35 Cal. App. 2d 349 | Cal. Ct. App. | 1939
This is an appeal by defendant from a judgment in favor of plaintiff for the unpaid balance of a certain nonnegotiable promissory note in favor of the plaintiff by his deceased sister, Ida M. T. Miller. The note dated April 25, 1928, is for the sum of $39,688.93; is to bear no interest; to remain in effect during the life of plaintiff un
The trial court found that the note was in fact supported by an adequate consideration, having been executed in compromise of an action involving the unpaid balance of a former note of decedent for $100,000; that plaintiff is the lawful owner and holder of said note; that one-third of the royalties accrued as of the time of the trial was $1713.24; that no contest of the executor’s rejection of plaintiff’s claim had been made; that plaintiff during the course of the trial waived all recourse against the general assets of the estate of the said decedent other than his right to one-third of said royalties until the balance of said note should be paid in full; that decedent during her lifetime made valid and binding transfers to plaintiff of the said one-third of the moneys accrued, and to accrue, from said royalties until he shall have received the balance of $8,994.36; and that plaintiff’s claim thereto is valid.
Based upon such findings, the court decreed judgment in favor of the plaintiff for said last-mentioned sum, payable out of said one-third of the royalties accrued and to accrue, until said sum shall have been fully paid, and directed said Bank of America, the depositary of said royalties, to pay plaintiff one-third of all such royalties until payment in full of said balance, and further adjudged that neither the said husband of decedent nor the said appellant has any right, title, or interest in or to the one-third of said accruing or accrued royalties until plaintiff shall have received said sum.
The bases of its appeal are: (I) In the absence of clear and convincing evidence showing such intention, a promissory note payable out of a specific fund does not constitute a partial assignment of such fund; (II) a recital in a promissory note that it is accepted as a gift and the acceptance thereof by the payee as a gift estops the payee to assert that it was for a valuable consideration; (III) a promissory note made payable out of a specific fund cannot under any circumstances operate as a partial assignment of
I. As between the decedent and her brother, the instrument was her irrevocable obligation to pay plaintiff the sum promised. In order doubly to insure such payment, she executed and delivered a separate order which was accepted directing the depositary of the fund to make the payments prescribed in the note. Upon the delivery of the note and the said order by the decedent to the said depositary bank, title of the plaintiff to the'interest conveyed was complete. (Civ. Code, secs. 1056, 1059; Burkett v. Doty, 176 Cal. 89 [167 Pac. 518]). Such was the intention of decedent, as demonstrated not only by her written act of authorization to said depositary to make the payments but also by her subsequent acquiescence in the payments over a period of nine years, during which time • the amount of the note was reduced from $39,688.93 to $8,994.36 at the time of her death. To effect a defeat of the transfer of the interest conveyed to plaintiff would require a pleading and a finding that the assignment is void for fraud or mis7 take and neither is suggested. The method adopted by decedent for the purpose of making payment of the sum of the note was evidently to safeguard her residuary interest in the entirety of the royalties but not to avoid or qualify her obligation to discharge said note. Decedent had a right to dispose of her royalties. Her order upon her depositary to pay any portion of it to her creditor was effective and effected upon the delivery of the instruments designed to accomplish that purpose.
The note was in truth a partial assignment of the fund created by the 6il royalties. (Burkett v. Doty, supra.) It is final in the absence of the claims of creditors and is as enforceable as any valid conveyance of a thing in action. (Fidelity Savings etc. Assn. v. Rodgers, 180 Cal. 683 [182 Pac. 426] ; Guggenhime & Co. v. Lamantia, 207 Cal. 96 [276 Pac. 995]; Donohoe-Kelly Banking Co. v. Southern Pac. Co., 138 Cal. 183, at 191 [71 Pac. 93, 94 Am. St. Rep. 28].)
The executor of decedent’s estate cannot avoid payment of the note out of the royalties assigned for two reasons: (1) The order for the payment of the royalties was accepted by the depositary in 1928; and (2) there are no
Holding a partial assignment of a designated fund and a contemporaneously accepted order to the depositary for its payment, and no rights senior to those assigned having been established to any portion of the one-third interest conveyed by decedent to him, plaintiff’s title to the portion assigned to him is indefeasible. (Goldman v. Murray, 164 Cal. 419 [129 Pac. 462].)
Moreover, the delivery of the note and the order for its payment out of the fund to the depositary and the acceptance thereof by said depositary created an equitable assignment by the decedent and gave plaintiff’s title precedence over any other assignment or lien. (McIntyre v. Hauser, 131 Cal. 11 [63 Pac. 69].) The language of the note and the order were sufficient to create an equitable assignment. “It is sufficient if, from the entire transaction, it appears that the intention of the parties was to pass title and that payment should be made to the one who becomes the equitable assignee.” (Goldman v. Murray, supra.)
Appellant’s cited authorities to the effect that an agreement to pay a debt out of specific funds does not constitute an equitable assignment are not in point. In the case of State Central Savings Bank v. Hemmy, 77 Fed. (2d) 458, the appellant bank having procured from the bankrupt an instrument providing for the payment out of the proceeds to be received by the bankrupt from certain insurance policies, the court held that there must be a distinct appropriation of the funds for the payment of the debt and that such appropriation must amount to a transfer and the establishment of a right in rem. The instrument in question did not operate as an assignment because it did not contain words of appropriation or of transfer. Since the paroi evidence concerning the entire transaction was in direct conflict as to the nature of the arrangements, the Circuit Court of Appeals declined to disturb the findings of the referee.
In the case of Lone Star Cement Corporation v. Swartwout, 93 Fed. (2d) 767, the claim of the plaintiff based upon the alleged assignment from the bankrupt was denied. At a time when the bankrupt was indebted to the plaintiff
II. The claim that the note was a gift without consideration is disposed of by the findings of the trial court. The postscript upon the note over the signature of the plaintiff to the effect that it was a gift is of no consequence in the face of the court’s findings that the note was delivered for a valuable consideration. All of the transactions between the parties, commencing with 1921 to the date of the settlement of the litigation between them, April 25, 1928, were given in evidence and such evidence constituted the basis of the court’s findings. The court with propriety received paroi evidence of the antecedent transactions between the parties to ascertain the true consideration for the note. (Civ. Code, sec. 1962; Richardson v. Lamp, 209 Cal. 668 [290 Pac. 14]; Gardner v. Watson, 170 Cal. 570 [150 Pac. 994].) “Plaintiff is not estopped by the recitals in the bill of sale with respect to its consideration.” (Wurdeman v. Waller, 88 Cal. App. 393 [263 Pac. 558].)
But if appellant’s contention were sound and all the paroi evidence excluded, the adequacy of consideration was established by the original conveyance of a one-third interest in the oil-bearing land; by the $100,000 note of decedent to plaintiff delivered upon plaintiff’s quitclaim of said one-third interest, and by the subsequent litigation arising from decedent’s attempt to cancel said last-mentioned note and by the written stipulation for its compromise. The compromise of a lawsuit was itself a sufficient consideration for the note. (6 Cal. Jur. 177; Gardner v. Watson, supra.)
III. The contention of appellant that the provision for the note to be payable out of a specific fund cannot operate as a partial assignment of a larger fund in the ab
Plaintiff’s filing of a claim with the executor was meaningless and its rejection was harmless. (Probate Code, sec. 716.)
The judgment is affirmed.
Wood, J., and McComb, J., concurred.
A petition by appellant to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on December 28, 1939.