14 Colo. 125 | Colo. | 1890
There are in this case forty-three errors assigned upon the record; but a large part of' them, if not the majority, arise out of, and are ancillary to, one im-' portant question, viz., who were the proper parties, or who was the proper party, to prosecute the suit?
In instituting the suit, William P. Linn was made a plaintiff with L. C. Rockwell, and so remained, without .a challenge or objection, so far as is disclosed by the record of the proceedings had in the district court in the first instance. It is true that the only adjudication in that court was upon a general demurrer to the complaint; but, under our code of practice, the objection that the plaintiff had no legal capacity to sue, or that there was .a defect or misjoinder of parties plaintiff or defendant, ■could have been made and determined upon demurrer. ‘Code, § 55, p. 18. This was not done. The question in regard to Linn’s being a proper party does not appear to have been raised until after the disposition of the case in this court on writ of error, and the death of Linn. Upon its being remanded for further proceedings, the question
But there ai’ises a difficulty; for it is averred that Rockwell was improperly a plaintiff, having no legal intei’est. The same proposition had been presented to the court by motion, and had, after argument, been overruled. In a subsequent paragraph it was averred that the executors were not properly plaintiffs; that the failure to be substituted in time, and the application of Rockwell to be allowed to prosecute as sole plaintiff, and the order of the court allowing it, worked a retraxit or a discontinuance on the part of the executors, — defendants claiming, in effect, by their answer, that the cause could not proceed at all. Such a position was clearly untenable,— certainly anomalous,— and an attempt to abate the suit first as to one plaintiff, then as to the other, piecemeal. At common law the pleader was required, in a plea in abatement, not only to show that the parties were not the proper ones, but to show who were; in the language
The contract executed between Linn and defendants had been assigned to Burrell, and by Burrell to Rockwell. Whether it could have been by its own terms legally assigned will be discussed hereafter. ■ It was a question that could only be determined upon the trial. Having been assigned for an unquestioned valuable consideration, he had, unquestionably, such an interest in the subject-matter of the controversy as would make him a proper party, if not an indispensable one, regardless of the character of the assignment, as to whether it was absolute, so as to pass the title, or qualified, as being assigned as collateral security. But, as to the executors, the determination. of the question as to the character of the assignment becomes important, in fact determines the question of the right to become parties.
In the third paragraph of the complaint it is alleged that Linn assigned to Burrell his right, title and interest in and to the agreement as security for the loan of $2,100, etc.; that Burrell afterwards assigned his right, title and interest to said contract to Rockwell, “who now holds said contract as collateral security for money theretofore loaned by him to said William P. Linn.” In the fifteenth paragraph of the answer it is said: “And defendants further aver, upon information and belief, that the supposed assignment of said contract to said plaintiff was only for the purpose of securing the pay
In all transactions of this kind the ultimate object of the inquiry is, what was the understanding and intention of the parties? And when ascertained such intention must control. Where the transaction imports nothing more than giving a security, without a sale or change of title to the property, the law makes it a pledge. In Jones on Pledges and Collateral Securities, § 17, it is said: “ An assignment of securities by a debtor to his creditor is presumed to be as collateral security, and not in payment of the debt, in the absence of evidence tending to show an intention that the securities should be applied in satisfaction of the debt, in whole or in part.” In section 15: “A bill of sale, absolute in terms, *' * * intended only as collateral security, is a pledge, if accompanied by a delivery of the property to the creditor.” See Walker v. Staples, 5 Allen, 34; Whitaker v. Sumner, 20 Pick. 399.' “ That the assignment is absolute in form is of no consequence as regards the question of intention.” Jones, Pledges, § 17. A transfer, absolute upon its face, “ may be shown by parol evidence to have been executed by way of security, and therefore to be a pledge.” Id. § 15; Eastman v. Avery, 23 Me. 248; Shaw v. Wilshire, 65 Me. 485. See, also, in equity, Morgan v. Dod, 3 Colo. 551.
The fact stated by Bockwell, that he afterwards advanced a larger sum of money, and was the real party in interest, is unimportant in determining the character of the transaction, so long as it is shown that the nature
Collateral security is defined by Bou vier as “a separate obligation attached to another contract to guaranty its performance;” by Webster, as “security for the performance of covenants, or the payment of money, besides the principal security;” by Worcester, as “security for the fulfillment of a contract or a pecuniary obligation in addition to the principal security.” In Holliday v. Holgate, L. R. 3 Exch. 299, it was said by Mr. Justice Willes: “ There are three kinds of security: The first is simple lien; the second, a mortgage passing a property out and out; the third, a security intermediate between a lien and a mortgage, viz., a pledge where, by contract, a deposit of goods is made a security for a debt, and the right to the property vests in the pledgee so far as it is necessary to secure the debt.”
In all cases of a pledge as collateral security, the general property remains in the debtor. The creditor has only a special property,— alien,— a right to retain his-security until the payment of the debt. When the debt is paid the security reverts. If default is made the assignee can proceed to dispose of the security, discharge his own debt, and the balance, if any, goes to the assignor or debtor. Jones, Chat. Mortg. § 4; Jones v. Baldwin, 12 Rick. 315; Robertson v. Wilcox, 36 Conn. 426; Conner v. Carpenter, 28 Vt. 237; Trust Co. v. Rigdon, 93 Ill. 458. It follows that the transaction, in the first instance, having been one of pledge as collateral security, and
We do not intend to be understood as saying that either Linn or his executors were absolutely indispensable parties, and that Rockwell could not have prosecuted as sole plaintiff, but that Linn, and after him his executors, had a legal right to be parties at their own election. They could not be precluded at the option of defendants, nor could their right to be parties be extinguished by the act of Rockwell in asking to be ^nade sole plaintiff, and the action of the court in making him so. The ultimate effect of making the executors plaintiffs may have been disastrous to defendants, by placing them under a disability in establishing a defense. They were unfortunate in not being able to make their proof by evidence aside from their own; but this grew out of a rule of evidence, not out of the fact of the executors having been made parties. Although such was the result of their having been made parties, it could in no wise affect or determine their right to be such and to prosecute the suit.
This, in effect, disposes of the question raised in regard to the assignment of the contract by Linn; defendants contending that by its terms it prevented any legal transfer, and that Rockwell took nothing by it. The legal effect of the provision in the contract that it should not be assigned must be construed to be that the title to the chose in action should not pass to another so as to prevent defendants from asserting any equity or defense
The evidence offered by defendants, and excluded by the court, was not taken out of the general rule by any exceptions to it. After a careful examination of the testimony offered and excluded, we cannot say that the court erred, or extended the rule beyond its proper limits; and the rule is a just and salutary one. Finding that the executors were properly made parties, and the only evidence offered in support of many of the averments in the answer was that of the defendants, which was properly excluded, disposes of many of the supposed errors. The defense of misrepresentations on the part of Linn in regard to title, rights, and development of the property sold, to induce the purchase, was untenable — First, from the character of the conveyance made by Linn; second, from the conduct of defendants after the purchase, which resulted, in law, in affirmance and ratification.
The other and remaining errors assigned were predicated upon the supposed fact that the executors were erroneously made parties, and defendants erroneously precluded from making the proof of the alleged new contract, and hence are disposed of in our view of the case. The defendants having failed to establish their defense by competent testimony, in fact having been prevented from putting in any testimony by reason of its character to support the averments in the answer, the court below was warranted in finding that the matters relied upon had been considered and determined by this court on error in the former case, and were res adjudicata, and in so regarding and treating them. Although, as before stated, the defendants, by the course pursued, and the
Pattison, 0., concurs. Richmond, 0., dissents.
Por the reasons stated in the foregoing opinion the judgment is affirmed.
Affirmed.