J. C. Bohart Commission Co. v. Buckingham

— 662 — The opinión of the court was delivered by Greene, J. : In this state every action must be brought in the name of the real party in interest, except those provided for in section 28 of the code of civil procedure. (Gen. Stat. 1897, ch. 95, §22; Gen. Stat. 1899, §4272.) It is not claimed that this action was prosecuted by plaintiff in error under any of the provisions of the latter section, nor is it claimed that the plaintiff below was, at the time this action was comménced, the owner of the notes sued upon; but its contention is that it is the agent of the owners for suit and collection and in the possession of and the indorser of the notes, and, as such indorser, has a beneficial interest therein and may therefore maintain an action in its own name. We think the plaintiff in error had no beneficial interest in the notes. The title thereto and the right to the proceeds thereof passed to Tootle, Lemon & Co. upon the indorsement and delivery by the payee, and Tootle, Lemon & Co. are entitled to the entire proceeds of these notes, and not the plaintiff in error. The plaintiff, by its pleading and statement, places the question of the ownership of the notes beyond controversy in Tootle, Lemon & Co. At the time this action was' commenced, by the admitted statement of of counsel, the plaintiff in error was the holder of the notes for collection. The question, then, is, Can an agent who holds paper for suit and collection only bring an action in his own name? We think not. He is not the real party in interest and has no beneficial interest in the paper. The case of Armour Bros. Banking Co. v. Riley Co. Bank, 30 Kan. 164, 1 Pac. 506, was an action on a sight-draft, indorsed as follows : “Pay W. H.Wynants, — 663 — Esq., cashier, or order, for account of the Riley County Bank, of Manhattan, Kan. J. K. Win chip, Cashier.” The court said: .“This is a restrictive indorsement, and that it operated to transfer the draft to the plaintiff only as agent for purposes of collection cannot be doubted.” It was held that the plaintiff had no property in -the draft and could not recover on it. In Ketcham v. Commission Co., 57 Kan. 773, 48 Pac. 29, the court said : “Many authorities are cited to the effect that the indorsement of a negotiable promissory note, secured by mortgage, passes the title to the mortgage as well. This seems to be a well-settled rule of law. . . . In the absence of any special agreement, it has been held that the payee who has indorsed a note to a bank as collateral security cannot maintain replevin for property covered by a chattel mortgage securing the nove so indorsed; that the right of action is in the bank.” The case of Cavanaugh v. Brodboll, 40 Neb. 875, 59 N. W. 517, approved by this court in Ketcham v. Commission Co., supra, was an action similar to the one at bar, and the court held : “The payee of certain notes secured by a chattel mortgage indorsed and delivered the same to a bank as security for an indebtedness owing by him to it. During the time the bank so held said notes and chattel mortgage the said payee brought against a subsequent mortgagee of said, property, who had taken possession thereof, an action of replevin, basing his right to the possession of said property on the notes and mortgages he had assigned to the bank. ' Held, (l)that the indorsement and delivery of the note to the bank operated as an assignment to it of the mortgage which the notes were given to secure; (2) that said payee at the time he brought this action was not entitled to the immediate possession of the mortgaged — 664 — property, and that his action was properly dismissed.” In Hays v. Hathorn et al., 74 N. Y. 486, it was held “that, to entitle a party to maintain an action upon a promissory note, he must be the legal owner and have the right of possession of the instrument.” In Sherwood v. Roys, 14 Pick. (Mass.) 172, the court said -that “a person holding a promissory note as a trustee may bring an action upon it in his own name; but a person holding a note as a mere depositary and agent must bring an action upon it in the name of his principal.” Pomeroy, in Remedies and Remedial Rights, 1st ed., sections 132 and 133, states the principle thus: “It is now settled by a great preponderance of authority, although there is some conflict, that if the assignment, whether written or verbal, of any thing in action is absolute in its terms, so that by virtue thereof the entire apparent legal title vests in the assignee, any contemporaneous, collateral agreement by virtue of which he is to receive a part only of the proceeds, and is to account to the assignor or other person for the residue, or even is to thus account for the whole proceeds, or by virtue of which the absolute transfer is made conditional upon the fact of recovery, or by which his title is in any other similar manner partial or conditional, does not render him any the less the real party in interest. “The mere parting with the possession of a note does not, however, constitute an assignment thereof, and the owner is the proper party to sue, although the instrument is in the hands of another person with whom it has been deposited.” In speaking of “indorsement for collection,” Daniel, in Negotiable Instruments,4th ed., section 698d, says: “Such an indorsement merely makes the indorsee agent for the indorser to collect the amount due,.but — 665 — it has been held does not invest him with such title as to make him a proper party plaintiff in a suit.” Authorities might be multiplied upon the proposition that one holding a negotiable promissory note for collection is not the owner, has no title to it, and cannot maintain an action in his own name. The plaintiff in this case was a mere agent holding the note for collection, the proceeds of. which it was bound to deliver over to its principals, Tootle, Lemon & Co., and cannot in this case maintain an action in its own name on the notes. To recover upon them it must sue in the name of its principals. This brings us to the second alleged error. Did the court commit prejudicial error, as against plaintiff below, in overruling the applications of E. B. Curtis and Tootle, Lemon & Co. to intervene in this action? We think not. The plaintiff in error, having no'right to bring this suit, having no standing in court, cannot complain of the refusal of the court to permit other parties who claim to have an interest in the subject-matter of the litigation to intervene in the case. Another question is presented in this case. The judgment of the court below was for the defendant for the return of the cattle, or, in case a return could not be had, for the value thereof, to wit, $6000. It was alleged in the petition of plaintiff in error that these cattle were worth thirty dollars per head, and that there were 200 head of them ; however, the sheriff in taking possession of the cattle, under his writ of replevin, only received 199, and those were delivered to plaintiff' in error. It therefore seems that the judgment of the court below should have been for the defendant for the return of 199 head of cattle, or their value, thirty dollars per head, and that the judgment which was i — 666 — rendered in the court below was for an amount thirty dollars greater than it should have been. It is therefore ordered that the judgment of the court below be modified in this particular, and, as thus modified, is affirmed.