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§ 70. *132. Absolute Assignment made Conditional or Partial by Contemporaneous and Collateral Agreement. 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.2 The debtor is completely protected by the assignment, and cannot be exposed to a second action brought by any of the

sold the note sued on, is a good defence: Van Housen v. Broehl (1899), 59 Neb. 48, 80 N. W. 260. See also National Distilling Co. v. Cream City Importing Co. (1893), 86 Wis. 352, 56 N. W. 864.]

[The defence that the plaintiff is not the real party in interest may be raised by answer or demurrer: Meyer v. Barth (1897), 97 Wis. 352, 72 N. W. 748; J. I. Case Threshing Co. ». Pederson (1894), 6 S. D. 140, 60 N. W. 747.

Where the defect appears on the face of the complaint, a general demurrer properly raises the objection: Smith v. Security Co. (1899), 8 N. D. 451, 79 N. W. 981. See also note, p. 714, on Issues Raised by Demurrers.

An amendment substituting the real party in interest is not allowable: Wilson v. Kiesel (1894), 9 Utah, 397, 35 Pac. 488. But an amendment alleging that one of the plaintiffs, originally alleged to be an

owner, has no interest in the property injured, may be allowed: Kansas City v. King (1902), 65 Kan. 64, 68 Pac. 1093. But see Service v. Bank (1900), 62 Kan. 857, 62 Pac. 670, and Hudson v. Barratt (1901), 62 Kan. 137, 61 Pac. 737, where such amendments were allowed.

Bowser v. Mattler (1893), 137 Ind. 649, 35 N. E. 701: A question as to the real party in interest, and as to the consequent right to sue, cannot be raised for the first time in the Supreme Court, but such a defence must be specially pleaded in bar.]

1 [Bohart v. Buckingham (1901), 62 Kan. 658, 64 Pac. 627, quoting the text.]

2 [Wines v. Rio Grande Ry. Co. (1893), 9 Utah, 228, 33 Pac. 1042, quoting the text; Anderson v. Yosemite Mining Co. (1894), 9 Utah, 420. 35 Pac. 502; Guerney v. Moore (1895), 131 Mo. 650, 32 S. W. 1132, quoting the text.]

parties, either the assignor or other, to whom the assignee is bound to account. This is the settled doctrine in most of the States.1 Notwithstanding the general unanimity of the courts in sustaining this doctrine, there are still some indications of a different opinion, although it can hardly be said that this difference has been embodied in an adjudication as the ratio decidendi. The opinion to which I refer will be found at large in the note,

1 Allen v. Brown, 44 N. Y. 228, 231 (assignment without consideration, and assignee to be accountable to the assignor for all the proceeds); Meeker v. Claghorn, 44 N. Y. 349, 353 (facts similar to the last); Wetmore v. Sau Francisco, 44 Cal. 294 (assignment made as collateral security); Durgin v. Ireland, 14 N. Y. 322 (assignment in writing absolute, but by a contemporaneous agreement the assignors

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to have one half the proceeds); Castner v. Sumner, 2 Minn. 44; Williams v. Norton, 3 Kans. 295; Cottle v. Cole, 20 Iowa, 481; Curtis v. Mohr, 18 Wis. 615; Hilton v. Waring, 7 Wis. 492 (assignment as collateral security); Wilson v. Clark, 11 Ind. 385; Gradwohl v. Harris, 29 Cal. 150; Saulsbury v. Corwin, 40 Mo. App. 373 (assignment of note for collection); Jackson v. Hamm, 14 Colo. 58; Brumback v. Oldham, 1 Idaho, 709 (assignment of account for collection); Young v. Hudson, 99 Mo. 102 (assignment of account for collection); Haysler v. Dawson, 28 Mo. App. 531 (same); Sheridan v. The Mayor, etc., 68 N. Y. 30; Gates v. No. Pac. R. Co., 64 Wis. 64 (assignee to pay certain debts of the assignor from the proceeds of the suit, and account to the assignor for the remainder); Vimont v. Chicago & N. W. R. Co., 64 Iowa, 513; Ginocchio v. Amador Canal & Min. Co., 67 Cal. 493; Ervin v. Oregon Ry. & N. Co., 35 Hun, 544; Walburn . Chenault, 43 Kan. 352. In Castner v. Sumner the notes in suit, which were for $3,100, were assigned as security for $1,500, owing by the payee to the plaintiff, the latter giving back a bond to pay over the balance after satisfying his own demand. Upon these facts the court, per Atwater J., said: "There may be a question as to whether the assignment of the notes was absolute, or whether a contingent interest remained in the assignor. But in either case the action is properly

brought in the name of the plaintiff." . In Williams v. Norton a note payable to the order of the payee had been verbally transferred and delivered to the plaintiff without endorsement. The action by such assignee was held to be properly brought, even though he may not be entitled to apply to his own use the whole proceeds. A delivery by the payee to his surety or indemnitor, with authority to receive the money and pay the principal debt, will enable the surety to sue in his own name. He will, within the meaning of the code, be the real party in interest."

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[In Laurence v. Congregational Church (1900), 164 N. Y. 115, 58 N. E. 24, it was held that "the assignee of a claim under a written assignment which vests the legal title in him, though as security for a debt, is not bound, in an action against the debtor, to prove the existence of a debt from the assignor to himself, as the state of the accounts between the assignor and assignee does not concern the defendant, or, if it does, the burden is upon him to prove such a state of facts as would render the assignment inoperative or reinvest the assignor in equity with the beneficial ownership of the claim" (Syllabus). In Falconio v. Larsen (1897), 31 Ore. 137, 48 Pac. 703, it was held that the assignee of a claim for wages, assigned for collection only, could sue in his own name. In Toby v. Oregon etc. R. R. Co. (1893), 98 Cal. 490, 33 Pac. 550, the court said: A trustee to whom a chose in action has been transferred for collection is, in contemplation of law, so far the owner that he may sue on it in his own name." Reaffirmed in Cortelyou v. Jones (1901), 132 Cal. 131, 64 Pac. 119. See also Pratchett v. Marsh (1895), 52 Ohio St. 494, 40 N. E. 200; McBrayer v. Dean (1897), 100 Ky. 398, 38 S. W. 508.]

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as it is an able argument upon that side of the question.1 braced within the same principle, and governed by the same rule,

1 Robbins v. Deverill, 20 Wis. 142. The plaintiff sues an assignee of Peet & Williams. Dixon C. J. gave the following opinion (p. 148): "The statute is imperative that every action must be prosecuted in the name of the real party in interest, except as therein otherwise provided. The proof is that the plaintiff is not the owner of the demand sued upon. It belongs to the firm of R. & L., composed of the plaintiff, his brother, and one Lewis. The demand was transferred to the plaintiff alone by words of absolute assignment, no trust being expressed, but, as the plaintiff himself testifies, he holds it nevertheless in trust for his firm. It was received on account of a debt due the firm of R. & L. from P. & W. Upon these facts it seems to me the plaintiff cannot maintain the action. He is not the real party in interest, nor the trustee of an express trust within the meaning of the statute. His brother and Lewis should have been joined as plaintiffs."

[In Crowns v. Forest Land Co. (1898), 99 Wis. 103, 74 N. W. 546, the court seems to have departed somewhat from the doctrine of Robbins v. Deverill. This was a suit to foreclose a mortgage, and the defendant attempted to defend on the ground that the plaintiff was not the real party in interest. The court said: "That portion of the answer which alleges that respondent gave no consideration for the note and mortgage presents no issuable fact. It tends in no way to defeat the action. It is a matter of no moment to appellant whether any consideration was paid for the note and mortgage or not. Under subsequent allegations in the answer it appears that respondent became vested with and held the legal ownership of the demand sued upon. The appellant had no legal interest to inquire whether the respondent's interest was actual or colorable, or whether consideration was paid therefor or not." And in Chase v. Dodge (1901), 111 Wis. 70, 86 N. W. 548, which was an action by the assignees of a bill of merchandise, the court said: "The assignee of a claim, holding the legal title by a transfer valid as against his assignor,

is the 'real party in interest,' and the proper party to sue thereon .; and the fact that such transfer is colorable only is immaterial unless the rights of creditors are involved or the right to interpose some defence or counterclaim supposed to be cut off by the assignment." See also Anderson v. Johnson (1900), 106 Wis. 218, 82 N. W. 177; Brossard v. Williams (1902), 114 Wis. 89, 89, N. W. 832.]

See also cases cited ante, under § *130; and Bostwick v. Bryant, 113 Ind. 448 (assignee for collection merely of a note cannot sue thereon in his own name); Hoagland v. Van Etten, 22 Neb. 681; s. c. 23 Neb. 462 (where the proceeds of the suit are to be paid to the assignor, and the assignee has no beneficial interest in them, the latter cannot sue on the assigned claim).

[In Kansas the supreme court has wavered in its decisions. In the case of Stewart v. Price (1902), 64 Kan. 191, 67 Pac. 553, in a carefully reasoned opinion, a divided court expressly overruled the case of Knapp v. Eldridge, 33 Kan. 106, and held that one holding by written assignment a verified itemized account is not the real party in interest, and cannot maintain an action thereon in his own name where it is shown that, by a contemporaneous oral agreement, he has agreed to pay the full amount thereof, when collected, to his assignor; and this is true notwithstanding the assignor testifies that the defendant in the action does not owe her anything, that the whole amount is due her from the plaintiff, and that he is to pay her provided he recovers in the action." But only two years later, Stewart v. Price was itself expressly overruled by the case of Manley v. Park (1904), 75 Pac. 557, the court unanimously approving the doctrine of the minority opinion in Stewart v. Price.

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The same rule obtains in Ohio. Brown v. Ginn (1902), 66 Ohio St. 316, 64 N. E. 123. In this case the court said: "We are aware that the tendency of some courts has been to uphold actions brought upon negotiable instruments, transferred for collection

is the case of an assignee of a thing in action, who, by the terms of the transfer, is not bound to pay the consideration thereof until the debt has been collected; he is the real party in interest, and is fully authorized to sue in his own name.1

§ 71. *133. Instances of Action by Assignee as Real Party in Interest. The following are particular cases in which the assignee was held by the courts to be the real party in interest within the meaning of the codes, and entitled as such to sue in his own name: Where a bond or a mortgage was assigned verbally; the assignment of a receipt and delivery order, which was in the following words: "1,000 bushels of corn. Received in store, on account of S. F. A., 1,000 bushels of corn, to be delivered to his order at, etc., etc. (signed) W. H. H.;"3 assignment of a promissory note payable to order without any indorsement; the assignment of a debt evidenced by a lost note; where the assignment of a bond or note was by means of a separate instrument in writing; the assignment of a claim arising from an agreement to pay the defendant in a certain pending suit a stipulated sum of money if he would withdraw his defence; the assignment of a claim for damages resulting from the wrongful conversions of chattels; the assignment by a widow of her right of dower after the death of her husband, but before the dower had been set apart to her. The mere parting

only, on the ground that the plaintiff is the real party in interest, and that there are some authorities which point to that conclusion. Indeed it may be admitted that the trend in some of the Code States is in that direction. But we have found no case which goes to the extent of holding that an assignment of an open account for the mere purpose of collection, one which gives the assignee a contingent interest only, constitutes him the real party in interest within the meaning of the statute."

See cases cited in note 3, p. 91, and note 1, p. 87.

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3 Merchants & Mech. Bank v. Hewitt, 3 Iowa, 93.

4 Carpenter v. Miles, 17 B. Mon. 598; White v. Phelps, 14 Minn. 27; Pease v. Rush, 2 Minn. 107; Pearson v. Cummings, 28 Iowa, 344; Hancock v. Ritchie, 11 Ind. 48; Rogge v. Cassidy (Ky. 1890), 13 S. W. 716; Caldwell v. Meshew, 44 Ark. 564; Heartman v. Franks, 36 Ark. 501; Kiff v. Weaver, 94 N. C. 274.

5 Long v. Constant, 19 Mo. 320.

6 Thornton v. Crowther, 24 Mo. 164; Peters v. St. Louis, &c. R. R., 24 Mo. 586. 7 Gray v. Garrison, 9 Cal. 325.

8 Smith v. Kennett, 18 Mo. 154; Laz

1 Cummings v. Morris, 25 N. Y. 625; ard v. Wheeler, 22 Cal. 139. In this last s. c. 3 Bosw. 560.

2 Conyngham v. Smith, 16 Iowa, 471; Barthol v. Blakin, 34 Iowa, 452; Green v. Marble, 37 Iowa, 95; Andrews v. McDaniel, 68 N. C. 385; Kiff v. Weaver, 94 N. C. 274.

case an action by the assignee to recover possession of the chattels was sustained.

9 Strong v. Clem, 12 Ind. 37; [Dobberstein v. Murphy (1896), 64 Minn. 127, 66 N. W. 204.]

with the possession of a note does not, however, constitute an assignment thereof, and the owner is the proper party to sue, although the instrument is in the hands of another person with whom it has been deposited. The assignee of a foreign executor or administrator may maintain an action in his own name to recover a debt due to the estate from a person residing within the State in which the suit is brought.2 Upon the same principle, when a demand not arising within the State, in favor of one foreign corporation against another foreign corporation, is assigned to a resident of the State, such assignee may maintain an action upon it against the debtor corporation, although the original creditor is expressly forbidden by statute to sue under such circumstances. The prohibition of an action between the foreign corporations does not affect the assignability of the claim.3

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§ 72. 134. Same Subject. The assignee of a judgment recovered by the defendant in an action brought to recover the possession of chattels may sue in his own name upon a bond given by the plaintiff upon the requisition made for a delivery of the goods to him. The assignment of the judgment carries with it all demands arising upon this bond or undertaking, and the assignee is the real party in interest. In like manner, the assignee of a judgment recovered against a sheriff for official misconduct in seizing the plaintiff's property may bring an action in his own name upon the sheriff's bond. The principle may be stated more broadly. The assignee of any claim or demand may, in general, sue in his own name upon any incidental or collateral security connected with the demand, and by means of which its payment or satisfaction can be enforced. Thus, the assignee of a judgment obtained in a garnishee process may maintain an action in his own name against the garnishees; the assignee of the cause of action in a pending litigation may sue on an appeal bond given to the plaintiff, the assignor, in the course of the

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revive a judgment by the assignee thereof; Gerner v. Church (1895), 43 Neb. 690, 62 N. W. 51 (assignee of subscription).]

4 Bowdoin v. Coleman, 3 Abb. Pr. 431. 5 Charles v. Haskins, 11 Iowa, 329. 6 Whitman v. Keith, 18 Ohio St. 134. In this case, Mr. Justice Scott gives a very full and clear exposition of the statutory provision under consideration.

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