87 Iowa 628 | Iowa | 1893
— The case, as presented by the pleadings, is as follows: April 1, 1885, M. H. King began suit in the circuit court of Madison county against the Des Moines, Osceola & Southern Railway Company to enforce a mechanic’s lien for $15,000, and for the. appointment of a receiver. April 9, 1885, King executed to R. T. Wilson & Co. the following assignment:
“I, M. H. King, plaintiff in the above-entitled cause, in consideration of the sum of nine thousand, three hundred dollars to' me in hand paid by R. T. Wilson & Co., of the city of New York, do hereby sell, assign, and transfer to said R. T. Wilson & Co. all my right, title, interest, and claim to a mechanic’s lien as set forth and claimed by me in the above-entitled suit, and in the petition and amended petition filed therein; and I do hereby authorize said R. T. Wilson & Co. to prosecute said suit in my name, or to have their own names substituted as plaintiffs in said cause, as they may elect. I further authorize said R. T. Wilson & Co. to prosecute my said claim and lien to judgment for their own use and benefit, exclusively, in any court they may see fit, and to cause execution to be issued therefor, and collect the same for their sole use and benefit, either in my name, or in the name of the firm ■of R. T. Wilson & Co., as they may elect.”
At the same time Wilson & Co. executed to King the following: “It is understood that the assignment made by M. H. King to R. T. Wilson & Co., of mechanic’s lien claim against Des Moines, Osceola & Southern Railway Company, does not include subsidy
R. T. Wilson, the defendant in this action, was the principal member of said firm of R. T. Wilson & Co. February 8, 1887, King obtained a judgment by default, in the district court of Clarke county, against said railway company, for six thousand, eight hundred and forty-seven dollars and sixty-nine cents. This judgment is based upon a part of the claim involved in the Madison county suit, and which, as appears on the face of the assignment above referred to, was by it transferred to Wilson & Co. In the same month King assigned the .Clarke county judgment to the plaintiff herein, a nonresident, who began this action. R. T* Wilson, as the plaintiff claims, was the owner of one thousand, five hundred shares of stock in said railway company, of one hundred dollars each, for which he was indebted to. said company, and an execution having been issued against the company, and returned unsatisfied, this action was brought to recover of the defendant, as a stockholder of said company, under the provisions of the statute. The defendant, for answer to plaintiff’s claim, pleaded: First. A general denial. Second. Ownership of the claim sued upon, in himself, by virtue of the assignment heretofore set out. Third. That, after King assigned the claim and lien, Wilson & Co. filed a pleading in the Madison county suit, setting out the assignment, and their ownership of the claim thereunder; that they moved the court to substitute them as plaintiffs; that the court found that King had sold the claim to Wilson & Co., and sustained their motion. This is claimed to have been an adjudication that Wilson & Co. owned the claim. A demurrer was sustained -to the second, defense. In a reply the plaintiff denied that King assigned his entire claim.
The defendant moved to strike the reply from the files because the matter therein constituted a new cause of action, in equity, and not the subject of amendment, which motion was overruled, and he excepted. Thereafter the defendant demurred to the reply, because the facts alleged did not constitute fraud; that the facts pleaded were not admissible to contradict the written assignment; that his claim is inconsistent with the one made in his original petition; that the matter had been adjudicated in the manner heretofore stated. The demurrer was overruled, and the defendant excepted. The defendant amended his answer, alleging that the stock in the railway company, held by Wilson & Co., was so held by them as trustees only; that they were induced to take said stock by reason of false and fraudulent statements made to them by the officers of the railway company as to its earnings; and that when they discovered the falsity of such statements the railway company was insolvent, and in the hands of a receiver, and hence the defendant was not liable for unpaid’ subscriptions on said stock. He also alleged that the stock upon which it was sought to render him liable was issued in excess of the amount authorized by the articles of incorporation of the company, and void. This amendment the plaintiff denied.
• On the former appeal it was held that the written assignment in controversy was “an assignment of all his (King’s) interest, made in the most positive form. * * * If the rule contended for by the appellee is to prevail, then, merely by way of construing the •contract, a radical change is made in its language. Instead of an assignment of all, as in terms expressed, it is made an assignment of part, and that without a word in the writing having a remote reference to such a purpose.” 77 Iowa, 605. The appellee’s contention is that in fact the claim assigned is made up of two separate claims; hence fraud may be pleaded as to one and the assignment held good as to the other. The difficulty in this case is that the claim, so far as appears from the assignment, is one and indivisible. There is nothing in the assignment, or the paper which is a part of it, to indicate or suggest that more than one claim was assigned, or that the subject-matter of the claim was based upon, or grew out of, two separate contracts. If the appellee’s contention is correct, then, by pleading fraud to an assignment, as to a part of the claim transferred by it, and treating the assignment valid as to the balance of the claim therein mentioned, it would operate, as it seems to us, to vary and contradict the assignment, as it appears on its face to assign, but one claim. If the fraud alleged does not avoid the whole assignment, which on its face purports to carry an indivisible claim, then, it would seem to follow, it must result in changing the legal effect of the instrument in part, which we think can not be done in an action of this kind. It is, in effect, accomplishing a reformation
In accordance with the views above expressed, the cause is reversed with direction to the district court to transfer the same to the equity calendar. Bevebsed.