Court Opinion

ID: 6898301
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:52:14.85008+00
Date Added: 2024-06-11T16:06:04.891708
License: Public Domain

Decided 26 March, 1900.
On the Merits.
In December, 1891, the City of Sellwood entered into a contract with one W. F. Dill for the improvement of Umatilla Avenue, a street in such city. In carrying out his contract, Dill purchased from the Columbia River Lumber & Fuel Company, and used in the work, lumber to the value of $3,680.83, under a verbal agreement that he would give it orders for warrants on the fund for the improvement of the street as the work should be accepted. After a considerable portion of the lumber had been delivered, and in pursuance of such agreement, Dill gave the company the following order :
“Portland, Oregon, February 23, 1892.

To J. D. Chapman, City Recorder of the City of Sellwood:

You will please deliver to D. J. Moore, Secretary of the Columbia River Lumber & Fuel Company, city warrants on the fund for the improvement of Umatilla Avenue in said City of Sellwood, in the State of Oregon, from time to time, as work on said avenue shall be accepted, and warrants ordered drawn, equal in amount to the value of the lumber furnished by said Columbia River Lumber *37& Fuel Company, and used in making said improvements, now under way, to be evidenced by bills presented by said company and approved by me.
W. F. Dill.”
This order was immediately filed with the city recorder, and has ever since remained in the custody of the City of Sellwood and its successor, the City of Portland. On May 26, 1892, Dill approved a bill for lumber amounting to $1,537.73, and a warrant for that amount was issued by the City of Sellwood to the fuel company, but he refused to audit or approve any other bills for the company, and on the twenty-fifth of July, 1892,. notified the city council that, “on account of nonfulfillment of contract I had with the C.R..L.& F.Co.,I revoke all orders I have given them for warrants.” Thereafter warrants were issued by the city for the balance due Dill on his contract, and delivered to him and his assignees, and the fund collected for such improvement was thereby exhausted. The fuel company subsequently commenced this suit against the City of Sellwood and others to recover the balance due for lumber furnished to Dill, on the theory that the order of February 23 operated as an equitable assignment of a portion of the fund for the improvement of the street sufficient to pay for the lumber so furnished. Thereafter the Commercial National Bank was regularly substituted as plaintiff, and the City of Portland, the successor of the City of Sellwood, as defendant, and, a decree being rendered for the bank, the city appeals. Reversed .
For appellant there was a brief over the names of Joel M. Long and Ralph R. Duniway, with an oral argument by Mr. Long.
For respondent there was a brief over the name of Platt & Platt, with an oral argument by Mr. Harrison Gray Platt.
Mr. Justice Bean,
after stating the facts, delivered the opinion of the court.
2. The only question for our decision is whether the order of February 23 amounts to an equitable assignment. At law, a part only of an entire demand cannot be assigned, so as to enable the assignee to bring an action upon it, without the consent of the debtor; but equity recognizes that in such case the assignee obtains by the assignment an interest in the property or fund, and permits such interest to be enforced by suit: McDaniel v. Maxwell, 21 Or. 202 (28 Am. St. Rep. 740, 27 Pac. 952). But the proof required of an assignment or transfer is the same at law as in equity. In either case there must be such a transfer or appropriation of the fund, or some definite part thereof, as to divest the assignor of any interest in or control over it, and to copfer a complete and present right on the assignee. Mr. Pomeroy says that “there must be a specific fund, sum of money, or debt actually existing or to become so in futuro, upon which the assignment may operate ; and the agreement, direction for payment, or order must be, in effect, an assignment of the fund, or of some definite portion of it3 Pomeroy, Eq. Jur. § 1280. No particular form of words is necessary. Anything amounting to a present transfer of the fund, or a part thereof, for value, is a valid assignment in equity. If the transaction is, in effect, a sale, vesting a present interest in the assignee, it is sufficient, but a mere agreement or promise to be executed thereafter is not. “In order to constitute an equitable assignment,” says the' syllabus of Hoyt v. Story, 3 Barb. 262, “by a debtor to his creditor of a sum due to the debtor from a third person, there must not only be an agreement to pay the creditor out of the particular fund, but an appropriation of the fund, either by giving an order upon *39it or by transferring it in such a manner that the holder would be authorized to pay it to the creditor directly, without the further intervention of the debtor: ’ ’ And Mr. Justice Swayne, in Christmas v. Russell, 81 U. S. (14 Wall.) 69, 84, says : “An agreement to payout of a particular fund, however clear in its terms, is not an equitable assignment. A covenant in the most solemn form has no greater effect. The phraseology employed is not material, provided the intent to transfer is manifested. Such an intent and its execution are indispensable. The assignor must not retain any control over the fund, — any authority to collect, or any power of revocation. If he do, it is fatal to the claim of the assignee. The transfer must be of such a character that the fund holder can safely pay, and is compellable to do so, though forbidden by the assignor. Where the transfer is of the character described, the fund holder is bound from the time of notice.” See, also, Clayton v. Fawcett's Adm’rs, 2 Leigh, 19 ; Christmas' Adm'r v. Griswold, 8 Ohio St. 558 ; Kimball v. Donald, 20 Mo. 578 (64 Am. Dec. 209); Ford v. Garner, 15 Ind. 298 ; 3 Pomeroy, Eq. Jur. § 1280, et seq.
Applying these rules to the order under consideration, we are forced to the conclusion that it did not operate as an equitable assignment. It does not contain words of transfer, or purport to assign to the fuel company any interest in the amount due or to become due from the city to Dill, nor is it directed to the debtor or custodian of the fund. It is addressed to the city recorder, and is simply an order to him to deliver to the secretary of the fuel company from time to time, as work on the avenue shall be accepted, warrants thereafter to be drawn by the City of Sellwood, presumably in favor of Dill, on a certain fund, equal in amount to the value of the lumber furnished by the fuel company, and used in making such improvement. But, waiving this point, and assuming *40that in this respect the order is sufficient to constitute an equitable assignment, the fatal objection remains that it did not vest in the fuel company a present right to the warrants, or authorize the city recorder to deliver them without the further approval of Dill. It is only upon the presentation of bills for lumber, approved by Dill, that the city recorder is authorized, under this order, to deliver warrants to the fuel company. The contract was not complete. Something remained to be done in the future by Dill before the right of the company to the warrants should become absolute. The city could not safely deliver to the fuel company, nor be compelled to deliver to it, any warrants, until its bills had been approved by Dill. The words ‘ ‘ evidenced by bills approved by me ’ ’ limited the authority of the city recorder to deliver warrants to the fuel company. It was only upon a certain condition that he was authorized to do so. Indeed, this interpretation seems to be in accordance with the actual intention of the parties. The evidence shows that at the time it was given the secretary of the fuel company desired an order on the recorder to deliver warrants to his company without any further act on the part of Dill, but Dill refused to give such an order, and the company accepted the present one upon the advice of the city attorney “.that it did not make any difference what trouble Mr. Dill” and the company got “into over the bills; that, after filing this order with the recorder of Sellwood, he would hold these waxxrants in his possession until” they “had come to an agreement.” It follows that the decree of the court below must be reversed, and it is so ordered. Reversed.