Dazey v. Mills ex rel. Pinkham

The Opinion of the Court was delivered by Treat, C. J. On the 9th of June, 1846, Dazey made a promissory note to Alexander Mills for $46, payable one day after date. A suit was brought on the note before a justice of the peace, on the 2d of October, 1846, in the name of Mills for the use of Nathan Pinkham. It resulted in a judgment for the plaintiff, and Dazey appealed to the Circuit Court, where the decision of the justice was affirmed. Dazey took the deposition of a witnesss, who testified to a conversation had with Mills on the 13th of October, 1846, in which the latter stated that previous to the commencement of the suit, he transferred the note to Pinkham as security for the payment of a debt; and that prior to the transfer Dazey paid him $26, which ought to be credited on the note. The Circuit Court, being of the opinion that the evidence was inadmissible, excluded the deposition, and the propriety of that decision is the only point in the case. This presents the naked question whether the declarations of the nominal plaintiff made after he has parted with his interest in the subject matter of the suit, can be introduced in evidence by the defendant to defeat the cause of action. There is a conflict of authority on the question, and we therefore feel bound to adopt the rule which will best sub-serve the ends of justice. It was decided in the case of Bauerman v. Radenius, 7 Term Rep. 663, that the defendant could give in evidence the admissions of the plaintiff on the record to defeat the action, although such plaintiff was only the trustee for a third person. The same doctrine is asserted in 2 Starkie’s Ev. 22, and in the cases of Thomas v. Denning, 3 Harr. & Johns. 242, and Dillon v. Chouteau, 7 Missouri, 386. On the other hand, it is held in the cases of Frear v. Evertson, 20 Johns. 142, Hackett v. Martin, 8 Greenl. 77, and Chisholm v. Newton, 1 Ala. 371, that the declarations of the nominal plaintiff, made after he has parted with his interest in the cause of action, are not admissible in evidence to defeat the claim of the real party in interest. The assignee of a chose in action will be protected in a Court of Law against the acts and declarations of the assignor subse- quent to the assignment. Kimball v. Huntington, 10 Wend. 677. Where a chose in action is assigned by the owner, he cannot interfere to defeat the rights of the assignee in the prosecution of a suit brought to enforce those rights, and it makes no difference whether the assignment be good at Law or in Equity only. Mandeville v. Welch, 5 Wheat. 277. A payment made to the nominal plaintiff after the defendant' has notice of the assignment constitutes no defence. Littlefield v. Storey, 3 Johns. 426. So of a set-off obtained after notice of the assignment. Anderson v. Van Allen, 12 Johns. 343. So of a release procured from' the nominal plaintiff after notice of the assignment. Andrews v. Beecker, 1 Johnson’s Cases, 411; Raymond v. Squires, 11 Johns. 47. And it is immaterial whether the assignment be of the whole subject matter, or as collateral security. Wheeler v. Wheeler, 9 Cowen, 34. It seems to be the tendency of modern decisions to recognise the rights of the beneficial party, and to protect him against the acts of the party possessing the naked legal interest, whenever it can be done without injuriously affecting the rights of the debtor; and subject to this qualification, we are inclined to adopt the rule in its fullest extent. The assignee is allowed to sue in the name of the person having the legal interest, and to control the proceedings. The latter cannot interfere further with the prosecution than to require indemnity against the payment of costs. The principle being conceded that Courts of Law will take notice of and protect the rights of the real party in interest, there should be no hesitation in applying it to every case in which the interests of the debtor are not to be prejudiced. The party who has ceased to have any substantial interest in the subject matter of the action, and whose name is used as a matter of necessity to satisfy a technical rule of the law, ought not to be permitted by his acts or declarations to defeat or disparage the title of his innocent assignee ; and this for the same reason that the acts and declarations of the vendor, made subsequent to the sale, are not admissible in evidence to affect the title of the purchaser. The principal ground for receiving the declarations of the party is, that being made respecting matters in which his interest is involved they are supposed to-be true, and are therefore admitted in evidence against him. The reason wholly ceases where he has no interest to be affected. The rule excluding the admissions of the nominal plaintiff, made after he has parted with his interest in the cause of action, does not operate to the injury of the defendant. It allows him to interpose any defence which existed when he received notice of the assignment. If the testimony of the assignor is necessary to enable him to establish his defence, he can obtain it through the medium of a bill of discovery. The judgment of the Circuit Court is affirmed with costs. Judgment affirmed.