Case ID: ky_111/html/0084-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE BURNAM", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Case 9 — Action to Enforce a Judgment
    May 29.
    Holt v. Thurman, &c.
    APPEAL FROM JEFFERSON CIRCUIT COURT.
    Judgment for Defendants and Plaintiff Appeals.
    Reversed.
    Public Officers — Assignment of Unearned Salary.
    Held: The assignment by a public officer of salary to be earned in the future iis void as against public policy. Manly v. Betzer, 91 Ky., 596, overruled.
    CHAS. P. JOHNSON and PRYOR & SAPINSKY, for appellant.
    (No brief for appellant.)
    J. B. McCORMICK and BULLITT & SHEILD, for appellee.
    W. T. Thurman was the duly elected prosecuting attorney of ■the police court of the city of Louisville with a fixed salary of $3,500 per year, payable monthly.
    The appellant, J. T. Holt, was a creditor of W. T. Thurman, as was also the appellees, H. Wedekind & Co.
    Thurman was indebted to appellee, W. S. Miller, Jr., in the sum of $291.66 and by a writing dated November 3, 1897, he assigned to Miller his salary for the month of November, 1897, and Miller being indebted to Wedekind & Co, indorsed said assignment to Wedekind & Co. The appellant, Holt, having a judgment for his debt, amounting to $135 and a return of “nulla bona,” sued out an attachment on November 23d, and garnished the wages of Thurman, claimed to be in the hands of the city of Louisville.
    The city filed an answer setting up the assignment to Miller, and Wedekind & Co., and Miller filed their petition and were made parties in which they claimed the attached fund under their assignment. Holt demurred to this pleading, and his ■demurrer being overruled, he declined to plead further, and judgment was entered for Wedekind & Co., from which Holt appeals. The questions to be decided'therefore are:
    1. Whether an assignment of wages to be earned in the future under an existing'contract is valid and vests in the assignee an equity superior -to that of an attaching creditor?
    2. Whether su,ch an assignment is against public policy?
    1. We contend that the assignment is valid and has been so held in this State and in other States and by many text writers.
    
      2. If the assignment is void as against public policy, then it is against public policy to enforce the attachment lien of Holt.
    AUTHORITIES CITED.
    Manly v. Bitzer, 91 Ky., 596; Boone v. Connelly, 12 Ky. Law Rep., 190; Bridgeford v. Keenehan, 8 Ky. Law Rep., 268; Griffen v. Mulliken, Sept., 1876; Newby, &c., v. Hill, 2 Mete., 531; ■Chitty on Contracts, vol. 2, p. 1361; Bracket v. Blake, 7 Mete., 335; Hartley v. Tapley, 2 Gray, 565; Gardner v. Haeg, 18 Pick., 168; Emery v. Laurence, 8 Cushing, 151; Benjamin on Sales, sec. 78; Beach on Contracts, vol. 2, see. 1498; Field v. .Shipley, 79 Ky., 260.
   Opinion op the court by

JUDGE BURNAM

Reversing.

At the date of the institution of this suit in the Jefferson circuit court, on the 26+h of July, 1897, W. T. Thurman was the duly elected, qualified, and acting prosecuting attorney of the Louisville city court, and was by law entitled to be paid ia salary for his services by the city of Louisville of $8,500, in monthly installments of $294.66, on the last day of each month of- his term. The appellant, J. T. Holt, had recovered a judgment against him, upon which execution had issued, and been returned by the proper officer “No property found.” Thereupon this action was instituted pursuant to section 439 of the Civil Code to subject the salary due to Thurman as prosecuting attorney by the city of Louisville to the payment of his judgment. Writs of garnishment were issued at different times, which, were served upon the treasurer of the city, which seem to have-been abandoned. Finally, on the 23d of November, 1897, an alias attachment was issued, wdiich was duly served upon the treasurer. The city of Louisville, for answer to the garnishment, said that on the 18th of November, 1897, before the suing out of the last attachment, there was filed with the auditor of the city, a writing, dated November 3, 1897, purporting to be an assignment by William T. Thurman of his salary due from the city for the month of November, 1897, to one W. S. Miller; and that, furthermore, no part of the salary 'of the defendant Thurman for the month of November, 1897, was due at the date of the service of the garnishment up oh the city, and asked that the order of attachment be 'discharged. Subsequently, on the 6th of January, 1898, another alias attachment was sued out, which was duly served upon the treasurer of the city, seeking to garnishee the slalary of Thurman for the months of November and December, 1897; 'Thereupon appellees H. Wedekind & Co. filed their petition to be made parties to the proceeding, setting up a written assignment dated November 3, 1897, by which Thurman assigned to W. S. Miller, Jr., his salary of $291.66 due and and to become due for the month of November, 1897, as prosecuting attorney of the police court, .and which was on the same day assigned in writing to them by Miller; and alleged that the assignment to them was prior in date to the attachment; and asked that the city of Louisville be required to pay Thurman’s salary for November to them. And the appellees, L. Simons & Co. filed their petition to be made parties, in which they allege that on the 6th day of December, 1897, Thurman, for a valuable consideration, had assigned and transferred to them1 in writing his salary earned and to be earned as prosecuting attorney of the police court for the month of December, 1897. The city of Louisville was required by rule to pay into court the amount due Thurman for .salary' as prosecuting attorney for the months of November and December, 1897. The appellant, Holt, interposed a general demurrer to each of the petitions of Wedekind & Oo. and Simons & Co., which were overruled, and judgment entered for claimants, and to review that judgment this -appeal is prosecuted.

The claims of both appellant and appellees are bona fide, and there is no dispute as to the facts, and the record therefore only presents two questions of law to be decided by this court: First. Is the assignment of his salary by a public officer, before it becomes due, contrary to public policy, and void? Second. Can the salary of u public officer, before it becomes due and payable, be reached by attachment, and subject to the claim of .a creditor of such officer? This question was considered by this court in the' case of Manly v. Bitzer, 96 Ky., 596, 13 R., 166 (16 S. W., 464), (34 Am. St. Rep.,242). The controversy was over the wages of a policeman in the city of Louisville. He had, about the 1st of the month, sold and assigned his claim against the city for wages of that month, and after the assignment, a creditor sought to subject it by attachment. It was held that, as the policeman had an existing contract with the' city for the payment of such a salary, and his term of office extended beyond the time when it could be presumed because of the existence of the contract that the salary would be earned, and had such a potential existence that he had a right to transfer it, .and, having done so for value, it vested the assignee with an equity which, being older in time than that of the attachment, must prevail. The opinion does not discuss or decide the question from the standpoint of public policy, and the authorities cited to support it do not in any way consider or involve this question. There is no suggestion in the opinion of any distinction whatever between the unearned wages of a person occupying a mere private position and one who is discharging the duties of a public officer. In the first casé, the law is well settled that there may be an assignment of wages- or salary to be earned under an existing employment, made' in good faith, and for a valuable consideration, and that a court of equity will compel the specific performance of such a contract in certain cases, there being no question of public policy involved in such a transfer; and to this class of cases the authorities referred to in Manly v. Bitzer have a direct application, and they are supported by many authorities. See 2 Am. & Eng. Enc. Law (2d Ed.) 31; Perkins v. Butler (Neb.) 2 Am. & Eng. Dec. Eq., 218 (62 N. W., 308), where there is a very full collation of the authorities on this subject. But the law is equally well settled that the future salaries of public officers are not assignable on the ground of public policy, and an attempted assignment thereof is void. “The protection thus extended to those engaged in the performance of public duties is not based upon the ground of tlieir private interest, but upon the necessity of securing the' efficiency of the public service by insuring- that the funds provided for its maintenance shall be received by those who are to perform the work, at the periods appointed for their payment; and the assignment of such funds before they are due .impairs the efficiency of the public service, and is void, both in lawr and equity, as being against public policy.” See 2 Am. & Eng. Enc. Law (2d Ed.) p. 1033, and cases there cited. This question has been repeatedly considered by the English and most of the American State courts, and they have been well-nigh unanimous in holding' against the validity of such assignments on the ground of public policy. We quote a few of them here: Greenh. Pub. Pol., rule 293, p. 319, says: “Any contract which secures to any one not occupying a public office its benefits or emoluments, or any part thereof, is void.” Id., rule 297, p. 351: “The salary or emoluments of a public officer, except when they are already earned, . . . are all incapable of assignment.” Mechem. Pub. Off., section 874: “Assignment of unearned, compensation opposed to public policy. . . . While the compensation already earned by a public officer may validly be assigned by him, it is settled by clear preponderance of authority that an assignment of future compensation, not yet earned, whether payable by salary or fees, is opposed to public policy, and void. ‘Salaries/ it is said in one case, ‘are by law payable after work is performed, and not before, and while this remains the law, it must be presumed to be a wdse regulation, and necessary, in the view of the lawmakers, to the efficiency of the public service. The contrary rule would permit the public service to be undermined by the assignment to strangers of all the funds appropriated to salaries.’ It is true that in respect to officer removable at will this evil could, in some measure, be limited by their removal when they were found assigning their salaries; but this is only a partial remedy, for there would still be no means of preventing the continued recurrence of the same difficulty. If such assignments are allowed, then the assignees, by notice to the government, would, on ordinary principles, be entitled to receive pay directly, and to take the place of their assignors in respect to the emoluments, leaving the duties as a barren charge to be borne by the assignors. It does noi need much reflection or observation to understand that such a condition of things could not fail to produce results disastrous to the efficiency of the public service.” And to the same effect are Clark. Cont. c. 8, p. 419, and Lawson, cont., section 355, p. 379, Bliss v. Lawrence, 58 N. Y., 442, 17 Am. Rep., 273 (syllabus): “An assignment by a public officer of the future salary of his office is contrary to public policy, and is void.” Statement of the case: “The complaint in each case alleged and the evidence established the fact that the defendant was a’ clerk of the United States treasury department in New York City, and that he sold and assigned to plaintiff a month’s salary in advance at a discount of ten per cent.; that the r defendant, when the salary became due, collected the same, and converted it to his own use.” Opinion: “The- controlling question in these cases is that of the lawfulness of an assignment by way of anticipation of the salary to become due to a public officer. The particular cases presented are of assignments of a month’s salary in advance. But, if this can be sustained in law, then such assignments may cover the whole period of possible service. In the particular cases before us, the claims to a month’s salary seem to have been sold at a discount of about ten per cent. While this presents no question of usury (since it was a sale, and not a. loan, for which the parties were dealing), it does present a quite glaring instance and example of the consequences likely to follow’ the establishment of the validity of such transfers, and thus illustrates one, at least, of the grounds ■on which the alleged rule of public policy rests, by which such transfers are forbidden. The public service is protected by protecting those engaged in performing public duties, and this not upon the ground of their private interest, but upon that of the necessity of securing the efficiency of the public service 'by seeing to it that the funds' provided for its maintenance should be received by those who are to perform the work at such periods as the law has appointed for their payment. It Is argued that a public officer may better submit to a loss in order to get his1 pay into his hands in advance than deal on credit for his ■necessary expenses. This may be true, in fact, in individual instances, and yet may, in general, not be in accordance with the fact. The substance of all is the necessity of maintaining the efficiency of the public service iby seeing to it that the public salaries really go to those who perform the public service. To this extent, we think, the public policy of every country must go to secure the end in view.” It would not be profitable for us to quote numerous ■other decisions sustaining the conclusion of the New York court, but we will cite a few of them. See State v. Williamson (Mo. Sup.) 21 L. R. A., 827 (23 S. W., 1054), Schloss v. Hewlett, 81 Ala., 268 (1 South., 263), Bangs v. Dunn, 66 Cal., 72 (4 Pac., 963), Beal v. McVicker, 8 Mo. App., 202; Stone v. Lidderdale, 2 Anstr., 233; Davis v. Duke of Marlborough, 1 Swanst., 74; Flarty v. Odlum, 3 Term R., 681; Lidderdale v. Montrose, 4 Term R., 248; Barwick v. Reade, 1 H. Bl., 627; Arbuckle v. Cowtan, 3 Bos. & P., 328; McCarthy v. Goold, 1 Ball & B., 389; Emerson v. Hall, 13 Pet., 409, 10 L. Ed., 223; King v. Hawkins (Ariz.), 16 Pac., 434; Field v. C'hipley, 79 Ky., 260 (42 Am. Rep., 215); Billings v. O’Brien, 14 Abb. Prac. (N. S.), 246; Bank v. Fink, 86 Tex., 303; (24 S. W., 256); Williams v. Ford (Tex. Civ. App.) 27 S. W., 723; Stevenson v. Kyle (W. Va.) 24 S. E., 886. In these various decisions, it has been held that the pay of an army officer, the salary of a clerk in the federal treasury, of a United States inspector of customs, of a County assessor, of a mail carrier, of a clerk of the police court, of the fees of a master of chancery, of a clerk of a court of chancery, of a sheriff, and of many other officers, can not be assigned in advance. So great were the wrongs arising from the assignment of claims against the United States government that a statute was passed in 1853, and re-enacted in section 3477 of the Revised Statutes of the United States, prohibiting the assignment of any claim or any interest in any claim until after it had been allowed, and a warrant for its payment issued. In this State this question was very fully considered in the case of Field v. Chipley, 79 Ky., 260. It was there held to be against public policy for the clerk of the Louisville chancery court to assign the fees and emoluments of his office to be earned in the future. Public policy is defined by Mr. Wharton to be “the principles under which the freedom of contract and private dealing is restricted by law for the good of the community. Thus, certain classes of acts are said to be ‘against public policy/ and the law refuses' to enforce or recognize them on the gnound that they have a mischievous tendency, so as to be injurious to the interests of the State, apart from illegality or immorality.” The regular receipt by public officers of the salary provided by law for their compensation strong, ly tends to secure the faithful discharge of their duty. If the prosecuting attorney of the city court can assign unearned salary for one "'month, no valid reason can be suggested why he could not assign it for one year, or, indeed, for the entire term for which he was elected. If a part is assignable by way of anticipation, there can be no limit, and thus one of the strongest incentives to the faithful performance-of official duty is removed. For'' these reasons we hold the assignment by the appellee, Thurman, of his unearned salary for the months of November and December, to H. Wedekind & Co. and L. Simons & Co., contrary to public policy, and absolutely void, and the case of Manly v. Bitzer is overruled. By a parity of reason it follows that a creditor can not subject the salary of a public officer, which is to become due for services to be rendered in the future, as such a course would result in expelling the debtor from the public service, and would be detrimental to the public weal. But it has been held by this court, in a number of cases that, as a city is a corporation, a creditor may subject money actually due and owing from the city to the officer for services which have been fully rendered at the date of the service to the attachment. See Speed v. Brown, 49 Ky., 111. It therefore follows that, as no salary was due to the appellee on the 23d of November, • the date of the service of the first alias attachment, nothing was reached by this attachment; but, at the time the alias attachment was served upon the city on the 6th day of January, there was due and owing to appellant by the city for services actually performed his salary for two months, and appellant was entitled to have same subjected to the payment of the debt sued for. For the reasons indicated, the judgment is reversed, and the cause remanded for proceedings consistent with this opinion.