Bd. of Educ. of Sch. Dist. No. 85 of Long Branch v. Duparquet

• Decision Date: 08 August 1892
• Parties: BOARD OF EDUCATION OF SCHOOL DIST. NO. 85 OF LONG BRANCH v. DUPARQUET et al.
• Court: New Jersey Court of Chancery

24 A. 922

50 N.J.E. 234

BOARD OF EDUCATION OF SCHOOL DIST. NO. 85 OF LONG BRANCH

v. DUPARQUET et al.

Court of Chancery of New Jersey.

Aug. 8, 1892.

(Syllabus by the Court.)

Bill of interpleader by the board of education of school district No. 85 of Long Branch against L. F. Duparquet, William J. Forbes, and others. Decree in favor of defendant Forbes.

Heisley & Morris, for complainant.

John E. Lanning, for Louis F. Duparquet & Knot.

John Griffin, for Griffing Iron Company.

W. D. Campbell and Mr. Hastings, for Ames Iron Works, Mulligan & Braze, and Milan & Lewis.

Throckmorton & McDermott, for William J. Forbes.

PITNEY, V. C. This is a bill of Interpleader. The defendants answered separately, claiming that the complainants should be charged with interest upon the amount ($2,088) which by their bill they admitted to be in their hands, and, by a stipulation, that question was first heard and determined, and the amount ascertained by the court to be due from the complainants was paid into court, and the complainants discharged. The contest is between the defendant William J. Forbes of the one part, and divers creditors of the Wilson Boiler Company of the other part. The boiler company erected upon the premises of the complainants a boiler and appliances for a contract price of which the sum just mentioned was the balance due from the complainants, and the defendant Forbes claims that balance by an assignment from the Wilson Boiler Company to him dated, executed, and delivered in February, 1887. The other defendants claim under an attachment issued out of the circuit court of the county of Monmouth on the 14th day of March, 1887, which proceeded to judgment, and the auditor appointed in the proceedings demanded the amount of the complainants. Forbes also demanded the amount due from the complainants, claiming under his assignment. The bill sets out that the auditor and creditors in attachment allege that the assignment to Forbes is defective, because it was not executed by the proper officer of the boiler company, but was executed by some person without authority to execute the same, and that it was not the corporate act of the boiler company, but was executed without its knowledge or consent, and without consideration, and that it is not sufficient to transfer the claim of the boiler company to Forbes, and was made for the purpose of defeating the creditors in the attachment suit, and preventing them from collecting their claims. The several answers of the several creditors to this allegation of the bill is substantially as follows. The defendants say that they have no direct knowledge of the making of the assignment to said Forbes, and therefore neither admit nor deny the same, and leave the said Forbes to make such proof thereof, and of the validity of the same, as the court may direct in the premises. The answer of Forbes, in answer to the allegations of the bill above set forth, sets out that the assignment was duly made under the seal of the company by an officer of the company authorized to use it, and that it was founded upon the consideration of the sum of $1,500 paid by the defendant Forbes to the said company at and before the execution of said assignment, and the further sum of $493.50 paid to and for said company subsequent to the delivery of said assignment, to which said assignment reference is made, with offer of production. Subsequently the Qriffing Iron Company filed an amended answer, in which they set up that on the 23d of March, 1887, and pending the attachment proceedings, they had served a notice upon the complainants under the third section of the mechanic's lien law, and such service was proved at the hearing. No further issue was ever made up between the parties, and the cause came to hearing, when the defendant Forbes proved to my satisfaction the execution of an assignment by the Wilson Boiler Company to him, dated on the —— day of February, 1887, but proved to have been actually executed and delivered before the 25th of that month, in consideration of $1,500, by which the Wilson Boiler Company assigned to Forbes "all sums of money now due, or hereafter to become due, to the said Wilson Boiler Company from the Electric Sugar Refining Company, and from the school board of education of Long Branch, N. J., for work done and to be done by the said Wilson Boiler Company, under their contracts with the above-named parties." He further proved that the sum of $1,500 was paid to the boiler company on or about the 23d of February, 1887, and that it was advanced by a syndicate of four or five individuals, of whom he (Forbes) was one, and one York, since deceased, was another, and that he subsequently advanced, on the strength of this assignment, other moneys to the company in order to enable them to finish their contract with the complainants, which at that time was incomplete. The exact amount that was so advanced in addition to the $1,500 was not clearly proven. It further appeared that $550 had been collected from the Electric Sugar Refining Company, and that the balance was still due. It further appeared that on the 19th of March, 1887, Mr. Forbes wrote two letters in duplicate, one addressed to the Long Branch board of education, and the other to Dr. T. G. Chattle, then secretary of the board of education, and mailed them in prepaid envelopes to Long Branch, N. J., of which this is a copy: "Dear Sir: The present serves to advise you that I have an assignment from the Wilson Boiler Company of their claim against your board for all sums of money now clue, or hereafter to become due, to the said Wilson Boiler Company, for work done or to be done on their contract with your board. Kindly take notice, therefore, that all payments for such work should be made to me, and that I hold you liable for such sums. Very truly yours." These letters were inclosed in envelopes, indorsed with a request to return to the writer, and neither of them were returned. I am satisfied, from this and other circumstances, that the letters reached their destination. I held at the hearing that, though the assignment was absolute on its face, yet, under the circumstances, it was a mere mortgage, and that Mr. Forbes, if entitled to anything, was entitled to only so much of the fund as would repay him the amount due, with interest.

The principal objection made at the argument to this assignment was that no sufficient notice of it bad been given to the complainants; and it was argued that, without notice being served prior to the issuing of the attachment, or to the service of the notices under the third section of the mechanic's lien law, it was inefficient to pass the title to the fund as against the attachment or the notices under the third section; and for this position reliance was placed on the opinion of Chancellor Green in Superintendent, etc., v. Heath, 15 N. J. Eq. 22, and Vice Chancellor Van Fleet in Shannon v. Hoboken, 37 N. J. Eq. 123, and of Vice Chancellor Green in Bank v. Bayonne, 48 N. J. Eq. 246, 21 Atl. Rep. 478.

With regard to the claim to the notice served under the third section of the mechanic's lien law, I think that the letter of March 19th is quite sufficient to protect Mr. Forbes. But, further, I think notice of this assignment was unnecessary in order to vest the title to this fund in the assignee. The document worked a complete transfer by the direct force of the language used, and does not depend upon any implication or mercantile usage. In this respect it is distinguishable from a mere order for the payment of the fund, or some portion of it, directed to the depositary or debtor. It transfers the property in the fund in prwsenti, and is irrevocable. It requires no assent on the part of the depositary or debtor in order to give the assignee a right of action in a court of equity in his own name. The function of an assent or acceptance by the depositary or debtor is to give the assignee a right of action at law in his own name, founded upon a new promise, but no such assent or acceptance is required in this court. The only defense which the depositary or debtor can have against the assignee is that, before receiving notice of the assignment, he paid the amount in his hands over to the assignor or upon his order. It is just here that the function of notice comes in. It prevents the depositary or debtor from paying the fund to a person who is no longer entitled to it. Such was its function in Bank v. Bayonne, supra. There the contractor, Phelan, made two assignments of the contract price for building a sewer, due and to...