Archibald v. Midwest Paper Stock Co.

• Citation: 158 N.W.2d 739
• Decision Date: 07 May 1968
• Docket Number: No. 52895,52895
• Court: Iowa Supreme Court
• Parties: Kenneth ARCHIBALD, Administrator of the Estate of Mildred Pauline Archibald, Deceased, Appellant, v. MIDWEST PAPER STOCK COMPANY and Cecil J. Morris, Appellees. MIDWEST PAPER STOCK COMPANY, Cross-Petitioner-Appellee, v. DART TRANSIT CO., Cross-Petitioner-Appellant.

Page 739

158 N.W.2d 739

Kenneth ARCHIBALD, Administrator of the Estate of Mildred Pauline Archibald, Deceased, Appellant, v. MIDWEST PAPER STOCK COMPANY and Cecil J. Morris, Appellees.

MIDWEST PAPER STOCK COMPANY, Cross-Petitioner-Appellee, v. DART TRANSIT CO., Cross-Petitioner-Appellant.

No. 52895.

Supreme Court of Iowa.

May 7, 1968.

Pryor, Riley, Jones & Walsh, Burlington, for appellant and cross-petitioner-appellant.

Fred Cromwell, Burlington, for appellee Midwest Paper Stock Co.

LARSON, Justice.

The parties embroiled in this controversy are Kenneth Archibald, administrator of the estate of Mildred Pauline Archibald, deceased, hereinafter referred to as Archibald; Dart Transit Company, the lessee of the truck involved in the fatal accident, hereinafter referred to as Dart; Cecil J. Morris, driver of the truck, an employee of Midwest loaned to Dart at the time of the accident; and Midwest Paper Stock Company, lessor-owner of the truck, hereinafter referred to as Midwest.

This is the second time these parties have been before us on an interlocutory appeal, the first being Archibald v. Midwest Paper Stock Company, 260 Iowa 1, 148 N.W.2d 460 (1967). Both proceedings involve a claim for damages arising from the same accident. In the prior action Archibald brought suit against Midwest for wrongful death. Subsequently, Midwest was permitted to join Dart pursuant to Rule 34, R.C.P., and filed a cross-petition against Dart for indemnification of any amount that Archibald might recover from Midwest. This cross-petition by Midwest gave rise to the first interlocutory appeal, in which this court held that Midwest was entitled to indemnification from Dart, with Dart having no recourse against Midwest. In the interim Dart's insurance carrier had settled with Archibald for $15,000 and, in consideration therefor, on July 20, 1964, Archibald executed a covenant not to sue and an assignment of all claims which Archibald might have against Dart or Midwest, giving Dart the power and authority 'to collect the claims and to bring any actions thereon as fully as the Estate or Administrator might have done had the claims not been assigned.'

On January 7, 1965, about six months after settlement with Dart, Archibald commenced the present action against Midwest. About nine months later on September 15, 1965, Archibald made an application in probate stating that he and Dart had reached an agreement whereby he was to share equally in all sums recovered from Midwest in the present action above $15,000, that Dart was to bear all costs of litigation, and that Dart was to have full control of the litigation with the power to settle, compromise, or dismiss the case at any time or in any manner Dart chose. On the same date the court ex parte issued its order approving this arrangement.

Shortly thereafter on September 27, 1965, Midwest amended its answer raising as a point of law that the 'plaintiff (Archibald) is not the real party in interest who has the capacity to sue under R.C.P. 2,' because of the prior assignment to Dart on July 20, 1964. On October 13, 1965, Archibald filed his reply to Midwest's amended answer denying all the allegations thereof.

On February 10, 1967, attorneys for Archibald and Dart filed a motion for adjudication of the law point raised by Midwest's amended answer under Rule 105, R.C.P. The trial court held that Dart, and not Archibald, was the real party in interest. Archibald and Dart then applied for and were granted an interlocutory appeal by this court.

I. In its decision the trial court applied the rule we stated in Hunt v. Wright, 256 Iowa 1378, 1380, 131 N.W.2d 268, 270, that 'A party is to be regarded as the real party in interest whenever a payment to him would protect the defendant from the claims of third persons.' It recognized the problem here presented was to 'analyze the covenant not to sue and assignment' and the effect of the application and order in the Archibald estate proceedings of September 15, 1965.

It recalled that the covenant and assignment was executed about six months before this suit was commenced, that the language of the covenant and assignment clearly stated the Archibald estate agreed to sell and transfer 'all of its right, title and interest in and to the claims to the Dart Transit Company * * *', that it conferred upon Dart the right to collect the claims and 'to bring any actions thereon as fully as the Estate or Administrator might have done had the claims not been assigned,' and that it was well established in Iowa that an administrator may assign a death claim and vest the assignee with full power to bring an action thereon in the name of the assignee, citing Flynn v. Chicago Great Western Railroad Co., 159 Iowa 571, 141 N.W. 401, 45 L.R.A.,N.S., 1098, and other cases.

It concluded the language used in this covenant and assignment means that 'The Archibald Estate is divested of all interest in any claims and Dart is granted the sold authority to bring the action which the Estate might have brought had the claim not been assigned.'

II. Plaintiff's position below and here is that an agreement between the attorneys for the estate and Dart, which agreement was referred to in the September 15, 1965, probate application, served to preserve or revive the administrator's right to maintain this action. However, he does not point to any language in the written agreement that would support that conclusion. Nowhere is it contended that a reassignment of the claim had occurred. The trial court observed that plaintiff's probate application itself asserts that Dart and its insurers had purchased from the estate this death claim and that Dart and its insurer 'have full and complete control of the lawsuit with full power to compromise and settle the claim and to dismiss the action at any time they choose.' It concluded that the estate did not share one 'iota' of control, and observed that the possibility of the estate's sharing in the recovery was not very great.

As a basis of appellant's contention that the trial court erred in holding Archibald was not the proper party to maintain this suit, he states that (1) an administrator may sue in his own name without joining the party for whose benefit the action is prosecuted, (2) a deceased's administrator or executor is the only party who can maintain a wrongful death action based on the Iowa survival statute, (3) the right of an administrator to share in recovery is sufficient to make him a real party in interest, and (4) it is no concern of Midwest in whose name the action is brought so long as it will not be compelled to pay twice. Although these general propositions may be true, we do not find them applicable here.

III. Rule 2, R.C.P., states: 'Every action must be prosecuted in the name of the real party in interest. But an executor, administrator, guardian, trustee of an express trust; or a party with whom or in whose name a contract is made for another's benefit, or a party specially authorized by statute, may sue in his own name without joining the party for whose benefit the action is prosecuted.' Also see Chapter 613, Code of 1966.

In interpreting this rule, we have often stated that a party is the real party in interest whenever a payment to him would protect the defendant from the claims and harassments of third persons. Grings v. Great Plains Gas Company, Iowa, 152 N.W.2d 540, 546; Hunt v. Wright, supra, 256 Iowa 1378, 1380, 131 N.W.2d 268, 270; Grantham v. Potthoff-Rosene Co., 257 Iowa 224, 233, 131 N.W.2d 256, 261; Home Indemnity Co. of New York v. State Bank of Fort Dodge, 233 Iowa 103, 134, 8 N.W.2d 757, 776, and citations. See also 67 C.J.S. Parties § 10; 39 Am.Jur., Parties, § 17.

In the case at bar, involved with this rule is the question of who may maintain an action where there has been an assignment of the claim. Although under Rule 2, R.C.P., an administrator may maintain a suit in his name for the benefit of others without joining them, it is equally well settled that an administrator may in good faith assign a claim to a third party. Flynn v. Chicago Great Western Railroad Co., supra, 158 Iowa 571, 141 N.W. 401, 45 L.R.A.,N.S., 1098; Barrett v. Chicago, M. & St. P.R. Co., 190 Iowa 509, 524, 175 N.W. 950, 957, 180 N.W. 670. See also 6 Am.Jur.2d, Assignments, § 35.

Although recognizing the requirement that the action Must be prosecuted by the real party in interest (Rule 2, R.C.P.), the appellant contends the assignor or subrogor of a claim who retains an interest in that claim is the real party in interest, and this is particularly so when the assignor is the representative of an estate.

True, if a party is assigned or subrogated to only a part of the entire cause of action, the assignor or subrogor usually remains the real party in interest. Firemen's Ins. Co. of Newark, N.J. v. Bremner (8th Cir.), 25 F.2d 75; Subscribers at Casualty Reciprocal Exch. by Dodson v. Kansas City Pub. Serv. Co., 230 Mo.App. 468, 91 S.W.2d 227; Shiman Bros. & Co. v. Nebraska Nat. Hotel Co., 143 Neb. 404, 9 N.W.2d 807; Hume v. McGinnis, 156 Kan. 300, 133 P.2d 162; Flor v. Buck, 189 Minn. 131, 248 N.W. 743; Henderson v. Park Central Motors Service, 138 Misc. 183, 244 N.Y.S. 409. See also 96 A.L.R. 875, 157 A.L.R. 1247. Basically, this is premised upon the rule that courts look upon splitting causes of action with disfavor. Van Wie v. United States (8th Cir.), 77...