Summary
In Graham v. Stewart, 152 Miss. 307, 120 So. 171, 172-73 (1929), the plaintiff Graham was permitted by the trial court to be substituted for the existing plaintiff, Wilder Motor Sales, for reasons that Graham had acquired from Wilder Motor an assignment of an account owed Wilder Motor by the defendant, Stewart. At the time of the substitution allowed by the trial court, Stewart had an existing counterclaim filed against Wilder Motor for an amount in excess of the claim of the account assigned to Graham.
Summary of this case from Hunsaker v. CommonwealthOpinion
No. 27596.
January 21, 1929.
1. SET-OFF AND COUNTERCLAIM. Defendant, after assignee of account was substituted as plaintiff, was not entitled to recover over against him on counterclaim ( Hemingway's Code 1927, sections 510, 2394, 2395).
Where, after defendant in action on account filed a set-off as authorized by Code 1906, sections 2740, 2741 (Hemingway's Code 1927, sections 2394, 2395), plaintiff assigned account to another who was substituted as plaintiff, in accordance with Code 1906, section 717 (Hemingway's Code 1927, section 510), defendant was not entitled to recover over against the substituted plaintiff on his counterclaim, being only entitled to use his offset defensively and not offensively.
2. PARTIES. Assignee of account could not, after defendant in action thereon filed set-off, be substituted as plaintiff over objection ( Hemingway's Code 1927, sections 510, 2394, 2395).
Where defendant in action on account filed a set-off, as authorized by Code 1906, section 2740, 2741 (Hemingway's Code 1927, sections 2394, 2395), in excess of amount sued for, subsequent assignee of account was not entitled to be substituted as plaintiff, under Code 1906, section 717 (Hemingway's Code 1927, section 510), in case of objection by defendant, since on filing of offset defendant at once became a cross plaintiff with rights against plaintiff or cross defendant.
APPEAL from circuit court of Kemper county, HON. J.I. STURDIVANT, Judge.
Wyatt Easterling and S.M. Graham, for appellant.
We submit that the court committed fatal error in instructing the jury that it might find a verdict against the plaintiff in favor of the defendant for the difference between the alleged payments made to W.M. Wilder bankrupt and the account sued for, for the reasons that the plaintiff was suing as assignee of the account and there was no privity or mutuality between the plaintiff and defendant and no judgment could have been rendered against the plaintiff except for cost. See Mellen, Admx., v. Boarman, 13 S. M. 100; Bullard et al. v. Dorsey, 7 S. M. 9; Maury v. Jeffers et al., 4 S. M. 87.
J.H. Daws, for appellee.
The appellant is a substituted plaintiff, and prosecuted the suit as such, and seeking all the way through by his testimony, and by his proof, and by his instructions to avoid judgment against them, and fasten upon the defendant amount sued for plus interest, sec. 496 of Hemingway's 1917 Code provides: "In case of a transfer after suit brought, the action shall be continued in the name of the original party, or the court may allow the person to whom the transfer is made to be substituted in the action. A set-off, or other defense existing at the time or before notice of the assignment shall not be prejudiced thereby." We submit that the case should be affirmed.
Wyatt Easterling and S.M. Graham, in reply for appellant.
Section 496, Hemingway's 1917 Code, quoted by counsel only says that the offset against an assignee with notice is not effected so far as an offset against the debt is concerned but does not say or intend to say that a judgment against an assignee is permitted.
W.M. Wilder, trading as Wilder Motor Sales Company, brought this action in the court of a justice of the peace of Kemper county against appellee on an itemized sworn account to recover the sum of one hundred twenty-eight dollars and forty cents. Appellee filed in the court of the justice of the peace, as provided by section 2740, Code 1906 (section 2394, Hemingway's 1927 Code), a set-off to the action in the form of a sworn itemized account showing payments to the Motor Sales Company, aggregating the sum of one hundred eighty-five dollars and sixty-one cents. There was a trial before the justice of the peace resulting in a judgment against appellee, in favor of the Motor Sales Company, in the sum of ninety-eight dollars and forty cents. From that judgment, appellee appealed to the circuit court. After the appeal to the circuit court, but before the trial of the cause in that court, appellant, by order of the court, was substituted as plaintiff in the case instead of Wilder Motor Sales Company; and after such substitution there was a trial in the circuit court, resulting in a verdict and judgment for appellee against appellant as substituted plaintiff on appellee's offset in the sum of fifty-seven dollars and twenty-one cents, that amount being the difference between the amount sued for, one hundred twenty-eight dollars and forty cents, and appellee's offset, one hundred eighty-five dollars and sixty-one cents. From that judgment, appellant prosecutes this appeal.
Appellant contends that, under the law, no judgment could be rendered against him, as substituted plaintiff, in favor of appellee on the offset or counterclaim of the latter against the Wilder Motor Sales Company.
Section 2741, Code 1906 (section 2385, Hemingway's 1927 Code), provides:
"On the return-day of the summons the justice shall hear and determine the cause if the parties appear; give judgment by default if the defendant fail to appear and contest plaintiff's demand, or judgment of nonsuit against the plaintiff if he fail to prosecute his claim; enter judgment in favor of the defendant where, in case of set-off, it shall appear that there is a balance due him, for the amount of such balance, and issue execution against the goods and chattels, lands and tenements, of the party against whom judgment is rendered, for the amount of the judgment and costs, or costs alone, as the case may require, returnable to a term of the court to be held more than twenty days after the rendition of the judgment, and not more than six months after the issuance of the execution; and the execution may be directed to the proper officer of any county in this state."
Section 717, Code 1906 (section 510, Hemingway's 1927 Code), is in this language:
"The assignee of any chose in action may sue for and recover on the same in his own name if the assignment be in writing. In case of a transfer of interest after suit brought, the action shall be continued in the name of the original party, or the court may allow the person to whom the transfer is made to be substituted in the action. A set-off or other defense existing at the time of or before notice of the assignment, shall not be prejudiced thereby."
The circuit court permitted appellant to be substituted as plaintiff for the Wilder Motor Sales Company upon the representation that he was the owner by assignment from the company of the account, which was the basis of this action. It will be observed that the concluding sentence of the statute last above copies that: "A set-off or other defense existing at the time of or before notice of the assignment shall not be prejudiced thereby." The evidence in the case tended to show that appellee' counterclaim on which he recovered judgment over against appellant was in existence before this action was brought and before the assignment to appellant of the account by the Wilder Motor Sales Company, upon which the action was based. Under the statute, therefore, appellant acquired the account by assignment from the Wilder Motor Sales Company subject to whatever set-off or other defense that existed between the original parties. But did it follow as a result thereof that appellee was entitled to recover over against appellant on his counterclaim? We think not. As against appellant, appellee was only entitled to use his offset defensively, and not offensively; he was not entitled to recover over against appellant, for appellant was not indebted to appellee in any sum whatever. Nor was appellant in a case of this character entitled to be substituted as plaintiff in place of the Wilder Motor Sales Company over the objection of appellee, for, upon filing his offset in the court of the justice of the peace, appellee at once became a cross-plaintiff and Wilder Motor Sales Company a cross-defendant. As cross-plaintiff, appellee had rights against the cross-defendant, Wilder Motor Sales Company, which could not be gotten rid of in that manner.
It follows from these views that the judgment is erroneous.
Reversed and remanded.