Court Opinion

ID: 6679005
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:18:54.388219+00
Date Added: 2024-06-11T16:00:47.291913
License: Public Domain

Mr. Chief Justice McIver,
dissenting. Not being able to concur in the conclusion reached by Mr. Justice Jones,, I propose to state, as briefly as practicable, the grounds of my dissent. The undisputed facts are, that the defendant, Sallie R. Cantey, on the 14th of November, 1893, borrowed from Ida All the sum of $700, for which she gave her three promissory notes, each for the sum of $233.33, payable, respectively, on the 1st of October, 1894, 1895, and 1896; and to secure the payment of the several sums of money mentioned in said notes she executed a mortgage on a tract of land, her separate estate; that before the maturity of said notes the said Ida All endorsed and delivered the same to W. A. All, jr., & Co.; that the said W. A. All, jr., & Co., before the maturity of the said notes, endorsed and delivered the same to the plaintiffs as collateral security for the payment of “advances made or to be made by plaintiffs to said firm,” W. A. All, jr., & Co.; that afterwards, but at *594what particular time does not appear, the said W. A. All, jr., & Co. “assigned said notes and mortgage for value to one Thomas Philpot,” subject to the assignment to plaintiffs, the said notes and mortgage being still in the possession of plaintiffs or their attorney; that after the first of the above mentioned notes became payable, to wit: on the 6th of May, 1895, this action was commenced for the foreclosure of the mortgage, the complaint being in the usual form for that purpose; that after the commencement of the action, the debt, for which said notes and mortgage were transferred to the plaintiffs as collateral security, was paid. These facts are all obtained as well from the report of the master, to whom it was referred to hear and determine all the issues in the case, as from the order of his Honor, Judge Aldrich, sustaining an exception to a previous report of the master upon a point not now pertinent to the question raised by this appeal; inasmuch as it is stated in the “Case,” as prepared for argument here, that: “It is further agreed, that the statement of the case contained in the order of Judge Aldrich be adopted as an agreed statement for the purposes of this appeal.” When the case was remanded to the master by the order of Judge Aldrich, another reference was held, at which defendants moved that the complaint be dismissed, or that Philpot be made a defendant. The master ruled that the debt due the plaintiffs having been paid, they were not the real parties in interest, but that Philpot was the real party in interest, and as it had been held by Judge Aldrich that Philpot could not be substituted as plaintiff, as he had not asked to be so substituted, and, without ruling upon the alternative presented by defendants’ motion, that Philpot be made a party defendant, he held that the plaintiffs could not maintain the action, and ordered that the complaint be dismissed. To this report plaintiffs excepted, upon the grounds set out in the “Case,” whereupon his Honor, Judge Benet, granted an ■order confirming the report of the master, “without prejudice to the real party in interest to institute such proceedings *595on the notes and mortgage in question as he may be advised.” From this order plaintiffs appeal, upon the ground set out in the record.
It seems to me that both the master and the Circuit Judge, as well as Mr. Justice Jones, have failed to give due significance and effect to the admitted fact that the debt due plaintiffs was paid after the commencement of this action. So far as appears from the “Case,” it cannot be doubted that, when this action was commenced, the plaintiffs had a perfectly good cause of action, and a clear right to maintain this action. They were bona fide holders of negotiable notes transferred to them before maturity, and as such had all the rights incident to that position. The fact that the notes were transferred to them as collateral security for a debt due them by their endorsers, W. A. All, jr., & Co., does not deprive them of the rights of innocent holders for value, or in any way affect their rights, as is abundantly shown by the passage quoted from Story on Promissory Notes, sec. 195, quoted with approval in Dearman v. Trimmier, 26 S. C., at page 511, and the other authorities there cited. Occupying, then, that position, I am unable to discover anything in the “Case” which would defeat or in anywise impair their right to recover at the time they commenced this action.
It is contended, however, that by the payment of the debt, for which the plaintiffs held these notes as collateral security, they are now no longer the real parties in interest, and, therefore, cannot maintain this action. But as the conceded fact is, that such payment was made after the commencement of the action, it is manifestly a case in which a party is seeking to avail himself of a defense resting upon facts occurring after the action was commenced. In such a case, under the former system of pleading, the defense could only be interposed by a plea puis darrein continuance, and the settled rule was that such a plea could only be allowed upon payment of all costs incurred up to the time of the filing of the plea. Jones v. Griffin, 1 Strob., 31. See, also, Elms v. Beers, 3 McC.,at page 9, where the *596same rule was recognized. The same rule has been recognized since the adoption of the Code of Procedure, in State v. Moses, 20 S. C., at page 468; for while, under the new system of pleadings, all the old forms of pleading have been abolished, and hence a formal plea puis darrein continuance is not now either necessary or pioper, yet the same result may be accomplished by a supplemental answer (Code, sec. 198), to which the same rule applies as to payment of costs, as it is founded upon the plainest principles of justice; for, certainly, it would not be just or right to mulct a party in costs, who had a good cause of action when the suit was commenced, because something has occurred since the commencement of the action which affords the defendant a good defense, either partial or total, and which, under the rules of pleading, he is allowed to set up; and this is what I understand the Court to mean when it was said, in State v. Moses, supra: “The application was, in effect, for leave to plead puis darrein continuance, and such leave will generally be granted upon a proper showing, but it should always be upon payment of costs.” It seems to me, therefore, that the plaintiffs should still be regarded as the real parties in interest, at least so far as their right to recover their costs is concerned, if no further.
But, in addition to this, it seems to me that the cause of action still continued in favor of the plaintiffs, notwithstanding the payment of the debt to plaintiffs; for it must be kept in mind, that the debt which has been paid was not the debt evidenced by the notes upon which this action is based; for, of course, if that debt had been paid, no one could maintain an action for its recover}?. But the debt, which has been paid, being the debt to plaintiffs, for which the notes were transferred to them as collateral security, there is no doubt that the right of action for the recovery of the debt, evidenced by the notes, still continued in favor of some one, and the question is, who? It seems to me that such question is answered by the provisions of sec. 142 of the Code, which appears to have been enacted to meet just *597such a case as this is. So much of that section as relates to the matter here under consideration, reads as follows: “No action shall abate by the death, marriage or other disability of a party, or by the transfer of any interest, if the cause of action survive or continue;” and after providing what shall be the course of proceeding in case of the death, marriage or other disability of a party, the section proceeds in these words: “In case of any other transfer of interest, the action shall be continued in the name of the original party, or the Court may allow the person to whom the transfer is made to be substituted in the action.” So that, where pending an action to recover a debt evidenced by a note, such note has been transferred to a third person, the action shall be continued in the name of the original party, or the Court may allow the person to whom the transfer has been made substituted as plaintiff, provided the cause of action continues. It will be observed that the language is: “If the cause of action * * * continue” — not if it continue in the original plaintiff- — but if it continue. Now, to construe this provision as if the words italicized in the preceding line were in the section, would be to render the provision wholly nugatory and totally unnecessary; for if the cause of action continued in the original plaintiff, then where would be the necessity for the provision? In such a case the action could be continued in the name of the original plaintiff without any such provision. It seems to me, therefore, that the real object and true meaning of the section was to authorize the continuance of an action in the name of the original plaintiff, even though his interest in the cause of action may have been transferred, pending the action, to some third person, provided the cause of action continued in such transferee. This view is made more manifest by the language used in the last sentence of the section, which necessarily implies that the action shall be continued in the name of the original plaintiff, even though he may, pending the action, have parted with his interest in the cause of action; and the concluding clause of that *598sentence strengthens this implication, for how could the transferee be allowed to be substituted as plaintiff, if the cause of action still continued in the original plaintiff?
I am satisfied that the true construction of section 142 of the Code is, that where, pending an action, the cause of action has been transferred to some third person, the action may be continued in the name of the original plaintiff, notwithstanding such transfer, provided the cause of action continues in favor of the transferee, or the Court “may allow” such transferee to be substituted as plaintiff. This implies that the transferee shall apply for such substitution; and if he makes no such application, then the provision is, that the action '■'■shall be continued” in the name of the original plaintiff — that is to say, the action shall be continued in the name of the original plaintiff — unless the transferee applies tobe substituted, when the Court "may allow” such substitution. If it should be said that it does not appear that the assignment to Philpot was made after the action was commenced, the conclusive answer would be, that the admitted fact is, that “the assignment of All & Co. to Phil-pot was made subject to the assignment to plaintiffs;'1'1 and, therefore, the assignment to Philpot must in law be regarded as made and as taking effect when the debt of All & Co. to plaintiffs was paid, and this is conceded to have been after the commencement of the action.
I think, therefore, that the judgment of the Circuit Court should be reversed, and the action should have been continued, in the name of the plaintiffs. But, in any view of the matter, I am satisfied that it was error to dismiss the complaint, except upon payment of plaintiffs’ costs.