Sprague v. Dugan

WILLIAMSON, Chief Justice. This is an action by the plaintiff Sprague (Buyer) and First Peninsula Company (Peninsula), assignee of the Buyer, and the defendants (Sellers), in which the Buyer seeks specific performance of a written contract for the sale and purchase of land in Machiasport. The Court denied specific performance. [466] The Buyer appeals from final judgment on the ground of error in the Court’s refusal to grant a new trial. The Sellers on cross appeal rely on error of the Court “in refusing to strike [the Buyer] as a Party Plaintiff and in determining him to be a Party In Interest.” Peninsula was made a party plaintiff on the Buyer’s motion after entry of the action, and did not appeal. In his motion for new trial the Buyer asserts error of the Court: (1) in excluding certain evidence of the purchase price of the real estate paid by the Sellers; (2) that the evidence was insufficient to warrant a decree for the Sellers, and (3) that the decree was against the weight of the evidence. Point (1) was not argued, and is waived. Point (3) is not applicable in a case heard by the Court without a jury. Under Point (2) the findings of fact of the single justice are to be tested under the “clearly erroneous” doctrine. Rule 52(a) M.R.Civ.P.; Gosselin v. Better Homes, Inc., Me., 256 A.2d 629, 636 (conclusive when supported by credible evidence) ; 1 F.McK. & W.Me.Civ.Pr.2d §§ 52.7, 52.8, for discussion and reference to Maine cases. The Court found in substance: The Sellers were the owners of approximately 620 acres of land in Machiasport. The Buyer negotiated with them for the purchase of the property. The Sellers wished to have the necessary instruments drawn by their attorney Mr. Vose of Ma-chias, but were persuaded by the Buyer to have them drawn by his attorney Mr. Blais-dell of Ellsworth. The contract drawn by Mr. Blaisdell, who was attorney for both the Buyer and Peninsula, provided among other things that it was assignable, and that the purchase price which the Buyer agreed to pay was $50,000, payable $5,000 upon execution and delivery of the agreement, $7,000 on or before delivery of the deed, and $38,000 by note of the Buyer secured by a purchase money mortgage. For purposes of the action August 20, 1967 was considered as the date for closing the transaction under the contract. The Buyer assigned “all my rights under and interest in said contract” to Peninsula by an assignment in fact executed before the contract of purchase and sale was executed by the Buyer and Sellers. The further agreement in a separate instrument was made at the same time by Peninsula with the Buyer “that if said property is conveyed to [Peninsula] by [the Sellers] in accordance with said contract then you shall have the right to purchase from [Peninsula] all of said property so conveyed except a strip of land Seven hundred (700) feet in width on the western side of said property” for a purchase price of $18,000. The contract between the Buyer and the Sellers prepared by Mr. Blaisdell was mailed to the Sellers in Florida and returned executed by them. It was then signed by the Buyer, dated July 6, 1967, and the $5,000 check mailed to the Sellers. Unknown to the Sellers the $5,000 payment in fact was supplied by Peninsula. By letter of August 16, 1967, Mr. Blais-dell advised the Sellers of the date and place of closing. On August 25 Mr. Blaisdell mailed to the Sellers drafts of a deed of the property to Peninsula and of a mortgage from Peninsula to the Sellers, and advised them of the assignment to Peninsula. This was the first information the Sellers had that the Buyer had assigned the contract. The Sellers were unwilling to accept a mortgage and note for $38,000 from Peninsula and insisted upon maintaining the personal liability of the Buyer Sprague. Mr.- Blaisdell on his part insisted that they were under an obligation by their agreement to convey to Peninsula and accept a purchase money mortgage and note without the Buyer Sprague’s personal liability. The Sellers thereupon secured the services of Mr. Vose as their attorney. Later, by letter of September 11, 1967, Mr. Blaisdell advised the Sellers that the Buyer would go forward with the purchase and give thé [467] mortgage and note. No action was taken by the Sellers on this information. At about this time the Buyer advised the Sellers that he had not assigned the contract to Peninsula. This, however, was not the fact. The Sellers refused to sell the property and subsequently the parties made mutually satisfactory arrangements concerning the $5,000 down payment. The Court found no loss to the Sellers from delay in completing the transaction. In short, the transaction could have been completed in September as well as in August 1967 without loss. The Court found: (1) that the Sellers were justified in considering the contract at an end about the time Mr. Blaisdell informed them that the Buyer would complete the transaction; and (2) further, that the Buyer was properly denied specific performance on the ground that he came into Court without “clean hands”. The Court, in his decree, said: “I [the Court] refer to [the Buyer’s] duplicity in affirmatively assuring plaintiffs that he was to use the property as a cattle ranch, and that his brother would help him finance it and to his efforts to keep the defendants from going to their Washington County attorney for the preparation of the documents and also to his attempt to persuade them to convey to him in September by denying that he had assigned to Peninsula.” The Court properly denied specific performance to the Buyer and entered judgment for the Sellers. We reach the same result by a different path. In our opinion when the Buyer assigned the contract to Peninsula, as he had the right to do, then the Buyer had no further interest in the transaction which the Sellers were in any way bound to recognize. Drafts of a deed from the Sellers to Peninsula and of a purchase money mortgage from Peninsula to the Sellers were prepared by Peninsula and presented by its attorney to the Sellers. Peninsula, however, did not comply with the contract in that the purchase money mortgage did not and was not intended to carry the personal liability of the Buyer. The Sellers, it is to be noted, became obligated under the terms of the contract to sel[ to Peninsula upon notice and of course proper proof of the assignment, which was determined to be valid by the Court. After the refusal of the Sellers to accept the mortgage from Peninsula, no mortgage from the Buyer was ever offered to them, except in connection with the Buyer’s demand in September 1967 that the Sellers convey the property to him. As we have seen, judgment was for the Sellers against the Buyer and Peninsula. The latter accepted the result and has not appealed. The Court, in our view, erred in not granting the Sellers’ motion to strike the Buyer as a party plaintiff when it became evident that the contract had been assigned by the Buyer to Peninsula. Whatever interest the Buyer had thereafter in the Sellers’ land was derived from his agreement with Peninsula, in which the Sellers had no part. Under this agreement (the validity of which we are not required to decide), the plaintiff Sprague not as a Buyer from the Sellers, acquired certain rights “if said property is conveyed to [Peninsula].” The Buyer ceased to be a party in interest upon the assignment to Peninsula. All of his rights were transferred to Peninsula. The assignment was total. When this situation became evident, the Sellers were entitled to have the Buyer removed from the case as a party. Rule 17(a) M.R.Civ.P.; Northland Industries, Inc. v. Kennebec Mills Corp., 161 Me. 455, 214 A.2d 100; Borough of Nanty-Glo to Use of Westinghouse Credit Corp. v. Fireman’s Fund Insurance Co. (D.C.Pa.1966) 250 F.Supp. 329; [468] United States for Use and Benefit of Allen Construction Corp. v. Verrier (D.C.Me.1959) 179 F.Supp. 336 (assignor for security a proper party plaintiff). “Where an assignment is total or where a subrogee has paid the full amount of the loss, the assignee or subrogee is the only real party in interest. He is therefore the sole proper party plaintiff, except for the provision made in the third sentence of Rule 17(a), discussed in Section 17.4 below [Insurers].” 1 F.McK. & W.Me.Civ.Pr.2d § 17.2. “When the assignor retains no interest in a chose in action he is not a real party in interest and may not sue thereon.” 2 Barron & Holtzoff § 482, p. 15. “Thus if the plaintiff has assigned away all his right, title and interest in a contract, he may not maintain an action for its breach.” 3A Moore’s Federal Practice ¶ 17.09, p. 272. With the judgment below in favor of the Sellers, there is no necessity of casting our entry in terms of their appeal. It is sufficient that the appeal of plaintiff Sprague be denied. In this view we do not reach the issues of termination of the contract or “clean hands”. The plaintiff Sprague was not properly in Court having assigned his contract to Peninsula, and Peninsula did not appeal. The entry will be Appeal denied. WEATHERBEE, J., did not sit.