School District No. 42 v. Peninsular Trust Co.

Opinion of the court by

Gillette, J.:

In the consideration of this case we are met at the outset with a question of practice which challenges the attention of this court.

It will be observed that the petition upon which the ease was tried was the Peninsular Trust Company, trustee, without stating who or what it was trustee for. The word trustee in the title of the cause was added by permission of the district court after the case had been tried in the probate court, without amending any of the allegations of the original petition, which alleged that the plaintiff was the owner and holder of the instrument sued on. The petition does not state who the plaintiff was trustee for, how or where it was appointed trustee, or what the nature or extent of its trust was, nor does it indicate when or by what means it became possessed of the instrument sued on, except to declare "it was” the owner and holder of the same, and the record nowhere discloses the nature of plaintiff’s right and interest, until we come to examine the testimony introduced on the trial, where it for the first time appears that the plaintiff was a mortgagee of all the property and assets of the Grand Rapids Seating Company, under and by virtue of a certain trust mortgage, which conveys to the plaintiff all the property of the Grand Rapids Seating Company, including the school warrants sued on herein, which said mortgage in the body thereof and by way of a grant to the plaintiff uses the following language:

“To have and to hold the property above mortgaged and conveyed to said party of the second part and to its successors forever, in trust, however, and by way of mortgage security only, and upon the terms and conditions herein provided.”

Then follows the terms and conditions, one of which is that if the indebtedness of the Grand Bapids Seating Company are paid by that company within three months from the date of said mortgage the obligation should be void. Otherwise, and in case of default in any of the conditions by the mortgagor, or in case the mortgagor should sell or attempt to sell, or in case the said mortgagee as trustee shall deem the security inadequate, the mortagee was empowered to take possession of all the property, and sell the same at public or private sale, and to sue for and recover the bills receivable and accounts conveyed by the mortgagee, and after satisfying the debts and expenses out of the same to return any surplus that might remain to the Grand Bapids Seating Company.

When , the petition was amended by adding the word “trustee” after the name of the plaintiff, it became manifest that the plaintiff was not suing in its own right, but in a representative capacity, and therefore the allegation of the petition that plaintiff is the owner ancl holder of the warrants sued on, was not true. The attention of the trial court was called to the fact that there was an irreconcilable conflict between the allegations in the body of the petition and the title of the cause, for if it was a trustee for some other party, then it was not itself the owner of the warrants sued on. Who was the real party in interest then becomes an all important question to the defendant. The defendant surely had a right to know who- it was being sued by. Withoxit setting out in its petition who it represented, the real party in interest was not disclosed, and without such disclosure the petition did not state facts sufficient to constitute a cause of action, unless as a matter of fact it was-suing as the owner and holder of the notes, and this was denied, not only by the amended title, but also by the motion for leave to amend, which states mat leave to amend is asked, “for the reason that said Peninsular Trust Company as trustee, instead of in its individual-capacity, was the right and real party in interest.”

The motion for leave to amend the pleading by adding the word trustee, was supported by an affidavit showing that the plaintiff was the trustee of the Grand Rapids Seating Company, and that its right to bring the action was in that representative capacity. This affidavit in support of the motion is the first and only information brought to the attention of the court (aside from the evidence) indicating to the 'court and defendant the plaintiff’s title and right to maintain the action, which information is in direct conflict with the language of the petition alleging that plaintiff was the owner and holder.

The demurrer of defendant to the petition was filed when this status of the case was made apparent to the court, and was considered by the court below, after the amendment was made, which added to the petition simply the word “trustee,” in the title of the cause.

Was the addition of the word “trustee” to the title of the cause a sufficient amendment to the petition to enable the plaintiff to proceed in its representative capacity ? is therefore a question fairly presented to the court by the demurrer, and by the'defendant’s objection to the introduction of testimony showing what its .representative capacity was. We think not.

.It was competent, we think, for the plaintiff to amend the petition in accordance with the motion asking leave of the court to amend, so as to show that it appeared in a representative capacity, but we think the amendment made was insufficient for this purpose, if in fact it was sufficient to amend even the title. In the judgment of this court the title of the cause when amended should have shown that the plaintiff sued as trustee for the Grand Rapids Seating Company, and the body of the petition-should have been amended so as to show by what authority and in what manner the plaintiff acquired the right to represent the Grand Rapids Seating Company. Without such amendment in the body of the petition a cause of action was not stated in favor of the plaintiff as trustee.

In the 32nd vol. Encyclopedia of Pleading and Practice at page 125, the author lays down the rule as follows:

“The bill, petition or complaint must distinctly aver every fact necessary to entitle the complainant to the relief sought. The plaintiff must recover if at all upon the theory upon which the bill is framed.”

And on page 126, with reference to averments of existence or creation of trusts, the author lays down the rule as follows:

“All the facts or circumstances relied upon to show the creation or existence of a trust in favor of the plaintiff must be distinctly alleged.”

Averments of this kind or character are wholly wanting in the petition under consideration. The addition of the word trustee gives no information whatever which tends to show the creation or existence of a trust, and disclosed no “fact which would be necessary to entitle the complainant to the relief sought.”

On the contrary, the allegation remaining in the petition that the plaintiff is the “owner and holder” amounts to a denial that the plaintiff is proceeding in a representative capacity — an inconsistency which cannot be reconciled, and is not permissible in an action either at law or in equity, Here the plaintiff is seeking to recover in a representative capacity, and has pleaded a cause in its personal favor as owner. If, as stated by the author of pleading and practice above quoted, “the plaintiff must recover, if at all, upon the theory upon which the bill is framed,” it could only recover in this action as owner of the instruments sued on. This was not thought of or pretended by the amended petition, as was understood by all of the parties when defendant’s demurrer to the petition was by the court overruled, and later when the court permitted over the objection of defendant the introduction of testimony showing plaintiff’s representative capacity, in support of the petition, which showed an altogether different cause.

The statutes of Oklahoma provide, see. 26, art. 4, ch. 66: “Every action must be -prosecuted in the name of the real party interested,” and this requirement is not modified except that section 28 of the same chapter provides that actions brought in a representative capacity by a representative, need not join with him the person for whose benefit it is prosecuted.

It follows almost as a logical sequence that the representative capacity of the plaintiff must be set; out, and since the statement of the names of the parties to a suit in the margin of a complaint is a part of the complaint, a complaint which describes the plaintiff in the margin, as trustee, is a sufficient averment to inform the court of the fact that the plaintiff is prosecuting in a representative capacity, and a petition following which does not show what his representative capacity is, is bad upon demurrer. The demurrer should have been sustained.

Numerous assignments of error are-pointed out in the motion for a new trial and petition in error, which relate to the introduction of testimony, but they are unnecessary to consider at this time, as the conclusion we have here reached requires a reversal of the judgment in the court below, and a retrial of the case.

Judgment reversed, and cause remanded to the district court of Garfield county, with instructions to sustain the demurrer to the amended petition, and for such further proceedings therein .as may be determined by that court.

All the Justices concurring.