Court Opinion

ID: 8038842
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:24:07.164331+00
Date Added: 2024-06-11T16:37:14.894466
License: Public Domain

Chappell, J.,
dissenting.
I am unable to agree with the majority opinion and respectfully dissent.
The question presented is whether there was a defect of parties plaintiff and a misjoinder of causes of action. The majority opinion in effect holds that there was not a defect of parties plaintiff and that plaintiff had the right to separately maintain his own cause of action, as well as the 39 others assigned to him for collection, but that since he was not the real party in interest as to the latter there was a misjoinder of all causes of action in one action because a *356judgment in no cause of action would effect the real party-in interest in any other cause of action.
Doubtless it would be well in the beginning to examine plaintiff’s petition wherein he states: “ * * * and plaintiff brings this action for and in behalf of himself and every employee whose claim has been assigned to him and who is similarly situated and this assignment is for the purpose of collection only as provided for in Fair Labor Standards Act, Title 29, Section 216, Sub Section B. U. S. C. A. Annotated.” The separate assignments to plaintiff, which are a part of plaintiff’s petition, assigned each respective claim to plaintiff without reservation and constituted and appointed him for his sole use and benefit “ * * * to ask, collect, demand, sue for, in his own name and right, receive, compound and give acquittances for said claim or claims, or any part thereof.”
After defining the extent of the civil liability of an employer to his aggrieved employee for violation of section 206 or section 207 of the Fair Labor Standards Act, the federal statute referred to in plaintiff’s petition provides: “Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for and in behalf of all employees similarly situated.” (Italics supplied.)
At the outset I am of the belief that such federal statute attempts in no manner to direct or control procedure in any court, either federal or state. It is substantivé law thereby creating and conferring new rights upon employees which never theretofore existed. As stated by Judge Delehant in Booth v. Montgomery Ward & Co., 44 F. Supp. 451: “The legislation was a novel venture. It did not merely declare and implement an existing, but hitherto undefined, right. It created a new right. And it appropriately provided the jurisdiction within which that right might be enforced. Its action in that behalf, the general validity of the legisla*357tion having been judicially affirmed, must not now be nullified by narrow or captious judicial construction. The basic right being allowed, its vindication must not be defeated by burdensome procedural restrictions, unless the congress, by clear mandate, has itself imposed them.” Thereupon that court remanded the case to the district court for Lancaster County, Nebraska.
Be that as it may, for the purposes of this case, the federal statute may be construed as procedural and arrive at the same result because it is not in conflict but entirely in accord with our own statutory procedure.
One of the exceptions contained in section 25-304, R. S. 1943, is that: “ * * * a person expressly authorized by statute, may bring an action without joining with him the person for whose benefit it is prosecuted.” In Hargrave v. Mid-Continent Petroleum Corp., 36 F. Supp. 233, construing a like statute, it was said: “The act, being remedial in nature, should be construed liberally so as to afford relief within the legislative intent. When so construed, and in the light of the sections of the Oklahoma Statutes authorizing suits to be brought by persons expressly authorized by statute, and further allowing class actions to be brought, an agent who is designated by employees to bring an action in their behalf is ‘a person expressly authorized by statute’ to bring an action. The plaintiff in this case has the right to bring such action in behalf of the employees, who have designated him as their agent, and all others similarly situated, in either the state or federal court.”
In Mid-Continent Pipe Line Co. v. Hargrave, 129 F. 2d 655, such an action was brought by plaintiff as agent for 56 named watchmen or guards. In the opinion it was said: “The final contention is that plaintiff was not the real party in interest, that the action was not maintainable in his name in the state court, and that on removal to the United States Court it could not be maintained in that manner. The several claimants signed a written instrument in which it was recited that they employed plaintiff to represent them in the collection of the overtime from the two com*358panies, gave him authority to represent them in or out of court, and appointed him as their agent. Section 16 (b) of the act, supra, provides inter alia that an action for the recovery of overtime compensation and liquidated damages may be maintained in any court of competent jurisdiction in the name of the employee or employees in interest or in the name of a designated agent; and Title 12, section 223, Oklahoma Statutes 1941, provides inter alia that a person expressly authorized by statute may bring an action without joining with him the person for which benefit it is prosecuted. * * * Section 16 (b) supra, and Title 12, section 223, supra, construed together, clearly authorized the maintenance of the action in the state court in the name of the agent, and it was likewise maintainable in that manner after removal.”
In La Guardia v. Austin-Bliss General Tire Co., 41 F. Supp. 678, it was said: “The contention that jurisdiction is lacking because plaintiff sues as assignee does not, in my opinion, have any merit. The Act permits the maintenance of the action by one designated as agent or representative in behalf of the employees affected. An assignee, in my opinion, is such an one.” Citing cases.
The exception “a person expressly authorized by statute” was applied in state courts to a person authorized to sue by federal statute as early as 1890 in Peters v. Foster, 10 N. Y. S. 389. See, also, 47 C. J., Parties, § 77, p. 40. As a matter of fact as early as 1883 in Watson v. Watson, 49 Mich. 540, 14 N. W. 489, it was held that a person expressly authorized by statute to prosecute an action could do so even without an assignment of the cause of action.
Under the circumstances in this case it seems only logical to hold that plaintiff in the case at bar was “a person expressly authorized by statute” who might bring the action as assignee without joining with him the persons for whose benefit.it was prosecuted. If that be true, then he was the real party in interest and there was not a misjoinder of causes of.action. Although that result would seem conclusive for the reasons heretofore stated, there are other rea*359sons as cogent requiring the same result.
’ The majority opinion is premised primarily upon the holding in Hoagland v. Van Etten, 22 Neb. 681, 35 N. W. 869, decided in 1888. It was an action by plaintiff to foreclose a mechanic’s lien for .material furnished by him personally and by others whose claims were formally assigned to plaintiff for the admitted purpose of enabling him to bring the action for the benefit of all. It was held in the opinion that plaintiff was not the real party in interest and did not come within any exception, therefore, he could not maintain the action. Thereupon the case was reversed and remanded for further proceedings. Upon rehearing, reported 23 Neb. 462, 36 N. W. 755, this court adhered to its former decision that the plaintiff was not the real party in interest or within any statutory exception, however, the court modified its former opinion, in the furtherance of justice, thereby permitting plaintiff to acquire all of the interest of the assignors, beneficial as well as legal, within 30 days to enable plaintiff to maintain the action and avoid the statute of limitations. Plaintiff so acquired all the interest of the others and the case was tried on the merits. Plaintiff recovered and appeal was taken to this court. The opinion affirming that judgment is reported 31 Neb. 292, 47 N. W. 920. It is interesting to note that plaintiff was permitted therein to maintain and recover not only upon his own claim but upon the claims that were assigned to him. Further it was said in the opinion: “As to the other creditors, he was in fact a trustee, and it is possible the action might have been sustained on that ground, although that is not clear.”
I call attention to the fact that in Meeker v. Waldron, 62 Neb. 689, 87 N. W. 539, decided in 1901, plaintiff brought an action as trustee or agent for four creditors of the defendant to foreclose a chattel mortgage. The assignment to him assigned, transferred, and set over to plaintiff as the “legal agent and trustee” of the claimants the mortgage and notes and authorized him to collect and discharge the same. It was contended by defendant that plaintiff was not *360the real party in interest since the creditors had the beneficial interest. This court held otherwise, primarily upon the basis that plaintiff was “ * * * a person with whom or in whose name a contract is made for the benefit of another may bring an action without joining with him the person for whose benefit it is prosecuted,” a specific exception provided in section 25-304, R. S. 1943. Further this court in so holding, placed its approval upon a holding in cited Iowa cases to the effect that “ * * * ‘the party holding the legal title to a cause of action, though he be a mere agent or trustee with no beneficial interest therein, may sue thereon in his own name.’ ” See, also, Huddleson v. Polk, 70 Neb. 483, 97 N. W. 624, opinions on rehearings 70 Neb. 489, 100 N. W. 802, and 70 Neb. 492, 102 N. W. 464 respectively.
In any event all three of the Hoagland v. Van Etten cases were decided before the exception “ * :|: * and assignees of choses in action assigned for the purpose of collection, may sue on any claim assigned in writing,” was placed in the statute by an amendment. Laws 1913, ch. 166, §1, p. 510. The truth is, as will hereinafter be observed, this court followed the minority rule in the above cases but the Legislature attempted to remedy that very situation by adding the above provision to the statute, thereby making such an assignee for collection an exception to the real party in interest statutory requirement, when, in fact, such an assignee always was the real party in interest. The majority opinion it seems would make that exception meaningless and give it no force or effect in cases similar to the one at bar by holding that in spite of it plaintiff was not the real party in interest. Regardless of the holding in Hoagland v. Van Etten, swpra, I believe the Legislature has by the aforesaid provision made an assignee for collection the real party in interest.
In the light thereof, I inquire what is the test by which it can be determined whether an assignee or agent for collection is the real party in interest? According to the theory of most courts the real party in interest is that person who can discharge the claim upon which suit is brought *361and control the action brought to enforce it, and not necessarily the person ultimately entitled to the benefit of the recovery or the person beneficially interested. It is enough for defendant to know that plaintiff is the party in legal interest and that a recovery by him will be full protection against a subsequent suit by another. 39 Am. Jur., Parties, § 17, p. 872; 6 C. J. S., Assignments, § 125, p. 1178; 47 C. J., Parties, § 70, p. 34, and § 71, p. 35.
In that connection it should be observed that section 25-303, R. S. 1943, specifically provides that “An action by the assignee of a thing in action shall be without prejudice to any counterclaim or defense existing between the original parties; * * * .”
It has been authoritatively stated that “Although an assignment merely for collection does not transfer the beneficial ownership to the assignee, such an assignment, when made absolutely with respect to a chose capable of legal assignment, vests the legal title thereto in the assignee, so that he may collect from the debtor, who may discharge himself by making payment to such assignee.
“An assignee for collection usually occupies a fiduciary relationship to the assignor similar to that of a trustee or agent, and he has the corresponding rights and obligations.” 6 C. J. S., Assignments, § 94, p. 1151.
It has also, been held that such an assignee “* * * may prosecute an action thereon in his own name as the real party in interest or as a trustee of an express trust; * * *” which is another exception provided in section 25-304, R. S. 1943. 5 C. J., Assignments, § 144, p. 958.
The rule supported by the weight of authority is that an assignee is the real party in interest and therefore entitled to sue if he has. the legal title to the chose, or such title that payment to him will discharge the debtor from any further liability. 5 C. J., Assignments, § 198, p. 994. It is held by a great majority of the courts that an assignee may sue in his own name as the real party in interest, although by the terms of the assignment he is bound to account to the assignor for the proceeds recovered, or to apply them as directed, or he is otherwise a mere agent or attorney for col-
*362lection. 5 C. J., Assignments, § 200, p. 995, citing in support thereof Huddleson v. Polk, supra, and Meeker v. Waldron, supra, and Hoagland v. Van Etten, supra, as contra. See, also, 6 C. J. S., Assignments, § 125, p. 1179.
In referring to the statutes requiring all actions to be prosecuted in the name of the real party in interest, it is said in 4 Am. Jur., Assignments, § 123, p. 328: “An assignee for collection is generally considered to be the real party in interest under these statutes, though he is to account to the assignor for the proceeds of the action; * * * .”
Likewise, in Pomeroy’s Code Remedies (5 ed.), § 70, p. 106, it is said: “Analogous to the subject discussed in the preceding paragraph is the question whether an assignee, to whom a thing in action has been transferred by an assignment which is absolute in its terms, so as to vest in him the entire legal title, but which, by means of a contemporaneous and collateral agreement, is, in fact, rendered conditional or partial, is the real party in interest. It is now settled by a great preponderance of authority, although there is some conflict, that if the assignment, whether written or verbal, of anything in action is absolute in its terms, so that by virtue thereof the entire apparent legal title vests in the assignee, any contemporaneous collateral agreement by virtue of which he is to receive a part only of the proceeds, ‘and is to account to the assignor or other person for the residue, or even is to thus account for the whole proceeds, or by virtue of which the absolute transfer is made conditional upon the fact of recovery, or by which his title is in any other similar manner partial or conditional,’ does not render him any the less the real party in interest; he is entitled to sue in his own name, whatever collateral arrangements have been made between him and the assignor ¡respecting the proceeds. The debtor is completely protected by the assignment, and cannot be exposed to a second action brought by any of the parties, either the assignor or other, to whom the assignee is bound to account. This is the settled- doctrine in most of the States.”
It will be noted then ..'that the above, and I think better, *363rules prevail in a great majority of the courts even in the absence of a specific provision such as appears in our statute to the effect that “ * * * assignees of choses in action assigned for the purpose of collection, may sue on any claim assigned in writing, * * * .”
It has also been stated: “ * * * that causes of action arising out of contracts between different persons and defendant may, if assigned to one plaintiff, be joined and enforced in the same action, particularly where the contracts are identical in terms, and the same state of facts is alleged as constituting a breach of each contract, * * * .” 1 C. J. S., Actions, § 97, p. 1278. It has been held in many cases “ * * * that there is no impropriety in joining a cause of action held by plaintiff in his own right with one acquired by him by assignment; * * * .” 1 C. J. S., Actions, § 97, p. 1281. See, also, Sroufe v. Soto, 5 Ariz. 10, 43 P. 221; Mosher v. Bellas, 33 Ariz. 147, 264 P. 468; United Verde Extension Mining Co. v. Ralston, 37 Ariz. 554, 296 P. 262; Nierman v. White’s Motor Parts, Inc., 269 Mich. 608, 257 N. W. 751; Sullivan v. Fidelity & Casualty Co. of New York, 208 Mich. 68, 175 N. W. 397, affirmed on rehearing at 210 Mich. 625, 178 N. W. 39.
In McNorrill v. Gibbs, 45 F. Supp. 363, plaintiff brought an action similar to the one at bar, setting up therein two claims severally to recover for himself and another who .authorized plaintiff in writing to institute suit in his behalf and nominated him as agent and representative to do any and all things necessary to a successful prosecution of the action. Under such circumstances the court found that there was not a misjoinder of causes of action.
If plaintiff in the case at bar held the legal title to the choses in action assigned to him for collection, and thus had a right to maintain an action thereon as the real party in interest, it follows that any judgment upon any one or all of the causes of the action, including his' own personal claim, affected all the parties to the action and were triable in the same place in conformity with section 25-702, R. S. 1943, and there could be no misjoinder of causes of action *364unless for some other reason in law which I have been unable to discover.
Lest it be argued that there was a misjoinder of causes of action for other reasons, it should be said that I believe the action comes squarely within the following provisions of section 25-701, R. S. 1943, to wit: “The plaintiff may unite several causes of action in the same petition, whether they be such as have heretofore been denominated legal or equitable, or both, when they are included in any of the following classes: (1) The same transaction or transactions connected with the same subject of action; (2) contracts* express or implied; * * * .”
The causes of action all involve express contracts of the same character of which the federal statute was a part. The contracts were all alleged to have been made and violated by the same defendant with employees who were required to perform similar duties for defendant at or about the same time.
Further they all involve “transactions connected with the same subject of action,” a right of recovery by reason of a violation of the federal statute which was an integral part of their contracts. True, the causes of action did not arise out of the same transaction. They could be joined in one action if they arose out of the same transaction but that is not necessarily required because they may be joined if they arose out of different transactions but are connected with the same subject of action. A transaction is whatever may be done by one person which affects another’s rights and out of which a cause of action may arise. The words, “subject of action” mean something different from “cause of action” or “transaction.” Its meaning- in all types of cases is ably and comprehensively discussed in the leading case McArthur v. Moffett, 143 Wis. 564, 128 N. W. 445. The conclusion must be that in cases similar to the one at bar, where the subject of action is intangible, the basic and fundamental element in determining whether the causes, joined are connected with the same subject of action is plaintiff’s main primary right for the invasion of which the *365action is brought, to wit: The right to recover by reason of defendant’s violation of the federal statutes which was a part of all the contracts.
The words “transactions connected with the same subject of action” were enacted for the very purpose of making broad and comprehensive provisions for joinder of'causes of action in the interest of justice when there is some substantial unity between them. The wording is general to the last degree and was so written with the intent that it should apply to the myriads of complicated actions that, might arise in modern times. 1 Am. Jur., Actions, § 84., p. 470, and § 77, p. 465.
It is now recognized that the leading principle in our modern system of procedure is the avoidance of a multiplicity of suits and the settlement in one action of the respective claims of all parties when they are of such nature as to admit of adjustment in that mode. The courts when confronted with permissive joinder of causes of action now recognize that they must exercise a wise discretion and construe such statutory provisions liberally, remembering-that they are remedial in nature. In so doing courts should, make such statutes as effectual as possible to promote and. expedite the administration of justice, thereby preserving economy and efficiency in courts which are so badly needed now in our complicated system of society. 1 C. J., Actions, § 239, p. 1082; 1 C. J. S., Actions, § 77, p. 1222.
The procedural statutes of this state certainly do not require that there be 40 different trials in the same place before 40 different juries or courts in cases like the one at bar. There is but one question of law involved and one trial before one jury or court with one set of instructions and one verdict or decree can and should dispose of all the causes; of action with dispatch, .economy, efficiency, and justice for-all the parties involved. I am of the firm belief that the judgment of the trial court should be reversed and re-manded for trial in one action.
Carter and Wenke, JJ., concur in the dissent.