Spencer v. Standard Chemicals & Metals Corp.

• Decision Date: 01 April 1924
• Citation: 237 N.Y. 479,143 N.E. 651
• Parties: SPENCER v. STANDARD CHEMICALS & METALS CORPORATION.
• Court: New York Court of Appeals Court of Appeals

237 N.Y. 479

143 N.E. 651

SPENCER

v.STANDARD CHEMICALS & METALS CORPORATION.

Court of Appeals of New York.

April 1, 1924.

Action by Harold R. Spencer against the Standard Chemicals & Metals Corporation. From a judgment of the Appellate Division (206 App. Div. 794,200 N. Y. Supp. 950), affirming judgment of Trial Term on directed verdict for plaintiff, defendant appeals.

Reversed, and new trial granted.

McLaughlin and Crane, JJ., dissenting.

Appeal from Supreme Court, Appellate Division, First department.

Abraham Benedict, of New York City, for appellant.

Simon M. Sapinsky and Benjamin Rich, both of New York City, for respondent.

ANDREWS, J.

[1] When we adopted our scheme of reformed practice, one purpose being to end in part the ancient distinctions between law and equity, we provided that every action must be prosecuted in the name of the real party in interest. Code of Procedure, § 111. A few exceptions were made. A trustee of an express trust, for instance, might still sue without joining with him the person for whose benefit the action is prosecuted, and later such a trustee was defined to include one with whom or in whose name a contract is made for the benefit of another. Code of Procedure, § 113. Theretofore, as the commissioners on practice and pleadings pointed out in their report, if the assignee sued at law he was turned out of court, and if the assignor sued in equity he was turned out also. So the rule adopted in courts of equity was made general, ‘that he who has the right is the person to pursue the remedy.’ First Report, p. 124. It was not the design to give a new cause of action where none previously existed, but the permit and require the beneficial owner to enforce his rights in his own name.

The real party in interest has been defined by this court:

‘If, as between the assignor and assignee, the transfer is complete, so that the former is divested of all control and right to the cause of action, and the latter is entitled to control it and receive its fruits, the assignee is the real party in interest.’ Cummings v. Morris, 25 N. Y. 625.

In other words, the plaintiff must have some title, legal or equitable, to the thing assigned. Hays v. Hathorn, 74 N. Y. 486. If the assignee have such title it is enough. The consideration paid, the purpose of the assignment, the use to be made of any proceeds collected, is immaterial. Allen v. Brown, 44 N. Y. 228;Meeker v. Claghorn, 44 N. Y. 349;Sheridan v. Mayor, etc., of New York, 68 N. Y. 30;Brown v. Powers, 53 App. Div. 251,65 N. Y. Supp. 733. But legal title or equitable interest he must have.

[2] This action is brought by Harold R. Spencer to recover the balance of the purchase price of certain ore said to have been sold by one Quan Kai to the defendant. It was alleged in the complaint that the cause of action had been duly assigned to the plaintiff. This was denied. At the close of the plaintiff's case the purported assignment was offered in evidence. This instrument named Spencer as attorney for Quan Kai, and gave him, among other things, ‘power to commence or prosecute any suit or action or other legal proceedings for the recovery of damages, * * * debts, demands, choses in action, causes or things whatsoever in the United States of America due or to become due to me and to prosecute and follow and discontinue the same if he shall deem it proper and for me and in my or his name to take all steps and remedies necessary and proper for the recovery * * * of any * * * sum of sums of money, choses in action or other things whatsoever that is, are or shall be by my said attorney thought to be due * * * to me in my right or otherwise, and also for me and in my name to compromise, settle, and adjust all causes.’ The attorney was also authorized to sign any release or receipt and he was given power to substitute other attorneys in his place. When this instrument was offered in evidence objection was made that it was not competent because it did not constitute an assignment but was a mere power of attorney. The attention of the trial judge was therefore sharply called to this question. The paper was received in evidence and an exception taken.

The plaintiff is clearly not within any of the definitions the trustee of an express trust. No legal title to the claim against the defendant was assigned to him. Neither does it appear that he has any equitable interest therein. Upon the face of the paper the attorney's duty is simply to collect what may be due to Quan Kai solely for the latter's benefit, and to transmit it to him. It is the ordinary case of the appointment of an attorney in fact. The attempt to authorize such an attorney to sue in his own name is, under the provisions of section 210 of the Civil Practice Act, which in this respect follows the original Code, entirely...