McGown v. Leavenworth

It appears, that this suit is brought to foreclose the rights acquired by the defendants under an executory contract for the purchase of land, by reason of the nonpayment of a balance of the purchase money agreed to be paid therefor, and was commenced on the 9th day of March last; that notice of the pendency of the suit was filed on the 11th of the same month; and on the 13th the defendant, Leavenworth, assigned all his interest in the contract to the petitioner, John W. Latson, who applied, by petition, to be made a defendant, and to be permitted to come in and answer ; and on such petition the order appealed from was made, making him a defendant, and allowing him to answer on payment of costs. The effect of filing notice of suit pending is not involved in the present inquiry. If the'defendant, Latson, comes in to defend, he does so subject to all the consequences which result from the filing of such notice. The inquiry is, shall he be permitted to defend in his own name, and prevent, if he has just grounds therefpr, a decree which would conclude him as a purchaser, pendente lite, if he is not permitted to do so.

It may be suggested that he could defend in the name of his assignor. The pleadings are not submitted so as to enable us to see that no decree is sought against Leavenworth, personally. And if not, there may be good reasons why Leavenworth should wish to defend for himself, notwithstanding he has parted with his beneficial interest in the agree*27ment. Besides, it appears that there have already been some supposed irregularities in the conduct of the defence, begun by the defendant, Leavenworth, which may hazard the petitioner’s rights, if not permitted to defend for himself; and the petitioner states positively that when he received the assignment he had no actual notice of the pendency of the suit. Section 118 of the Code of Procedure provides, that any person may be made a defendant who has or claims an interest in the controversy adverse to the plaintiff. Section 121 provides, that in case of a transfer of interest, the court may allow the person to whom the transfer is made, to be substituted in the action; and section 173 provides, that the court may at any time, in furtherance of justice, amend any proceeding by adding or striking out the name of a party. Under these sections, there appears to me no room to doubt the power of the court to grant the prayer of the petitioner.

And if it rested merely in the discretion of the judge, by whose direction the order was entered, I am not disposed to interfere, on appeal, with the exercise he has made of that discretion. I suppose the power of the court to permit an assignee pendente lite to cause himself to be made a party, was long since well settled. Under our former chancery system, a supplemental bill, in the nature of a cross bill, would probably be necessary. And the court would take care not to allow intruders into a controversy to come in so as to unreasonably hinder or delay a plaintiff, whose proceedings were regular, but would hold them bound by notice of suit pending, and to its proper consequences, nor suffer mere speculators to embarrass the cause by interference. (See Story Eq. Plead. § 348; 3 Daniels’ Ch. Pr., Perkins’ ed. 1665; Wilder v. Keeler, 3 Paige, 164; Whitbuk v. Edgar, 2 Barb. Ch. R. 106.)

If the whole interest of the defendant, Leavenworth, in the controversy has ceased, an order substituting the defendant, Latson, under section 121 of the Code, would have been appropriate upon proper terms as to costs; but I cannot say *28that the form, of relief allowed hy the court at special term was not within its discretion. The petitioner, purchasing (according to his uncontradicted petition) for valuable consideration, without actual notice of the pendency of suit, finds himself in danger of losing the whole benefit of his purchase, when, as his petition states, he has a good defence to the action. There have been some laches on his part in not making an earlier application, but no bad faith is shown. There may, undoubtedly, be cases where great delay, or bad faith or misconduct, should forbid the quantity of the relief sought, and no doubt there were some such circumstances in the case said to have been decided by Judge Mason. But I cannot say that there was any such improvidence in granting the order that it ought to be vacated on appeal; nor do I perceive, from the papers, that any considerable delay will result to the plaintiff from the relief given^—certainly not so much as has been occasioned by the appeal he has taken from the order. The order appealed from should be affirmed, with ten dollars costs, which ought, however, to be set off against the costs which the order directed the petitioner to pay, if such costs have not already been paid by him.

I think there was no ground on which this motion could be sustained:

1. The purchase by Latson, pendente lite, was wrong, and he is to be charged with full notice of the pendency of the suit.

2. Such a purchase, if sanctioned, may lead to an interminable course of proceedings in cases relating to real estate, by which defendants may, from time to time, just before judgment, transfer their interest to others, and thereby prevent a plaintiff from collecting moneys due him on mortgage or otherwise.

3. There is no warrant in the Code for such an application by a person not a party to a suit.

Section 118 relates merely to the persons who may be made defendants by the plaintiff when he commences his suit.

*29Section 121 provides that a transfer of interest in the subject matter shall not abate the suit; and provides that in cases of disability of the plaintiff or defendant, the action is to be continued, on motion, or by a suplemental complaint/ and, in case of a transfer of interest, the action to be continued in the name of the original party, or allows a substitution, not the addition of new defendants.

Section 122 provides for ordering new parties to be brought in, when a complete determination cannot be had without the presence of such parties.

Ko such reason exists in this case, as a full determination of the case can be had upon the merits, without the introduction of a new defendant.

Section 173 allows the court, in furtherance of justice, to add new parties. But I am utterly at a loss to see how it is in furtherance of justice to allow a third person, after a suit brought for the payment of interest on the purchase money of land two years ago, to become a purchaser of an interest in such land, and then to become substituted or added as a defendant, and, when the cause is ready for hearing, put the plaintiff off for a longer period, to wait for his answer; and when this defendant’s answer is in, and the case again ready for hearing, allow another substitution, and so on, ad infinitum. Such a conree of proceeding does not tend to a prompt administration of justice; nor do I think it was ever contemplated by the system of practice which professes to abridge the proceedings of courts of justice. The order should be reversed.

The practice of allowing an assigneependmte lite to be made defendant, was well settled in the former Court of Chancery, and there is every reason why it should continue in the present state of the practice, unless it is inconsistent with or prohibited by the Code. • The 118th section provides, that any person may be made a defendant who has a claim or interest in the controversy; and the 173d section, that the court may at any time, in furtherance of justice, *30amend any proceeding or pleading, by adding to or striking out the name of any party; and section 121, that in case of the transfer of the interest, the court may allow the person to whom the'transfer is made to be substituted.

Judge Ingraham is of opinion that section 118 relates only to persons who may be made defendants by the plaintiff. I understand it, however, to be a general declaratory provision as to who may be made defendants, and to apply as well to a case like the present as to any other. There is nothing in the section itself restricting it, and it should not be carried any farther by construction. But if .a doubt exists respecting this, the 173d section is comprehensive enough. It provides, expressly, for the adding of the name of any party in any proceeding, in furtherance of justice. Judge Ingraham thinks that a permission of this kind is not in furtherance of -justice.

The granting of such an application, rests in the sound discretion of the court, and I think this was a fair case for the exercise of it. The assignment to Latson was without notice of the suit, and there was nothing showing fraud or an intention to delay the plaintiff. Under such circumstances, I think he was entitled to the relief asked for, upon terms.

Order affirmed.

The judge, at chambers was correct in holding that an order to stay the plaintiff’s proceedings did not enlarge the time for the defendant to answer. That time is fixed by statute. It can only be enlarged by consent, or by an order for that purpose. The stay of proceedings prevented the plaintiff from taking advantage of the omission to secure the answer in time, until that stay was vacated or at an end; but as soon as that took place, he had a right to proceed upon the default in not answering within the time allowed by law. We have repeatedly held that a service of a pleading after the time allowed by law, although before the other party has proceeded thereon, is not good. '

Where a paper is served upon a party, who declines to receive it, he is required, to return it within a reasonable time. This has never been limited to a shorter period than the same day; and to return a paper in two hours after the receipt of it, is within all the rules of diligence ever required in such cases.

The order at chambers should be affirmed.