United States Fidelity & Guaranty Co. v. A. F. Messick Grocery Co.

61 S.E. 375, 147 N.C. 510, 1908 N.C. LEXIS 88

• Court: Supreme Court of North Carolina
• Decided: April 29, 1908
• Status: Published

Opinion

"Walker, J.,

after stating tbe case: Tbe only question to be considered in this case is whether tbe action was properly brought in tbe Superior Court, or is it one of wbicb a justice of tbe peace has jurisdiction ? Tbe plaintiff contends that it can recover only under tbe equitable doctrine of subrogation, as when it paid the amount of Morisey’s defalcation to the oil company it acquired the rights of the latter company as against its agent, Morisey, by subrogation. Even if it did, the cause of action which the oil company had at law against Morisey, and which the plaintiff thus acquired, was not converted into one in equity. The plaintiff has the right to sue Morisey at law in the same manner as the oil company could have done before the payment to it was made, although the right to do so was passed to the plaintiff by virtue of an equitable assignment to it. The rights acquired by subrogation do not depend upon a written assignment of the claim. Upon payment by the party who is secondarily liable for a debt to the creditor he is substituted to all the rights of the latter as against the party primarily liable, and may sue upon the debt as the creditor could have done, without any actual or legal assignment of it. Equity considers that as done which should be done. Insurance Co. v. Railroad, 132 N. C., 75; Cunningham v. Railroad, 139 N. C., 421. This is a familiar principle and has been applied in several cases by this Court. In Markham v. McCown, 124 N. C., at p. 166, the Court said: “It must be admitted that a justice of the peace has no jurisdiction to declare an equity or to enforce an equitable lien, while on the other hand it seems to us that it must be admitted that a-justice of the peace has the jurisdiction to enforce the collection of money which equitably belongs to a party. The distinction between the two is clear to our minds.” So, in Walker v. Miller, 139 N. C., 448, it was held that, while a justice of the peace has no power to administer an equity, the owner of an equitable title may sue in a justice’s court, citing Lutz v. Thompson, 87 N. C., 334. The same distinction between an equitable cause of action and an equitable assignment of a legal cause of action is recognized and enforced in Nimmocks v. Woody, 91 N. C., 1, where it is said that the equitable assignee can maintain an action upon tbe implied promise of tbe original debtor to pay back tbe money wbicb tbe plaintiff bad been compelled to pay for bis benefit.

. But in tbis case there was a written assignment to tbe plaintiff of tbe claim of tbe oil company against its agent, Morisey, so that tbe plaintiff bas acquired both tbe legal and equitable title. Why, therefore, should not a justice of tbe peace have jurisdiction of tbe action? Besides, tbe plaintiff is not seeking to be subrogated to tbe rights of tbe oil company in any action against it. Tbe subrogation bas already been effected and bas been followed, as we have said, by an actual assignment of tbe claim.

It was not necessary for tbe plaintiff to charge fraudulent collusion between its agent and tbe defendant, and none was established. It admits that tbe agent bad authority to sell tbe goods, but no authority to collect tbe money, wbicb should have been remitted directly by tbe defendant to tire plaintiff, and that tbe defendant bad knowledge of these facts. Tbe defendant acquired title to tbe goods, as the agent bad authority from tbe plaintiff to sell them, and if tbe defendant wrongfully paid tbe agent it is still liable to tbe plaintiff for tbe price of tbe goods. But if tbe agent bad tbe authority both to sell tbe goods and to collect tbe purchase price, as contended by tbe defendant’s counsel upon tbe evidence, then tbe defendant is not liable. In any view of tbe case we think there was no error in tbe ruling of tbe court.

No Error.