Summary
In Lanigan's Adm'r v. Bradley & Currier Co., 50 N. J. Eq. 201, 24 Atl. 505, the equitable assignment was made out altogether by parol agreement to assign, and acts thereunder.
Summary of this case from Seyfried v. StollOpinion
06-13-1892
LANIGAN'S ADM'R v. BRADLEY & CURRIER CO., Limited, et al.
Mr. Collins, for Bradley & Currier Co., Limited. S. A. Besson, for Vezzetti Bros. Nivens & Minturn, for Emil Tietje.
(Syllabus by the Court.)
Bill of interpleader by John Lanigan's administrator against the Bradley & Currier Company, Limited, Vezzetti Bros., and Emil Tietje.
Mr. Collins, for Bradley & Currier Co., Limited.
S. A. Besson, for Vezzetti Bros. Nivens & Minturn, for Emil Tietje.
PITNEY, V. C. This is a bill of interpleader. The fund in court represents the balance of the contract price agreed to be paid by Lanigan for the building of a house on his land by Conroy. The contest is between the Bradley & Currier Company, Limited, who claim under an alleged assignment by Conroy on the one side, and Vezzetti Bros. and Tietje, who severally claim under notices served upon Lanigan under the third section of the mechanics' lien law. The claims of these last are sufficient to take the whole fund if they prevail over that of the Bradley & Currier Company, Limited. This company was made defendant because it also served a notice under the same section of the statute for a small sum, but at a latter date than that of Vezzetti Bros, and Tietje. The claim the Bradley & Currier Company relies upon, viz., an assignment from Conroy, is set up by a cross bill. The facts are undisputed, and are as follows: Lanigan was the owner of a lot upon which he was minded to build a house according to certain plans and specifications. Conroy offered to build it for $5,799. Lanigan was satisfied with this offer, but had no ready money, and could raise upon mortgage no more than $5,000, and his project was likely to be abandoned for lack of funds. In this situation of the affair one Evans, the sales agent of the Bradley & Currier Company, who had made a bid to Conroy for the sash and blinds for the house, offered to sell to Conroy goods manufactured by the Bradley & Currier Company such as Conroy used in his business of a builder, and to take in payment therefor the promissory notes of Lanigan on a long credit, to the extent not to exceed $1,000, to which the $5,000 to be borrowed by Lanigan on mortgage should fall short of paying Conroy his contract price. Conroy communicated this offer to Lanigan, and he agreed to the arrangement, and the building contract was signed, and the building erected in pursuance of it. Tills arrangement was made irrespective of whether the Bradley & Currier Company obtained the contract for furnishing the sash and blinds for Lanigan's house or not; but they did obtain the contract, and furnished materials which went into the house to the extent of $385, and, further, while the house was being erected, furnished other goods to Conroy for his use in other buildings, to the extent, In all, of about $1,000. The arrangement so made between Evans, Conroy, and Lanigan was never repudiated by either of the parties to it, nor was there any dispute as to the length of credit to be given to Lanigan. The only objection made by Lanigan to carrying it out and giving his notes to the Bradley & Currier Company was that he claimed a deduction for upwards of $100from the contract price for an alleged incompleteness in the contract work. The parties—Conroy, Lanigan, and Evans, representing the Bradley & Currier Company—met for the purpose of adjusting this difference, and did finally agree upon an allowance, but before the notes were actually given to the Bradley & Currier Company notices were served by Vezzetti Bros, and Tietje under the third section of the mechanic's lien law, and thereupon Lanigan, under the advice of counsel, filed his bill, and paid into court the amount for which, but for the notices, he was ready to give his notes to the Bradley & Currier Company.
The sole question is whether or not what took place between the Bradley & Currier Company and Conroy and Lanigan amounted to an assignment by Conroy to the Bradley & Currier Company of so much of the contract price for building the house as the proceeds of the $5,000 mortgage loan should fall short of paying. This is the only question, because it is well settled that, if Conroy did so assign such balance before the notices were served, the assignee takes in preference to the claimants under notice. The third section of the statute in question gives no lien or right in the nature of a lien, but simply a right of stoppage. It is essential to this right that there should be money due from the owner to the contractor on account of the contract at the time the notice is served. The section in questiondoes not interfere with the right of the contractor to assign sums due him on the contract at any time before the notices are served. Craig v. Smith, 37 N. .7. Law, 549; Freeholders v. Lindsley, 41 N. J. Eq. 189, at page 195, 3 Atl. Rep. 391; Kirtland v. Moore, 40 N. J. Eq. 106, 2 Atl. Rep. 269; Burnett v. Jersey City, 31 N. J. Eq. 341, at page 351. The effect of what took place between Evans, Conroy, and Lanigan was this: Lanigan says to Conroy: "I am unable to pay you cash for the whole of your contract price, but I must have credit for a certain part of it." Evans, for the Bradley & Currier Company, says to Conroy: "1 will furnish you building materials to the amount of that certain portion, and take my pay in Lanigan's notes on time." Conroy accepts the proposition and agrees that the portion of the contract price in question shall be paid by Lanigan to the Bradley & Currier Company, and that he will take his pay from them in materials. It seems to me impossible to escape the conclusion that this arrangement amounted to an assignment by Conroy to the Bradley & Currier Company of the stated portion of the contract price to become due to him from Lanigan. Under it the Bradley & Currier Company delivered to Conroy the materials agreed upon. To that extent Conroy was paid, and it is admitted that the amount so paid, when added to the cash received by him from the mortgage loan, was sufficient to pay him in full. After having thus received the full amount of his contract price,—partly in cash from Lanigan, and partly in materials from the Bradley & Currier Company on the strength of Lanigan's credit, —it is impossible to say that anything was owing to him from Lanigan. It was not essential to the validity of the transaction in equity that Lanigan should assent to it. If, in place of what took place, Conroy had given the Bradley & Currier Company a written order on Lanigan for so much of the contract price when earned, it would have operated as an assignment in equity without Lanigan's consent, which he would have been bound to respect after notice of it. Kirtland v. Moore, 40 N. J. Eq. 106, 2 Atl. Rep. 269; Superintendent v. Heath, 15 N. J. Eq. 22; 3 Pom. Eq. Jur. §§ 1280, 1283. If, however, such a written order had been given and accepted by Lanigan, the affair would have reached the stage of novation, and Lanigan would have been liable at law to the Bradley & Currier Company. 1 Pars. Cont. p. 217. But the law does not require that such an assignment should bein writing or assume any particular form. 2 Story, Eq.Jur.§1047; 1 Pars. Cont. p. 228; 2 Lead. Cas. Eq., 4th Amer. Ed., (1877,) p. 1641 et seq.; Tibbits v. George, 5 Adol. & E. 107, 31 E. C. L. 543; Heath v. Hall, 4 Taunt. 326. These last cases go to the length of holding that an assignment of a debt by parol, and without the delivery of its instrumental evidence, if there be any such, is good. The result is that we have a complete appropriation by Conroy of a specific portion of a debt, to grow due to him from Lanigan tor work to be done, to the payment to the Bradley & Currier Company of a debt to grow due to them from Conroy for goods to be sold. The arrangement was executory, but was afterwards executed by all the parties except Lanigan. Conroy did his work for Lanigan, so that certain moneys came due from Lanigan. The Bradley & Currier Company delivered the goods to Conroy, so that certain moneys came due to them. This gives them the right to have the appropriation carried out. Lanigan waived the right, if any, which he had to withhold payment until the contract was fully completed, and also his right to have time for payment, by paying into this court the sum he admitted to be due. That money Conroy had, in effect, directed him to pay to the Bradley & Currier Company in payment of the goods furnished by them to him, and it seems clear enough that they have a right to follow it into this court. 3 Pom. Eq. Jur. § 1280. The case is clearly distinguishable from that class in which the debtor promises to pay his creditor out of a particular fund when or as soon as he shall receive it. Such mere promise does not amount to an assignment or appropriation. The distinguishing feature of this class is that the party does not part with the control of the fund, but his promise is consistent with its being paid to and received by him. 3 Pom. Eq. Jur. § 1283, note 2. The American annotator of White & T. Lead. Cas. Eq. at page 1044, vol. 2, says: "A covenant to pay a debt with the proceeds of goods when sold, or out of an outstanding demand when collected, will not operate as an assignment, because it implies that the covenantor is to retain the control over the fund, and that more remains to be done on his part to make the transfer effectual;" citing several of the cases relied upon by the defendants herein in their briefs. The test laid down in Trist v. Child, 21 Wall. 441, is: "Does the contract or arrangement in question authorize the depositary of the fund to pay it directly to the creditor or party claiming as assignee without the further intervention of the debtor or party originally entitled to it?" Eib v. Martin, 5 Leigh, 132, and Ford v. Garner, 15 Ind. 298, and other cases cited by defendants, are instances of the class of promises which do not authorize the depositary of the fund to pay it directly to the promisee, and so do not amount to an assignment. In the casein hand the precise terms of the arrangement v ere that Lanigan should pay directly to the Bradley & Currier Company. It seem too clear for argument that such payment would have been a complete discharge no him as against Conroy. The fact that the Bradley & Currier Company might have sued Lanigan at law does not disturb their footing in this court. They have the right to follow the fund wherever they find it. Being made parties to the interpleader, they would be barred if they did not assert their right under the assignment. I think that Bradley & Currier Company, Limited, are entitled to the fund, and will so advise.