authorize the assignment of a thing in action not arising out of contract," in New York, Indiana, Kansas, Missouri, Wisconsin, Florida, South Carolina, Kentucky, Oregon, Nevada, Dacota, North Carolina, Washington, and Montana. It was sometimes said that at the common law a thing in action, not negotiable, could not be assigned; but the true meaning of the rule was merely this, that the assignee could not bring an action upon it in his own name. Courts of law had long recognized the essential validity of such assignment in a large class of cases, by permitting the assignee, who sued in the name of his assignor, to have entire control of the action, and by treating him as the only person immediately interested in the recovery. Indeed, the assignment gave to the assignee every element and right of property in the demand transferred, except the single one of suing upon it in his own name it was regarded as assets in his hands and in those of his personal representatives; his rights were completely protected against the interference of the assignor with an action brought in the latter's name. It is true, the property derived from the assignment was said to be equitable, and not legal; but this distinetion did not lessen the intrinsic, essential nature of the ownership. It would seem that the property of the assignee is now strictly legal, although the question does not require any solution in this work.

§ 125. One effect- and perhaps the principal effect of this statutory provision — is, that all assignees of things in action which are assignable may sue upon them in their own names, and are no longer obliged to sue in the names of the original assignors. It is not strictly correct to say that the provision itself renders any thing in action assignable, that it creates any attribute of assignability; but, for the purpose of defeating such possible interpretation, the second clause was added in many of the codes. This limiting clause, however, is only negative in its form and meaning. It merely forbids a certain construction to be placed upon the preceding language. It does not say that no thing in action is assignable unless it arises out of contract. The

1 This provision only applies to actions" as defined in the code, and not to special proceedings. The proceeding to enforce a mechanic's lien, in pursuance of certain special statutes in New York, is

not an action; and the original holder of the lien who had assigned it, is the proper party to institute the proceeding for the benefit of his assignee. Hallahan v. Herbert, 57 N. Y. 409.

rules governing this quality of things in action are found in other provisions of the law, and not in this section. It will be seen in the sequel that a large class of things in action not arising out of contract, but which arise out of torts to property, may be assigned, and that the assignee may, therefore, bring an action upon them in his own name. It is plain, however, that a full discussion of this section requires an exhaustive examination of the question, What things in action may be assigned? And this examination will be made in the next succeeding section of the present chapter.

§ 126. The immediate and in some respects the most im- · portant consequence of the rule that "every action must be prosecuted in the name of the real party in interest," is this: wherever a thing in action is assignable, the assignee thereof must sue upon it in his own name. I shall therefore, in the first place, discuss this result, and ascertain the extent to which it has been carried, and the cases to which it has been applied. It is abundantly settled that when a thing in action, transferable by the law, is absolutely assigned, so that the entire ownership passes to the assignee without condition or reservation, and the legal title is fully vested in him, he is the real party in interest, and may sue upon it in his own name, and is, in fact, the only proper party to bring the action, — as in the case of a claim for the use and occupation of land thus assigned;1 a partnership demand transferred by the other partners to one member of the firm ; 2 a delivery bond taken by a constable for the delivering up of property which he had seized on execution and transferred to the plaintiff in the action; the right of action to recover damages for a breach of a covenant of seisin in a deed of conveyance assigned by the grantee; a claim for borrowed money. It was held in Missouri that the assignee of a thing in action arising out of contract must sue in his own name, although there was no specific statutory provi1 Mills v. Murry, 1 Neb. 327, and a and see Moorman v. Collier, 32 Iowa, daim of damages for waste against a tenWhere a bond is taken in an action ant or subtenant in favor of the rever- by an officer for the security of any parsioner, and by him assigned to the plain- ticular person, that person is the real tiff. Rutherford v. Aiken, 3 N. Y. Sup. party in interest. Ct. 60.

Canefox Anderson, 22 Mo. 347. A non-negotiable note payable in work, Schnier v. Fay, 12 Kans. 184; Williams v. Norton, 3 Kans. 295.

Waterman v. Frank, 21 Mo. 108;

138.

4 Van Doren v. Relfe, 20 Mo. 455; Utley v. Foy, 70 N. C. 303 (a land contract).

5 Smith v. Schibel, 19 Mo. 140; Knadler v. Sharp, 36 Iowa, 232, 235 (an open account).

sion in that State permitting such a demand to be assigned, and the statutory provision to that effect formerly existing had been omitted from the revision of the laws then in force. The clause of the Practice Act [the Code] was enough to authorize the action because he was the the real party in interest.1

§ 127. Not only does the rule prevail when the assignment is absolute and complete, and the assignee is the legal owner of the demand; it prevails with equal force in cases where the assignment is simply equitable in its character, and the assignee's title would not have been recognized in any form by a court of law under the old system, but would have been purely equitable. Such assignee, being the real party in interest, must bring an action in his own name; for, in respect to this provision of the statute, the equity doctrine which it embodies is, beyond a question, to be applied to all actions. As illustrations: the person to whom an order is given by a creditor upon his debtor for the whole amount of the demand, although the debtor has not accepted nor promised to pay, is an equitable assignee, and must sue in his own name; also, where a creditor assigns part of his

1 Long v. Heinrich, 46 Mo. 603.

2 See Cottle v. Cole, 20 Iowa, 481, 485; Lytle v. Lytle, 2 Metc. (Ky.) 127. In the first of these cases Mr. Justice Dillon said: "The course of decision in this State establishes this rule; viz., that the party holding the legal title of a note or instrument may sue upon it, though he be an agent or trustee, and be liable to account to another for the proceeds of the recovery; but he is open in such case to any defence which exists against the party beneficially interested. Or the party beneficially interested, though he may not have the legal title, may sue in his own name. This may not precisely accord with the line of decisions under other codes, but we think it liberal and right, and conducive to the practical attainment of justice." In Lytle v. Lytle, Duval J. said (p. 128): "Upon the face of the petition in this case, it is perfectly clear that the plaintiff was not the owner of the debt for which the action is brought; but that Harmon [the assignee] is the equitable owner of it, and he is, therefore, the real party in interest; and under the plain rule of practice (§ 30) the action should have been brought in his name as

plaintiff. It is true that, according to § 31, the assignor, Mrs. Lytle, was a necessary party as plaintiff or defendant, as the assignment was not authorized by statute, and did not invest the assignee with the legal title to the debt assigned." This last remark refers to a clause of the Kentucky code requiring the assignor to be made a party plaintiff or defendant, when the demand is not negotiable, or the assignment is not expressly authorized by some statute, so as to answer to the assignment and his own interest in the subject-matter.

3 Wheatley v. Strobe, 12 Cal. 92, 98; Walker v. Mauro, 18 Mo. 564. Upon facts as stated in the text, Gamble J. says in the last case: "The effect of our new code of practice, in abolishing the distinc tions between law and equity, is to allow the assignee of a chose in action to bring a suit in his own name in cases where, by the common law, no assignment would be recognized. In this respect, the rules of equity are to prevail, and the assignee may sue in his own name." He goes on to show that this is an equitable though not a legal assignment.

claim to the plaintiff, of which the debtor has notice; and when a bond was verbally assigned, and was delivered by the obligee to the plaintiff; and when the assignment, though absolute on the face, was, in fact, partial, the assignee agreeing to account for the remaining portion to the assignor. In this case the assignor might be brought in to protect his own interests, and, in some States, would be an indispensable party. The rule deduced from these authorities is plain and imperative

2 Conyngham v. Smith, 16 Iowa, 471, N. C. 130.

assignee need not be the legal owner of the thing in action; if the legal owner, he must of course bring the action; but, if the assignee's right or ownership is for any reason or in any manner equitable, he is still the proper plaintiff, in most of the States the only plaintiff, although, in a few, the assignor should be joined as a plaintiff or as a defendant. The plain intent of the statute is to extend the equity doctrine and rule to all cases.'

§ 128. As the statutory provision declares that "every action must be prosecuted in the name of the real party in interest," the defence that the plaintiff is not such real party in interest is, in general, a bar to the suit. This is certainly so when the plaintiff is the assignee of any thing in action not negotiable, and the issue raised by an answer setting up such defence would be simply whether the plaintiff was, upon the proof, the real party in interest. If, however, the thing in action is an instrument negotiable in its nature, the subject is complicated by the special doctrines and rules of the law which relate to the quality of negotiability. It is elementary that possession of negotiable paper, payable to bearer, is at least prima facie evidence of ownership; and it is also settled that when such paper, payable to order, is indorsed and delivered to the indorsee, the legal title passes to him, and he may maintain an action thereon; while the maker, acceptor, or indorsers cannot question his title, at least in any manner short of impeaching its good faith. This legal title carried with it the right to sue, no matter what arrangements might be made between him and his immediate indorser concerning the use of the proceeds. The question, then, arises, Has the rule introduced by the code changed these established doctrines? Does the apparent and formal legal ownership resulting from the possession of a negotiable instrument payable to bearer, or from the indorsement and possession of similar paper payable to order, constitute the plaintiff the real party in interest within the meaning of the code? Or may the defendant go behind this formal title, and show that some other person is the real party in interest, and thus defeat the action? If the latter query must be answered affirm

1 McDonald v. Kneeland, 5 Minn. 352, 365, per Atwater J. "The code has wisely dispensed with the absurdity of requiring the assignee to use the name of the assignor in bringing suits, but it does not therefore follow that the legal estate in the thing assigned passes to the assignee; on the contrary, the only object of this

provision of the code seems to have been to assimilate the practice in courts of law to that which always prevails in courts of equity, in permitting the real party in interest to sue in his own name. The interest or right acquired under this assignment is an equitable one."