Case Name: William Wadhams et al., Appellants, v. Portland, Vancouver & Yakima Railway Company, Respondent
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1905-02-17
Citations: 37 Wash. 86
Docket Number: No. 4938
Parties: William Wadhams et al., Appellants, v. Portland, Vancouver & Yakima Railway Company, Respondent.
Judges: 
Reporter: Washington Reports
Volume: 37
Pages: 86–91

Head Matter:
[No. 4938.
Decided February 17, 1905.]
William Wadhams et al., Appellants, v. Portland, Vancouver & Yakima Railway Company, Respondent.
Bills and Notes — Oedf.bs—Acceptance in Wbiting — Complaint —Sufficiency. A complaint in an action upon an order or hill of exchange is insufficient, and a demurrer thereto is properly sustained for want of sufficient facts, where it fails to allege that the acceptance of the order by defendant was in writing, under Laws 1899, p. 363, §127, providing that there shall be no liability until the drawee has accepted the bill, and (§ 132) that such acceptance must he in writing.
Appeal from a judgment of the superior court for Clarke county, Miller, J., entered July 22, 1903, upon sustaining a demurrer to the complaint, in an action upon an order.
Affirmed.
Cotton, Teal & Minor and W. C. Bristol, for appellants.
The order constitutes an equitable assignment and transferred to the appellant any funds belonging to the construction company then in the possession of the respondent. Bal. Code, §§ 4793, 4835; Dickerson v. Spokane, 26 Wash. 292, 66 Pac. 381: Bario v. Seattle etc. R. Co>., 28 Wash. 179, 68 Pac. 442. Formerly there were two well supported conflicting rules on this subject, viz: First, that a bill of exchange of itself operates as an equitable assignment of funds in the hands of the drawee, without designating the funds. Kahnweiler v. Anderson, 78 N. C. 143; Lee v. Robinson, 15 R. I. 369, 5 Atl. 290; Blin v. Pierce, 20 Vt. 25; Gardner v. National City Bank, 39 Ohio St. 600; Fanner v. Smith, 31 Neb. 107, 47 N. W. 632, 28 Am. St. 510; Brady v. Chadbourne, 68 Minn. 117, 70 N. W. 981; Foss v. Five Cents Sav. Bank, 111 Mass. 285; Moore v. Robinson, 35 Ark. 293. Second, that a bill of exchange operates as an equitable assignment only under special circumstances, and when the fund is designated. Brill v. Tuttle, 81 N. Y. 454, 37 Am. Rep. 515; Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83, 17 N. E. 671; Fourth St. Nat. Bank v. Yeardley, 165 U. S. 634, 17 Sup. Ct. 439; First Nat. Bank of Canton v. Dubuque etc. R. Co., 52 Iowa 378, 3 N. W. 395, 35 Am. Rep. 280; Bank of Commerce v. Bogy, 44 Mo. 13, 100 Am. Dec. 247; Ehrichs v. De Mill, 75 N. Y. 370; Noe v. Christie, 51 N. Y. 270; Hall v. Flanders, 83 Me. 242, 22 Atl. 158; Schmittler v. Simon, 101 N. Y. 554, 5 N. E. 452, 54 Am. Rep. 737; Des Moines County v. Hinkley etc., 62 Iowa, 637, 17 N. W. 915; Papincau v. Naumkeag etc. Co., 126 Mass. 372; Sears v. Lawrence, 15 Gray (Mass.) 267; Rogers v. Union Stone Co., 130 Mass. 581, 39 Am. Rep. 478; Coyle’s Executrix v. Saterwhite’s Adm’r, 4 T. B. Mon. (Ky.) 124; Bull v. Bank of Kasson, 123 U. S. 105, 8 Sup. Ct. 62; Wadlington v. Covert, 51 Miss. 631. The object of the negotiable instrument law was not to entirely change the law, but to harmonize the general law by adopting the second rule, and by obviating such conflicts between the state and federal jurisdictions as is illustrated by Coddington v. Bay, 20 Johns. 637, 11 Am. Dec. 342, and Swift v. Tyson, 16 Peters 1; or by Coulter v. Richmond, 59 N. Y. 478, and Good v. Martin, 95 U. S. 90. In no jurisdiction has it ever been held that a bill of exchange could not under any circumstance operate as an equitable assignment. Byles, Bills and Notes (8th ed., Wood’s), pp. 31, 32; Daniel, Negotiable Inst. (3d ed.), pp. 15-23; Tiedeman, Commercial Paper (1889), pp. 4-18. The negotiable instrument law was not intended to render void all equitable assignments not manifested in the form of a bill of exchange. Nelson v. Nelson Bennett Co. 31 Wash. 116, 71 Pac. 749. Under the special circumstances alleged there was an equitable assignment and an established privity between the plaintiff and the railroad company, absolutely binding the company to properly apply tire funds in its hands. McDaniel v. Maxwell, 21 Ore. 202, 27 Pac. 952, 28 Am. St. 740; Willard v. Bullen, 41 Ore. 25, 67 Pac. 924, 68 Pac. 422; Wadhams & Co. v. Inman, Poulsen & Co., 38 Ore. 143, 63 Pac. 11; Erickson v. Inman, 34 Ore. 44, 54 Pac. 949; Seattle v. Liberman, 9 Wash. 276, 37 Pac. 433; Dowling v. Seattle, 22 Wash. 592, 61 Pac. 709; Central Nat. Bank of Pueblo v. Spratlen, 7 Colo. App. 430, 43 Pac. 1048; Ruple v. Bindley, 91 Pa. St. 296; McLellan v. Walker, 26 Me. 114; First Nat. Bank of Wellsburg v. Kimberlands, 16 W. Va. 555; Beaumont Lumber Co. v. Moore (Tex. Civ. App.), 41 S. W. 180; Harris County v. Campbell, 68 Tex. 22, 2 Am. St. 467; Doty v. Caldwell (Tex. Civ. App), 38 S. W. 1025; Hutchinson v. Simon, 57 Miss. 628; James v, Newton, 142 Mass. 366, 8 N. E. 122, 56 Am. Rep. 692; Lowery v. Steward, 25 N. Y. 239, 82 Am. Dec. 346; Izzo v. Ludington, 79 N. Y. Supp. 744; Warren v. First Nat. Bank, 149 Ill. 9, 38 N. E. 122, 25 L. R. A. 746; Griggs v. St. Paul, 56 Minn. 150, 57 N. W. 461; Slobodisky v. Curtis, 58 ETeb. 211, 78 N. W. 522; Thomas v. Exchange Bank, 99 Iowa 202, 68 N. W. 780, and cases supra.
B. S. Grosscup, for respondent.
Reported in 79 Pac. 597.

Opinion:
Dunbar, J.
The complaint alleges, in substance, that the defendant, the Portland, Vancouver & Yakima Railway Company, and the Western Construction Company, as parties of the first and second parts respectively, entered into a contract or agreement in writing, whereby, among other things, the Western Construction Company agreed to execute, construct and finish the clearing and grubbing and other works necessary to prepare a road bed and 'structure for the reception of the ties and rails on a certain part of the railway of the Portland, Vancouver & Yakima Railway Company, in the state of Washington; that thereafter the Western Construction Company entered upon the performance of" its contract, and that the plaintiffs supplied said Western Construction Company with provisions, at its instance and request, aggregating the agreed value of $1,718.60; that thereafter the Western Construction Company issued and delivered to the plaintiffs its written order and assignment, of moneys due it from and upon the Portland, Vancouver & Yakima Railway Company, wherein and whereby it set over, and directed to be paid, to plaintiffs, and their order, the sum of $1,718.60, in full of all accounts and moneys, then in the hands of the. Portland, Vancouver & Yakima Railway Company, due and to become due to it, said Western Construction Company; that thereafter the plaintiffs presented said order to the Portland, Vancouver & Yakima Railway Company, and demanded payment of the same, and the said Portland, Vancouver & Yakima Railway Company did receive and accept said order, and promised and agreed with said plaintiffs to retain, out of the money due and to become due to the Western Construction Company under said contract, and'to pay the plaintiffs, the sum of $1,718.60, the amount of said order; that> at the time said order was presented, there was money due and to become due, to the construction company from said railway company, a sum largely in excess of the said sum of $1,718.60; that thereafter, with full notice and knowledge of the fact that the plaintiffs were the holders of said order, and the assignees of the Western Construction Company to the amount thereof, the Portland, Vancouver & Yakima Railway Company set- tied with the Western Construction Company, and paid to it, and upon its order, large sums of money, the exact amount of which these plaintiffs do'not- know, but allege that, the sums so paid were more than sufficient to cover the amount of said order of plaintiffs, and in a sum greater than $1,718.60; that the plaintiffs have frequently demanded payment of said sum of $1,718.60 from the Portland, Vancouver & Yakima Railway Company; that said defendant has withheld the same; and has not paid the said sum, nor any part thereof. To this amended complaint the defendant demurred, on the ground that it appears upon the face thereof that the said amended complaint fails to state facts sufficient to constitute a cause of action against the defendant. The demurrer was sustained by the court and, the plaintiffs declining to plead further, the judgment was entered dismissing the cause; from which judgment this appeal is prosecuted.
Avery earnest and learned brief is filed by the appellants in this case, to sustain their claim that the court erred in sustaining the demurrer interposed to the complaint. But we think the judgment of the court is sustained by the case of Nelson v. Nelson Bennett Co., 31 Wash. 116, 71 Pac. 749. Section 127, p. 363, of the Laws of 1899, in the interpretation of bills of exchange, provides that a bill of itself does not operate as an assignment of the funds in the hands of the drawee available, for the payment thereof, and the drawee is not liable on the bill unless and until he accepts the same; and § 132 defines acceptance in the following language:
"The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. The acceptance must be in writing and signed by the drawee."
In Nelson v. Nelson Bennett Co., supra, the action was upon an unaccepted order for the payment of money. In that case there was an attempt to support the order described in the complaint by an allegation to the effect, in substance, that there was a contract between the drawer and the drawee, by the terms of which the drawer agreed to pay for the work in orders, and that the order in question was drawn in pursuance of that contract. Upon this statement in the complaint, it was assumed by this court, without deciding, that the allegation might support the action stated; but when the whole record was presented, and it was found that the allegation of the complaint relating to the contract was not supported by competent proof, and that all that was left as a basis of the action was the unaccepted order, it was held that no cause of action existed, for the reason that the demands of the statute had not been met by an acceptance of the order in writing.
We are satisfied with that decision, and the judgment in this case will, therefore, be affirmed.
Mount, C. J., Fullerton, and Hadley, JJ., concur.
Rudkin, Root, and Crow, JJ., took no part.