statutes Kentucky. Laws.

Civil and Criminal codes of practice of Kentucky online

. (page 3 of 142)
Online Librarystatutes Kentucky. LawsCivil and Criminal codes of practice of Kentucky → online text (page 3 of 142)
Font size
QR-code for this ebook

bond could sue in his own name, because, according to the opinion of the court : "Under
the former system of pleading, the action must have been brought in the name of the
Commonwealth, for the use and benefit of the plaintiff. But the Code of Practice has
changed this rule of pleading, by requiring e\ery action to be prosecuted in the name of
the real party in interest. The plaintiff was the person injured, and the real party in
interest, and therefore had the right to bring the action in his own name. 11 Lane v. Kasey,
I Met., 410.

In Hughes v. Cotton, &e, t 13 Bush, 596, the court, referring to Lane v. Kasey, held that
a pensioner can not maintain an action in his own name on a United States pension agent's
bond, there being no covenant to pay money to the pensioner.

(2) A may maintain an ordinary action upon B's receipt to C for money to be delivered
to A. 3 Met, 198

(3) A, being indebted to B, made a contract with C, whereby C agreed to pay said debt:
held, that B could maintain an equitable action for the debt against A and C. I Bush, 48.

(4) On a covenant to A, to provide for her children, by will, they may sue in equity.
5 Bush, 625.

(5) A contracted with B for a machine for C, which C received, agreeing to pay the
price charged by B. C having failed to pay the price, A paid it. In an ordinary action
by A and B against C, for said price, it was held that they were properly joined as plain-
tiffs; and that A could not have sued without making B a defendant, or uniting with him
as plaintiff. 18 B. M., 132.

(61 A, to pay certain debts, left money with B, which he deposited with C, a banker.
On B's check, C, by mistake, paid $70 too much to D, a creditor of A. In an action by A
against D for the $70, it was held that, as the deposit was a general, and not a special one,
the right of action was in C. I Met., 415.

4. Generally.

(1) In Humphreys v. Pearce, I Duv., 237, it was held that a person who, by a separate
transaction, became beneficially entitled to a note, should join with the payee in an action

(2) A corporation may sue in its corporate name upon an obligation to its " president,
directors, and company " (17 B. M., 48) ; or to its " president and directors." 10 Bush, 26.

(3) An action against officers of a corporation, for misconduct, should, generally, be

Digitized by



brought by the corporation ; but, if it be under their control, one or more of the stock-
holders may sue them in equity. 10 Bush, 660.

d. In order to enable a stockholder to sue for. the corporation, or for himself and his
associate stockholders, where the rights of the corporation are involved, he must allege
that the directors decline to sue, or refuse to permit him to sue in the name of the corpor-
ation, and the corporation must be a party plaintiff or defendant. 79 Ky., 300.

e. A county may sue for the unlawful destruction of its court-house (2 Duv., 502) ; or
lor an injury to a county road. 81 Ky., 225.

/. In Masters**- v. Hagan, <5rV., 17 B. M., 325, it was held that an action for mesne
profits could not be maintained in the fictitious name of John Doe, though the land was
recovered in his name before the adoption of the Code.

g. An administrator having taken a note payable to himself, for a debt due to his
intestate, it was held that the administrator de bonis tion could maintain an equitable action
on the note, the administrator not having charged himself, nor having been charged, there-
with upon a settlement. 2 Bush, 42. In a similar case it was held that the administrator
de bonis non could maintain an ordinary a 6 tion. Ma ram an v. Trunnell % 3 Met., 146. (But

h. If a personal representative refuse to sue for money due to the decedent, his dis-
tributees may maintain an action in equity against the debtor, making the personal repre-
sentative a defendant. 13 B. M., 194-95.

j* Tax-payers can maintain an action to recover taxes paid under an illegal levy by the
-county court, or to enjoin the collection of taxes so levied, or to prevent a misappropria-
tion of taxes paid under a legal levy. 4 Bush, 154 and 157; 80 Ay., 500.

k. See } 28, and notes thereto.

/. Before the adoption of the Code, although upon the death of a joint tenant or co-
partner in trade his beneficial interest passed to his representatives, the right of action
survived to the survivors. Has that rule been changed by J 18? Sec J 500, and note (a)

§ 19 [31]. Actions by assignees* — In the case of an assignment of a
thing in action, the action by the assignee is without prejudice to any
discount, set-off, or defence now allowed (a) ; and if the assignment be
not. authorized by statute the assignor must be a party, as plaintiff or
defendant (6). This section does not apply to bills of exchange, nor to
promissory notes placed upon the footing of bills of exchange, nor to
-common orders or checks (c).


"A set-off and discount are separate and distinct matters. The first is an independent
«• debt or demand which the debtor has against his creditor, and which he can use to coun-
** terbalance the demand against him, either in whole or in part. The second is a right
■" which the debtor has to an abatement of the demand against him, in consequence of a
*■ partial failure of consideration, or on account of some equity arising out of the transaction
"on which the demand is founded." Trabue's ex'r v. Harris, I Met., 597.

• An act of 1798 (1 £ L^ 150), which made bonds and notes legally assignable, contained provisos " that
•the defendant shall be allowed all discounts, under the rules and regulations prescribed by law, he can
M prore at the trial, either against the plaintiff or the original obligee or payee, before notice of the assign-
*ment;" and, "that nothing in this act contained shall be so construed as to change the nature of the
** defence, either in law or equity, that any defendant may have against an assignee or the original assignor."
And chapter m, section 6, of the General Statutes (which is the same as the Revised Statutes), makes
bonds and notes legally assignable, " but not to impair the right to any defence, discount, or set-off that
m the defendant has or might have used against the original, or any intermediate assignor, before notice
m of the assignment to the plaintiff."

Digitized by



The payor of a note may plead against an assignee any discount or defence, legal or
equitable, which existed against the payee at the time of the assignment {Hardin, 25;

4 Mon., 79; 3 //., 510; 2/. /. M., 365; 5 B. M., 563; II Id., 73); including a failure
of consideration, though it may not have been judicially established until after the assign-
ment (Lucketl v. Tripletts adm'r, 2 B. M., 39; but see Chiles v. Com, 3 Mar., 230.)

And, in general, the payor can plead against the assignee any defence which accrued
against the payee after, but before notice of, the assignment (I Mon., 233; 5 Id., 420; 3
/. /. M., 224) ; including — according to dicta in Chiles v. Corn, 3 Mar*, 230, Ridgeway v.
Collins, Id., 410, and Wathen v. Chamberlain, 8 Dana, 164 — an equitable right to set-off
against the assignee a demand against the payee, upon the ground that he became insol-
vent or removed from the State after, but before notice of, the assignment ; contra, as to
removal or insolvency of the payee, Robbins v. Holley, 1 Mon., 191 ; Markham v. Todd, 2
/./. M., 366; Talbott v. Warfield, 3 Id., 87 ; Daviess v. Newton, 5 Id., 9a And see Bow-
man v. Halstead, 2 Mar., 200, in which it was said that the assignee " must be allowed to
hold the note free of future contingencies between the obligor and obligee, arising out of
transactions dehors the note."

And, A and B having signed a note apparently as principals, though B was in fact a
surety, it was held that he could plead, as a defence, the assignee's failure to sue A within
seven years after the cause of action accrued, without alleging that the assignee had
knowledge of the suretyship. 3 Bush, 157.

In an action against a sheriff, for failing to collect an execution in favor of the plaintiff,
as receiver, against an administrator, for the benefit of creditors of a decedent, the sheriff
can plead, as an equitable defence, payments made by the administrator to the creditors.

5 Bush, 221.

" As a general rule, a court of equity will not compel a creditor to surrender to an
assignee of his debtor, or to another creditor, money in his hands until his own debt is
first satisfied. Indeed, he is regarded in equity as only owing to the debtor the balance
that may remain after his own debt is paid. The assignee occupies the attitude of the
debtor, and is only entitled to that balance." 14 B. M., 136.

Payment of a note for usury is not a payment on a note for the principal debt then
held by an assignee with notice to the payor. 8 B. M., 405.


1 . As to what constitutes a set-off, legal or equitable, against a payee, see notes to J 96, subs. 2.

2. As to pleading such set-offs against an assignee.

(1) I need not cite authorities to prove that, in general, a set-off existing in favor of a
payor against a payee, at the time of assignment, can be pleaded against an assignee.

(2) "The doctrine that a debt or demand can not be used as a set-off until it become*
due, and that, unless it be due before notice of the assignment, it is not available against
the assignee, is fully established" (2 Met., 295) : and it must continue to be due; for, if the
payor subsequently take the payee's note for the amount of an account due at the time of
notice, though the note be payable one day after date, this suspension of the right of set-
off against the payee is an abandonment of it against the assignee. 7 Dana, 374.

(3) Payor's note having been assigned to A, his note assigned to payor can be pleaded
-as a set-off against A's subsequent assignee. 6 Mon., 355.

(4) Payor's demand against payee is an equitable set-off against assignee, even though
unliquidated, if connected with the note sued on and the payee be insolvent. Taylor &*
Son v. Stowell, &c, 4 Mel., 175.

(5) In an action by a payee, for the use of a parol assignee, the payor may plead a
set-off against the latter, but not against the former. I Mar., 487 ; 3 Mon., 19.

(6) If a payee assign the note for the benefit of his creditors, a set-off subsequently
accruing to the payor against the assignee can not prevail against the creditors. 3 J. J.
M. t 56.

Digitized by



(71 A payee of several notes having assigned some of them to different persons, at
different times, and retained others: 1, the payor can not plead a demand against the
payee as a set-off against the assignees, if the amount of the retained notes equal the
amount of the set-off; and, 2, if the latter amount exceed the former, but be less than the
amount of the assigned notes, the excess of the set-off shall be first applied to the notes
which we're assigned last, the eldest assignee having the best equity (6 Dana, 223). But,
as to the latter point, see 4 Dana, 183.

(8) A payor having notice that his note has been assigned, though he does not know to
whom it was assigned, can not plead against the assignee a set-off subsequently acquired
against the payee. 1 1 B. M., 213.


Although, generally, the payor of a note, when sued by an assignee, has not merely an
equitable but a legal right to avail himself, as matter of defence, of any usury embraced
in it (4 Met., 57) ; yet, if he discharge such note by giving a new one, embracing the usury,
to a third person who has no knowledge of the usury, he can not plead it against such
person, but must look to the payee in the first note. 3 /. /. M., II ; 1 Duv., 54. Aliter,
if the payee of the new note had knowledge of the usury. 7/. /. M., 176 ; SB. M., 404- 5-

And so a payor may estop himself from pleading a set-off or defence against an assignee
by giving his note to the payee to enable him to raise money (13 B. M., 390; 4 Met., 49) ;
or by inducing the assignee to purchase the note, by promises or representations leading to
the belief that it will be paid (4 Mon., 73; 2/./. M., 223 ; 9 Dana, 593; 17 B. M., 168;
18 Id., 833; 4 Met., 269); or by a promise, after the assignment, to pay the assignee, in
consideration of indulgence or for other valuable consideration, but not by a promise
without valuable consideration. LUt. S. C, 469; 5 B. M. t 241 ; 6 Mon., 565.

But an obligation for money, payable in horses, having been assigned, and the obligor
having taken it up by giving to the assignee a bond for "a negro of a certain description,"
with a longer time for payment, it was held that the obligor was not estopped from plead-
ing failure of consideration of the original bond. Pile v. Shannon, <5rV., Hardin, 53. But
see Morrison v. Clay, Hardin, 431, in which that decision is questioned.

And a creditor who, in good faith, attaches his debtor's property, and obtains the pro-
ceeds pursuant to a judgment of the court, is not estopped, though the judgment be
reversed, from setting off his demand against the debtor in an action for the proceeds
brought by the debtor's assignee. 14 B. M., 133.


Whatever was evidence against the assignor, before the assignment, is evidence against
the assignee (I Mon., 233; 14 B. M., 137); but the assignee's admission, after the assign-
ment, though of facts stated to have existed before, is not evidence against the assignee.
4 B. M., 10.

(4) See note 1 to } 18.

(e) 1. The object of this provision (which is the same as that contained in J 58 of the
Code of 185 1 ) is the protection of bona fide assignees of bills of exchange, &c: and, con-
sequently, though neither failure of consideration nor fraud can be pleaded against such
assignee (1 Met., 313), yet the right to plead a set-off or defence exists as between the
original parties, and against an assignee without valuable consideration (16 B. M., 354),
or an assignee after maturity (8 Bush, 357) ; and though an assignment to secure payment
of a debt is not, such assignment in discharge of a debt is, a valuble consideration (16
B. M., 354; 1 Met., 628; 2 Id., 534; 78 Ky., 335) : and a payee who, after discounting a
»ote in bank, takes it up, holds it subject to defences, &c, as if it had not been discounted
(78 Ky., 550) ; a/iter, if a note be discounted, and taken up, by a bona fide assignee (2 Met.,
"3): but the bona fide holder of a check, payable on presentation, takes it free from all
equities, though it be assigned several days after its date. 8 Bush, 357.

2. As to notes placed on the footing of bills by our law, see Gen. Stat., ch. 22, { 21 ;

Digitized by



and as to notes placed on such footing by the laws of other States and assigned here, see
Short &* Co. v. Trabue & Co., 4 Met., 299; Carlisle v. Chambers, 4 Bush, 268; Davis v.
Mortin, 5 Id., 160; Hyatt v. Bank of Ky., 8 Id., 193.

By the laws of England and most of the American States negotiable promissory notes
are placed on the footing of bills of exchange, though in Kentucky a bank-discount is
necessary for that purpose; and questions have risen as to the rights of an assignee, suing
here, on a note placed on the footing of a bill by the law of another State, but not by our
law. In an action by the assignees of a note which was executed and payable in Tennes-
see, and placed by the law of that State on the footing of a bill of exchange, the plead-
ings failed to show where the assignment was made, and the court held that to be imma-
terial, upon the ground that set-offs and defences pertain to the remedy and are governed
by the law of the country in which the action is brought {Davis v. Morion, Gait cV Co., 5
Bush, 160) . I do not dispute that doctrine as to bills or notes which are governed by the
law of another country, and not assigned here ; but it seems to me that the court over-
looked the importance of the question as to an assignment in Kentucky, concerning which
see Short & Co. v. Trabue & Co., 4 Met., 299; Carlisle v. Chambers, 4 Bush, 268; Hyatt v.
Bank of Kentucky, 8 Bush, 193 ; which, as it seems to me, established the rule that the
remedial rights of an assignee of a note, made negotiable in another State, in which it is
payable, but assigned in this State, are governed by our law.

§ 20 [32]. If the right of the plaintiff be transferred or assigned
during the pendency of the action, it may be continued in his name;
or the court may allow the person to whom the transfer or assignment
is made to be substituted in the action, proper orders being made as to
security for the costs.

1. This section "gives a,discretion to the court, as matter of convenience to the parties,
and to be exercised in the furtherance of justice, 1 ' with reference to allowing a case to
proceed in the name of the original party, or the substitution of an assignee. It never
was intended to authorize a member of a firm to transfer his interest to his. .partners, so as
to make him a competent witness for them. Dougherty v. Smith, Wilson, &c, 4 Met., 279.

2. And it gives to the plaintiff's assignee the right to prosecute the action, notwith-
standing a compromise between the plaintiff and defendant, made after the defendant had
notice of the assignment. Cantrell v. Hewlett, &c, 2 Bush, 311.

3. An order that an assignee be substituted as plaintiff, "on condition that he be
responsible for all costs, past and future," not objected to by the defendant, releases the
original plaintiff. fVarner v. Turner, 18 B. M., 758.

4. See notes to } 32.

a \fllljr' § 2I C33D* Actions by fiduciaries. — A personal representative (a), guar-

£,0l\V T dian(£), curator, committee of a person of unsound mind, trustee of an

JL / $• l&- fr ) express trust (c), a person with whom or in whose name a contract is
made for the benefit of another, a receiver appointed by a court (d), the
assignee of a bankrupt (e), or a person expressly authorized by statute
to do so, may bring an action without joining with him the person for
whose benefit it is prosecuted.

[a) See notes g and h, ante, page 11.

(b) According to Anderson v. Watson, 3 Met., 509, this section only authorizes a guar-
dian to sue, in his .name, in cases wherein he might have done so before the adoption of
the Code. It seems clear that, linger the old practice: I, a guardian could sue for an
injury to property of the ward in his possession, his right of action being founded, not on

Digitized by


Digitized by


Digitized by


Digitized by


Digitized by



his title, but on his possession (3 Bibb, 12) ; 2, that he conld sue for money or property of
the ward lent or leased by him (the guardian); his right of action being founded, not on
his title, but on his contract (Crane v. Anderson, 3 Dana, 119; 3 Met,, 510) ; and, 3, that
he could not maintain an action except in such cases (3 Bibb, 11 ; 3 Dana, 120; 13 B. M.,
194; 3 Met., 510; 12 Bush, 223).

But, according to a dictum in Powell v. Gossom, 18 B. M., 192, if a tenant, holding
under a lease made by a guardian, hold over, contrary to the contract, an action to eject
him must be brought in the name of the ward ; and, in support of that dictum, the court
cited Mc Chord v. Fisher's heirs, 13 B. M., 194, which clearly relates to an adverse possession
of the ward's estate, and not to a holding under a lease from the guardian. According to
that dictum, section 21 seems to be nugatory so far as it relates to guardians, curators, and
committee of persons of unsound mind.

(c) 1. An executor, who is authorized by will to lease out a ferry, during his life, is a
trustee for life ; and may sue, in equity, for a quiet enjoyment of the franchise, without
joining with the testator's heirs. Newport, &c, v. Taylor's ex y rs, 16 B. M., 781.

2. A trustee, to whom property is conveyed for the separate use of a married woman,
may sue for it without making her a party. McClanahan v. Beasly, 17 B. M., 117. But
see C. & L. R. Co. v. Bowler's heirs, 9 Bush, 468.

3. An action for church-property may be maintained by trustees thereof, appointed by
deed, or by a committee appointed by the congregation for that purpose. 3 B. M., 261-62;
4 Bush, 215. See 7 B. M., 481 ; 8 Id., 70 ; and notes to chapter 13 of the General Statutes.

4. A trustee authorized by will to appoint his successor can maintain an action for th^t
purpose without making the beneficiary a party. 83 Ky., 493.

5. A railroad company conveyed its property to a trustee to secure payment of bonds
to be issued by it; the deed declaring that, "upon failure of said company to pay the
interest or principal of said bonds when due and demanded, the said trustee shall proceed
by due course of law to subject the said railroad and all its effects to sale to satisfy the
amount claimed and due ;" and, the company being in default, it was held that the trustee
could not maintain an action for sale of the property without making the bondholders
parties. 4 Met., 199. But, a deed for a similar purpose having authorized the trustee to
"receive, collect, sue, and pay over," it was held that the bondholders were not necessary
parties to an action of the trustee. 80 Ky., 330.

6. It was held in Robinson v. Robinson's trustee, 1 1 Bush, 174 (decided in 1874), that a
trustee for the payment of existing creditors of the grantor may sue for a sale of the trust-
property, without making all the creditors parties. And that decision seems to have been
approved by section 438 of the present Code.

(d) 1. There is a manifest distinction between permitting a receiver to collect a judg-
ment already rendered and authorizing him to bring an action in which he has no interest :
the parties interested should sue. 79 Ky., 311.

2. A receiver can not, even under an order of court, maintain an action involving title
to land, or submit a controversy with regard thereto, without the consent of the real
parties in interest. Caldwell v. McWhirter, 84 Ky., 130.

(0 The assignee of a bankrupt may sue to set aside a fraudulent conveyance made by
him. Anderson v. Anderson, 80 Ky., 638.

§ 22 [34]- WAo ma y fa* as plaintiffs. — All persons having an inter-
est in the subject of an action and in obtaining the relief demanded may
be joined as plaintiffs, unless it is otherwise provided in this Code.

I. Has the Code changed the old rules as to the joinder of plaintiffs?

In Pellyy. Bowyer, 7 Bush, 513, the court seems to have regarded the old rules as being
still in force. But in Waolfolk v. Ashby, b*c, 2 Met., 288, which was an ordinary action
for land, it was held that several claimants had a right to join as plaintiffs ; the court

Digitized by



saying that the Code "authorizes joinder of causes of action in some cases which would
not have been tolerated under the former system of pleading." The opinion as to this
matter does not seem to have been well considered; for, i, it confounds the joinder of
causes of action ({ 83) with the joinder of plaintiffs. Clearly, the Code permits the joinder
of causes of action which could not be joined before ; as, covenant and assumpsit or tres-
pass and trover. But this does not prove that the Code permits persons to join as plaintiffs
who could not join before. And, 2, the opinion, in one place, speaks of the plaintiffs as
being " tenants in common," and, in another place speaks of them as being " joint owners,"
and, in another place states that they claimed " under the same title" — a fact which proves
that they were not tenants in common ; for one of the distinctions between joint tenants
and coparceners, on one side, and tenants in common, on the other, is that the former claim
under the same title and the latter under different titles. If each of said plaintiffs had an
interest in the land, not being tenants in common, they must have been either joint tenants
or coparceners; and, consequently, they had a right to join as plaintiffs under the old
practice, as will be shown in note II, 2, on this page.

II. Joinder of plaintiffs in ordinary actions.

t. In actions on contracts.

If the obligees have a joint interest in a contract, they must all join in an action thereon,

Online Librarystatutes Kentucky. LawsCivil and Criminal codes of practice of Kentucky → online text (page 3 of 142)