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BIRKINS v. SEABOARD SERV.

December 29, 1950

BIRKINS et al.
v.
SEABOARD SERVICE



The opinion of the court was delivered by: FORMAN

Plaintiffs, George Birkins and Daniel Ohl, citizens of the State of New York, filed a complaint against Seaboard Service, a New Jersey corporation, alleging a controversy between each of the plaintiffs and the defendant exceeding the sum of $ 3,000 exclusive of interests and costs and reciting three causes of action as follows:

In the first cause of action plaintiff Birkins alleges that he is the owner and holder of general mortgage bonds of the defendant in the aggregate principal sum of $ 12,080, each payable to bearer, and secured by a mortgage on real property, pursuant to an Indenture of Mortgage and Deed of Trust executed and delivered February 1, 1935 to certain named trustees; that in and by the said bonds the defendant promised to pay on September 1, 1949 to the bearer of each of said bonds, or if registered, to the registered owner thereof, the principal amount of said bonds; that at their maturity the defendant refused to deposit funds with the trustees for the payment thereof and notified the holders thereof that it would not pay the bonds which had become due and payable.

 In the second cause of action plaintiff Ohl charges similar allegations except that he claims to be the owner of $ 13,080 of said general mortgage bonds.

 The defendant moved to dismiss the complaint against both plaintiffs on the grounds that they were not the real parties in interest; that the court had no jurisdiction of the claims of the plaintiffs to collect the principal of the bonds in view of the provisions of the New Jersey statute which provides that where a bond and mortgage have been given for the same debt, all proceedings to collect the debt shall be first, a foreclosure of the mortgage, and, second, an action on the bond for any deficiency, N.J.R.S. 2:65-2, N.J.S.A.; and that the matter in the controversy between each of the plaintiffs and the defendant does not exceed the sum of $ 3,000 exclusive of interests and costs. The defendant rested on the complaint, depositions of the plaintiffs and exhibits referred to in said depositions.

 At the same time plaintiffs moved for judgment against the defendant under several of the Federal Rules of Civil Procedure, 28 U.S.C.A., including Rule 56(a) for summary judgment. In addition, there were other motions in connection with projected depositions. Hearing on all of these was deferred pending the determination of defendant's motion to dismiss the complaint.

 The plaintiff George Birkins consented to a dismissal of the complaint against him after hearing on defendant's motion. This dissolved the first cause of action and left Daniel Ohl as the sole plaintiff, supporting the second cause of action and his part in the third cause of action.

 An evaluation of the grounds urged by defendant in support of its motion to dismiss suggests the following considerations. While the complaint states that the plaintiff Ohl generally was the owner and holder of bonds as aforesaid, it was brought out at the argument that he was an employee of the Security Adjustment Corporation and that he had personally obtained possession of the bonds alleged to be held by him from the owners thereof for the purpose of retaining counsel, instituting suit and delivering to the owners of the bonds the proceeds of any judgment which might be obtained less costs of the litigation.

 A grave question arises as to whether the status of Ohl was as an attorney in fact for the purpose of collecting under the bonds or as an assignee for such purpose. If he establishes himself in the latter status he must be regarded as a real party in interest, as defined in Rule 17(a) of the Federal Rules of Civil Procedure, and properly the plaintiff in this action, Rosenblum v. Dingfelder, 2 Cir., 111 F.2d 406, 407; while if it is established that he is an attorney in fact he is not the real party in interest entitled to bring this suit. Clark v. Chase National Bank, D.C., 45 F.Supp. 820; Spencer v. Standard Chemicals & Metals Corp., 237 N.Y. 479, 143 N.E. 651. *fn1"

 At a subsequent examination on March 31, 1950 he stated that he had not written such letters but had prepared a form of letter addressed to himself to be signed and forwarded to him by the bond owner. He produced these letters and one of them became available to the court. It is as follows:

 'Mr. Daniel J. Ohl

 c/o Security Adjustment ...


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