Burns v. Cities Service Company

217 S.E.2d 56, 158 W. Va. 1059, 1975 W. Va. LEXIS 195
CourtWest Virginia Supreme Court
DecidedJuly 29, 1975
Docket13488
StatusPublished
Cited by14 cases

This text of 217 S.E.2d 56 (Burns v. Cities Service Company) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burns v. Cities Service Company, 217 S.E.2d 56, 158 W. Va. 1059, 1975 W. Va. LEXIS 195 (W. Va. 1975).

Opinion

Sprouse, Justice:

Robert Burns, doing business as Twin Rivers Steel Company, appeals from the judgment of the Circuit Court of Marshall County in an action instituted by Burns against Cities Service Company, Columbian Carbon Company, Lawson-Light, Inc., and The Lummus Company. The action was brought to enforce a mechanic’s lien for work done pursuant to a subcontract with Lawson-Light, Inc. By intervention, R. G. Richardson, Ira Houghton and the United States of America were made parties.

The trial court granted separate motions for summary judgment, dismissing the mechanic’s lien as not timely filed and dismissing the appellant as a party. It is this latter action that the plaintiff appeals. The sole question presented for decision is whether the trial court properly granted summary judgment, dismissing appellant Burns as a party having no interest in the subject matter of the civil action.

*1061 Cities Service Company, the successor corporation of Columbian Carbon Company, contracted with The Lum-mus Company for construction of certain buildings on land owned by Columbian Carbon in Marshall County. Lawson-Light was a subcontractor with Lummus on the project. Lawson-Light, in turn, entered into a contract with the plaintiff to furnish labor and equipment for erection of the buildings. The contract, dated April 15, 1970, provided for a total contract price of $60,350.

On August 3, 1970, prior to the commencement of work under the contract, the plaintiff entered into an agreement designated as a “Joint Venture Agreement”, with Ira Houghton and R. G. Richardson. Houghton and Richardson agreed to pay for labor and equipment rentals and expenses necessary to complete the plaintiff’s contract with Lawson-Light. In return, the plaintiff agreed to assign to Houghton and Richardson “the proceeds due or to become due under these contracts”, and to permit the use of the proceeds “to reimburse * * * Houghton and * * * Richardson for any monies furnished * * * on the contracts and * * * for any amount loaned * * * on amounts otherwise owing * * *.” The agreement further provided as follows: “Upon completion of the contracts the proceeds therefrom, after all necessary expenses have been paid or provided for, shall be paid to Robert Burns, save for a fee of 5% of the gross proceeds from the jobs.” The plaintiff thereafter executed an assignment of all proceeds of the contract, and notified Lawson-Light of such assignment.

Following the completion of the contract, the plaintiff instituted this action for enforcement of its mechanic’s lien for $20,299.40 plus interest and costs. Upon the motion of Cities Service Company, summary judgment was granted, discharging the lien as not timely filed. The court, however, retained jurisdiction to determine the merits of the underlying contract claim.

After the dismissal of the mechanic’s lien, Ira Houghton and R. G. Richardson intervened as parties plaintiff. Lawson-Light then filed a motion for summary *1062 judgment seeking to dismiss Burns as a party plaintiff “on the ground that said plaintiff has no interest in the subject matter of this Civil Action, by virtue of an assignment of all of his interest in the contract which is the subject of this Civil Action, and the proceeds there- Qf í ^

Attached to the motion for summary judgment as an exhibit was an affidavit of Ira L. Houghton. In the affidavit Houghton stated that “on August 12, 1970, Robert B. Burns assigned all money due him from said contract to affiant and directed Lawson-Light, Inc. to pay all sums of money due from said contract to affiant.”

The affidavit further stated: “Affiant further saith that he is the sole owner of the proceeds due from said contract * * *.”

A second exhibit to the motion was a letter from Burns to Lawson-Light in which Burns informed Lawson of the assignment of “all moneys due our organization on this job” to Ira L. Houghton. In opposition to the motion for summary judgment, Burns filed an affidavit signed by his counsel which stated that statutory tax liens had been filed against Burns by the Internal Revenue Service for $21,216.42, representing the amount Burns owed the Service. No mention of the joint venture agreement was made in the affidavit and that agreement was never made a part of the record.

On October 23, 1970, Robert Burns was dismissed as a party to the civil action. Thereafter, the United States of America was permitted to intervene in the action. This intervention was based upon perfected tax liens in the amount of $23,400.51, plus accrued interest and penalties, which arose because of the failure of the plaintiff to withhold taxes for three quarterly periods.

The single issue to be determined is whether the record presents a genuine issue of material fact, which would preclude summary judgment dismissing the plaintiff as a party having no interest in the case. The plaintiff contends that, as his assignment to Houghton and *1063 Richardson was either for collection or for security purposes, he had an interest in any surplus funds remaining after payment to the assignees. Alternatively, Burns argues that he had an interest in the outcome of the case to the extent that any satisfaction of the Federal tax liens from the proceeds of the contract would result in a pro tanto reduction of his tax liability. The validity of this latter argument, he concedes, depends on his contention that the assignment was for collateral security and was inferior to the tax liens because the assignees failed to record under the provisions of Sections 301 and 302 of Article 9, Chapter 46, Code, 1931, as amended.

Rule 17(a) of the West Virginia Rules of Civil Procedure provides in part: “Every action shall be prosecuted in the name of the real party in interest; * * This Rule is largely a continuation of the law existing in this State at the time of its adoption rather than an innovation. Lugar & Silverstein, West Virginia Rules of Civil Procedure 161.

It is true that a minority of American jurisdictions, in determining real party in interest questions, have held that an assignor retains an interest in an assignment for collection or in one for collateral security. See 3A Moore, Federal Practice, Section 17.09[1.-1], pages 276-79. The decisions are unanimous, however, in holding that the unconditional assignee of a chose in action is the only real party in interest. “The federal courts, in construing the real party in interest provisions of various state codes, and all of the state courts, in construing their own provisions, have been in full accord in holding that the unconditional assignee of a complete chose in action is the real party in interest and suit must be brought in his name. * * *” 3A Moore, Federal Practice, Section 17.09[1.-1], pages 272-73. See also, 2 Kooman, Federal Civil Practice, Section 17.02, page 357; 6 Wright & Miller, Federal Practice and Procedure, Section 1545, pages 651-655; Northwest Oil and Refining Co. v. Honolulu Oil Corporation, 195 F. Supp. 281 (D.C. Mont.); Texas San Juan Oil Corporation v. An-Son Offshore Drilling Company, 194 F. Supp. 396 (D.C. N.Y.).

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Bluebook (online)
217 S.E.2d 56, 158 W. Va. 1059, 1975 W. Va. LEXIS 195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burns-v-cities-service-company-wva-1975.