Court Opinion

ID: 6696511
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:53:04.699897+00
Date Added: 2024-06-11T16:01:15.942477
License: Public Domain

AlleN, J.,
dissenting: At February Term, 1917, of tbe Superior Court of Mecklenburg, Paul Chatham and tbe Charlotte Eapid Transit Company, in which Chatham was tbe principal stockholder, recovered judgment against tbe Mecklenburg Eealty Company, a corporation, for $10,000, and being unable to collect tbe judgment, tbe same plaintiffs, without tbe joinder of other parties, instituted this action against tbe stockholders and directors of tbe realty company to compel tbe payment of tbe judgment.
*506Tbe former action was commenced 12 August, 1914.
Tbe realty company began tbe distribution of its assets among its stockholders in 1911, and in that year paid to each stockholder $157.50 on each share of stock of the par value of $100; in 1913, $10; in 1916, $7.94, and on 7 December, 1916, all of the assets being distributed, the corporation was dissolved.
The judge finds that Paul Chatham and the Charlotte Rapid Transit Company are the only creditors of the realty company, and that the payments to the stockholders were made without intent to defraud the plaintiffs.
It also appears that before this action was commenced the plaintiffs made three assignments of their judgment, the first two being as security for debts, and the last to Margaret Kavanaugh, and the record failing to disclose that Mrs. Kavanaugh knew of the assignment to her, or that she had accepted the same, the order recited in the opinion was made, which states that it was not to be conclusive on the parties.
In obedience to the order, Mrs. Kavanaugh filed the following plea in the Superior Court:
Pursuant to the order of the Supreme Court made in this case, Mrs. Kavanaugh hereby comes into court and makes herself a party plaintiff herein, adopts the complaint heretofore filed herein, joins in the prayer for relief therein contained, and agrees to be bound by any judgment rendered herein by the Supreme Court.
And the said Mrs. Margaret Kavanaugh hereby accepts the assignment of the judgment sued on in this action, and prays that she may be declared to be the owner thereof, subject to the previous assignments of H. L. Taylor and E. T. Oansler, if in law, equity, and good conscience she is entitled thereto. Mss. Mabgaeet T. KavaNaugh,
By H. L. Taylor, Attorney in Fact.
The other assignees were made parties, and neither they nor the Charlotte Rapid Transit Company and Paul Chatham resist the prayer of Mrs. Kavanaugh to be declared the owner of the judgment subject to the prior assignments, and the defendants- allege in their answer that she is the owner of the judgment.
It appears, therefore, that no party to this action denies the allegation of Mrs. Kavanaugh that she is the owner of the judgment sued on, by assignment executed before this action was commenced, and this presents two questions for decision.
1. Can the owner of a judgment assign it, and afterwards prosecute an action in his own name to enforce payment ?
2. If not, can the assignee be made a party to an action instituted by the original owner after appeal to the Supreme Court, and continue the prosecution of the action?
*5071. It was undoubtedly the doctrine of the common law that the assignment of a judgment, whether absolutely or as security, only passed the equitable and beneficial interest, leaving in the plaintiff in the judgment the legal title, but this legal title was not held for the benefit of the assignor, but to enable the assignee to bring an action in the líame of the assignor to his own use.
As said in Winberry v. Koonce, 83 N. C., 353, the assignor “occupies the relation of a sort of trustee in the sense of being bound to allow the use of his name in actions at law for their collection.”
The -doctrine at common law, and under modern authority, is stated in 15 R. C. L., 778, as follows: “At common law the effect of an assignment of a judgment was merely to transfer an equitable title, and the assignee was not permitted to bring an action thereon in his own name, but the assignee, by virtue of his equitable interest, had the right to control the collection of the judgment, and for that purpose to use the name of the plaintiff, his assignor, and to receive the money collected. The general rule today is that an assignee of a judgment is the real party in interest in actions based upon such judgment, and may bring suit in his own name. "Where an assignment of a judgment has been made as collateral security for the payment of a designated debt, the right of the assignee to sue is not impaired by the residuary interest of the assignor, and the latter cannot bring suit, unless it be alleged, that the assignee neglects or refuses to do so, under circumstances calculated to prejudice the right of the assignor.”
Our State, departing from the refinements and subtleties of the common law, follows 'the modern thought in this particular, and deals with the substance instead of the mere shell of a legal title.
The statute (Rev., 400) provides that “Every action must be prosecuted in the name of the real party in interest,” and the Court said in Moore v. Nowell, 94 N. C., 270, after holding that the assignee may maintain an action on the judgment in his own name, “The judgments mentioned and described in the complaint, were assigned to the plaintiff in writing, for value, and he became the complete equitable owner of them and the Teal party in interest.’ ”
This case was approved in Ricaud v. Alderman, 132 N. C., 64, where it is stated that “It is well settled that a judgment is assignable, and that the assignee for value acquires all of the rights and remedies of the original plaintiff.” (Italics mine.)
. It is therefore clear to me that the original plaintiffs cannot maintain this action because they parted with all interest in the judgment by assignment before the action was commenced.
2. The second question is answered by what is said in Bennett v. R. R., 159 N. C., 347, which is quoted by Walker, J., in Reynolds v. Cotton Mills, 177 N. C., 425.
*508“While courts are liberal in permitting amendments, sucb as are germane to a cause of action, it bas been frequently beld that the court has no power to convert a pending action that cannot be maintained into a new and different action by the process of amendment. Best v. Kinston, 106 N. C., 205; Merrill v. Merrill, 92 N. C., 657; Clendenin v. Turner, 96 N. C., 416.
“In the last case it is said: ‘The court has no power, except by consent, to allow amendments, either in respect to parties or the cause of action, which will make substantially a new action, as this would not be to allow an amendment, but to substitute a new action for the one fending.’ ”
If, however, the assignees could be substituted as plaintiffs, the statute of limitations is pleadéd, and as it would run against them until actually made parties, their cause of action would be barred by the statute of three years.
I think the action ought to be dismissed.
BeowN, J), concurs in this opinion.