taken to his position as plaintiff, even although there might be evidence sufficient to satisfy a jury that the ownership of the claims in suit was in the defendant. The question could not be further inquired into, so that the argument leads to this proposition. Hence it follows that the title of Mr. Reading to the claims he purchased from Frank Herdic is destroyed by the order of the court below, without the intervention of a jury and without any right of review in this court. To state such a proposition is to refute it.

*W. S. Stenger,*for defendant in error,

not heard. — The only exception to the rule that error cannot be assigned on a matter in the discretion of the court below is where the court below has been guilty of “an excess of power” in the exercise of a discretionary function. To this effect is the case of Catlin *v.*Robinson, 2 Watts, 373, in which a “judgment was opened after the power of the court over it was at an end.” There the court held that, for excess of power in the exercise of judicial discretion, the act of the court below may be annulled, and Chief Justice Gibson, delivering the opinion, cited Bailey *v.*Musgrave, 2 S. & R. 220, and Huston *v.*Mitchell, 14 S. & R. 310, as confirming that view.

But refusal to open judgment is never a transgression of power: Henry *v.*Brothers, 48 Pa. 71. No more substantial rights were passed upon and adjudged by the court below in this case than were determined in Kindig’s Ap., 2 W. N. C. 680. It was argued there that the application, to amend the record of the entry on the judgment index was in the nature of a bill in equity, but this court held that no appeal would lie.

There is no determination here of the ownership of or right to any property, except so far as the right to prosecute the action is involved. It can make no difference that, in considering the question of reinstating this cause, the court below decided in favor of the application to reinstate the action. The conclusion reached is not material, so far as the point we are arguing is concerned, although, if the court below had discharged the rule, the hardship would have been greater to Peter Herdic than it is now to the defendant below, because such an order would have been a final judgment as to his rights in this suit. This is the plain ruling of Welch *v.*Mandeville, hereafter cited. It is the nature of the subject-mat*721ter considered and passed upon by the court below that, by the express decisions, prevents this court from taking cognizance of it upon a writ of error. That subject-matter consisted of the discontinuance of this suit and the entry thereof upon the record by the consent of the prothonotary without the leave of the court, the circumstances under and the manner in which this was done, and the amendment of the record by striking off the discontinuance, re-instating the cause and permitting Peter Herdic to prosecute the action. Clearly, the exercise of the discretion of the court below was not characterized by any excess of power, and there was no adjudication of the ownership of property or determination of substantial rights w'hich amounted to a final decree.

March 12, 1888.

The discontinuance and re-instatement of causes are matters of judicial discretion: Mechanics’ Bank *v.*Fisher, 1 Rawle, 341; Pollock *v.*Hall, 3 Yeates, 42; Broom *v.*Fox, 2 Yeates, 531; Bank *v.*MacAlester, 6 W. & S. 149; McCullum *v.*Coxe, 1 Dali. 139.

The action of the court below with reference to the discontinuance of actions is not the subject of review: Evans, Adm’r *v.*Clover, 1 Grant, 164; Brazier *v.*Tarber, 4 Ala. 569; Welch *v.*Mandeville, 7 Cranch, 151.

Per Curiam,

Writ quashed.

Note. — The motion in the above case should be stated as a motion to quash the writ because the order was simply an exercise of judicial discretion which is not assignable for error; and the last sentence of the syllabus should be so stated.

The date of argument was March 12, 1888. Paxson, Trunkey and Sterrett, JJ., absent.

In Bach *v.*Burke, decided April 20, 1891, the supreme court held that the refusal of the court below to make absolute a rule to discontinue, was not reviewable, although the parties, for a valuable consideration, had agreed to a discontinuance.

See also the next case.