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Ertag v. Haines

Decided: March 24, 1954.


On motion to strike complaint.

Gaulkin, J.c.c.


Plaintiff sues on a book account, assigned to him by Synvar Corporation, a Delaware corporation, for goods sold and delivered by Synvar Corporation to defendants in Monmouth County between January and September 1953.

Defendants admit the receipt of the goods, and the prices, but allege that the goods did not correspond to the samples in accordance with which they were sold; that deliveries were not in the amounts nor at the times agreed upon, and that consequently defendants suffered damage in excess of the plaintiff's claim.

Defendants concede that they may not counterclaim for the excess against the assignee. Pargman v. Maguth , 2 N.J. Super. 33, 38 (App. Div. 1949).

Consequently, they move "for an order dismissing the complaint filed herein on the ground that the plaintiff, Leo Ertag, is not in fact an assignee, but is the nominee, or agent, of his alleged assignor, for the purpose of bringing this suit and thereby permitting his alleged assignor to evade the statutes and rules of the Court with respect to non-resident

plaintiffs, and for the purpose of foreclosing the defendants from asserting a counterclaim which in fact and law the said defendants are entitled to assert as against the real party in interest in this action."

At the argument the attorney for the assignee frankly admitted that the assignee shares offices with him, paid nothing for the assignment, has no interest in the claim or the outcome of the litigation, and is the mere holder of the naked title to the claim as Synvar's nominee. The assignee's attorney said the assignment was made because defendants reside in Monmouth County, and the attorney wanted to sue in this county for his personal convenience. However, when defendants offered to waive any question of venue if Synvar were joined or substituted as a party plaintiff, the offer was declined. In fact, the assignee's attorney at first contended that (because of the peculiar wording of the complaint) defendants could not assert any recoupment for any damages except such as arose from only two of the 12 shipments, but he finally stipulated that defendants could prove, by way of recoupment, damages up to, but not exceeding, the amount of the assigned claim.

Defendant argue this is unjust. They say, and the assignee admits, that the claim, the defense and the counterclaim all arise out of the same transaction -- the supplying by Synvar of plastic molding compound to defendants to be molded by defendants into buttons. The plaintiff admits that when the case comes to trial the officers and employees of Synvar will have to be here to testify, and if the assignee is then present at all, it will only be as a mildly curious bystander. The issues and the proof will be the same as if Synvar itself sued, except that defendants will not be able to recover any excess they may prove to be due them over and above the assigned claim. In fact, to protect defendants' right to sue for the excess in Delaware, the court here may have to ask the jury to bring in a special verdict. As to such excess, defendants will have to start a separate suit in Delaware, and perhaps try the whole case all over again, provided there is nothing in the Delaware law that will block defendants

because of the proceedings in New Jersey. A resident of New Jersey could not so unjustly advantage himself over us, say defendants, so why should a non-resident be permitted to do so? Cf. Carey v. Brown , 92 N.J. Eq. 497 (Ch. 1921); Maplewood Bank & Trust Co. v. Carragher Constr. Co. , 12 N.J. Misc. 227 (Sup. Ct. 1934).

Such a result is, of course, completely contrary to the spirit of our rules. A fundamental aim of our practice is to dispose of all controversies between the same parties in a single action, as speedily as is consistent with justice. Multiplicity of suits is today as abhorrent to the courts as it always has been to the litigants. Galler v. Slurzberg , 22 N.J. Super. 477, 483 (App. Div. 1952), certification denied 11 N.J. 582 (1952).

The assignee's attorney insists Synvar is within its legal rights in making the assignment, and the assignee in suing upon it, and firmly states that this court has no power to prevent it. R.R. 4:30-1, says he, provides that "Every action may be prosecuted in the name of the real party in interest * * *." This was formerly Rule 3:17-1, which originally read "Every action shall be prosecuted," etc. On November 10, 1949 the rule was amended to change "shall" to "may" -- a clear indication, says plaintiff, that the option lies with the litigant and not with the court. Furthermore an assignee (at least one for value) is a "real party in interest." Zurcher v. Modern Plastic Machinery Corp. , 24 N.J. Super. 158, 163 (App. Div. 1952), affirmed (memo) 12 N.J. 465 (1953).

Defendants in their brief "frankly concede that there is no explicit grant of power or authority in the rules" to the court to grant that "which the defendant on this motion requests," but they urge that "to deny defendants' motion is to admit that this court is operating in a vacuum where a wrong is without a remedy. This is ...

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