Court Opinion

ID: 8787312
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:38:59.031847+00
Date Added: 2024-06-11T17:03:09.108757
License: Public Domain

DAYTON, District Judge
(after stating the facts as above). We do not deem it necessary to consider the assignments of error in detail.
[1] The vital question is whether this assignment with “the order to pay” incorporated in it barred the plaintiff’s right to maintain this action. Under the common law there could be no question about the matter. These choses in action were not assignable. Tolson v. Elwes, 28 Va. 436.
[2] Therefore the whole question turns upon the construction of ' and limitation to be imposed upon section 2860, Va. Code 1904, touching the right of assignees to sue. Decisions from other states construing other and different statutes are calculated to mislead. The Virginia statute in its present form is as follows:
*676“The assignee or beneficial owner of any bond, note, writing or other chose in action, not negotiable, may maintain thereon in his own name any action which the original obligee, payee or contracting party might have brought, but shall allow all just discounts, not only against himself, but against such obligee, payee or contracting party, before the defendant had notice of the assignment or transfer by such obligee, payee, or contracting party, and shall also allow all such discounts against any intermediate assignor or transferer, the right to which was acquired on the faith of the assignment or transfer to .him, and before the defendant had notice of the assignment or transfer by such assignor or transferer to another.”
This statute in Virginia is very old. It is first found in the Acts of the Assembly of 1705 (3 Hen. St. at Large, p. 378). As found in the Code of 1819 (1 Rev. Code, c. 125, § 5, p. 484), it reads:
“Assignment of all bonds, bills and promissory notes, and other' writings obligatory, whatsoever, shall be valid; and an assignee of any such may thereupon maintain any action, in his own nam'e, which the original obligee or payee might have brought, but shall allow all just discounts, not only against himself, but against the assignor, before notice of the assignment was given to the defendant.”
In the Code of 1849 (chapter 144, § 14, p. 583) it is found with the change in words that:
“The assignee of any bond, note or writing not obligatory may maintain,” etc.
Without further change it was incorporated in the Code of 1860 (chapter 144, § 14, p. 630). With some changes, not affecting its material purpose, it was adopted in West Virginia, and will be found in its Code 1906, as section 3452.
In construing this statute the courts of both states have uniformly held that its only effect is to enable the assignee 'to sue in his own name, taking the paper subject to all the equities of the maker or obligor. The legal title still remains in the assignor. It did not intend to abridge his rights nor to enlarge those of the assignee beyond that of suing in his own name. Mackie v. Davis, 2 Va. 219, 1 Am. Dec. 482; Norton v. Rose, 2 Va. 233; Garland v. Richeson, 4 Rand. (Va.) 266; Caton v. Lenox, 26 Va. 31, 42; Feazle v. Dillard, 32 Va. 30, 34; Davis v. Miller, 55 Va. 1, 13; Clarksons v. Doddridge, 55 Va. 42, 44; Iaege v. Bossieux, 56 Va. 83, 98, 76 Am. Dec. 189; Gordon v. Rixey, 76 Va. 694, 704; Stebbins v. Bruce, 80 Va. 389, 400; Tyler v. Ricamore, 87 Va. 466, 12 S. E. 799; Bantz v. Basnett, 12 W. Va. 772, 779; Clarke v. Hogeman, 13 W. Va. 718; Whitteker v. Gas Co., 16 W. Va. 717; Scraggs v. Hill, 37 W. Va. 706, 712, 17 S. E. 185; Bentley v. Ins. Co., 40 W. Va. 729, 23 S. E. 584; Cochrane v. Hyre, 49 W. Va. 315, 319, 38 S. E. 554.
In Dunn v. Price, 38 Va. 203, at page 209, Judge Tucker, discussing this statute, says:
“It does not follow because he (assignee) is entitled to recover in his own name under this statute that he can no longer sue in the name of his assignor for his own benefit. The case- of Garland v. Richeson, 25 Va. 260, is pregnant with proof that a party may proceed under the statute or as at common law.”
*677In Davis v. Miller, 55 Va. at page 13, Moncure, J., says:
“The legal title still remains in the assignor in whose name the suit may be brought.”
And in Clarksons v. Doddridge, 55 Va. at page 44, he says:
“The assignee may, at his election, sue at law in his own name or in that of the obligee or payee for his benefit”
[3] It is therefore clear that under this statute and these decisions suit may be brought in one of three ways — in the name of the original obligee or payee, in his name for the use of the assignee, or in the name of the assignee alone. And in cases, where complete protection and relief cannot be obtained at law, equity may be appealed to. Code Va. 1904, § 2862 ; 2 Va. Raw Reg. 384, Barton, E. Pr. (2d Ed.) 235, 236; Code W. Va. 1906, § 3454.
[4,5] But it seems to have been the opinion of the learned judge below that because this assignment contained an order to pay and proof would be forthcoming that such order had been accepted that it created a new debt between the original debtor and these assignees for the whole amount of the assignor’s claim, and barred any and all right on the part of the assignor to sue. We cannot concur in this view:
First, because the “order to pay” incorporated in the assignment, as it is, should be considered in connection with the assignment, as a part of it, and incident and subordinate to it.
Second, because, while the paper purports to be an assignment of all moneys due and to become due under the contract and a direction to pay the same to these assignees, the -evidence was undisputed that it was in fact only executed to secure the debt due such assignees, much less in amount than that asserted by plaintiff to be due from the defendant. An assignment absolute upon its face may be held to be in. trust only to pay certain debts. Protzman’s Ex’r v. Joseph, 65 W. Va. 788, 65 S. E. 461. The rights of these assignees, as we have shown, were only equitable ones allowed by statute to be asserted at law, and the obligation of such law court becomes apparent, therefore, to protect both the rights of the assignor, still retaining legal title, and the assignee having the equitable one.
Third, because as distinctly held in Tyler v. Ricamore, 87 Va. 466, at page 469, 12 S. E. 799, at page 800, a case very similar, “it being; admitted and clear that the cause of action is assignable, the defendant cannot object to the several assignments because a determination under the issues joined in this suit will finally settle and conclude claims as to him if there be a complete or a partial assignment.” This would be true iu this action for the further reason that, while these assignees were not formal parties to it, they had full knowledge of it and entered no objection to its prosecution, but were furnishing evidence to maintain it on trial. Linder such circumstances a general verdict directed for the defendant, as was done here, upon issues denying all obligation to pay anything might be held to preclude them from recovery iu any subsequent action on their part. As to this, however, we are not called upon to decide. We are of the opinion *678that the plaintiff had the right to maintain this action; that his motion to amend his declaration so as to show that it was for the use and benefit of his assignees should have been sustained and not overruled; and that the court erred in stopping the course of the trial and directing the general verdict for the defendant.
The judgment of the court below-will be reversed and the case remanded, with directions to set aside the verdict and grant a new trial.
Reversed.