Court Opinion

ID: 9765937
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:25:36.146145+00
Date Added: 2024-06-11T07:30:16.898290
License: Public Domain

HUGHES, Justice
(dissenting).
Assuming that the assignment to the South Main State Bank of Houston was not in proper form to be filed,1 I believe that *950our decision should be controlled b.jr the judgment of the Supreme Court in Quinn v. Dupree, 157 Tex. 441, 303 S.W.2d 769, In .the recent case of Parker Square State Bank v. Triangle Supply Co., 364 S.W.2d 418 cited to us by Appellees, and relied upon in .the majority opinion, Judge Grissom, for the- Eastland Court, in referring tp. Quinn states :■ “The opinions do not disclose whether notice of the assignment was re-, corded. Article 260 — 1 was not mentioned. If-the'assignment’’was recorded our interpretation of the statute would require 'the judgment rendered by the Supreme Cohrt.”,' the inference being that if ,the assignment was not filed, the judgment was erroneous. I have examined the record in such case and it does not appear therefrom that the notice of the assignment to the, Pittsburgh National Bank by Quinn of all sums of money due' him under his contract with' Loné Star Steel Company was filed in compliance with and in order to make it a protected assignment under the provisions 'óf Art.. 260 — 1; V.A.C.S. Without proof -of such, the case must have been determined under principles of general law. The assignment .to the Pittsburgh bank was dated January 6, 1954. Writs of garnishment were sued out by creditors of Quinn against Lone Star March 6, 1954, and on April 5, 1955, under which money owing by Lone Star to- Quinn was impounded. The Supreme Court held that the assignment to the bank prevailed over the subsequent-garnishments. The Supreme Court did nqt mention Art. 260 — 1 in its opinion. Neither was such Article mentioned in the briefs of the parties in that case. In my opinion there was no necessity to mention süch Article in that case. It was simply not involved. No, one claimed to have a. “protected assignment” under that Article; hence, there was no need to discuss it.
It is my opinion that Appellees here, and the Trial Court,2 have read into the statute provisions and a meaning which it does not contain and which, in fact, it actually and,affirmatively refutes. Such statute has been read and construed as if it provided that all assignments not coming within its provisions are void, and that all assignments coming within its provisions and notice of which is not filed, as required by the statute are also void. Nothing could be further from the facts. There simply are no such provisions in the statute. -This Act is not a “no action shall be brought” statute like the Statute of Frauds, Art. 3995, V.A.C.S. The statute gives full protection to those assignments which come within its terms and as to which compliance with the statute has-been made. It goes no further. It does not- invalidate any assignment.
Sec. 2 of the Act defines a protected assignment. It is an assignment in writing of an account as defined in the Act, fully describing it, and by filing for record the notice of assignment.
Sec. 6 of the Act prescribes the protection afforded by taking and filing notice of an- assignment as authorized by Sec. 2. Such Section provides, inter alia, that no prior or subsequent assignee of the assignor “hblding an assignment not protected” shall “have, or be deemed to have acquired, any right in the account or accounts so assigned or'in the proceeds thereof, or in any obligation substituted therefor, superior to the rights therein of the assignee named in such .prior protected assignment.” .(Italics added)
*951This language certainly is not susceptible to the construction that unprotected assignments are void, that no rights are vested thereunder. It simply provides for a priority in favor of a protected assignee. The rights of an unprotected assignee are clearly recognized to the extent that they exist but are inferior to the rights of the protected assignee.
Sec. 1(1) (d) of the Act defining an “account” in construction contracts and providing that the “land upon which the improvements are to be constructed” should be described in the assignment of the account also states “which assignment shall not be effective prior to such filing.” Since Art. 260 — 1 is a notice statute and does not purport to change or create any rules of substantive law, it is my opinion that the last phrase of (d), supra, means only that such assignment shall be ineffective as notice unless prepared and filed as required by the Act.
The Dallas Court of Civil Appeals in Asch v. First National Bank in Dallas, 304 S.W.2d 179, writ ref., n. r. e., rendered similar judgment in a situation exactly paralleling the one found in Quinn v. Dupree, supra, the only difference being that in Asch it affirmatively appeared that the prior assignment of an account had not been filed. This unfiled but prior assignment was held superior to subsequent garnishments.
The Court in Asch did not mention Art. 260 — 1, although by reference to the fact that the assignment had not been filed it is a fair assumption, I believe, that the attorneys, as well as the Courts, were fully aware of its existence.
I repeat that there was no occasion for anyone connected with Asch to mention Art. 260 — 1. It was not involved. It had no bearing on the rights of the parties.
In Tezel & Cotter v. Roark, 301 S.W.2d 179, San Antonio Civil Appeals, writ ref., n. r. e., the Court simply enforced Art. 260 — 1 to protect an assignee who had complied with its terms. The same Court performed an identical service in Scarborough v. Victoria Bank & Trust Co., Tex.Civ.App., 250 S.W.2d 918, writ ref.
In Seligmann v. Hill & Combs, Tex.Civ.App., 338 S.W.2d 178, writ ref., n. r. e., the same Court merely held that the funds in controversy were not within the terms of a prior filed assignment; hence, there was no assignment.
The same Court in Keeran v. Salley, Tex.Civ.App., 244 S.W.2d 663, writ ref., held that an instrument stating that the assignor “has assigned or intends to assign one or more accounts to” the Bank without designating specific accounts or contracts assigned or to be assigned was insufficient and even though filed as required by Art. 260 — 1 did not give the Bank priority over a subsequent garnishment of accounts accruing to the assignor after the date and filing of the assignment. The Court held that filing notice under the statute was not authorized and was not notice for the reason that Art. 260 — 1, as it then read, limited the notice under it to accounts due or to become due under existing contracts. Since there were no existing contracts when the assignment was executed, filing the assignment gave no protection to the assignee.
While the Court, in Salley, did not discuss the validity of the assignment apart from Art. 260 — 1, if it had done so it would, no doubt, have concluded that it was invalid as between the parties.
In McKneely v. Armstrong, 109 Tex. 363, 210 S.W. 192, the Court held that an assignment of wages in any employment for any employer was void.
In Globe Indemnity Co. v. West Texas Lumber Co., Tex.Civ.App., 34 S.W.2d 896 (1930) this Court held:
“Future earnings or profits under a contract not yet made have no potential existence, and any attempt to assign them is void.” We followed this decision in Vilbig v. State, Tex.Civ.App., 318 S.W.2d 10, writ ref., n. r. e.
*952In the Victoria Bank case, supra, the Court stated, in reference to Art. 260 — 1, in its original form, that “From the wording of the act itself it appears that its purpose was to encourage accounts receivable financing. * * * A change is made in the common law rule as to priority of assignments of accounts. This was accomplished by a setting forth of a method whereby a notice of assignment could be filed in a public place and thus become 'protected assignment.’ ” (Italics added.) I completely embrace this pronouncement.
The ■ emergency clauses in the original and in the amending Acts3 confirm the purpose, stated by the Court, for which this statute was enacted. This purpose does not include enlarging the rights of creditors to a priority status over prior but unfiled assignments of accounts. The Court, in Victoria, also very correctly notes the permissive nature of the Act, reflected by the use of the word “may” in Sections 2 and 3 of the Act,4 by stating that notice of assignment “could” be filed.
Sec. 6 of Art. 260 — 1, provides, in part, that as to a person, in good faith, taking a protected assignment “all creditors of, and all subsequent assignees, purchasers and transferees of or from the assignor shall be conclusively deemed to have received notice of such assignment dating from the time of filing. (Italics added)
In Mitchell, Gartner & Thompson v. Young, 135 S.W.2d 308, Fort Worth Civil Appeals, writ ref., the Court construed Art. 6636, V.A.C.S. which provided for the transfers of judgments by filing a written transfer among the papers of the case. The statute further provided, “When said transfer is duly acknowledged, filed and noted as aforesaid, the same shall be full notice and valid and binding upon all persons subsequently dealing with reference to said cause of action or judgment, whether they have actual knowledge of such transfer or not.”
Involved was a contract between a prior but unfiled transfer of a judgment and subsequent garnishments. In holding that the owner-transferee of the judgment was entitled to priority the Court stated:
“In speaking of such assignments as the one before us we find the following language in Vol. 5 Tex.Jur., page 29, para. 23: ‘The purpose of this statute is merely to furnish parties dealing with the cause notice of the assignments, and it is not intended that it should affect the validity of any sale of a cause of action, or any part thereof, or the sale of a judgment.’

[4] We do not believe that Art-6636, R.C.S., was enacted to protect either an attaching creditor or a garnishing creditor. When a creditor sues out a writ of attachment, or of garnishment, he does so at his peril. He simply takes his chances of attaching property that may or may not belong to his-debtor, or of garnishing funds that may or may not belong to his debtor.
[5] If Young had filed his assignment among the papers in the suit filed1 by D. H. Purvis & Son against Anderson et al., that would not have added validity to his assignment, and his failure to do so would not detract from its validity.”
This opinion is, to me, very persuasive-authority for concluding that Art. 260 — 1 means what the Court stated it meant in Victoria, supra, and that it was not enacted! for the benefit of creditors of the assignor..
It is elemental that failure to register or-ílle an instrument required or authorized to be filed for the purpose of giving notice-*953is not rendered void between the parties by such failure. Chattel Mortgages, 12 Tex.Jur.2d Sec. 30, p. 41.
It is also settled beyond question, except such as may be raised by Art. 260 — 1, that an assignment of debt or fund supported by a valuable consideration has priority over subsequent attachment or garnishment for a debt of the assignor. Assignments, 6 Tex.Jur.2d Sec. 49, p. 439.
It is my opinion that the pledge to the South Main State Bank should be honored and granted priority over the claims of Appellees. I respectfully dissent.

. The 1957 amendment to Art. 260 — 1 provides that an account shall not include money accruing to a contractor for labor performed or material furnished on any public or private construction contract unless the assignment “properly describes the land upon which the improvements are to be constructed.” The emergency clause to this amending Act provides, in part, “The fact that the present definí*950tion of- ‘account’ or ‘account receivable’ prevents contractors from obtaining in-, terim financing by pledging accounts receivable” etc. (Italics added.)
. The language of the amendment an the use of the word “interim”, in the emergency clause supports the position of Appellant that if the improvements contracted for were complete when as-.si'gnmént of money due under the contract was made, then there was no necessity to describe the land on which improvements had already been constructed in the assignment.

. The Trial Court concluded as a matter of law that the Bank assignments were of “no force or effect whatsoever” even as between the assignor and assignee.

. Ch. 293, p. 463, Acts 49th LegReg.Sess.1945; Ch. 305, p. 822, Acts 54th Leg.Reg.Sess.1955; Ch. 348, p. 818, Acts 55th LegReg.Sess.1957.

. Sec. 2, “may be protected”; Sec. 3, “may be filed.”