Willison v. Salmon

| N.J. | Mar 15, 1889

The opinion of the court was delivered by

Van Syckel, J.

In March, 1886, one Elizabeth Bowlby made a contract for the erection of a house on her premises in Newark with James B. Willison, who claimed to be acting as the agent for his wife, ■Julia B. Willison. The building was completed about the 3d of August, 1886, and the final payment of $1,000 was due -August 14th, 1886.

By proceedings taken under a judgment against said James-B. Willison, an order for discovery was made July 1st, 1886, and on the 15th of July, 1886, Albert B. C. Salmon was appointed receiver.

In July, 1886, the receiver served notice upon Mrs. Bowlby,. claiming the final payment.upon said’building.

Claims were also made upon her, under the third section of the Lien law (Rev. p. 668), by those who had furnished labor' and materials in the erection of the building.

Thereupon, after Willison had completed the building, Mrs. Bowlby, admitting the said sum to be due to him, filed her bill, of interpleader, making the several persons who had presented these conflicting claims parties thereto.

No decree that the defendants should interplead was made in-the cause, but all the defendants answered Mrs. Bowlby’s bill,, setting up their several claims upon the fund in question. In this state of the pleadings, testimony was taken, and the case-proceeded to final hearing,- and a decree was made that the receiver appointed under the supplementary proceedings was entitled to the said sum of $1,000.

The receiver rested his case upon an alleged fraudulent cover, his contention being, that Willison took the contract for the-building in the name of his wife, for the purpose of preventing his creditors from reaching the profits which would accrue to-himself from it. Under the testimony in this case, I think it must be conceded that the contract was made in the name of the-wife with a fraudulent intent, and the case must be dealt with as though the husband was the contractor.

The question then arises as to the status of the receiver with, respect to this fund.

Did this fund pass to the receiver under the Execution act (Rev. p. 394 § 26)?

At the time of issuing the execution, and at the time the re- • ceiver was appointed, it was neither a debt nor a trust.

It was not debitum in prcesenti, for the work on which payment depended was not entirely done.

It is not like the case of a debt existing, but not yet payable,. which the debtor, by assignment or otherwise, may apply to the payment of the judgment against him.

But if before the debt accrues the judgment creditor can intervene at any stage of such contract as the present one, how will it be possible for the judgment debtor to perform any such contract or to pursue his avocation ?

Manifestly, he would be at the mercy of his judgment creditor, and could be stopped in any work he might undertake whenever a sum exceeding $50 has been earned. It is clear that the judgment debtor, however willing he might be to appropriate all assets within his control to the liquidation of his debts, would be driven from the pursuit of contract work.

The defect to be amended by the act authorizing supplementary proceedings was the inability of the judgment creditor, by a proceeding at law, to reach a certain class of property belonging to his debtor.

The statute contemplated a wrongful withholding of property' by the debtor from his execution creditor. The right to relief could not arise until the debtor was in default. Until the debt was in existence, there could be no unlawful withholding of it.

In my judgment, the statute does not operate upon such an inchoate right. «

It was intended to reach the dishonest debtor who fails or refuses to turn over to his creditor the property within his control, and not the unfortunate debtor, to whom no fault can be imputed save that he has not also turned over the right to his future earnings.

In this case it appears that but little of the work remained to be done before the final payment would become due, but that cannot affect the legal rule.

If in any case the creditor can seize upon such a right, he can in every case, without regard to the progress the contractor has made in the execution of his undertaking.

If a different conclusion had been reached in this case, the receiver’s claim could not be superior to that of the claimants under the Lien law.

All the receiver could acquire was the right, legal and equitable, which resided in the judgment debtor.

The receiver obtained no legal lien in this case, and if he could have acquired an equitable lien, he must have taken subject to the equities to which the money was liable.

The fund, being in court, would be primarily liable to the equities of the lien claimants, and the receiver could not ask the aid of the court without consenting to the liquidation of those claims.

In this case the lien men have not appealed, and that presents a difficulty in the way of establishing their claims in this court. There has been irregularity in the procedure on this bill of inter-pleader which has not been clearly waived.

The orderly course of proceeding is to take a decree that the defendants interplead, which withdraws the complainant in the original bill from further participation in the suit, and the case then becomes a case between the defendants as between a complainant and defendant. Rowe v. Hoagland, 3 Hal. Ch. 131; Kirtland v. Moore, 13 Stew. Eq. 106.

No such decree was taken in this case. Under these circumstances, the receiver having established no right to the fund, and Mrs. Willison, who has appealed, having asked for the payment of the lien claims, a decree should be made validating the lien claims and establishing their right to be paid out of the fund in court, when they shall be proven before .a master.

The decree below should be reversed and the case remitted, that it may be proceeded in accordingly.

For affirmance — Depue, Dixon, Clement — 3.

For reversal — The Chief-Justice, Garrison, Knapp, Reed, Scudder, Van Syckel, Brown, Cole, Whitaker —9.