Ridgeland Box Mfg. Co. v. Sinclair Refining Co.

• Decision Date: 28 November 1949
• Docket Number: 16287.
• Parties: RIDGELAND BOX MFG. CO. et al. v. SINCLAIR REFINING CO.
• Court: South Carolina Supreme Court

56 S.E.2d 585

216 S.C. 20

RIDGELAND BOX MFG. CO. et al. v. SINCLAIR REFINING CO.

No. 16287.

Supreme Court of South Carolina

November 28, 1949

Cosgrove & Bailey, Charleston, for appellant.

Thomas M. Boulware, Allendale, Y. C. Weathersbee Ridgeland, Randolph Murdaugh, Hampton, E. W. Mullins Columbia, for respondents.

STUKES Justice.

This action was commenced in the Court of Common Pleas for Jasper County on July 22, 1948. It was removed from that court to the United States District Court but remanded by order of the latter filed January 26, 1949. Ridgeland Box Mfg. Co. et al. v. Sinclair Refining Co., D.C., 82 F.Supp. 274. Thereafter, upon motion for change of venue the case was transferred for trial to the Court of Common Pleas for Charleston County.

The complaint contains two causes of action, the first for damages to real estate from fire caused by the negligence of the defendant in specified particulars, the second for destruction by fire of personal property which resulted from defendant's breach of implied warranty of fuel oil which it furnished. The latter characterization of the second cause of action is not an adjudication. The parties differ in their construction of it but the point is not an an issue in this appeal, was not argued and need not be decided.

It was alleged in the first cause of action that one W. D. Ellis now deceased, owned a described acreage of land in Jasper County on which there was a box mill plant of the value of $7500 in itself and to the real estate; on July 13, 1943 the plant contained manufacturing machinery which was operated by a power unit which used fuel oil and was the property of Ridgeland Box Manufacturing Company, a corporation; on and before that date defendant manufactured and sold to the Box Company fuel oil which was not adapted to the purpose for which it was sold, in the knowledge of defendant, in that instead of having a flash point not below 100~ F, required for such a power unit, in fact had a flash point far below 100~ F and contained a high explosive or substance which rendered it dangerous for use as fuel, which the defendant had failed to test or analyze or give warning of the danger, all of which caused the power unit to set fire to the contents of the connected fuel tank with resultant explosion and fire which destroyed the box plant, to the injury and damage of Ellis, in the sum of $7500. The aforementioned conduct of the defendant was the proximate cause of the damage and defendant was negligent in six particulars which need not be here stated. The cause of action continues to the effect that the Box Company has acquired, for value, title to the land and also to the cause of action of Ellis against defendant; and the other plaintiff, Southard, has acquired from the Box Company and its trustees-in-liquidation an undivided one-hundredth part of the land and a similar one-hundredth part of the cause of action of Ellis against the defendant.

The material allegations of the second cause of action contained in the complaint are that the Box Company owned and operated certain personal property in the destroyed building which constituted its manufactory and the articles of property and their itemized values aggregating $33,750 are listed as an exhibit to the complaint; the plant was operated by a power unit which consumed fuel oil and fuel was manufactured and sold by defendant to the Box Company for that purpose on and before July 13, 1943, but the fuel was not adapted to such use, within the knowledge of defendant, and the allegations are repeated from the first cause of action as to the flash point of the fuel and that it contained a high explosive or substance which rendered it dangerous, the defendant failing to test or analyze it, whereby it caused an explosion and resulting fire which destroyed the machinery and stock to the damage of the Box Company in the stated amount of $33,750; the co-plaintiff, Southard, had theretofore acquired legal title and beneficial ownership to an undivided one-hundredth part of the assets of the Box Company, including particularly the stated cause of action against the defendant. The prayer is for damages upon the first cause of action $7500, and on the second cause of action, $33,750.

Defendant moved for an order to strike from the title of the cause the name of the plaintiff, Southard, and all references in the complaint to him, upon the ground that he is not a necessary or proper party because the causes of action are indivisible and non-severable, the right if any, being vested solely in the Box Company; and failing in that, then Southard should be stricken from the complaint so far as he may be related to the second cause of action, for the same reason stated in the first part of the motion. It was denied by formal order dated July 16, 1949.

Defendant moved at the same time to make the complaint more definite and certain in numerous particulars which will be referred to in the discussion hereinafter of the appeal from the formal order by which the motion was refused, also on July 16, 1949.

Finally, defendant demurrer to the complaint for alleged defect of parties upon the ground that it appears upon the face thereof that the Box Company is, and was prior to the commencement of the action, in liquidation and that the trustees-in-liquidation, receiver or receivers, is or are not plaintiffs; and that because of the pending liquidation there should be authority or resolution for the institution of the action. The demurrer went further with respect to the second cause of action upon the point that the cause of action therein alleged is indivisible, vested solely in the Box Company and the cause of action cannot be maintained by the alleged joint plaintiffs. The demurrer was overruled by formal order of the same date as the others.

From the several adverse orders the defendant has appealed and in our consideration the format of the brief will be followed.

I. As to order denying motion to strike portions of the complaint.

The question is argued by appellant in a double aspect, (1) is Southard a real party in interest in each cause of action? And (2) is he a real party in interest in the second cause of action? However, the reasons for affirmative answers to the questions are equally applicable to both. The ultimate answer is that he is a real party in interest in both causes of action because under the allegations of the complaint he is an assignee of part of each cause.

Respondents' successful motion to remand the case to the State Court resulted in the comprehensive order cited supra. It decided the major questions which are presented by this appeal and we are in agreement with that Court's disposition of them. The main points under consideration there were the effectiveness of the alleged assignment to the plaintiff Southard of part of the claims against the defendant and whether on that account Southard is a real party in interest. The conclusions were favorable to the respondents here, which resulted in remand because it was alleged that Southard and defendant were of the same State of residence and diversity of citizenship (necessary to jurisdiction of that court) did not exist.

The decision was reached upon the authority of Bultman v. Atlantic Coast Line R. Co., 103 S.C. 512, 88 S.E. 279, which involved the partial assignment of a fire damage claim, and Evans v. Watkins, 112 S.C. 419, 100 S.E. 153. The recent cases of Pacific Mills v. Textile Workers' Union, 197 S.C. 330, 15 S.E.2d 134, 135 A.L.R. 497, and Orr Cotton Mills v. St. Mary's Hospital, 203 S.C. 114, 26 S.E.2d 408, were properly held not to impinge upon the earlier established rule. They involved multitudinous partial assignments of wages to be earned in the future and, if enforced, would have been unreasonably burdensome on the employers and, at least in the Orr case, fraught with danger of liability, considerations which are not present here.

There is an older authority in our reports which is very illuminating. It is Childs v. Alexander, 22 S.C. 169, which was decided soon after the adoption of the code in this State. It involved suit upon a note and mortgage where the partial assignee declined to join as plaintiff and was made a defendant. That procedure was approved and we quote at length from the opinion:

'So that the code, in our opinion, when it provided and enacted in general terms that 'every action must be prosecuted in the name of the real party in interest,' except as otherwise provided therein (Sec. 132), was intended to apply principally to the cases of assignments of contract, or rather to rights of action capable of assignment, and in that way to meet the difficulty which existed at common law, where, as we have seen, the assignee, although after assignment to him he was in truth the real and only party in interest, yet could not sue in in his own name. In other words, this section of the code was intended to adopt in all the courts the practice which formally prevailed in the Court of Equity on this subject. The code, however, has not gone to the extent of making things legally assignable which were not so before, but it simply declares that when a transfer or an assignment has been made, which in equity has the effect of making the assignee the real party in interest, that then such assignee must sue. * * *

'Under this state of facts a question arises, what is the effect of a partial assignment of a contract, note, or mortgage, as to the right of action in the parties interested? Can the contract...