Knadler v. Sharp

36 Iowa 232

• Court: Supreme Court of Iowa
• Decided: March 20, 1873
• Status: Published

Opinion

Cole, J.

i. pabties : champerty, etc. • — • I. The first point made by the counsel for appellant is, that the plaintiff is not the real party in interest, and cannot therefore maintain the action; and further, .¡.pg facts s|lown the case respecting the transfer of the claims of others to plaintiff constitute champerty and will defeat the entire action. Without controverting the able and forcible argument at bar by the senior counsel for appellant, or undertaking to determine the question upon the principles of the common law, we turn our attention to the statutes of our own State bearing upon it. It is enacted by Revision, section 1799: “ An open account of sums of money due on contract may be assigned, and the assignee will have the right of action in his own name, but subject to the same defenses and set-offs, as the instruments mentioned in the preceding section.” These are any defenses or set-offs legal or equitable, which the debtor in the account may have against any assignor thereof before suit is commenced thereon. To give effect to this statute, we must hold that the assignment of an open account for money due on contract, passes to the assignee the legal title to the account assigned, just as the assignment of a negotiable note, under the statute of Anne, passes the legal title to the assignee of it. And it must be conceded that champerty could not be predicated upon the assignment of such a note and an action thereon, although the assignee gave, as the only consideration for it, his obligation to pay the net proceeds of the action. The reason is, that to assign such a note- is lawful, and the right to bring the action results from the assignment regardless of the intent of the parties to it. Under our statute the same sanction is given, and the same result follows the assignment of an open account for money due on contract.

It is also provided by Revision, section 2757: “Every action must be prosecuted in tbe name of tbe real party in. interest, except as provided in the next section.” This language was first construed, as found in the Code of 1851, section 1676, to mean the party having the legal title or interest. Farwell v. Tyler, 5 Iowa, 535. But, afterward, it was held to mean the party having the beneficial interest, as contradistinguished from the mere holder of the legal title. Conyngham v. Smith, 16 Iowa, 471. And subsequently it was held that the party holding the legal title of a note or instrument may sue on it though he be an agent or trustee, and liable to account to another for the proceeds of the recovery, but he is open in such cases to any defense which exists against the party beneficially interested; or, the party beneficially interested, though he may not have the legal title, may sue in his own name. Cottle v. Cole, 20 Iowa, 481. The same doctrine was again affirmed in Rice v. Savery, 22 id. 470. It follows, therefore, that the court did not err in holding that the plaintiff might recover upon all the claims as the proper party to the action, and that the contract of assignment to him and his agreement to pay over the net proceeds did not constitute champerty. The effect of such assignment and action by one was to relieve the defendant from twenty actions and their accumulated costs.

3. Covenants : against incumbrances. II. Some of the persons who made and assigned the open accounts upon which the plaintiff sues, were the remote grantees of the defendant Sharp. It is now •, ,, , ,, . . . , urged that the covenant * against incumbrances . , , . - is a personal one, and is broken as soon as made, and does not run with the land, and, therefore, that no right of action existed in favor of such assignors. The true rule in such cases doubtless is, that the covenant against incumbrances - is broken upon the making of the conveyance, so that the grantee might then maintain an action and recover nominal damages; but such action and recovery would not defeat or prevent another action by that grantee, or by the grantee of that grantee, however remote, when and after either had been required to discharge the incumbrance in order to protect his title — the breach, as to the amount thus required to be paid, would not occur until the payment, and then, in favor of the party holding the title and making the payment. In this State, the covenant of seizin also runs with the land. Schofield v. The Homestead Co., 32 Iowa, 317.

III. Certain instructions were asked by defendant and refused respecting the statute of limitations and the right of redemption. They may have embraced correct legal propositions, but as they were not founded upon any facts in issue or in proof in the case, it was not error to refuse them. The statute of limitations had not fully run, and no question of redemption had in fact arisen.

The defendant also claimed, and asked an instruction accordingly, that since the judgment creditor could only make any title acquired under the execution sale, available by redeeming from the,mortgage foreclosure sale, and since it would take more, in each case, to redeem, than the purchase-money and interest, the jury should find, for the defendant. This was refused, and properly so, because it ignores the fact that the purchasers had the right to the benefit of their purchases, and not simply to a return of their money and interest. Any expenditure they might be required to make in order to protect their title, not exceeding such purchase-money and interest, they might properly make and demand its return from their grantor, although some other course, which would not protect them title, might be greatly more advantageous to their grantor.

IY. Upon the question of the agency of McHenry there was some conflicting testimony, and the jury must have found that he was the agent of Sharp at the time notice was given to him of the incumbrance and to remove the same. We see no reason for doubting the correctness of the finding in this respect, or of the instructions in regard thereto. The effort to separate the agency as to certain of the lots sold, and to terminate it as to them, while the general agency was continued, is too narrow to be of practical advantage in a controversy before a jury. It is enough, too, to satisfy the law, that the whole question was fairly submitted to them.

We have not deemed it necessary to set out the instructions at length, but have endeavored to meet, as briefly as possible, the questions made upon them in the discussions of the general propositions submitted and argued by counsel. In our opinion the judgment was right, and is, therefore,

Affirmed.