Opinion
No. 23620
Decided April 11, 1934.
Assignments — Money due or to become due assignable, without debtor's consent, when.
A partial assignment of money due and to become due under an existing contract is valid and enforceable in equity without the consent of the debtor thereto.
ERROR to the Court of Appeals of Franklin county.
On January 20, 1930, The Continental Clay Company filed in the Court of Common Pleas of Franklin county a creditor's bill against the city of Columbus and James O. Jones who operated under the name of J. S. Construction Company. In substance the plaintiff alleged that it held in unsatisfied judgment against Jones, and that the city had in its possession certain funds owing to Jones for work he had performed for the city under a contract to construct certain sidewalks and pave certain alleys. The plaintiff asked that these funds be applied in payment of that judgment.
The Boggess Coal Supply Company obtained leave to become a party defendant, and filed a pleading designated as an answer, but containing a prayer for equitable relief. It claimed that under an agreement with Jones it had furnished all the materials and had paid for all the labor used by him in the performance of his contract with the city. The company further alleged that as a part of its agreement with Jones, it had on August 5, 1929, protected itself by obtaining from him an assignment of all money to be paid to him by the city under its contract with him.
In the answer filed by Jones he admitted the judgment held by the plaintiff, The Continental Clay Company, and also the assignment claimed by The Boggess Coal Supply Company.
The city of Columbus filed an answer admitting the possession of a certain sum of money which it holds subject to the order of the court.
Another creditor, Clarence O'Brien, obtained leave of court, and filed an answer alleging an assignment from Jones to himself in the sum of $94.25.
The reply filed by the plaintiff, The Continental Clay Company, contained a denial of any legal assignment by Jones, and further claimed that any purported assignment was fraudulent and without notice to or acceptance by the city of Columbus.
The decree of the Court of Common Pleas was in favor of the plaintiff on the ground that the assignment held by The Boggess Coal Supply Company was invalid, inasmuch as it was but partial and conditional and had not been accepted by the city of Columbus. The court also approved a compromise settlement of O'Brien's claim.
The Boggess Coal Supply Company then proceeded by appeal to the Court of Appeals, where it filed a second pleading designated as a supplemental answer, asserting that it had subsequently protected itself still further by filing a "mechanic's lien" on September 12, 1931.
To this supplemental "answer" the plaintiff, The Continental Clay Company, filed a reply claiming, first, that the statutes under which the purported mechanic's lien was filed are unconstitutional, and, second, that The Boggess Coal Supply Company had waived its right to a "mechanic's lien" when it had first attempted to take an assignment of the same funds against which the "mechanic's lien" was subsequently asserted.
Later The Indemnity Insurance Company of North America obtained leave to become a party defendant, and filed an answer and cross-petition claiming that it, too, held an unsatisfied judgment against Jones, and asking that the funds held by the city be applied in payment thereof.
To this answer and cross-petition The Boggess Coal Supply Company filed a reply denying the claim of The Indemnity Insurance Company of North America, and re-asserting its own claims as to its assignment and as to its attested account.
In its decree the Court of Appeals sustained the claims of the plaintiff by holding that both the assignment and the attested account held by The Boggess Coal Supply Company were void. The Court further held that the claim of The Indemnity Insurance Company of North America was valid and constituted a lien second only to that of the plaintiff.
The case is in this court by reason of both a petition in error, filed as of right, and the allowance of a motion to certify.
Mr. C.F. Luckhart, Mr. Lawrence D. Stanley and Mr. Dwight A. Swisher, for plaintiff in error.
Mr. C.L. Corkwell, Mr. J.L. Davies, city attorney, Mr. C.F. Luckhart and Mr. Phil S. Bradford, for defendants in error.
A careful study of the somewhat confusing record in this case discloses that the course actually followed by The Boggess Coal Supply Company was to file first an original and then a supplemental answer and cross-petition alleging in substance that it held certain claims against Jones, and that these claims were protected by an assignment and also by a subsequent attested account, each of which involves the same fund held by the city of Columbus. It is contended by The Continental Clay Company and The Indemnity Insurance Company of North America that their judgments are superior to the claims of The Boggess Coal Supply Company for the reason that the assignment is invalid, and for the further reason that the right to an attested account was waived when the assignment was taken.
The assignment in question reads as follows:
"Columbus, Ohio, Aug. 5, 29. "Contract between J.O. Jones sole owner of the J. S. Construction Co. and The Boggess Coal and Supply Co.
"The said J.O. Jones having entered into a contract with the city of Columbus for the construction of certain sidewalks being all of the sidewalks let by the said city of Columbus in June 1929, and beginning alphabetically with Belvidere and ending with Weber rd. And the said J.O. Jones having said work under construction does hereby assign all money due and to become due to the said Boggess Coal and Supply Co. and no money paid by the city of Columbus for said work is to be used by the said J.O. Jones, and all checks issued by the auditor of the city of Columbus in payment of said work are to be indorsed by the said J.O. Jones and delivered to the said Bogges Coal and Supply Co., for which the said Bogges Coal and Supply Co. agrees to furnish all material used in the construction of said sidewalks herein described the balance of money paid for said work by the said city of Columbus, is to be applied on note held by the said Boggess Coal and Supply Co. against the said J.O. Jones and for labor used in the construction of said walks herein described.
"J. S. Const. Co. "J.O. Jones. "By J.O. Jones.
"Witness: "Aaron Graham."
The evidence shows that the city of Columbus was notified of the assignment, but complaint is made that there was no consent to it. However, under the well-settled rule of equity none is necessary, even though the assignment be a partial one. 3 Ohio Jurisprudence, 271; P., C., C. St. L. Ry. Co. v. Volkert, 58 Ohio St. 362, 50 N.E. 924; General Excavator Co. v. Judkins, post, 160. It therefore is unnecessary to determine whether the evidence shows this assignment to be entire or partial.
It is urged that the assignment was conditional and did not definitely give The Boggess Coal Supply Company a right to the fund. Much is made of the fact that the written agreement required the checks to be indorsed by Jones. However, it is important to note that they were not to be delivered to Jones, but to The Boggess Coal Supply Company. A similar arrangement obtained in the case of the General Excavator Co. v. Judkins, supra. In that case the checks were indorsed actually by the assignee bank. In the instant case all indorsements except one were made by Mrs. Boggess, who was a partner in The Boggess Coal Supply Company and also the secretary-treasurer of the J. S. Construction Company.
In view of the fact that the validity of the assignment is sustained by this court it becomes unnecessary to discuss the numerous other questions raised in the briefs and in oral argument. It follows that the decree of the Court of Appeals must be reversed and final judgment entered fixing the priorities in favor of The Boggess Coal Supply Company, The Continental Clay Company, and The Indemnity Insurance Company of North America, in the order named.
Decree reversed and final judgment entered.
ALLEN, STEPHENSON, JONES, MATTHIAS, BEVIS and ZIMMERMAN, JJ., concur.