Chew v. Brumagen
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80 U.S. 497 (1871)
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U.S. Supreme Court
Chew v. Brumagen, 80 U.S. 13 Wall. 497 497 (1871)
Chew v. Brumagen
80 U.S. (13 Wall.) 497
1. The assignee of a bond and mortgage who by the terms of the assignment holds it as collateral security for the payment of another debt may, under the 111th and 113th sections of the New York Code of Procedure sue, without making his assignor a party to the suit.
2. And if on such a suit the debtor seek to recoup a certain amount from the mortgage debt, and judgment goes accordingly for less than the amount of the same, the original assignor cannot bring suit for any balance. He is concluded by the former proceeding.
The Code of Procedure of the State of New York enacts by its 111th section that:
"Every action must be prosecuted in the name of the real party in interest, except as otherwise provided in section 113."
The exception of this 113th section is that:
"An executor or administrator, a trustee of an express trust, or a person expressly authorized by statute may sue without joining with him the person for whose benefit the action is prosecuted."
And by the same section:
"A trustee of an express trust within the meaning of this
section, shall be construed to include a person with whom or in whose name a contract is made for the benefit of another."
Other sections of the code make provisions which may be referred to. Thus, the 117th enacts that:
"All persons having an interest in the subject matter of the controversy, may be joined as plaintiffs."
The 118th that:
"Any person may be a defendant who has or claims an interest in the controversy adverse to the plaintiff, or who is a necessary party to a complete determination or settlement of the question involved therein."
The 119th enacts that:
"Of the parties to the action, those who are united in interest must join as plaintiffs or defendants, but if the consent of anyone who should have joined as plaintiff cannot be obtained, he may be made a defendant."
This Code of Procedure being the law of New York, a certain Walker sold to one Chew a farm in New Jersey, taking Chew's bond for $3,500 and a mortgage on the farm sold.
Soon after the bond was given, Walker, the obligee, assigned the bond and mortgage to one Wood as collateral security for the payment of $1,700, and afterwards by another instrument of writing declared that the assignee held them as collateral security for the payment of $200 more. Wood, having thus become the assignee, brought suit on the bond in the supreme court of New York in 1853 against Chew, the obligor, and joined Walker as a defendant, he having refused to join as plaintiff, but process was not served upon Walker, nor did he appear. After his death, which occurred before the trial, on affidavit of his administratrix that he had died, the court ordered that the action should be continued against her as administratrix, but it did not appear that the order was ever served upon her. Chew, however, pleaded fraud in the sale of the farm, and claimed to recoup the damages he had sustained in consequence of the fraud,
and the case went to trial upon the issue tendered by this plea. On the trial, the jury found for Wood the sum of $2,091, for which judgment was given, and which Chew immediately paid.
Pending the suit, however, Wood assigned the bond and mortgage to one Braisted, and, two days after the judgment which had been recovered was paid, Braisted and Walker's administratrix joined in assigning them to a certain Brumagen. A bill was then filed in chancery in New Jersey, at the suit of Brumagen, seeking to foreclose the mortgage, and Chew's administratrix set up in defense the suit in the supreme court of New York, the judgment therein and the payment of the judgment, asserting that the debt which the mortgage was given to secure was thereby satisfied, and consequently that the mortgage, which was only a security for the debt, had also been satisfied. But it was decided by the chancellor that the judgment in the supreme court of New York was no defense to the bill beyond the amount actually recovered by Wood and paid to him; that inasmuch as neither Walker nor his administratrix was served with process in that suit or appeared therein, the assignee was not concluded by the judgment, and the ruling of the chancellor was affirmed in the court of errors and appeals. From that decree the case was brought here.