BOUCHARD v. PEOPLE'S BANK

By statute ( 52-118), the "assignee and equitable and bona fide owners of any chose in action, not negotiable, may sue thereon in his own name." The plaintiff, who had purchased all of the assets of a certain corporation, O Co., sought, inter alia, to recover for the defendant bank's negligent payment to a third party of certain checks that were payable to O Co. The bank moved to strike the complaint on the ground that the plaintiff could maintain the action only in the name of the corporation or as a derivative action. The trial court granted the motion to strike and rendered judgment for the bank. On the plaintiff's appeal, held that the trial court should not have granted the motion to strike; the plaintiff, having pleaded a dated transaction in which he had acquired all of the assets of O Co., framed his complaint in a manner legally sufficient to state a cause of action under 52-118. Necessary allegations of complaint asserting statutory cause of action, discussed.

GLASS, J.

The sole issue in this appeal is whether the plaintiff, Frederick L. Bouchard, pleaded sufficient facts in his complaint to state a cause of action against the defendant, People's Bank, as the assignee of certain choses in action under General Statutes 52-118. See Practice Book 190. We conclude that the plaintiff's complaint was legally sufficient, and we therefore reverse the judgment of the Superior Court that was rendered following the granting of the defendant's motion to strike the complaint.

In reviewing the legal sufficiency of the plaintiff's complaint, we assume the truth of the facts alleged and construe them in the light most favorable to sustaining the sufficiency of the complaint. Michaud v. Wawruck, 209 Conn. 407, 408, 551 A.2d 738 (1988). The plaintiff is a former officer and shareholder of Organization Change Associates, Inc. (the corporation). The corporation never maintained a bank account with the defendant. Another former officer and shareholder of the corporation, Jeffrey Pilgrim, acting under the name of Datatran Company (Datatran), had, however, maintained a bank account with the defendant.

In his position as a corporate officer, Pilgrim had access to incoming checks payable to the corporation. Between November 2, 1988, and January 31, 1989, Pilgrim presented at least four such checks to the defendant for deposit in the Datatran account. The defendant, knowing that the corporation did not maintain an account with it, negligently paid the checks into the Datatran account.

After learning of the defendant's negligence in July, 1989, and, having purchased all of the assets of the corporation on June 27, 1989, the plaintiff requested that the defendant provide him with an accounting of the Datatran account. The defendant refused to do so. Thereafter, the plaintiff filed this complaint seeking damages in the amount of money negligently paid by the defendant into the Datatran account.

The defendant, advancing two related arguments, moved to strike the plaintiff's complaint pursuant to Practice Book 152. The defendant first argued that the plaintiff's complaint failed to state a claim upon which relief could be granted because it alleged a "wrong" to the corporation, and thus the plaintiff, without a right of action separate from that of the corporation, could maintain the action only in the name of the corporation or as a derivative action. Second, the defendant asserted that the action could not proceed without joinder of the corporation as a necessary party whose "interest" in the action would he affected if judgment were rendered in its absence. The plaintiff opposed the motion on the ground that he had properly pleaded a cause of action under Practice Book 190, the counterpart to 52-118, by alleging that he had purchased all of the assets of the corporation. The same allegation, the plaintiff claimed, demonstrated that the corporation had no interest in the action and thus need not be joined as a necessary party.

The court concluded that the corporation was a necessary party to the action and ordered the complaint stricken without considering its legal sufficiency under 190. After declining to plead further, the plaintiff suffered a default judgment, from which he appealed to the Appellate Court. We transferred the appeal to this court pursuant to Practice Book 4023.

On appeal, the parties have briefed and argued the issues whether: (1) the court properly decided that the plaintiff's complaint should be stricken for failure to join the corporation as a necessary party; and (2) the court's decision can be affirmed on the alternate ground that the plaintiff's complaint failed to state a cause of action under 52-118 and 190. Both parties agreed at argument, however, that if we should find the plaintiff's complaint legally sufficient under 52-118, the complaint would not be defective for failure to name the corporation as a party. Because we conclude that the plaintiff's complaint can reasonably be read to allege sufficient facts to state a cause of action under 52-118, we do not consider whether the corporation was a necessary party to the action.

Section 52-118 provides: "The assignee and equitable and bona fide owner of any chose in action, not negotiable, may sue thereon in his own name. Such a plaintiff shall allege in his complaint that he is the actual bona fide owner of the chose in action, and set forth when and how he acquired title." See Practice Book 190. The plaintiff argues that he has stated the requisite statutory cause of action in the fourth paragraph of his complaint, in which it is alleged that "[t]he Plaintiff . . . is the successor in interest to all assets of [the corporation], by virtue of his purchase of all of the assets of the corporation on June 27, 1989." Notwithstanding this allegation, the defendant contends that the complaint properly was stricken because the plaintiff failed to allege facts in "strict compliance" with 52-118. The defendant claims that such compliance is necessary because the applicable statutory cause of action is in derogation of the common law. According to the defendant, a complaint in "strict compliance" with 52-118 must contain allegations phrased in the precise terms of the statute. The defendant thus faults the plaintiff's complaint for its omission of allegations that the plaintiff was the "actual," "bona fide" "owner" "of the chose[s] in action" sued upon, and that the choses had been "assigned" to him by the corporation. The defendant also asserts that none of the facts alleged in the complaint otherwise show that the plaintiff was entitled to bring the action in his own name under the statute. We disagree with the defendant in both respects.

This court has long held that it is not essential to the sufficiency of a complaint alleging a statutory cause of action that the precise terms of the applicable statute "be either counted upon or recited." Leone v. Kelly, 77 Conn. 569, 570, 60 A. 136 (1905); see Dubreuil v. Waterman, 84 Conn. 47, 51, 78 A. 721 (1911). "It is enough for [the plaintiff] to state such facts as, under the general law, of which courts will take judicial notice, entitle him to the redress he seeks." Griswold v. Gallup, 22 Conn. 208, 212 (1852); see Senior v. Hope, 156 Conn. 92, 97-98, 239 A.2d 486 (1968). Consequently, a plaintiff asserting a cause of action as an assignee under 52-118 need only "allege the facts necessary to bring himself within the terms of the statute"; Tuckel v. Argraves, 148 Conn. 355, 357, 170 A.2d 895 (1961); Allen v. Lyness, 81 Conn. 626, 627, 71 A. 936 (1909); thus apprising the court and the defending party of the assignment relied upon and showing the plaintiff's right to sue upon the chose in action acquired thereby. Accord Leone v. Kelly, supra; cf. Hanover Ins. Co. v. Fireman's Fund Ins. Co., 217 Conn. 340, 345, 586 A.2d 567 (1991).

Furthermore, whether the plaintiff alleged the facts required to bring himself within 52-118 must be determined with due regard to the principle that the facts necessarily implied by the allegations in a complaint are sufficiently pleaded, and hence need not expressly be alleged. Ferryman v. Groton, 212 Conn. 138, 146, 561 A.2d 432 (1989); Senior v. Hope, supra, 98; Fisher, Brown Co. v. Fielding, 67 Conn. 91, 103, 34 A. 714 (1895). If any facts provable under the express and implied allegations in the plaintiff's complaint support a cause of action under 52-118, the complaint is not vulnerable to a motion to strike. Senior v. Hope, supra; see Alarm Applications Co. v. Simsbury Volunteer Fire Co., 179 Conn. 541, 545, 427 A.2d 822 (1980). Construing the plaintiff's complaint in the manner most favorable to sustaining its legal sufficiency; Michaud v. Wawruck, supra; we conclude that the facts expressly and impliedly pleaded therein are sufficient to support a cause of action under 52-118.

The legal injury alleged in the plaintiffs complaint was the defendant's tortious interference with his asserted right to receive and retain money represented by checks payable to the corporation. Since the "commonest type of right subject to assignment is one for the payment of money"; 3 S. Williston, Contracts (3d Ed. Jaeger) 412, p. 34; the plaintiff sued the defendant on a validly assignable chose in action. In addition, the plaintiff premised his claim to the money upon his alleged status as the corporation's "successor in interest" by reason of his purchase of all of its assets on June 27, 1989. A purchase is a recognized mode of assigning a chose in action, pursuant to which "`the rights of the seller, as against the third party, pass to the purchaser. As between the seller, the purchaser, and the third party, an assignment is perfected upon the completion of the sale.'" Id., 430, p. 171; see Newman v. Gaul, 102 Conn. 425, 428, 129 A. 221 (1925). The plaintiff's express averment that he had purchased "all" of the corporation's assets, moreover, implied that he had purchased all of its intangible personal property, necessarily including the choses in action underlying the plaintiff's complaint.

While the defendant correctly points out that the term "successor in interest" ordinarily refers to a corporation that "by a process of amalgamation, consolidation or duly authorized legal succession, has become invested with the rights and has assumed the burdens of [another] corporation"; D.D.J. Electrical Contractors, Inc. v. Nanfito Sons Builders, Inc., 40 Conn. Sup. 50, 52, 479 A.2d 1250 (1984); the clear import of that term when employed by an individual such as the plaintiff is: "One who follows another in ownership or control of property." Black's Law Dictionary; see Drazen Properties Limited Partnership v. E. F. Mahon, Inc., 19 Conn. App. 471, 475, 562 A.2d 1142 (1989). Succession by an assignee to exclusive ownership of all or part of the assignor's rights respecting the subject matter of the assignment, and a corresponding extinguishment of those rights in the assignor, is precisely the effect of a valid assignment. See S. Williston, supra, 413; see generally 3 Restatement (Second), Contracts 317; 4 A. Corbin, Contracts (1964) 861, 891.

In sum, the plaintiff pleaded a dated transaction resulting in his acquisition of validly assignable choses in action, and vesting him with an ownership status equivalent to that obtained by an assignee pursuant to an effective assignment. If proven, therefore, the facts set forth in the plaintiff's complaint would have entitled him to sue the defendant in his own name as an assignee under 52-118. The plaintiff thus framed his complaint in a manner legally sufficient to state a cause of action under the statute. Accordingly, the trial court should not have stricken the complaint.