Chesney v. District Court of Salt Lake County

• Decision Date: 02 January 1941
• Docket Number: 6108
• Citation: 99 Utah 513,108 P.2d 514
• Court: Utah Supreme Court
• Parties: CHESNEY et al. v. DISTRICT COURT OF SALT LAKE COUNTY et al

108 P.2d 514

99 Utah 513

CHESNEY et al. v. DISTRICT COURT OF SALT LAKE COUNTY et al

No. 6108

Supreme Court of Utah

January 2, 1941

Original proceeding by E. L. Chesney and another against the District Court of Salt Lake County, the Honorable R. I McDonough, Judge thereof, and A. G. Brown on a writ of certiorari to have reviewed an order of that court made and entered in an action there pending, wherein defendant A. G Brown is plaintiff and the plaintiffs are defendants.

Order affirmed.

M. E Wilson, R. C. Wilson, and E. A. Walton, all of Salt Lake City, for plaintiffs.

Fabian, Clendenin, Moffat & Mabey, of Salt Lake City, for defendants.

THURMAN, District Judge. MOFFAT, C. J., PRATT, J., and L. A. WADE, District Judge, concur. LARSON, J., concurs in the order. WOLFE and McDONOUGH, JJ., being disqualified, did not participate.

OPINION

THURMAN, District Judge.

This matter is before us on a writ of certiorari to the District Court of Salt Lake County. Plaintiffs seek to have reviewed an order of that court made and entered in an action there pending wherein the defendant. A. G. Brown, is plaintiff and the plaintiffs are defendants. The facts so far as may be material here and upon which plaintiffs base their claim to the relief sought are as follows: On August 10, 1931, plaintiffs executed and delivered to the Bank of America National Trust and Savings Association, their promissory note in the principal sum of $ 25,000. To secure the payment of the note they executed and delivered to the Corporation of America, a deed of trust to certain real property situated in the City and County of Los Angeles, State of California, under which the bank was named as beneficiary. Thereafter payments due on the note became delinquent and on December 12, 1933, pursuant to the provisions of the deed of trust, the property described therein was sold and conveyed to the bank for the sum of $ 15,000. The aggregate amount found to be due and owing on the note at the time of sale, including principal, interest, costs and penalties, equaled the sum of $ 30,176.75. The amount realized upon the sale was credited to the total indebtedness, leaving an unpaid balance or deficiency in the amount of $ 15,176.75 due and owing on the note. On March 1, 1934, the bank assigned the note or its interest in the balance due thereon to Brown.

On March 12, 1934, Brown brought an action in the district court against the plaintiffs on the note and claim so assigned to him. In his complaint he alleges that the bank had assigned the note and its interest therein to him for the purpose of collection and that he is the owner and holder thereof for that purpose. Before answering, the defendants made in effect a motion to the district court for an order requiring the bank to come in as a party plaintiff, or in the event of its refusal so to do that the action be dismissed. The district court denied the motion and it is from that denial and the effects thereof upon defendants that they seek relief in these proceedings.

A writ of certiorari may be granted by this court as provided in Section 104-67-2, Revised Statutes of Utah, 1933, which reads in part as follows:

" * * * when an inferior tribunal, board or officer exercising judicial functions has exceeded the jurisdiction of such tribunal, board or officer, and there is no appeal, nor, in the judgment of the court or judge, any plain, speedy and adequate remedy in the ordinary course of law * * *."

By Section 104-67-8 of the same statute it is provided:

"The review upon this writ [certiorari] cannot be extended further than to determine whether the inferior tribunal, board or officer has regularly pursued the authority of such tribunal, board or officer."

The two sections when construed with reference to each other restrict our review of the matter before us to a consideration of the question whether the District Court of Salt Lake County in denying plaintiffs' motion regularly pursued its lawful authority. Such a consideration of necessity entails a determination of the further question as to whether the lower court exceeded its jurisdiction and whether there is an appeal or any other plain, speedy and adequate remedy in the ordinary course of law. In other words, if the district court exceeded its jurisdiction or power in denying the motion then it did not regularly pursue its lawful authority and this court in this proceeding can review and correct its action. If, on the other hand, the court merely erred, however gross the error may appear to us, this court cannot, in such a proceeding, review the error. Smith v. District Court, 24 Utah 164, 66 P. 1065. Also if it be determined that the district court did exceed its jurisdiction, under the express mandate of the above-quoted statutes there is presented for determination the further question of whether the error can be corrected on appeal or by some other plain, speedy and adequate remedy in the ordinary course of the law.

Plaintiffs allege in their motion to the district court and likewise in their petition for the writ herein that they have a valid and meritorious cause of action against the bank growing out of the sale of the property under the trust deed, which they desire to plead as a counterclaim; that Brown is the agent and servant of the bank; that the property at the time of the sale had a reasonable market value greatly in excess of the amount for which it was sold, i. e., $ 50,000 or more; that the trustee under the deed of trust was a "dummy" of the bank; and that the bank and trustee conspired to cheat and defraud the plaintiffs; and that the sale was unlawful and fraudulent as to the plaintiffs. Also, that a complete determination of the respective claims of the parties to the action cannot be had unless the bank is made a party plaintiff therein; that the effect of the denial of their motion by the district court is to require them to proceed in the action but denying them the opportunity to have full and complete relief under their alleged counterclaim; and that for such reasons the district court has no jurisdiction or power to proceed in the action pending before it without the bank being made a party plaintiff, and that to do so is in excess and beyond its jurisdiction.

Plaintiffs argue, in support of their position, that Brown is not the real party in interest for the reason that he is neither actually nor substantially interested in the subject matter of the suit, and that his only interest, if such it can be called, is that of collector. This court, in conformity with the weight of judicial authority, is committed to the doctrine that the assignee of a chose in action or promissory note after maturity and for the purpose of collection alone may sue in his own name and as such is the real party in interest. Rutan v. Huck, 30 Utah 217, 83 P. 833 at page 840; Baglin v. Earl-Eagle Mining Co., 54 Utah 572, 184

P. 190; Industrial Commission v. Wasatch Grading Co., 80 Utah 223, 14 P.2d 988; Bancroft's Code Pleading, Vol. 2, Sec. 885, p. 1305; Bancroft's Ten Year Supp., Vol. 1, Sec. 885; Lawler v. Jennings, 18 Utah 35, 55 P. 60; Perkes v. Utah Idaho Milk Co., 85 Utah 217, 39 P.2d 308 at page 311; Moss v. Taylor, 73 Utah 277, 273 P. 515; Meyer v. Foster, 147 Cal. 166, 81 P. 402.

Counsel contends, however, that where such an assignee sues in his own name and the defendant to the action has a claim against the assignor in excess of the amount sued on by the assignee the latter thereby ceases to be the real party in interest. To such a doctrine we cannot adhere. The fact that the assignor may have some rights or owes some obligation in connection with the transactions out of which the assigned claim arose it seems to us, does not affect the status of such an assignee in a suit brought by him. He is still the legal owner and holder of the chose and the real party in interest for the purpose of his suit.

Plaintiffs also argue that they have a counterclaim which grows out of the transactions set forth in Brown's complaint and connected with the subject of the action; that they are required to set up such a counterclaim in the action brought by Brown or else the counterclaim is gone forever; that their counterclaim is indivisible; that it cannot be used as a defense in an action brought by Brown without barring them from the use of it or any part of it in an action against the bank.

Section 104-9-4, Revised Statutes of Utah 1933, provides as follows:

"When cross demands have existed between persons under such circumstances that, if one had brought an action against the other, a counterclaim could have been set up, the two demands shall be deemed compensated so far as they equal each other, and neither can be deprived of the benefit thereof by the assignment or death of the other."

This section of our statutes is the same as Section 440 of the California Code of Civil Procedure. Identical or similar provisions are found in the statutes of most if not all of the states that have adopted the Code system of pleading and, as far as material to the question under consideration, has been construed to give a defendant sued by a plaintiff assignee of a chose in action the right to offset, to the extent of defeating the plaintiff's claim, any claim that the defendant may have against the assignor and should the claim against the assignor exceed the assignee's claim, the defendant may recover the excess of his claim from the assignor in a separate suit. Bancroft's Code Pleading, Vol. 1, Sec. 374, and supporting authorities.

The case of Gordon v. Van Cott, 38 A.D. 564, 56 N.Y.S. 554, 560, dealing with the same question holds:

"From an early period in the legislation of our state, assignments of choses in action have been permitted,...