Hackett v. Belden

10 Abb. Pr. 123, 40 How. Pr. 289

Opinion

By the Court.

*—Talcott, J.

This is an appeal from an order of the Monroe special term ordering that the Suit be revived and continued in the name of Gertrude A. Hackett, sole executrix of the plaintiff, Lawrence Hackett, deceased.

The facts, so far as they bear upon the propriety of this order, are as follows:

The plaintiffs, having been copartners, brought an action against the defendant upon an account, claimed to have accrued against the defendant in favor of and in the business of the copartnership during its continuance, and recovered a judgment for three thousand seven hundred and twenty-six dollars and seventy-eight cents, from which the defendant has appealed. Pending the appeal, the defendant procured Richard Hackett, one of the plaintiffs, to execute and acknowledge satisfaction of the judgment, and the satisfaction piece was duly filed in the ofiice where the judgment was filed and docketed.

Afterwards, Lawrence Hackett made a motion to have the satisfaction-piece set aside on the ground that it was fraudulent and collusive as against him.

That motion was granted at the Steuben special term, in June, 1869, so far as it affected the interests of the plaintiff, Lawrence Hackett, and it was further ordered that said Lawrence Hackett might proceed to enforce the judgment to the extent of his interest in the same, as though the satisfaction-piece had not been executed.

But the satisfaction was allowed to stand as against Richard Hackett, who had collusively and fraudulently undertaken to satisfy the judgment. Protection was also extended by the same order to the lien of the attorneys for the plaintiff; but this is unimportant for the purposes of the question before us. After the making of the last mentioned order, and whilst Lawrence Hackett was defending against the appeal, he died, leaving Grertrude A. Hackett his sole executrix ; and she, after obtaining letters testamentary, made the motion on which the order now appealed from was made. The appellant insists that the suit can only be continued in the name of Richard Hackett, as to whom the fraudulent and collusive satisfaction still stands in full force of record, and he relies upon numerous decisions laying, down the undeniable proposition that, in general, a cause of action in favor of two partners or joint contractors survives to the survivor, and that an action upon it cannot be brought or continued in the name of the personal representative of the deceased partner, nor can such representative be joined in the action.

This is clearly the rule at the common law. The rule that an action could be brought or continued only in the name of the party having the legal, as distinguished from the equitable interest, was, before the Code, most strictly enforced.

The common law courts, however, found themselves embarrassed by the attempts of parties to the record to interfere with the rights of the-real parties in interest, by collusive settlements, releases, and otherwise, and were accustomed to protect, as far as possible, the rights of assignees and equitable owners, on motion.

The Code, however, has provided that every action must be prosecuted in the name of the real party in interest, intending to abrogate the technical rule of the common law which has been referred to. Since the Code, there can be no doubt but that if the claim in this case had been by the partners assigned to some third party, an action to recover it might have been maintained in the name of such third party. There can be as little doubt that in case one partner releases and assigns all his interest in the assets of "the firm to the other, such other may maintain an action to collect a debt due the firm, in his own name. Indeed, this is common practice.

In the case of Mills v. Pearson (2 Hilt., 16), the New York common pleas held, that in case of an assignment by one partner to a third person, of the interest of such assigning partner in a claim, an action could not be maintained in the name of the assignee alone, but the non-assigning partner must be joined as co-plaintiff. This was on the express ground that the assignment did not purport to embrace anything but the individual interest of the assigning partner.

In this case, the effect of the order by which the satisfaction was allowed to stand as against Richard Hackett, was to cancel and discharge all the interest of Richard Hackett in the claim, leaving the balance to stand, and leaving Lawrence Hackett the sole remaining party in interest.

By the rule of the common law, the personal representatives of the deceased partner did not succeed to the legal title of the decedent in the copartnership assets, and in snch a case as this a protection against the fraudulent and collusive conduct of the surviving partner could only be found by an appeal to the court of chancery, which, as a protection against the fraud, would have appointed a receiver, or possibly by an application to the equitable powers which a court of law asserted Over suits prosecuted before it, and judgments rendered by it. So, also, creditors of the copartnership, "though interested in a proper application of the assets of the firm, could not interfere in the prosecution of actions by it, or by one of the parties, to collect the debts due it, except through the aid of a court of equity, by injunction and receiver, in a proper case.

In this case, Lawrence Hackett was the only party interested after the order setting aside the satisfaction as to him and allowing it to stand as to Richard.

The order produced the same effect as though an assignment of all his interest had been made by Richard to Lawrence Hackett, and the interest of Lawrence devolved upon his personal representative to the same extent as though such an assignment had been made to Lawrence in his lifetime, or as though Richard had never had any interest therein. The course of action was one which was not lost or extinguished by death, but survived ; and in such case, the court is authorized to allow the action to be continued in the name of the representative or successor in interest of the deceased (Code, § 121).

Conceding that the court had power to make the order, its propriety in this case cannot be questioned.

The order must be affirmed with costs.

Order affirmed.

Present, Mullen, P. J., and Johnson and Talcott, JJ.