Archer v. Musick

23 N.W.2d 323, 147 Neb. 344, 1946 Neb. LEXIS 76

• Court: Nebraska Supreme Court
• Decided: June 7, 1946
• Docket: No. 32067
• Status: Published

Opinions

Yeager, J.

This is an action by Frederick H. Archer, plaintiff and appellant, against G. Meredith Musick, doing .business as G. Meredith Musick, Architect Engineer, defendant and appellee. The action is in 40 causes of action. The first cause of action is for the recovery of overtime pay, penalty, and attorney’s fees claimed to be due plaintiff on account of service performed by him in excess of 40 hours per week under a contract of hiring which was controlled by the provisions of Title 29, sections 201 to 219, inclusive, U. S. G. A., being what is known as the Fair Labor Standards Act of 1938, and for costs. The other 39 causes of action are by plaintiff as assignee of 39 other persons having like claims.

A demurrer was filed to the petition on the ground that there was a misjoinder of causes of action and a defect of parties. The demurrer was sustained as to all except the first cause of action. Motion was filed by plaintiff requesting leave to docket the 39 causes of action as separate actions. The motion was overruled and the leave requested was denied, whereupon the 39 causes of action were by the court dismissed.

From the orders sustaining the demurrer and overruling the motion to separately docket and the judgment of dismissal, the plaintiff has appealed.

The stated grounds for reversal are (1) that the court erred in sustaining defendant’s demurrer on the ground of misjoinder of causes of action, and of parties plaintiff, and (2) that the court erred in refusing to permit plaintiff on motion to amend and file several petitions for each of his causes of action and to separately docket the same.

A summary of the allegations of the petition which are important in arriving at a decision upon the questions involved in this appeal is the following: The defendant was an architect engineer engaged in the production of goods for commerce at the Alliance Air Support Transport Glider Station in Box Butte County, Nebraska. On or about May 26, 1942, plaintiff was employed by defendant as a guard at the station at an annual rate of pay of $1,620 per annum for 2,000 working hours or a weekly rate of $30.75 for a 40-hour week. The relationship was controlled by the provisions of the afore-mentioned Fair Labor Standards Act. The plaintiff worked 192 hours overtime during the period of his employment. For this overtime he was entitled, under the Fair Labor Standards Act, to receive for the overtime $223.44, or one and one-half times the rate of pay for regular time under the contract of employment, and also an equal sum as a penalty, or a total of $446.88, together with a reasonable attorney’s fee to be taxed as costs. The other 39 causes of action are drawn on the same theory and are each for overtime for other employees engaged in similar employment to that of plaintiff. The statements, as finally presented with amendments, each contain a recital of assignment to plaintiff for the purpose of suit. Plaintiff by virtue of the assignments instituted suit on the 39 causes and joined them with his own, which is the first cause of action.

It was this joinder of the 39 causes of action with the first that the district court held amounted to a defect of parties and a misjoinder of causes of action.

Plaintiff insists that there was neither defect of parties nor misjoinder of causes of action. The first ground for this contention is that this form of action and this joinder of causes is speeificially authorized by the Fair Labor Standards Act.

That action in this form and substance is authorized by the Act is beyond question. The authority is contained in Title 29, subsection (b), section 216, U. S. C. A., as follows:

“Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee oí employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Action to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for and in behalf of all employees similarly situated. The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.”

Appellee contends, however, that this is not controlling where the action for recovery is in a state court; that when the action is in the state court the procedure of the state court with regard to joinder of parties and causes of action is controlling; and that the type of joinder here is not permissible under Nebraska law pertaining to procedure.

We have found no difficulty in arriving at the conclusion that an action in a state court for recovery under a United States statute is controlled by the procedural rules of the state. This conclusion is supported by an abundance of authority. In Rockwood v. Crown Laundry Co., 352 Mo. 561, 178 S. W. 2d 440, the rulé is stated as follows: “Since plaintiff seeks relief in a state court, the jurisdiction of the state court must be invoked in conformity with local law and practices and even though the right sought to be enforced arises under federal law, the state rules of practice and procedure govern as to all matters pertaining to the remedy.” This statement follows a previous pronouncement of the rule and an exhaustive explanation of the reasons therefor in Minneapolis & S. L. R. R. Co. v. Bombolis, 241 U. S. 211, 36 S. Ct. 595, 60 L. Ed. 961.

The second contention of plaintiff is that the type of joinder here is permissible under the laws of Nebraska. It is urged that this is a class action and as such is maintainable in the manner instituted and also that it is maintainable under statutes specially authorizing joinder of bauses of action.

Class actions are permissible under the statutes of this state. The statute declaring the right provides as follows: “When the question is one of a common or general interest of many persons, or when the parties are very numerous, and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.” § 25-319, R. S. 1943.

The statute has never been construed but it has been applied in Folts v. Globe Life Ins. Co., 117 Neb. 723, 223 N. W. 797; Whaley v. Matthews, 134 Neb. 875, 280 N. W. 159; Clark v. Lincoln Liberty Life Ins. Co., 139 Neb. 65, 296 N. W. 449; May v. City of Kearney, 145 Neb. 475, 17 N. W. 2d 448. It has been applied without reference in a number of other cases including Allen v. City of Omaha, 136 Neb. 620, 286 N. W. 916, and Wightman v. City of Wayne, 146 Neb. 944, 22 N. W. 2d 294.

In each of the cases cited it was clear that from any viewpoint the question involved was of common and general interest to many persons and also that it was impracticable to bring all of them before the court. It therefore was unnecessary to define class action. We do not deem it necessary or expedient to do so here. We shall limit ourselves to a determination of the question of whether or not this .is a type of class action within the meaning of the statute.

We do not think that this is a class action. The petition does not bring the action either directly or by clear implication within the purview of the statute. An action may not be maintained as a class action by a plaintiff in behalf of himself and others unless he has the power as a member of the class to satisfy a judgment in behalf of all members of the class. Vashon Fruit Union v. Godwin & Co., 87 Wash. 384, 151 P. 797. No one would contend here that plaintiff could satisfy judgments obtained on the 39 causes of action on any class action theory. It is of course true if judgments were obtained plaintiff could satisfy them but that would be on the basis of transfer thereof to him by assignment and not as representative of a class within the meaning of the statute.

We think this is sufficient to show that this case may not he termed a class action within the meaning of section 25-319, R. S. 1943.

Plaintiff contends further that he has the right to maintain the 39 causes of action as assignee. To sustain his position he relies on the provisions of sections 25-301, 25-302, and 25-304, R. S. 1943. They are:

Section 25-301: “Every action must be prosecuted in the name of the real party in interest, except as otherwise provided in section 25-304.”

Section 25-302: “The assignee of a thing in action may maintain an action thereon in his own name and behalf, without the name of the assignor.”

Section 25-304: “An executor, administrator, guardian, trustee of an express trust, a person with whom or in whose name a contract is made for the benefit of another, or a person expressly authorized by statute, may bring an action without joining with him the person for whose benefit it is prosecuted. Officers may sue and be sued in such name as is authorized by law, and official bonds may be sued upon in the same way, and assignees of choses in action assigned for the purpose of collection, may sue on any claim assigned in writing, but such assignee shall be required to furnish security for costs as in case of nonresident plaintiffs.”

It will be noted that section 25-301 requires that every action must be prosecuted in the name of the real party in interest with exceptions which are contained in section 25-304. One of the exceptions is that a chose in action assigned for the purpose of collection may be sued in the name of the assignee, if the assignee furnish security for costs. It will be further noted that section 25-302 permits an assignee of a thing in action to maintain action thereon in his own name and behalf. '

It is under the exception of section 25-304 and the apparent exception of section 25-302 that plaintiff contends that he is entitled to maintain action on the 39 causes of action.

He may claim no right under section 25-302, since this is not an exception to section 25-301. It is a provision which permits a party when he has in fact become the owner of a thing in action by assignment to bring action thereon in his own name without naming the assignor. See Huddleson v. Polk, 70 Neb. 483, 97 N. W. 624.

Clearly though under section 25-304, plaintiff has the right to maintain action on the causes of action as assignee for collection on giving security for costs. Whether or not plaintiff gave security for costs is not ascertainable from the transcript but no objection is urged by defendant on that ground.

To sustain his right to join the causes of action which he has the right to institute as assignee for collection with one declaring his own right plaintiff relies on section 25-701, R. S. 1943, as follows: “The plaintiff may unite several causes of action in the same petition, whether they be such as have heretofore been denominated legal or equitable, or both, when they are included in any of the following classes: (1) The same transaction or transactions connected with the same subject of action; (2) contracts, express or implied; (3) injuries with or without force to person and property or either; (4) injuries to-character; (5) claims to recover possession of personal property, with or without damages for the withholding thereof; (6) claims to recover real property with or without damages for the withholding thereof and the rents and profits of the same; and (7) claims against a trustee by virtue of a contract, or by operation of law.”

This section is limited by section 25-702, R. S. 1943, as follows: “The causes of action so united must affect all the parties to the action, and not require different places of trial.”

The defendant contends that the limitation of section 25-702 upon section 25-701 prohibits a joinder of the 39 causes of action with the first for the reason that the causes of action so united would not affect all the parties to the action. The theory of this contention is that while plaintiff is nominally the party in interest the real parties in interest are the assignors respectively of the 39 causes of action.

If this theory of the defendant is correct then his contention in this connection must be sustained. It is obvious that a judgment on any one of the causes of action would have no relation to any other cause of action; and if the assignors are the real parties in interest it becomes equally obvious that the causes of action united do not affect all of the parties to the action. The limitation of section 25-702 would therefore prevent a joinder of the causes of action in a single action.

This statute has been construed from the viewpoint of misjoinder of causes of action against several defendants. See Barry v. Wachosky, 57 Neb. 534, 77 N. W. 1080; School District v. De Long, 80 Neb. 667, 114 N. W. 934; Raapke & Katz Co. v. Schmoller & Mueller Piano Co., 82 Neb. 716, 118 N. W. 652; Radcliffe v. Lavery, 100 Neb. 31, 158 N. W. 387; Drainage District v. O’Neill, 109 Neb. 552, 191 N. W. 685; Sickler v. City of Broken Bow, 143 Neb. 542, 10 N. W. 2d 462. In all of these cases it was held that there could be no joinder unless the judgment sought would affect all of the defendants, that is the judgment on all joined causes of action would affect all parties defendant.

It would seem that the statute admits of no different interpretation for parties plaintiff. It therefore becomes necessary to ascertain whether the plaintiff herein is, or the assignors are, the true parties plaintiff as to the 39 causes of action, within the meaning of the law.

Sections 25-301 and 25-302, R. S. 1943, are sections 29 and 30 of the Code of Civil Procedure. In Hoagland v. Van Etten, 22 Neb. 681, 35 N. W. 869, in passing on the misjoinder of causes of action in an action instituted by the assignee on purely formal assignments without being the real party entitled to the avails of the suit, the same as in this case, the court held that action could not be maintained by an assignee since he was not the real party in interest. At that time suit by assignee for collection was not permissible. Permission to sue as assignee for collection came with an amendment to section 32 of the Code in 1913 as follows: “and assignees of choses in action assigned for the purpose of collection, may sue on any claim assigned in writing, but such assignee shall be required to furnish security for costs as in case of non-resident plaintiffs.” Laws 1913, ch. 166, §1, p. 509. This section of the Code as amended is 25-304, R. S. 1943.

The effect of this decision is to say that an assignee for collection is not a real party in interest. In the opinion it was said: “We hold, therefore, that an assignee having no interest in the result of the suit, and not entitled to any portion of the proceeds thereof, is not entitled under section 29 to maintain an action as the real party in interest.”

We conclude therefore that the demurrer on the ground of misjoinder of causes of action was properly sustained. There can be no doubt that under the exceptions of section 25-304, R. S. 1943, the plaintiff herein had authority to institute action on his own cause of action as well as the 39 others but that since the judgment on no cause of action would affect the real party in interest in any other cause of action the causes were improperly joined.

The objection of defendant that there was a defect of parties plaintiff, we think, is without merit. Defendant’s contentions in this respect are not without support in the decisions of other jurisdictions but we do not believe that their reasoning is sound when applied to the facts pleaded in the petition herein and applicable statutes. A case in point supporting the contention is Rockwood v. Crown Laundry Co., supra.

Our statute (section 25-806, R. S. 1943) permits demurrer on account of defect of parties. In Salisbury v. Berry Motor Co., 122 Neb. 605, 241 N. W. 86, in interpretation of the statute, this court approved the following from 6 Standard Ency. of Procedure, 899: “A defect of parties means an absence of necessary parties and the objection that there are too many parties cannot be reached by a demurrer on this ground.” This is a case wherein this court has attempted to define the term “defect of parties” as used in this statute. It follows Boldt v. Budwig, 19 Neb. 739, 28 N. W. 280; Davey v. County of Dakota, 19 Neb. 721, 28 N. W. 276, and County of Lancaster v. Rush, 35 Neb. 119, 52 N. W. 837. In other cases there is an indication that it means misjoinder of unnecessary parties as well as the absence of necessary parties:

Johnson v. Platte Valley Public Power & Irrigation District, 133 Neb. 97, 274 N. W. 386, was a case.wherein objection was made under the statute in question here that there was a misjoinder of plaintiffs, in other words, that there were unnecessary parties plaintiff. The court, without passing directly upon the question of whether or not the question of defect of parties could be raised, said that the question had not been timely presented and then said: “When a defect of misjoinder of parties appears on the face of the petition, it must be raised by a special demurrer.”

The substance of this holding has been sustained in Hagadone v. Dawson County Irrigation Co., 136 Neb. 258, 285 N. W. 600, and Cunningham v. Brewer, 144 Neb. 218, 16 N. W. 2d 533. We think therefore that the holding in Salisbury v. Berry Motor Co., supra, was too narrow and that to give effect to the intent of the Legislature it must be held that an obj ection on the ground of defect of parties is available where there is a joinder of unnecessary parties as well as where there is a nonjoinder of necessary parties. Salisbury v. Berry Motor Co., supra, and the cases which it follows, are to that extent overruled. Accordingly, therefore, special demurrer on the ground of misjoinder of parties plaintiff was available to defendant herein.

We think, however, that in this case there was no misjoinder of parties plaintiff. As of right the plaintiff was a proper party in the first cause of action. By the terms of •section 25-304, R. S. 1943, and the pleadings he was the .proper party in the other 39 causes of action. The causes of action were separate and distinct actions and so stated. In order to properly institute actions on the 40 causes of actions no proper plaintiff could be added and none taken away. In this sense it cannot be said that there was a misjoinder of parties plaintiff but only a misjoinder of causes of action. The demurrer on the ground of misjoinder of parties plaintiff was improperly sustained.:

■ After the demurrer was sustained to the 39 causes of action the plaintiff asked leave of the court to docket each as a separate cause of action. This leave was denied and the causes dismissed.

In the light of our holding that the demurrer was properly sustained on the ground of misjoinder of causes of action but erroneously sustained on the ground of misjoinder of parties the trial court was in error in refusing to allow separate docketing and in dismissing. Section 25-809, R. S. 1943, which is controlling under the circumstances, is the following: “When a demurrer is sustained on the ground of misjoinder of several causes of action, the court, on motion of the plaintiff, shall allow him, with or without costs, in its discretion, to file several petitions, each including such of said causes of action as might have been joined; and an action shall be docketed for each of said petitions, and the same shall be proceeded in without further service.”

By this section plaintiff was granted the right, on motion, to have a separate docketing of the causes of action, subject only to the discretion of the court on the matter of taxing costs.

For the reasons herein stated the cause is reversed and remanded with directions to the district court to vacate its order of dismissal, to vacate that portion of its order sustaining the demurrer on the ground of misjoinder of parties, and to enter an appropriate order allowing separate docketing of the 39 causes of action.

Reversed with directions.