Appeal, No. 187 | Pa. Super. Ct. | Feb 20, 1914
Opinion by
The plaintiff’s right to the judgment he obtained rests on his claim that he had an equitable assignment of or an equitable lien upon the fund for distribution. If he had such assignment or lien, it must have been created by the agreement in writing entered into by him and Caldwell, the owner of the property, the sale of which produced the fund. Before attempting to interpret the language of that instrument, a chancellor would naturally have before him the circumstances under which the agreement was made and the existing conditions at the time. Hurley was a creditor of Caldwell. This indebtedness represented labor done and material furnished by Hurley in the alteration and improvement of the identical property of Caldwell which afterwards produced the fund for distribution. The amount of the indebtedness had been previously ascertained and agreed on and was evidenced by four promissory notes, one of which was past due and another shortly thereafter to fall due. Caldwell, lacking the ready money to pay, was desirous of obtaining an extension of the due time of his notes to the end that he might negotiate
Let us turn then to the language of that agreement. In its tlfird paragraph, it provides that in case of the sale or transfer of his business, with the lease, fixtures, etc., all of the' four promissory notes, the due time of which had been previously extended, were at once to become due as if they had been made payable on demand. Section 4 followed, and we quote it: “Robert G. Caldwell agrees that in case he shall at any time sell or transfer his said business, or lease or fixtures, at 1118 South Broad Street, he will pay the entire amount of said notes, or any unpaid balance thereof, out of the first proceeds of such sale and will immediately upon such sale give such order to Hurley on the purchaser as will secure such payment.” Did the parties by that language contemplate a pledge pro tanto of the fund that would arise from the sale to secure the payment of the notes to Hurley?
We are not concerned with many of the questions that have arisen in defining and applying to particular cases the doctrine of equitable assignment or lien. It is ciear the plaintiff gave a good and valuable consideration for what he was to obtain. All of the cases have practically held that no legal obstacle to the creation of such assignment or lien arises from the fact that the
It is true the agreement contains none of the usual words of a formal assignment or transfer in prsesenti. The very fact there was then nothing in esse to assign should sufficiently account for the absence of such words. From the same learned author, vol. 3, par. 235, we quote: “Liens arise from executory agreements which do not convey or transfer any legal estate in the property but which stipulate that the property shall be security, or which pledge it for the performance of an obligation.” So in Day and Sharpe’s Est., 21 Sup. Ct. Rep. 118, it was said: “An equitable assignment is an agreement in the nature of a declaration of trust which a chancellor never hesitates to execute when it has been made on a valuable, or even good, consideration (cases cited). The matter of form is unimportant: East Lewisburg Lumber & Mfg. Co. v. Marsh, 91 Pa. 96" court="Pa." date_filed="1879-10-06" href="https://app.midpage.ai/document/east-lewisburg-lumber--manufacturing-co-v-marsh-6236221?utm_source=webapp" opinion_id="6236221">91 Pa. 96. The case last cited is authority for the statement that equity will support assignments of contingent interests and expectancies; things which have no present actual existence, but rest in mere possibility, provided the agreements are fairly entered into and it would not be against public policy to uphold them.”
The opinion filed by the learned judge below cites other authorities that we think fully sustain the proposition that the rival claimants to the fund, the appellants, had no such standing as to give them priority over the appellee, provided the latter has shown that as between him and his debtor he had such a pledge or appropriation of the proceeds of the future sale as equity would recognize and enforce. Nor do we think it can be successfully argued that our conclusion carries the doctrine of equitable lien or assignment beyond the boundaries heretofore established. Patten v. Wilson, 34 Pa. 299" court="Pa." date_filed="1859-07-01" href="https://app.midpage.ai/document/patten-v-wilson-6231012?utm_source=webapp" opinion_id="6231012">34 Pa. 299, is one of our earliest cases on the subject. It has been not infrequently cited in later cases, and we have not been able -to discover any intention on the
For the reasons we have indicated, in addition to those so well stated in the opinion of the learned judge below, we feel obliged to concur in the conclusion he reached. The assignments of error are overruled.
Judgment affirmed.