Court Opinion

ID: 8185420
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:07:50.785901+00
Date Added: 2024-06-11T16:40:23.914162
License: Public Domain

NewmaN, J.
In this state every action must be prosecuted in the name of the real party in interest. R. S. sec. 2605. The real party in interest is the party who has the right to receive and control the recovery. The statute is imperative. Even though the vendor of a promissory note may retain some residuary, contingent, or equitable interest in the note, he cannot maintain an action upon it.' Pomeroy, Code Rem. (3d ed.), § 135; Gates v. N. P. R. Co. 64 Wis. 64; Cummings v. Morris, 25 N. Y. 625. The defense that the plaintiff is not the real party in interest is, in general, an absolute bar to the action. A party without right to prosecute the action cannot maintain an attachment. That remedy is ancillary, merely, to the action. So, the defendants could maintain neither their action nor the attachment, unless they owned the indebtedness which was the cause of action, at the time of the commencement of their action. No doubt the law is that the taking of the vendee’s promissory note by the vendor of chattels is not an absolute payment for the chattels, in the absence of an agreement to that effect. But the taking of the note operates as a conditional payment. If the note is transferred, so long as it •remains in the hands of the assignee it operates as an absolute payment of the original consideration. If the creditor who takes such securities is charged as indorser and takes them up, he is then remitted to his original rights. The suspended right of action, upon the original consideration, revives in him, and he may bring his action upon such original consideration, or upon such securities, at his election. Battle v. Coit, 26 N. Y. 404, and cases cited; Meridan S. M. L. Co. v. Guy, 40 Conn. 163.
If the notes taken by the defendants from Steinkirchner were voidable by them for the fraud of Steinkirchner, as found by the trial court, it would then become a serious ■question whether the defendants bore such a relation to the *174notes as would entitle them to make the election to bold' them void. They had parted with their title to them, and they were then the property of the bank. They certainly could do nothing, lawfully, to impair the value of the notes-in the hands of the bank, even if the bank did take them relying on the credit of their indorsement. That fact could not operate as a reservation of an interest, in a legal sense, in the notes. They were the absolute property of the bank, to be disposed of at its will, and were not, to any extent, under the dominion of the defendants. The transaction by which the bank obtained the notes was a purchase, in the usual course of business.
But the evidence which goes to prove the fraud found by the trial court is, at the best, but meager and unsatisfactory. It seems to consist exclusively in the -fact that Stein-kirchner absconded, taking with him a large amount of property or money, and leaving too little to satisfy all his-creditors. At the time of his disappearance, he left many debts, and had an amount of property larger than his debts by a considerable margin. The property attached by creditors was sold by the sheriff for $1,721, and the court finds that he took with him “ about $18,000.” This does not establish very clearly that he was insolvent at the time of his departure. It does not show that he could not have continued his business, and paid his debts in the usual course of his business. It does not appear that creditors were pressing him. Much less does this prove that he was insolvent a month or two months earlier, when he gave the notes. Of course, his disappearance and withdrawal of his property,, clandestinely, from the power of the process of his creditors, is a conclusive impeachment of his business integrity, but, as -a proof of his insolvency at a previous date, it is far from conclusive. Nor is the evidence which is held to prove that-,, at the time when he gave the notes, he intended not to pay *175them, any more satisfactory. Apparently he was solvent at the time when he gave the notes. There is no evidence tending to show that he then meditated such a final wind-up of his business: He continued the business for some two' or three months later. There is really no evidence that, at the time when he gave the notes, he intended other than to'pursue his business. It is more probable that his resolution to abscond was of later origin. But, at best, it all rests in mere surmise, without basis upon any facts other than that he disappeared, taking property with him.
It seems to be claimed upon the part of the defendants that the judgment which the defendants entered against Steinkirchner, in their action against him, is conclusive upon the plaintiffs that they owned the cause of action upon which they recovered, and that it was due at the time of the commencement of their action. No doubt that judgment is conclusive upon the parties to the action and their privies. It binds no others. As a rule, a judgment is not admissible in evidence, either for or against a stranger to-the action. 12 Am. & Eng. Ency. of Law, 84, and cases cited in note 4. The judgment has no relevancy in this action, either by way of estoppel or as evidence. All these’ questions could properly be inquired into in this action. Sexton v. Rhames, 13 Wis. 99. It was a competition for precedence among creditors. Each one had the right tO’ avail himself of such technical advantage as the actual situation offered him, and each might be fairly required to stand within his own right. None but those who were actual creditors, in legal contemplation, at the time, had a right to-compete. The one who has the best legal right is to be preferred and advanced. It cannot well be doubted that, but for the false and misleading affidavit of Bartels, the plaintiffs would have secured the precedence sought by their-intervention. They ought in this action to obtain the ad*176vantage of which they were defeated by that deception. That was not permissible strategy.
By the Court.— The judgment of the superior court of Milwaukee county is reversed, and the cause remanded with direction to render judgment for the appellants for the ¡relief demanded in the complaint.