Kansas Midland Railway Co. v. Brehm

The opinion of the court was delivered by Johnston, J.: This was an action brought by John M. Brehm against the Kansas Midland Railway Company and the Kansas Construction and Improvement Company to recover damages alleged to have been suffered by nine other parties through the negligent escape of fire from the locomotives of the defendants below, which, it is averred, burnt up and destroyed hay and other property belonging to those parties. These claims for damages were assigned to Brehm. Two of them appear to have been- assigned to and purchased by him outright for a specific consideration, and the remainder of [754] the claims were conditionally assigned to him. The conditions were as follows: “ Now, I have and do hereby transfer, assign and set over to John M. Brehm all my said claim against said company or against whomsoever it may be because of said damages, hereby fully authorizing and empowering said Brehm to settle or sue on said claim, and recover damages therefor as fully as I have power to do at this time; and said Brehm is to and hereby agrees to pay to me for my said claim an amount equal to whatever he may recover and receive thereon, to be due and payable only after the same comes into the hands of said Brehm, less all costs, expenses, attorney’s fees, and 1 per cent, in addition thereto, in consideration hereof, and of his agreeing to take said claims on the terms herein.” In the assignment, it is stated that on December 6, 1887, the Kansas Construction Company, by its negligence, set and permitted fire to escape from the right-of-way of the Midland Railway Company, thereby burning and destroying property of a certain description and of a stated value. The answer of the railway company was, first, a denial; and, next, that the plaintiff was not the real party in interest and had no capacity to sue; and, third, that the contracts and agreements between him and the parties alleged to have been injured were champertous and contrary to public policy, and that by such agreement the plaintiff had undertaken to prosecute the alleged claims in his own name, and at his own expense, for a part of the proceeds in case of a recovery. The Kansas Construction Company was not served, and did not appear or answer in the case, and no judgment was rendered against it. Brehm recovered upon seven of the claims against the railway company, the total amount of the recovery being $635. It is first contended that Brehm cannot maintain an action upon any of these claims, for the reason that the same do not arise out of contract, and are not assignable. It is said that the parties attempted to assign to Brehm a naked clause of action for a tort, pure and simple. They do not assign to him any property or property right, but simply a cause of action [755] for an alleged wrong which had been done to them. It is urged that it is not the policy of the law to permit the assignment of torts, whereby one undertakes to recover damages for a wrong alleged to have been suffered by another, and that the one who suffers should be willing to vindicate his own wrong, if he conceives himself to be injured. To permit another to speculate on such a cause of action tends unduly to increase litigation and smacks of champerty and maintenance. As the only right which Brehm had to any of the claims was obtained upon assignment and transfer from those who had been injured, he cannot recover on any of them, if such claims are not assignable. It was a principle of the common law that a chose in action or right to a thing not in possession could not be assigned, and that no man could purchase another’s right to a suit, either in whole or in part. This rule has been somewhat modified, and later, courts of equity have recognized and enforced the assignment of ehoses in action arising out of contract. In 2 Story, Eq. Jur., § 1040A, the rule is stated as follows: “So, an assignment of a bare right to file a bill in equity for a fraud committed upon the assignor will be held void, as contrary to public policy, and as savoring of the character of maintenance, of which we shall presently speak. So, a mere right of action for a tort is not, for the like reason, assignable. Indeed, it has been laid down as a general rule that, where an equitable interest is assigned in order to give the assignee a loans standi injudioio in a court of equity, the party assigning such right must have some substantial possession, and some capability of personal enjoyment, and not a mere naked right to overset a local instrument or to maintain a suit.” The general doctrine, both at law and in equity, is, that a right of action for a pure tort is not the subject of assignment. This rule has been changed to some extent by statute, and the provisions with reference to what ehoses in action will survive or abate by the death of either or both of the parties have been held to modify this rule, so that everything which survives and can be transmitted to the executor or administrator of the assignor, in case of death, is assignable. (Smith v. Railroad Co., 28 [756] Barb. 605, and cases cited.) Sections 420 and 421 of our code prescribe what actions may survive to the personal representatives of a party in case of his death, and, if these provisions stood alone, it might, perhaps, be said that the legislature intended to modify the common-law rule so that all rights of action which survive might pass by assignment. Such provisions have been held to have that effect in other states. We have another provision, however, adopted at the same time, which clearly indicates a legislative intent to restrict the assignment of choses in action to those arising out of contract. In § 26 of the code it is provided, that “every action must be prosecuted in the name of the real party in interest, except as otherwise provided in §28; but this section shall not be deemed to authorize the assignment of a thing in action not arising out of contract.” Evidently, this provision recognizes the limitation which existed at common law when the code was adopted, and inferentially, at least, provides that a chose in action arising out of a pure tort is not assignable. To meet the objection that a right of action arising out of torts of this character is not assignable, defendant in error relies upon Stewart v. Balderston, 10 Kas. 131. While some of the language of the opinion in that case might seem to warrant the view taken by defendant in error, it is manifest that the case cannot be regarded as an authority that a right of action arising out of a tort is assignable. The subject-matter of that action was a claim for money wrongfully taken; but as the party injured in such a case can waive the tort and sue as upon an implied contract, (Challiss v. Wylie, 35 Kas. 506), and as there was an implied agreement to pay the money, it was treated as a chose in action arising out of contract, and was therefore assignable. Shortly afterward, the same subject was under consideration, when it was said: “At common law, no chose in action was negotiable or even assignable. In equity, every chose in action, except a tort, was assignable; but it was assignable subject to all equities that might be set up against it. Under our statutes, every chose in action is assignable except a tort, [757] the same as it was in equity. Civil Code, § 26.” (McCrum v. Corby, 11 Kas. 464, 470.) In this view, the defendant in error was not entitled to maintain the action, and hence the judgment of the district court must be reversed. All-the Justices concurring.