Allardyce v. Dart , 291 Mich. 642 ( 1939 )

Defendant Dart Company, a copartnership, agreed in writing on May 27, 1936, to pay plaintiff Allardyce a finder's commission of one and one-half cents for every share of common stock of the McBrayer Springs Distillery, Inc., that might be sold by them under their contract with that company if, as, and when the issue was validated for sale by the Michigan corporation and securities commission. This contract covered the sale of 267,000 shares, but the securities commission approved the sale of only 150,000 shares. On the same day that Allardyce obtained his written promise from Dart Company, he and John C. Gray, who is not a party to this litigation, executed an agreement which reads as follows:

"Whereas the said George Allardyce agrees to give the said John C. Gray $2,500 out of commission received from finder's fee as set forth in letter from Dart Company addressed to George Allardyce dated May 27, 1936, it is mutually agreed between the parties hereto that the first $2,500 so received by the said George Allardyce shall be given to John C. Gray and the said George Allardyce hereby gives the said Dart Company authority to issue a check to John C. Gray in that amount."

Plaintiff sued defendants in assumpsit and his declaration was met by a joint and several answer containing a general denial and raising the affirmative defenses of failure of consideration and fraudulent misrepresentation and that plaintiff was not the real party in interest.

In a trial before the court, sitting without a jury, plaintiff had judgment against defendants in the sum of $2,074, plus interest and costs.

The question of "real party in interest" arises out of the statute, 3 Comp. Laws 1929, § 14010 (Stat. Ann. § 27.654), which reads in part:

"Every action shall be prosecuted in the name of the real party in interest, but an executor, administrator, guardian, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party expressly authorized by statute, may sue in his own name without joining with him the party for whose benefit the action is brought."

Defendants say the trial court erred in holding that the quoted "Allardyce-Gray" instrument was not an assignment. InBarak v. Detroit Apartments Corp., 232 Mich. 59, 61, the rule found in 20 R. C. L. p. 666, which is as follows, was quoted:

"This (statute requiring the real party in interest to sue) is not to be understood, however, as excluding one holding the legal title or right from suing in his own name. Such person may sue as the real party in interest, if he can legally discharge the debtor, and the satisfaction of the judgment rendered will discharge the defendant, although the amount recovered is for the benefit of another."

In 4 Am. Jur. p. 229, an assignment in law is defined as "A transfer or setting over of property, or of some right or interest therein, from one person to another, and unless in some way qualified, it is properly the transfer of one's whole interest in an estate, or chattel, or other thing. It is the act by which one person transfers to another, or causes to vest in another, his right of property or interest therein."

The American Law Institute has defined an assignment of a right in its Restatement of the Law of Contracts, p. 171, § 149 (1), as "A manifestation to another person by the owner of the right indicating his intention to transfer, without further action or manifestation of intention, the right to such other person or to a third person."

This court has defined the word assignment in the language of Webster as meaning "to transfer or make over to another;" and in the language of Burrill's Law Dictionary as "to make over or set over to another; to transfer." Aultman, Miller Co. v.Sloan, 115 Mich. 151, 153.

What is it that was set over or transferred to Gray by Allardyce? Allardyce had a written undertaking by Dart Company to pay him one and one-half cents on each share of the distillery stock sold by Dart Company. Dart Company on the same day had an agreement with the distillery corporation in which it indicated a desire to sell 267,000 shares of its stock. If the sale of all this stock were validated by the commission and Dart Company paid Allardyce one and one-half cents on each share, he would have received $4,005. The trial court held that the finder's commission due Allardyce from defendants amounted to $2,250. The language of the Allardyce-Gray agreement did not give Gray the right to recover the commission but did authorize Dart Company to pay Gray when, as and if moneys were due Allardyce, all of such moneys up to and including the first $2,500. Such a written order cannot be held to be an assignment, and the court was correct in holding that Allardyce, and not Gray, was the real party in interest.

The record supports the finding of the trial judge that there was no failure of consideration in the premises or any fraudulent misrepresentation by Allardyce. The judgment is affirmed, with costs to appellee.

BUTZEL, C.J., and WIEST, SHARPE, POWER, CHANDLER, NORTH, and McALLISTER, JJ., concurred.