Chew v. Brumagim.

of several parties in interest will not satisfy its requirement; all must be joined. This section declares who shall prosecute an action, and who shall be plaintiff is made to depend, not upon the nature of the defence which may be set up, but upon the character of the interest which the plaintiff has.

The code allows defences, either legal or equitable, to be set up in a suit at law in all cases, and thus every defence is made a legal defence, a defence that will prevail in a suit at law.

The fact whether Walker was really interested in the bond, or the extent of his interest, must be determined by the contract he made with Wood, not by the circumstance that the obligee may chose to allege fraud in the consideration of his bond, which was not an admissible defence before the code to an action at law on a sealed instrument.

This view, however clear it may be to my own mind, must be yielded, if it is in conflict with the adjudicated cases in New York; whatever construction the courts have adopted there, should conclude us here.

In Lewando v. Dunham, 1 Hilton 114, the plaintiff had an absolute assignment of the claim under seal; it appeared in evidence that the assignor was entitled to half the amount to be recovered. The court held that suit would not lie by the assignee alone, thus clearly holding that the absolute legal title, coupled with a partial interest, will not sustain a

suit.

In Cummings v. Morris, 25 N. Y. R. 625, the notes sued upon were passed to the plaintiff under an agreement to give the assignor, when the notes were collected, the amount thereof in stock of the Evergreen Cemetery Company. The court properly held that the assignee could sue alone; the assignor had no interest whatever in the proceeds of the notes when collected; he had simply a claim against the assignee for the stock agreed to be furnished. In this case, as previously reported in 3 Bosworth 572, the court say that a party, who has an absolute right to the money, to

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appropriate it to his own use when recovered, is the real party in interest, under section 111, and that in this case the plaintiff had the legal and equitable title. It is evident from the language used by the court, that if the assignor had been entitled to any part of the money when collected, he would have been held to be a necessary party.

Considerant v. Brisbane, 22 N. Y. R. 389, is a leading case on this subject. The suit was brought by Considerant, upon a promissory note drawn by Brisbane, payable to Considerant, as executive agent of the company, Bureau, Guillon, Godin & Co. Judge Wright, in delivering the opinion of the court, held that although, prior to the code, Considerant could alone have maintained the action, because he had the absolute legal title, yet, under section 111, he was not the real party in interest, the beneficial interest being the sole test of the right to sue. But in this case, the plaintiff's right to sue was sustained, upon the ground that he was trustee of an express trust. In this opinion Justices. Selden, Davies, Clerke, and Welles, concurred. Judge Denio, in a dissenting opinion concurred in by Chief Justice Comstock and Judge Bacon, says, that the code, though adopting as a general rule, the practice prevailing in courts of equity, by which the parties having the beneficial interest were required to be brought before the court, made an exception in favor of trustees of express trusts, and dissents from the majority opinion, only in holding that the principals named in the note must be regarded as the promisees, and the suit must be in their name.

In this case decided in 1860, the eight judges of the Court of Appeals, united in holding that the code had adopted the practice prevailing in equity, by which the parties having the beneficial interest must be before the court, and that the beneficial, not the legal interest, was the sole test of the right to sue.

In the Western Bank v. Sherwood, 29 Barb. 389, the suit was by the assignee, to whom the bond had been assigned a3 collateral security, to which the defence set up was want

1

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of consideration. Judge Marvin in his opinion says, that when a complete determination of the controversy cannot be had without the presence of other parties, they must be brought in, and that the judgment rendered in the court below, would not determine the controversy between the defendant and Johnson, the plaintiff's assignor, who was not a party.

Boynton v. The Clinton and Essex Mutual Insurance Company, 16 Barb. 254, was a suit by assignor and assignee as plaintiffs, on a policy of insurance assigned as collateral. The court held that although by the terms of the policy, nothing could be recovered on it in excess of the amount due from assignor to assignee, the assignor was properly joined with him as plaintiff in the suit, because he was party in interest, as payment of the loss to that extent, would discharge his debt to the assignee.

Secor v. Keller, 4 Duer 416, is equally in point, where it was held that a dormant partner in a suit by his copartners, was a necessary party under section 111. The court uses this unmistakable language: "Before the code, in an action at law, a dormant partner was not a necessary party, but in equity, every partner, active or dormant, having an interest in the controversy, was a necessary party, and we agree with the referee, that the code has adopted the rule which prevailed in equity, and made it universal. The provision of section 111 is imperative, and subject to no exception other than those stated in section 113."

It will be found, upon a critical examination of the cases in which a suit has been maintained by one not having the entire beneficial interest, that he has been treated as trustee of an express trust.

The case of St. John v. The American Life Insurance Company, was mainly relied upon by defendant's counsel. The plaintiff sued upon two policies of insurance, which had been assigned to him under an agreement that if the policy, number 2500, should be paid to him, he would pay $1500 of the proceeds to the assignor' swife, and pay to her all he

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recovered on the other policy. The point was made, that the assignor was a necessary party; the Court of Appeals held otherwise, without stating the ground upon which they rested their decision. There was no doubt about the right of the plaintiff to sustain his action; he was a trustee of an express trust. So in the case of Nelson v. Easton, 26 N. Y. R. 416, the plaintiff was held to be the trustee of an express

trust.

Grant v. Tallman et al., 20 N. Y. R. 191, was an action to foreclose a mortgage by the party to whom it was assigned as collateral. The court say that the assignee was the legal owner of the securities, and the proper party to sue, and that the action might be continued in his name even though the assignor had paid the debt for which he held the mortgage as security. It does not clearly appear, but it would seem from the names of the parties at the head of the case, "Grant v. Tallman et al.," and the statement in the case that the defendants, Tallman and wife, alone resisted the foreclosure, that the assignor was a party to the suit, and if that was so, all parties in interest were before the court.

These cases are in full accord with what I understand to be the correct interpretation of the code, and therefore Walker was a necessary party to the suit on the bond, unless by virtue of the assignment to him he became the trustee of an express trust. By the assignment, Wood did not become a trustee for Walker; Walker's right was strictly an equity, a right to redeem by paying his debt. If Wood had collected an amount in excess of his claim, a trust would have resulted, but until that contingency happened he was in no sense a trustee of an express trust for Walker. In reaching this conclusion the amendment to section 113, in 1851, has not been overlooked.

Walker having been a necessary party, the record produced must answer whether he was an actual party.

In New York a person who is not served with process, or does not appear, unless he is a joint contractor with the party served, or appearing, is not deemed a party to the

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suit, and cannot be affected by the judgment, although he is named as a party in the summons or process. New York Code § 136; Robinson v. Frost, 14 Barb. 536; Howard v. Finch, 5 Duer 666; Norton v. Hayes, 4 Denio 245; East River Bank v. Cutting, 1 Bosw. 536.

The complaint does not aver, nor does the record in any way show, as the code requires that it should, that Walker was either summoned, or voluntarily in court. A record made up according to the course of proceeding at common law sets out the declaration, which avers that the defendant is in custody, or that he was summoned or attached to answer, or present in court in his own proper person, and in such case the record would be prima facie, if not conclusive against the defendant, in the absence of any statutory provision. Price v. Ward, 1 Dutcher 225. The judgment in New York therefore has not the virtue which is claimed for it, and the defendant is without defence, except as to the amount which was paid to Wood upon the bond.

The code clearly defines the mode of proceeding in a case like the one under consideration. If Walker refused to join in the suit as plaintiff, that fact being stated in the complaint authorized Wood to make him a defendant. Wood having failed to bring Walker in, Chew, under section 144. of the code, should have demurred for want of proper parties, and thus have secured an adjudication that would have fully protected him. The further prosecution, to which Chew is subjected, results from his own neglect.

The decree of the Chancellor must be affirmed.

For affirmance-BEDLE, DALRIMPLE, DEPUE, OGDEN, OLDEN, SCUDDER, VAN SYCKLE, WALES, WOODHULL. 9.

For reversal-KENNEDY.