Court Opinion

ID: 5255985
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:28:04.457505+00
Date Added: 2024-06-11T08:28:00.610384
License: Public Domain

John M. Kellogg, P. J. (dissenting):
Before action brought, Otis & Sons Engineering Company, the owner of the claim, gave an order upon the defendant for the payment of the claim to the bank, and defendant duly accepted it. Concededly the order was given purely as collateral security. Thereafter the company brought an action upon the claim, and the defendant set up various defenses and a counterclaim, but raised no question that the claim had been assigned to the bank. During the pendency of the action the trustee in bankruptcy of the company was substituted as plaintiff. Upon selling the assets of the bankrupt, its interest in this claim was sold to the bank, and by the order appealed from the bank has been denied substitution.
A fair interpretation of the record bears out the statements made upon the argument, that the motion was not denied on the ground of laches, but upon the ground that the assignor had no right to maintain the action and, therefore, the assignee could not be substituted in its place. On February 28, 1918, the court made an order dismissing the plaintiff’s complaint for want of prosecution, with leave to the plaintiff to move to reopen at the April term of court upon the payment of ten dollars, and with leave to the bank to apply to be substituted as plaintiff. The bank paid the motion costs and filed the stipulation required.
Concededly an action may be maintained by an assignor, who has assigned as collateral only, if his assignee is made a party. The distinction between legal and equitable actions has been abolished, and there is now but one action upon the case, and that action is in a court of justice which will administer legal or equitable relief as the occasion requires, and such *34as is consistent with the case made. If the case had come to trial, the court might have ordered the assignee to be brought in or, the defendant having failed to raise the question by-answer, the case could have proceeded without bringing in the bank. The defendant, the plaintiff and the assignee, at the time the action was brought, had equal knowledge of the assignment. In the view most favorable to the defendant the assignee bank was a necessary party, either plaintiff or defendant, but that objection not having been raised by demurrer or answer is waived and the case may proceed without prejudice on account of its absence. (Code Civ. Proc. §§ 488, 498, 499.) The bank, having acquired the interest of the plaintiff in the cause of action, during the pendency of the action, had the right to be substituted as a party plaintiff. (Code Civ. Proc. § 756.) An attempt to raise the question of plaintiff’s right to sue at this late day, when the Statute of Limitations would prevent the bringing of a new action, is not fair to the assignee, as the defendant, to all intents and purposes, practically consented to litigate the question with the assignor. In Whiting v. Glass (217 N. Y. 333) the plaintiff had absolutely parted with all his interest in the cause of action. In Weniger v. Fourteenth Street Store (191 N. Y. 423) the contractor ordered the defendant to pay a certain sum of money from the amount due upon the contract, which order was accepted, and recovery was of course permitted to the payee. Justice requires that the action proceed and that the bank be made a party to it, so that the rights of the parties interested may be properly adjusted. I favor a reversal.
Order affirmed, with ten dollars costs and disbursements.