| U.S. Circuit Court for the District of Northern Iowa | Apr 21, 1897
This is an action in which the plaintiff seeks to recover damages against the defendant railroad company for alleged overcharges upon interstate shipments of freight, the right of action being based upon the provisions of the interstate commerce act. The first count in the petition seeks to recover damages accruing to the plaintiff upon shipments made by himself, and the remaining counts are founded upon claims accruing to third parties, and by them assigned to the plaintiff. The defendant company demurs to the second and subsequent counts, upon the ground that claims for overcharges, in violation of the provisions of the interstate commerce act, are not assignable, and that the language of the act is such that the right to sue for damages is confined to the person or corporation suffering the damages in the first instance.
It is not questioned that at the common law a ehose in action, of the nature of those counted on in this case, is not assignable, so as to enable the assignee to maintain an action at law thereon in his own name; and therefore, to confer the right of action upon an assignee, it must appear that the right is conferred by some statute or rule of law, applicable to the particular case. Thus, in Glenn v. Marbury, 145 U.S. 499" court="SCOTUS" date_filed="1892-05-16" href="https://app.midpage.ai/document/glenn-v-marbury-93401?utm_source=webapp" opinion_id="93401">145 U. S. 499-509, 12 Sup. Ct. 914, 918, it is said:
“The right which the express company acquired by the defendant’s subscription to its capital stock was only a chose in action. It passed by the deed of September 20, 1866, to the trustees Blair, Kelly, and O’Donnell, but subject to the condition that a ehose in action is not assignable, so as to authorize the*79 assignee to sue at law, in his own name, unless the right so to do is given by a statute, or by settled law, in the jurisdiction where suit is brought. This is the well-established rule of the common law, and the common law touching the subject governs in the District of Columbia.”
On behalf of plaintiff it is claimed that it is the settled law of the state of Iowa that choses in action are assignable so as to confer a right of action in the name of the assignee, and such seems to be the effect of the rulings of the supreme court of the state. Weire v. Davenport, 11 Iowa, 49" court="Iowa" date_filed="1860-10-06" href="https://app.midpage.ai/document/weire-v-city-of-davenport-7092088?utm_source=webapp" opinion_id="7092088">11 Iowa, 49; Vimont v. Railway Co., 64 Iowa, 513" court="Iowa" date_filed="1884-10-21" href="https://app.midpage.ai/document/vimont-v-chicago--northwestern-railway-co-7101164?utm_source=webapp" opinion_id="7101164">64 Iowa, 513, 17 37. W. 31, and 21 37. W. 9; Everett v. Railway Co., 73 Iowa, 442" court="Iowa" date_filed="1887-12-14" href="https://app.midpage.ai/document/everett-v-central-iowa-ry-co-7103129?utm_source=webapp" opinion_id="7103129">73 Iowa, 442, 35 37. W. 609.
-On behalf of the defendant company it is claimed that the causes of action set forth in the counts of the petition that are demurred to arise solely under the provisions of the interstate commerce act; that jurisdiction to entertain the same is confined to the courts of the United States; that as the cause of action is created by the act of congress, and certain remedies are therein provided for, no other proceeding can be maintained, save those named in the statute; that these are limited, by the express provisions of section 9 of the act, to the right to make complaint to the commission or to bring suit for damages on behalf of the party injured; that neither the interstate act nor the statutes of the United States provide for or authorize the assignment of claims for damages under the interstate commerce act; and that, as congress has legislated upon the mode of enforcing claims for damages arising under that act, that fact prevents recourse to the provisions of state laws upon that subject.
This court has held in this and other similar cases now pending that the state courts have not concurrent jurisdiction with the courts of the United States over actions for damages, based upon the provisions of sections 8 and 9 of the interstate commerce act. See Van Patten v. Railway Co., 74 F. 981" court="None" date_filed="1896-06-10" href="https://app.midpage.ai/document/van-patten-v-chicago-m--st-p-r-9307381?utm_source=webapp" opinion_id="9307381">74 Fed. 981. In that case it was held that, as the suits were expressly based upon the cause of action created by section 8 of the act, the only remedies available were those provided in section 9, and these were limited to a right to make complaint to the commission, or to bring suit for damages in a district or circuit court of the United States; and the question now presented for determination is whether a claim for damages arising under the act can be assigned to a third party, so as to authorize him to maintain an action thereon in his own name. This question presents two matters for consideration, the first one being whether a claim for damages based upon the provisions of section 8 of the interstate commerce act is assignable, so as to transfer the beneficial interest therein to the assignee; and, second, if the claim is assignable, can the assignee maintain an action at law thereon in his own name?
If the chose in action is of such a character that it can be assigned, so as to- transfer the beneficial interest therein to the assignee, then the question whether suit thereon can be maintained in the name of the assignee, or must be brought, in the name of the assignor for the benefit of the assignee, is merely a question of the mode of procedure, determinable by the law of the forum; but the question whether the chose in action can be assigned, so as to confer any right or interest
“Whether an assignee of a chose in action shall sue in his own name, "or that of his assignor, is a technical question of mere process, and determinable by the law of the forum; but whether the foreign assignment, on which the plaintiff claims, is valid at all, or whether it is valid against the defendant, goes to the merits, and must be decided by the law in which the case has its legal seat. * * * It is to be noted, however, as an important circumstance, that the same claim may sometimes be a mere matter of process, and so determinable by the law of the forum, and sometimes a matter of substance, going to the merits, and therefore determinable by the law of the contract.”
The question, therefore, is whether claims for damages based upon section 8 of the interstate commerce act, under the provisions of the laws of the United States, are assignable. It will be remembered that the court is considering now only the point whether the property interests represented by the assigned claims are assignable, so- as to convey the beneficial interest therein to the assignee; and this does not involve the question whether suit thereon can be maintained in the name of the assignee. The choses in action sued on in this case do not grow out of- purely personal torts, which at the common law would lapse at the death of the party injured, but constitute property rights, which would pass to the legal representative upon the death of the original owner thereof.
In regard to choses in action' of the latter character, the general rule is, as I understand it, that the beneficial interest therein may be lawfully assigned to another, subject to the exception that, in case the substance of the claim be such that public policy forbids the assignment thereof, then it is not assignable; and of course, if there be an express statutory prohibition against the assignment of a given class of claims, that would except that class from the operation of the general rule. In Traer v. Clews, 115 U.S. 528" court="SCOTUS" date_filed="1885-11-23" href="https://app.midpage.ai/document/traer-v-clews-91475?utm_source=webapp" opinion_id="91475">115 U. S. 528, 6 Sup. Ct. 155, Henry Clews brought an action at law to recover, as damages, the value of 50 shares of the capital stock of the Cedar Eapids Northwestern Construction Company, and the dividends which had been declared thereon. Clews was the original owner of the stock, having subscribed therefor in 1870. In November, 1874, Clews was adjudged a bankrupt, and his property, including the named shares of stock, was assigned to Tappan, trustee of his estate. Subsequently Traer purchased the stock and the dividends declared thereon from the assignee, under circumstances which rendered the purchase a fraud upon the assignee and the rights represented by him. In December, 1877, Tappan, the
In this case we are not dealing with executory contracts, but with a claim for damages, and the rule applicable thereto is to be found in the principle recogmzed by the supreme court in Traer v. Clews, 115 U.S. 528" court="SCOTUS" date_filed="1885-11-23" href="https://app.midpage.ai/document/traer-v-clews-91475?utm_source=webapp" opinion_id="91475">115 U. S. 528, 6 Sup. Ct. 155, already cited, in which it is held a mere naked right to bring a suit is not assignable, but a right of property is assignable. The claims declared on are based upon the alleged fact that the defendant company charged the shippers exorbitant or unreasonable rates upon the freight by them shipped on defendant’s road, and in reality the action is brought to recover back the sums of money, which, it is claimed, the shippers were compelled to pay, over and above a reasonable rate. To illustrate the point, suppose it appeared that there were two shippers who had been overcharged upon certain shipments of freight, the amount of the exorbitant charge in each case amounting to flOO; and it appeared that the one sMpper had paid the overcharge in money, and the other had paid the
It is further earnestly contended on behalf of the defendant that, even though the claims in question might be held assignable under the general rules of law governing that question, the terms and provisions of the sections of the interstate commerce act, creating the right of action, are such as to show that it was the intent of congress to limit the right to the remedies provided for in the act to the party originally injured, and it must therefore be held that the act prohibits the assignment of claims for damages based upon section 8 of the
Since the adoption of the act of March 2, 1889, amendatory of the interstate commerce act, the commission holds that, upon proper application and proof, it is the duty of the commission to pass upon the question of damages for past violations of the law. Macloon v. Railway Co., 5 Interstate Commerce Com. R. 84-95. If, therefore, a property right in the nature of a claim for illegal overcharges is owned by A., he being the original shipper, he has the right, as the party in interest, to seek reparation by invoking the aid of the commission, or he may sue the carrier directly in an action at law. This claim, being in the nature of a property right, A. can lawfully assign to B.; and, upon becoming the beneficial owner thereof, no reason exists why the remedies provided for in the act are not open to B., as the real and beneficial owner of the claim. The assignment of the claim defeats no defense existing thereto, nor does it in any way impose any greater burden upon the carrier in meeting the same; and there appears no good reason why a person who holds the beneficial interest in the claim for damages may not invoke either of the remedies provided for by section 9 of the interstate commerce act.
But it is further urged that the use of the words “in his or their own behalf,” in section 9, shows that it was the intent of congress to limit the right to institute suits for damages solely to the persons to whom the damages originally accrued. There is plausibility in the argument, but upon consideration of the provisions of the act, taken as a whole, it would seem more likely that these words were used to mark the distinction between the two remedies provided for by the act, the one being the right to make complaint to the- commission, thus calling into action the powers and duties imposed upon the board of commissioners, and the other being the right to bring an action at law, in his or their behalf, for the recovery of the damages. In the one case the party seeking relief must apply to the board of commissioners, and it is the board which calls the carrier to account. In that case the shipper or person injured cannot, in his own name or behalf, call the carrier to account by a direct proceeding, but must invoke the action of the commission. If, however, the shipper prefers to seek damages only, then, in his own behalf, and without the aid of the commission, he can sue the carrier in an action at law. In the
It is also claimed in argument that the assignability of claims for damages, based upon section 8 of the interstate commerce act, should be denied, upon the ground that the same savors of maintenance. If the assignment carried only a mere light to bring an action, and did not convey a right of property, the argument would have force, because, as is said by the supreme court in Traer v. Clews, supra:
“The rule is that an assignment of a mere right to file a bill in equity for fraud committed upon the assignor will be void, as contrary to public policy, and savoring of maintenance. But, when property is conveyed, the fact that the grantee may be compelled to bring a suit to enforce his right to the property does not render the conveyance void.”
The conclusion reached upon this question of the assignability of claims of the character of those declared on is that such claims constitute property rights; that, as such, they can be assigned so as to convey the beneficial interest therein to the assignee; and that the assignment thereof is not prohibited by any of the provisions of the interstate commerce act, nor is it forbidden by any considerations of public policy.
The claims being assignable, and having been duly transferred to the plaintiff, the next point presented by the demurrer is whether suit thereon at law can be maintained in the name of the assignee. If the rule on this question in force in the courts of the state of Iowa is applicable, there can be no doubt as to the right of the assignee to maintain the action at law in his own name. Code Iowa, § 2543, expressly provides that all suits must be brought in the name of the real party in interest, and the uniform construction of the section has been to the effect that the assignee of a chose in action is the proper party plaintiff, even though the assignment is merely verbal. Green v. Marble, 37 Iowa, 95" court="Iowa" date_filed="1873-12-15" href="https://app.midpage.ai/document/green-v-marble-7095712?utm_source=webapp" opinion_id="7095712">37 Iowa, 95. As already stated, the supreme court, in Pritchard v. Norton, 106 U.S. 124" court="SCOTUS" date_filed="1882-11-13" href="https://app.midpage.ai/document/pritchard-v-norton-90656?utm_source=webapp" opinion_id="90656">106 U. S. 124-130,1 Sup. Ct. 102,106, holds that “whether an assignee of a chose in action shall sue in his own name or that of his assignor is a technical question of mere process, and determinable by the law of the forum”; and, if the rule thus given is applicable to this case, it settles the point under consideration. On behalf of defendant it is urged that this general rule does not apply to actions based upon the provisions of the interstate commerce act, which creates alike the cause and right of action, and that such actions must be excepted out from the operation of sections 721 and 914 of the Bevised Statutes of the United States, which enact that the laws of the several states, except where the constitution, laws, or treaties of the United States otherwise require, shall be regarded as rules of decision, and that in law actions the practice, pleadings, and modes of proceeding in the several states shall be followed as near as may be
The sole difference now contended for is that, upon the claims assigned, the action-should be in the name of the original owner of the claim, for the benefit of the present plaintiff, instead of being, as it now is, in the name of the assignee, as the real party in interest. The form of the action in this particular does not in the least affect the merits of the controversy, and there is no sufficient reason shown justifying the court in holding that the merits involved in these claims are of such a nature that they form an exception to the general rule that an action at law, under the settled law of Iowa, can be maintained thereon in the name of the assignee, the claims being of the nature of property rights. The demurrer is overruled.