No. 856 | Nev. | Apr 15, 1878
By the Court,
In August, 1875, defendant entered into a written contract with M. Pettinelli and M. Pardini, partners and doing business under the firm name of M. Pettinelli & Co., whereby P. & Co. agreed, prior to July 1, 1876, to cut, manufacture and pile for defendant, thirty thousand cords of fire wood of a stipulated length, upon lands of defendant, selected and agreed upon by both parties. P. & Go. also agreed to cut all trees suitable for mill purposes into saw-logs of certain length and diameter, or pay all damages for failure so to do, and to “ clear up ” the land whereon the wood was cut.
Defendant agreed to pay P. & Co. therefor ninety cents a thousand fer cutting the logs, and two and one eighth dollars per cord for the wood so cut and piled. Defendant was to measure the wood and its measurement was to be taken as correct. Defendant agreed to make such advancements, in the meantime, as might be “proper” for P. & Co. to carry out their contract.
Under the contract stated, P. & Co. cut between eight and' nine hundred cords in the fall of 1875, when they ceased work until April, 1876, at which time they resumed and continued until about the first of September, 1876, when they ceased work altogether; having cut, according to defendant’s books, a little less than fifteen thousand cords of wood, and about five hundred and eighty-four thousand two hundred and twenty-four feet of logs. Defendant paid to P. & Co., or on their account, considerable sums of money from time to time, the first payment having been in November, 1875; and thereafter the record shows payments each month, except January and July, 1876. P. & Co. cut the
It also appears that on or about the seventeenth or eighteenth of July, 1876, P. & Go. became involved, and were unable to pay their laborers, who were dissatisfied and threatened to stop work if they were not paid or their wages secured. They proposed to keep possession of the wood that had not been measirred and accepted by defendant, until they were paid. Under such circumstances, D. H. J ones, defendant’s superintendent, made a verbal agreement with P. & Co., on the eighteenth of July, with the consent and to the satisfaction of the laborers and sub-contractors, or at least a large part of them, to the effect that defendant should pay the men for their labor out of the first moneys due to P. & Co., under the wood contract. Under this arrangement the men continued their work. In accordance with the verbal agreement stated, Pettinelli & Pardini, on the morning of July 21, and prior to the drawing of the ten thousand dollar order hereinafter mentioned, made and delivered to defendant’s superintendent a written order, signed by both, directing the superintendent to retain from the first moneys due to P. & Co. on their contract, the amount due their men for work done on wood and logs by the terms of their contract, the balance, after paying the men, to be held subject to their order.
The superintendent verbally accepted the order and agreed to pay the men accordingly. He commenced to pay the laborers about the first part of August, generally upon statements from P. & Co., showing the amount due, and continued to do so until P. & Co. discontinued work. Defendant paid the men in full, and from the testimony of the superintendent and the books of defendant, it appears that, including the amount paid the men, P. & Co. have been paid the whole amount coming to them under their contract, except four hundred and eighty-nine dollars, for which amount defendant is liable on account of legal garnishments in suits against P. & Co.
Plaintiffs did not make any advancements, or pay any sums of money to P. & Co. after the twenty-first of July,
On the sixth day of June, 1876, when P. & Co. were indebted to plaintiffs in about the sum of one thousand three hundred dollars, for advances, the former made and delivered to the latter an order of which the following is a copy:
Peno, June 6, 1876.
“1,000. Pay to the order of J. E. Jones & Co. one thousand dollars in United States gold coin, value received, and charge the same to the account of
M. Pettinelli & Co.
To the Pacific Wood, Lumber and Flume Company, Virginia City, Nev.”
On the same or following day, plaintiffs forwarded the order to the defendant with the request that the latter should “hold it against P. & Co. for plaintiffs’ benefit, that in case any suit should be brought against P. & Co., the order might operate as an assignment to the extent of one thousand dollars.”
On the sixteenth of July, 1876, defendant’s superintendent returned the order to plaintiffs with a letter wherein he said: “ The inclosed draft I find among the papers of the company. To avoid any question (as) to Pardini’s authority to draw in this way, I return it to you for proper signature (P. & P.), which please get, and if you wish, will hold him (them) for payment from any balance due them in settlement and completion of the contract.” This draft was returned bv the plaintiffs to P. & Co. on the twenty-first of July.
On the sixth of July, 1876, plaintiffs, for the same purpose, received a third order from P. & Oo., in the same form, for three thousand dollars, when P. & Co. owed plaintiffs four thousand and seventy-five dollars — less the acceptance of three thousand five hundred dollars, before mentioned. This order was returned by defendant without acceptance, and with the order for one thousand dollars was given up by plaintiffs to P. & Oo. July 21. On the twenty-first of July, when P. & Go. owed plaintiffs about six thousand five hundred dollars, less the acceptance of June 19 for three thousand five hundred dollars, and at the time that the one thousand dollar and three thousand dollar orders were returned by plaintiffs to P. & Oo., the latter gave plaintiffs a fourth order for ten thousand dollars, to cover and secure the entire indebtedness due from P. & Oo. to plaintiffs, further advances, and some debts due to other parties. Plaintiffs were not to be responsible to those last named, unless this order was paid. Defendant had notice of the different orders named soon after they were drawn, Inrtnone were accepted except the one for six thousand dollars, which was paid, as before stated, before the commencement of this action. Defendant had no notice of the ten thousand dollar order until after its agreement to pay P. & Co.’s indebtedness to the men, and there was no evidence
Three days after the ten thousand dollar order was presented, the superintendent wrote the plaintiffs as follows: “In relation to the account of Pettinelli & Pardini, I will say that there is not much doubt but that there is plenty due them in settlement to pay all their liabilities. Should anything occur to change my opinion in this respect, will let you know at once.” About the middle of September he informed plaintiffs that the condition of P. & Co.’s account did not permit an acceptance of their orders; that P. & Co., after paying the workmen, had nothing coming to them. Until that time plaintiffs did not know of defendant’s agreement to pay the men. It does not appear, however, that defendant could or should have given plaintiffs earlier information as to the state of P. & Co.’s account, or that plaintiffs were injured by the delay. Plaintiffs recovered judgment for three thousand dollars, the amount due to them from P. & Co., and this appeal is from the judgment and the order denying defendant’s motion for a new trial. Appellant’s assignments of error are numerous. Among others,
All the orders set out in the complaint are admitted to be, in form, inland bills of exchange, as they undoubtedly are. None of them, upon the face, were drawn upon any particular fund. It is alleged in the complaint that all except the one for ten thousand dollars were drawn for a part, only, of the amount due P. &, Co. from defendant; and as to the last, the complaint does not show with certainty whether its amount, and the sum alleged to have been due from defendant to P. & Co., were or were not the same. The proof, however, shows that they were all drawn for a portion of the fund — that is to say, the amount coming to P. & Co. upon the wood contract. The case was tried upon the theory that the orders mentioned, operated as an equitable assignment pro tanto of the fund, or the money due P. & Co. from defendant under the contract, and that after notice of such orders, defendant was bound to the extent of the sums stated in the orders, or to such part as was due from defendant to the drawers, without acceptance or other promise to pay the same.
Appellant urges that the court erred in so interpreting the orders in question, and this assignment constitutes the most important subject presented for our consideration. It is not necessary at present to inquire whether, in case of an order upon a particular fund, it is indispensable that such order shall embrace the whole fund in order to operate as an assignment. That question may not arise in the decision of this case, if it be true, as we think it is, that an order in the form of an inland bill of exchange is not, before acceptance, an assignment, and does not create any lien in favor of the holder upon funds of the drawer in the hands of the drawee.
The following instructions, among others, were given to the jury on behalf of plaintiffs:
*367 “No. 15. You are instructed that the fact that the defendant has paid Pettinelli & Pardini, or persons for them, all the money due upon the contract for cutting wood and logs, is no defense to this action, provided the jury believe, from the evidence, that before such payments, Pettinelli & Pardini had assigned to plaintiff, with the knowledge or consent of defendant, the sum claimed by plaintiffs and due to them.”
“No. 16. You are instructed that the orders set out in the complaint were an assignment of any sum or sums of money in the hands of the defendant, at the time due to Pettinelli & Pardini, and that if the defendant had notice of such orders at such time as said sums were due, then the orders bound the defendant to pay the plaintiffs the sums of money specified, and which were due.”
“No. 10: You are instructed that no promise made by the defendant to pay the sub-contractors or laborers of Pettinelli & Pardini, sums of money, which at the time and before the promise was due to them from Pettinelli & Pardini, was valid or binding upon the defendant, unless the promise or some note or memorandum thereof was in writing.”
“No. 13. You are instructed that the order or authorization directing or requiring D. H. Jones, superintendent, to retain and set aside from the money due Pettinelli & Pardini, on the contract, the sum due the men for work done on the wood and logs, was not an assignment in favor of the men of the sum, or any sum, of money then due from the defendant to Pettinelli & Pardini. ”
“No. 14. You are instructed that the order of July 21, 1876, directing the defendant to pay the plaintiffs ten thousand dollars, was a revocation of any previous authorization to pay the men, except as to such sums due to Pettinelli & Pardini, as were in excess of ten thousand dollars.”
It will be noticed that, from these instructions, the jury could not fail to find for plaintiffs, if they found that defendant had notice of the orders, which it did not deny, and that, at the time the orders were presented, defendant was indebted to Pettinelli & Pardini, considering the amount paid to the laborers a portion of such indebtedness;
By the tenth, they were told that they could not consider defendant’s promise to pay the men, unless the promise or some note or memorandum thereof was in writing, and, as we have seen, defendant admitted that it was not in writing.
By the thirteenth, they were told that the order from P. & Go. to defendant, to pay the men was not an assignment in their favor of any sum due to P. & Co., and by the fourteenth that the order last mentioned was revoked by the ten thousand dollar order in favor of plaintiffs, except as to any excess of that sum due from defendant to P. & Go. So, we repeat, there was nothing left for the jury but to find a verdict for plaintiffs, -if they found that defendant had notice, and that it was indebted to P. & Go. at the time of such notice.
Let us consult the books. In Pars, on Notes and Bills, Yol. 1, 331, the author says: “There may be some dicta to the effect that a bill of exchange is an assignment, but no case that we are aware of, with the exception of one (referring to Corser v. Craig, 1 Wash. C. C. R. 424), has held this doctrine in an unqualified way, and that case must be considered as overruled. The doctrine is well settled, that before acceptance, a negotiable bill for a part of the funds is no assignment, but becomes one on the drawee’s signifying his assent by accepting the bill.” The case of Hutter v. Ellwanger, 4 Lansing, 11, is similar to this in many respects. One Underhill had contracted with the defendant to erect certain houses for a specified sum, of which eighty percent, was to be paid as the buildings progressed, on the architect’s certificates given once in two weeks. Plaintiff did the mason work under a sub-contract with Underhill, and on the seventh day of December, 1869, there was due to him from Underhill, on account of such work, six hundred and
“$670. Messrs. Ellwanger & Barry: Pay the bearer, Mr. Hutter, sis hundred and seventy dollars, and charge my account for building on Cypress street, when work is accepted, it being amount due him on settlement.
“ December 7, 1869. R. W. Underhill.”
Within a few days thereafter plaintiff notified defendants of the order. More than a month prior to the date of Hutter’s order, Underhill gave to the payees therein named two other orders upon Ellwanger & Barry, as follows:
“Please pay to M. F. Reynolds & Co. five hundred dollars on my contract for building houses, when the work is completed and accepted.
“Nov. 4, 1869. R. W. Underhill.”
$900. Pay to the order of Luther Gordon & Co., nine hundred dollars, at time of completion and acceptance of contract, value received, and charge to the account of
“Nov. 4, 1869. R. W. Underhill.”
As in this case, Underhill had no other account with, or funds in the hands of, defendants than those arising from the contract for building, and defendants had due notice of the orders of November 4, prior to notification of plaintiff’s order; Underhill’s contract was completed and accepted December 12, 1869.
Defendants refused to accept plaintiff’s order, but at the same time informed him that they had more than sufficient funds in their hands belonging to Underhill, on his contract, to pay it. They were mistaken, however, as to the amount of money due Underhill, the fact being, that the orders of November 4 covered the whole amount due Underhill, if both operated as an assignment of the building fund due from Ellxvanger & Barry to Underhill. The court held that the order of November 4, for nine hundred dollars in favor of Gordon & Co., was not an assignment or appropriation of any part of the money due Underhill on his contract, but that the orders to Reynolds & Co., and to
The Marine and Fire Insur. Bank v. Jauncey et al., 3 Sandf. 258, was a suit in equity for the purpose of reaching certain funds received by the defendant Jauneey, arising from the sale of cotton delivered to, and sold by, him, on which plaintiff claimed to have an equitable lien, by reason of the facts stated in the opinion. The court says: * * * “It was next insisted that the bill or draft having been drawn against a consignment, was, of itself, an equitable assignment by the drawer of the property or its proceeds. This is certainly carrying the doctrine of equitable assignments very far, and is, in our judgment, entirely unsupported by authority. In the cases cited by counsel, and in all the other cases where an order has been held to be an equitable assignment of a particular fund, the fund has been specified in the order, and the party giving the order has thereby divested himself of all right to control the fund purporting to be assigned. The form of the assignment is immaterial, but these two ingredients are essential.” And
In Harris v. Clark, 3 Comstock, 115, it is said: “ The research of the counsel for the plaintiff has not enabled me to find a case where it has been held, that upon a negotiable bill of exchange the drawee has been made liable in equity to the holder of the bill, without his acceptance or assent. Such an instrument gives to the holder no lien upon the funds in the hands of the drawee.” This language is quoted with approval in Lunt v. Bank of North America, 49 Barb. 229.
In Chapman v. White, 2 Seld. 416, the question was, whether a draft payable generally, operated as an assignment, either at law or in equity. The court held that the instrument was an ordinary bill of exchange, and that the drawee owed no duty to the holder until it was presented and accepted.
Winter v. Drury, 1 Seld. 525, was a suit in equity, and after announcing the same doctrine the court adds: “ If the holder, by the receipt of the bill of exchange for value, acquired neither at law nor in equity, a lien upon the balance
Luff v. Pope, 5 Hill, 415, was an action upon an ordinary bill of exchange drawn by one Bell in favor of plaintiff Pope. Tbe court said: * * * “There is no color for tbe argument that tbe instrument on which tbe plaintiff sued was not a bill of exchange. A bill of exchange is a written order or request by one person to another, for tbe payment, absolutely and at all events, of a specified sum of money to a third person, blow, what have Ave here? Bell requests Luff, thirty days after sight to pay a specified sum of money to Pope. It is payable absolutely, and without reference to any particular fund, and if it be not a bill of exchange, tbe Avit of man cannot devise one. Tbe justice thought it was not a bill, but only ‘an order or instrument in writing,’ because it Avas said at tbe time, and tbe proof tended to establish tbe fact, that Luff bad funds in bis bands belonging to Bell. It Avould be enough to say, that a Avritten instrument which is perfectly plain and explicit on its face, cannot be changed into something else by anything which tbe parties said at tbe time of making it, nor by any extrinsic facts. It must speak for itself.”
In Hopkins v. Beebe, 26 Pa. St. 85, it was held that tbe bolder of a bill of exchange is not tbe owner of money, goods or effects remitted by tbe drawer to tbe drawee; nor has be any lien upon tbe funds, whether the remittance was made before or after tbe date of tbe bill; that effects remitted to meet a bill draAvn, or intended to be drawn, are tbe property of tbe party remitting them, and be may transfer or use them as other men use their own, at any time after they are shipped; that tbe bolder of a bill of exchange drawn against such remittance cannot call tbe remittee to
The following additional authorities sustain those from which we have so liberally quoted: Harrison v. Williamson, 2 Edwards, Ch. 437; Pope v. Luff, 7 Hill, 577; Dickinson v. Phillips, 1 Barb. 454" court="N.Y. Sup. Ct." date_filed="1847-12-14" href="https://app.midpage.ai/document/dickenson-v-phillips-5457196?utm_source=webapp" opinion_id="5457196">1 Barb. 454; Kimball v. Donald, 20 Mo. 577" court="Mo." date_filed="1855-03-15" href="https://app.midpage.ai/document/kimball-v-donald-7999521?utm_source=webapp" opinion_id="7999521">20 Mo. 577; Drake on Attachments, sec. 611.
An equitable assignment secures to the assignee the property against attachment for the debt of the assignor, although no notice be given prior to attachment. It is only necessary that notice be given in time to enable the person holding the property or owning the debt, to bring the fact of such assignment to the attention of the court before judgment is rendered against him as garnishee. (Drake on Attachments, sec. 527.) Between the parties, the assignment is complete the moment it is made, although no notice be given, and if, after the assignment, the assignor received payment of the debt, he will bo obliged to pay the amount to the assignee. (Drake on Attachments, sec. 606; Miller et al v. Hubbard, 4 Cranch, C. C. R. 453.) If, then, the orders set out in the complaint operated as assignments, it follows that if any other creditor of P. & Co. had garnished the defendant immediately after the orders Were delivered to plaintiffs, and before notice to such creditor or to defendant, plaintiffs’ lien would have taken precedence, in case the defendant had received notice before its liability had become fixed as garnishee; and if these orders were assignments, it follows, too, that in all cases, a bill of exchange drawn upon the general fund or general credit of the drawer, is an absolute appropriation of his funds pro tanto; that thereafter the drawer has no further control of such funds; and, that after notice merely, if the drawer pays out such funds even to the drawee in person, he does so at his own peril and risk. If these orders are assignments, then every bill of exchange is an assignment, and the statute is practically a nullity. (Compiled Laws, 14.) There are many authorities which hold that, an order drawn on a particular
In referring to this language of Judge Story, the court in Harris v. Clark, supra, said: “This is undoubtedly true with respect to drafts on a special fund, which are not bills of exchange; and it will be found on a careful reading of the section referred to, and of the cases quoted in the notes, that the commentator is speaking of orders to pay over particular debts and drafts on particular funds and not of bills of exchange proper.”
We are referred to Hall v. The City of Buffalo, 1 Keyes, 193" court="NY" date_filed="1864-09-15" href="https://app.midpage.ai/document/hall-v-city-of-buffalo-5454909?utm_source=webapp" opinion_id="5454909">1 Keyes, 193; Conway v. Cutting, 51 N. H. 409; Risley v. Smith, 39 N. Y. (S. C. R.) 137, and Lewis et al. v. Berry, 64 Barb. 593" court="N.Y. Sup. Ct." date_filed="1873-04-01" href="https://app.midpage.ai/document/lewis--pelton-v-berry-5462631?utm_source=webapp" opinion_id="5462631">64 Barb. 593, to sustain the doctrine that a court may receive and the jury consider testimony outside of the order itself to prove
The second and third instructions offered by defendant should have been given. We do not deem it necessary to pass upon any other assignments of error contained in the record.
The judgment and order appealed from are reversed and the cause remanded.