129 N.Y.S. 1025 | N.Y. App. Div. | 1911
Lead Opinion
The plaintiff brings this action on an assignment of seven-alleged causes of action against the defendant for installments of salaries of certain of its employees, which were assigned by.1 their attorneys in fact, acting under powers of attorney in the States of Rhode Island and Maine, on default in payment of promissory notes of the same employees, likewise executed in said States by the attorneys in fact acting under the same powers of attorney. The scheme under which the notes and assignments were executed was manifestly devised to evade the usury laws of the State in which the contracts of employment were made and the services were rendered, and also, I think, to evade the provisions of section 42 of the Personal Property Law of this State (Consol. Laws, chap. 41; Laws of 1909, chap. 45), There is no attempt to disguise the fact that the purpose was to evade the usury law, for that is frankly admitted by counsel, who apparently confidently asserts that the plan successfully protects the lender within the provisions of said section 42 of the Personal Property Law. Of course, it does not directly and necessarily concern the employer that his employees have obtained loans at exorbitant rates of interest in States which have no usury law, and that has no material bearing on the question presented for decision. It does, however, concern the employer if thereby
“ 1. Any person or persons, firm, corporation or company, who shall after March eighteenth, nineteen hundred and four, make to any employee an advance of money, or loan, on account of salary or wages due or to be earned in the future by such individual, upon an assignment or note covering such loans or advances, shall not acquire any right to' collect or attach the same while in the possession or control of the employer, unless within a period of three days after the execution of such assignment or notes and the making of such loan or loans, the party making such loan and taking such assignment shall have filed with the employer or employers of the individual so assigning his present or prospective salary or wages, a duly authenticated copy of such agreement or assignment or notes under which the claim is made.
“2. No action shall be maintained in any of the courts of this State, brought by the holder of any such contract, assignment or notes,- given .by an employee for moneys loaned on account of salary or wages, in which it is sought to charge in any manner the employer or employers, unless it shall appear to the satisfaction of the court that a copy of such agreement, assignment or notés, together with a notice of lien, was duly*439 filed with the employer or employers of the person making such agreement, assignment or notes, by the person or persons, corporation or company making said loan within three days after the said loan was made and the said agreement, assignment or notes were given.”
, If the purpose of this legislation were to give the employer timely notice to enable him to honor the assignment it would have been sufficient to have provided that he would not he liable to the assignee unless due notice and proof of the assignment should he given, to him within a specified time before the salary became .payable and before payment thereof had actually been made. It is manifest, I think, that this was not the sole purpose of the Legislature: Both subdivisions-of the section indicate that the Legislature intended to require that the employer, in order to he hable to the assignee for the accrued and unpaid salary, should he notified within three days of the making of the agreement or loan or note pursuant to or as security for which the salary was then or thereafter assigned.
In the case at bar the attorneys in fact were clothed by the powers of attorney, not only with authority to make the notes, hut with authority to assign the salaries as security therefor. The notes were executed under the powers of attorney and sold, and a percentage of the proceeds immediately transmitted to the employees; but the formal assignments of the salaries were not made until default in the payment of the notes. It was not shown that at the time the notes were issued and thus discounted there was any formal agreement in writing obligating the employees or their attorneys in fact to execute assignments of salary in the event that the notes should not be paid, but the assignments were made to the purchasers and holders of the notes and it appears from the evidence that they were executed by the attorneys in fact whenever requested by such purchasers and holders after default in the payment thereof, and it is fairly to he inferred that there was a parol agreement, at least, to that effect.
It is contended on the part of the respondent that the attorneys in fact were the agents and representatives of the purchasers of the notes, and that the execution of the powers of
I am., of opinion, however, that the inference is fairly'warranted from the evidence that it was part of the agreement under which the notes were negotiated that if they were not paid at maturity formal assignments of the salaries would be executed to the purchasers, and the statute requires, I think, not merely, as contended by counsel for the appellant, that notice three days after the last transaction or the execution of the last paper relating to the transaction be given, but that the notice must be given within three days' after each loan was made to the employee, and also within three days after the agreement, assignment or note concerning the same was given. In the case at bar no notice was given to the employer until after the formal assignments of the wages or salary, which was after default in the payment of the notes and long after the loans were made and the notes issued. The judgment was, therefore, right and should be affirmed.
It follows that the determination of the Appellate Term ■should be affirmed, with costs.
Dissenting Opinion
(dissenting):
I dissent. It seems to me that a successful scheme has been devised to evade the statute. No claim against the employer( arose until the execution of the assignment- of salary. Within three days after such assignment the employer received a copy of the assignment • as the statute required. What has the employer — the defendant herein- — : to complain of? It received'due-notice in time to protect itself against a double payment and is protected by the assignment from any further demand on the part of ■ the employee on the assigned claim.
That employee chose to make his bargain with the money lender in a State which has no usury law. But the fact that he made, an unwise contract puts no additional burden on the
.The determination of the Appellate Term should be reversed.
Scott, J., concurred.
Determination affirmed, with costs.
