Rice v. Savery

Dillon, J. 1. Parties: real party in interest. The grounds of demurrer, urged in argument, are resolvable into two: Eirst, it is insisted that there is no privity of contract between the plaintiff and defendant, and hence the action is not maintainable in the plaintiff’s name. Second, it is claimed that there is a defect of parties plaintiff, inasmuch as the trustees (Sypher, Allen and White), if not the other subscribers to the loan, are necessary parties. These objections, kindred in their nature, will be considered together. The Revision has made, great changes in relation to parties to actions. Chap. 117. It is no longer absolutely necessary (§§ 2757 and 2758) that the party to whom a promise is made shall be the plaintiff on the record, in an action to enforce it. That is to say, if the promise is made for the benefit of another who is the real party in interest, the latter may sue though the contract or promise be made to an agent or trustee; -or in the case last supposed, the agent, or trustee, or person in whose name a contract is made for [478] the benefit of another, may sue without joining the party for whose benefit the suit is prosecuted. This is well settled by the previous adjudications of this court. Conyngham v. Smith, 16 Iowa, 471; Cottle v. Cole, 20 Iowa, 482; Taylor v. Adair, at present term. 2. _ trustee. Applying the settled construction of these sections (§§ 2757, 2758) to the present case, we admit, that since by the note, so called (we refer to the instrument for $60,000), the defendant promised to pay the trustees, they might have sued him upon it in their own names without joining the subscribers. We say the trustees might have sued. But must the suit be brought by them ? It is argued that the trustees are necessary parties, because they are entitled to commissions; therefore, it is claimed it would be unjust to hold that the beneficiaries may sue, and thus deprive the trustees of their compensation. There is nothing in this objection, at least when coming from the defendant. The trustees have stipulated for no commissions. If entitled to any, this is a matter between them and the subscribers, a matter with which defendant has no concern. In favor of the defendant’s view, that the trustees must bring the suit, there is really but one argument which has any force, and that is, that such an action will protect him from a multitude of suits. This objection travels outside the record. The demurrer speaks. It is not alleged in the petition, and hence we do not know, that there are any unpaid subscribers to the loan except the plaintiff. 3. — parties to subscription. Upon the theory propounded by defendant’s counsel, it would scarcely be denied by them, that all of the unpaid subscribers might join in an action on the in- , „ r* _ . __ strument for $60,000. At all events such a proposition could not be successfully denied. They would be the real parties in interest, and hence, under the exposi [479] tion of sections 2757 and 2758, could sue without joining the trustees. 4. — single unpaid subscriber. If this is true, then the plaintiff, if he is the only unpaid subscriber, may alone sue upon it, and we repeat that, so-far as the petition shows, the plaintiff is the only unpaid subscriber. Indeed, it is not expressly averred in the petition that any of the other subscribers ever paid their subscriptions. And the same observations apply to an action, not upon the instrument, but to recover the amount loaned; and on this point the present appeal only requires us to hold that if the plaintiff is the only subscriber who is unpaid, as for aught disclosed he is, he may sue alone, and need not join with him the trustees, in an action to recover the amount by him loaned to the defendant. 5. _ one of several unpaid subscribers. On the supposition that it shall appear that there are other unpaid subscribers, the court are not exactly agreed in relation to the right of the plaintiff to sue his own name alone. A portion of the court is inclined to regard the transaction as a several loan by the subscribers, each on his own account; and that, as there was no unity or commingling of interests among the subscribers, who were neither copartners nor jointly interested, each, may sue" in his own name and by himself. Another portion of the court is, however, inclined to the view that the only promise by the defendant is contained in the note or instrument for $60,000; that this promise is single and entire, and hence the defendant cannot be compelled to defend more than one action brought by the trustees, or by all of the unpaid subscribers. 6. — several unpaid subscribers. As the cause must go bach for further proceedings, it has been deemed advisable to suggest to'the parties, that we are all agreed that, if there are other unpaid subscribers, the trustees, as their repre [480] sentatives, are proper parties to the suit, either as plaintiffs or defendants. The plaintiff may amend and make them parties, changing his proceeding, if he so chooses, in equity. If it turns out that the controversy cannot be determined without the presence of the trustees, the court must order them to be brought in. Rev., § 2765. So it is in the defendant’s power, to file a cross petition against the plaintiff and make the trustees parties, if he has a cause of action affecting the subject-matter of the present suit. § 2892. And similarly; if he has a set-off or counter-claim. §§ 2886, 2888, 2889. So that if there are numerous claimants against the defendant, and he wishes to settle the whole controversy in one suit, he has it in his power to accomplish this result. He may allege against the trustees (if made parties by the plaintiff, or if the defendant makes them parties) any matter of defense he may have against the instrument, and ask its cancellation. They, or the plaintiff, may contest this claim, and thus the matters in controversy will, or at least may be, brought to an end. The judgment of the District Court sustaining the demurrer is reversed, and the cause remanded for further proceedings in accordance with this opinion. Reversed.