Cranmer v. Howard

MoCO'Y, J. There was judgment dismissing the action on the merits, at plaintiff’s cost, and awarding costs to defendant, from which judgment plaintiff appeals. The assignments of error raise the questions of sufficiency of the evidence to justify the findings of fact and conclusions of law; that the decision and judgment are against the law; errors of law occurring on the trial and excepted to by plaintiff; and error in overruling plaintiff’s motion for new trial. [1] It appears from the record that this action has been pending since 1914, and has been before this court on a former occasion. 40 S. D. 202, 166 N. W. 1086. The record now before us discloses the fact, that pending the action in the courts, both plaintiff and defendant, at the time the action was last tried in the lower court, had ceased to be parties in interest in the subject-matter of the action. The entire interest' of the original plaintiff, Emma A. Cranmer, and the entire interest of the original defendant, D. E. Christian, had been transferred to and was then' solely in a third party, the First National Bank of Aberdeen. The respondent contends that as no real party in interest is now before the court the judgment appealed from should be affirmed. We are of the opinion that this contention is well taken. It seems to be generally held to be against public policy to permit parties having no actual interest in a controversy other than costs to further prosecute and defend an action. -The provisions of the statute (section 23x7, Rev. Code 1919) authorizing the continuance of a suit, after a transfer of the subject-matter, in the name of the original party, or by the person to whom a transfer has been made, exists solely for the benefit of the transferee, and not for the benefit of the assignor. The transferee alone has the right to elect as to whether the action, after a [221] transfer of the suibject-matter, shall be carried on in the name of the original party, or whether he will proceed as a substituted party in his own name. The fact that after such transfer the action may be carried on in the name of the original party does not make such original party a party in interest that may thereafter in any manner control the procedure of the action. In the case of Sykes v. Beck, 12 N. D. 242, 96 N. W. 844, the Supreme Court of Nlorth Dakota, under a like statute, said: “The statute of California is substantially like our own. It lias been uniformly held in that state that, when the subject matter of a pending action is transferred, it is the right of the transferee to prosecute and defend that action either in the name •of the original party, or to request a substitution, and further, that the assignor pendente lite is, after the assignment, divested •of further authority to control the action.” The decisions in the following cases sustain this rule: Walker v. Felt, 54 Cal. 386; Crescent Co. v. Montgomery, 124 Cal. 142, 56 Pac. 797; Card v. Bird, 10 Paige (N. Y.) 426; Poundstone v. Baldwin, 145 Ind. 139, 44 N. E. 191; Moore v. Jenks, 173 Ill. 157, 50 N. E. 698; Studabaker v. Markley, 7 Ind. App. 368, 34 N. E. 606; Ried v. Vanderheyden, 5 Cow. (N. Y.) 719; Tuffree v. Stearns Ranchos Co., 124 Cal. 306, 57 Pac. 69; Ashby v. Winston, 26 Mo. 210; Hirshfeld v. Fitzgerald, 157 N. Y. 166, 51 N. E. 997, 46 L. R. A. 839; 30 Cyc. 43. [2,3] In Studabaker v. Markley, and in Ried v. Vanderheyden, the court, among other things, said, in substance, that a mere interest in the costs gives one no right to appeal in respect to matter in which he has ho interest; that it would be a travesty on legal proceedings to say that a party who has no actual interest in a controversy other than costs may prosecute an appeal. In the case of Card v. Bird, it was held that a plaintiff who had parted with his interest pending suit had no right to object or to appeal from the decree subsequently entered. The only possible interest the appellant could have in the pending action is in relation to costs that the trial court may erroneously have adjudged against her. Appellant might possibly have appealed from the taxation of costs and from that part of judgment which alone related to costs. But that is not what the appellant is seeking by this appeal. Appellant is here seeking a [222] reversal of the entire judgment upon the merits, in which she clearly has no interest. By no assignment of error or otherwise has the appellant brought before this court on this appeal the question of the alleged error of the trial court in relation to costs. The record in this case shows beyond all doubt that the property in question, which is the subject-matter of this suit, was by the appellant voluntarily mortgaged to a third party, who, upon default being made in the terms of said mortgage, duly foreclosed said mortgage by action; that a foreclosure sale was made; that, time for redemption expired; and that sheriff’s deed issued all during the pendency of this suit, and before trial, which resulted in the judgment from which this appeal is taken. The issuance of a sheriff’s deed and the passing of title thereby is treated as a' voluntary conveyance of the mortgaged premises by the mortgagor, who voluntarily executed the mortgage authorizing a foreclosure sale on breach of the conditions contained in the mortgage. By the sheriff’s deed, all the right, title, and interest of the appellant in and to the subject-matter of this action became vested in the said 'First National Bank upon the issuance of said sheriff’s deed, and which bank thereafter had the right to carry on this suit against the original plaintiff, or in its own name as a substituted party. After the issuance of said sheriff’s deed, this appellant lost all right to control or take part in the procedure of this action. Thereafter the said! bank, instead of prosecuting the suit against the original defendant, procured from her a deed of all her right, title, and interest in and to the subject-matter of this action, thereby completely uniting in said bank the opposing interest in the said subject-matter. Both the original opposing parties to this suit, pendente lite, transferred all their respective interest to the First National Bank. The said bank by such transfers became both plaintiff and defendant in the real and actual interest in the litigation, and had the right, if the case could be carried on at all, to carry on the same in the name of the original parties without actually having itself substituted as a party to the suit. Under the authorities cited, the said bank had the right to control the procedure on both sides of this legal controversy. Under these circumstances it is against public policy and is a travesty on legal procedure to permit the further carry [223] ing on of this litigation in the courts. It would he a judicial farce to reverse the judgment of the lower court and remand .this cause for further consideration-.. This action will not survive such transfers. There are some causes of action that survive transfers. But this, is not one of them. The law of survival of actions in relation to deceased parties in many cases has no application whatever to the survival of actions by reason of transfers of interest, there being well-grounded distinctions between such survivals. [4] Under the circumstances of this case, the state of the pleadings is wholly immaterial, as the bank, by reason of said transfers, had the right to control the pleadings on both sides without substitution of itself as a party. Under elementary rules of pleading and practice, where a defendant transfers his interest pendente lite the original plaintiff in order to acquire jurisdiction over the person of the transferee, if he so desires, must, by supplementary complaint and procedure, acquire such jurisdiction. But when a plaintiff transfers his interest in the subject-matter pending suit and before trial, the original defendant, under a general denial, and without supplementary answer may, on the trial, show transfer of interest by plaintiff, or title in a third-party, as a direct defense to plaintiff’s right to recover. Bliss Code Pleading, § 328. Pitts Ag. Works v. Young, 6 S. D. 557, 62 N. W. 432. There is no- such thing known to the law of pleading as a supplementary general denial, as the defendant is always permitted to show under his general denial that at the time of the trial plaintiff is not then entitled to recover, by reason of his then having no title or right to the subject-matter of the suit. • • The appellant, not. being a party in interest, has no right to object to or appeal from this judgment on the merits. The judgment and order appealed from are affirmed. (dissenting.) This action, as originally