Citizens' Loan Ass'n v. Boston & M.R.R.

• Decision Date: 27 November 1907
• Citation: 82 N.E. 696,196 Mass. 528
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: CITIZENS' LOAN ASS'N v. BOSTON & M. R. R.

196 Mass. 528

82 N.E. 696

CITIZENS' LOAN ASS'N

v.BOSTON & M. R. R.

Supreme Judicial Court of Massachusetts, Worcester.

Nov. 27, 1907.

Exceptions from Superior Court, Worcester County; F. A. Gaskill, Judge.

Action by the Citizens' Loan Association against the Boston & Maine Railroad. There was a judgment for plaintiff on an agreed statement of facts, and defendant brings exceptions. Affirmed.

Plaintiff and defendant are domestic corporations. On February 27, 1905, and for a long time prior thereto, Steven J. Wescott was in the employ of defendant as a conductor. On that day Wescott, for a valuable consideration, and as security for the payment of a note given by him to plaintiff, and for money loaned, assigned to plaintiff all claims which he might thereafter have against defendant for moneys becoming due between that date and January 1, 1908, for services.

Webster Thayer, Hollis W. Cobb, and Fred A. Walker, for plaintiff.

Chas. H. Thayer and Alex. H. Bullock, for defendant.

RUGG, J.

The single question presented by this appeal is whether an assignment of wages to be earned in an existing employment, given before bankruptcy, without fraud, and upon sufficient consideration, to secure a valid subsisting debt, and duly recorded, can be enforced, after the discharge in bankruptcy of the assignor, as to wages earned in the course of the original employment, by the creditor, who has not proved his debt in bankruptcy. A debt is not extinguished by a discharge in bankruptcy. The remedy upon the debt, and the legal, but not the moral, obligation to pay, is at an end. The obligation itself is not canceled. Champion v. Buckingham, 165 Mass. 76, 42 N.E. 498; Heather v. Webb, 2 C. P. D. 1. An assignment of future earnings, which may accrue under an existing employment, is a valid contract and creates rights, which may be enforced both at law and in equity, whichever may in a particular case be the appropriate forum. Tripp v. Brownell, 12 Cush. 376;Weed v. Jewett, 2 Metc. 608,37 Am. Dec. 115;Brackett v. Blake, 7 Metc. 335,41 Am. Dec. 442;Hartey v. Tapley, 2 Gray, 565;Gardner v. Hoeg, 18 Pick. 168;Taylor v. Lynch, 5 Gray, 49;Lannan v. Smith, 7 Gray, 150;St. Johns v. Charles, 105 Mass. 262;Lazarus v. Swan, 147 Mass. 330, 333,17 N. E. 665;James v. Newton, 142 Mass. 366, 8 N. E. 122,56 Am. Rep. 692. These cases proceed upon the theory that the worker under contract for service, though indefinite as to time and compensation and terminable at will has an actual and real interest in wages to be earned in the future by virtue of his contract. He may recover for an unjustifiable interference with such an employment, as for an injury to any other vested property right. Moran v. Dunphy, 177 Mass. 485, 59 N. E. 125,52 L. R. A. 115, 83 Am. St. Rep. 289;Berry v. Donovan, 188 Mass. 353, 74 N. E. 603,5 L. R. A. (N. S.) 899, 108 Am. St. Rep. 499. It is plain that one may sell wool to be grown upon his own sheep, or a crop to be produced upon his own land, but not that to be grown or produced upon the sheep or land of another. No more can one assign wages, where there is no contract for service. Jones v. Richardson, 10 Metc. 481;Low v. Pew, 108 Mass. 347, 11 Am. Rep. 357. But profitable employment is a reality. Wages to be earned by virtue of an existing employment are no more shadowy or insubstantial than the fleece of next spring or the crop of the following autumn. Money to accrue from such service is not a bare expectancy or mere possibility, but a substance capable of grasp and delivery. It constitutes a present, existing, right of property, which may be sold or assigned as any other property. Although not in the manual possession of the assignor, it is in his potential possession. The transfer of this potential possession creates the assignee a lienor upon the property right. The holder of such an assignment stands upon a firmer plane than the mortgagee of future acquired property, who has only the right by contract to act betimes in the future for his protection. Wasserman v. McDonnell, 190 Mass. 326, 76 N. E. 959. The assignee of wages to be earned under an existing contract gets a present right, perfect in itself, requiring no future action on his part. Contracts for personal service are of such a character that their breach is in appropriate cases enjoined. Lumby v. Wagner, 1 De G., M. & G. 604; Duff v. Russell, 133 N. Y. 678, 31 N. E. 622; Whitwood Chemical Co. v. Hardman [1891] 2 Ch. 416. See Phila. Base Ball Club v. Lajoie, 202 Pa. 210, 51 Atl. 973, 58 L. R. A. 227, 90 Am. St. Rep. 627. It may be taken for granted that the right to future wages to be earned under such a contract does not pass to the trustee in bankruptcy. Nor are we dealing here with a contract as to labor in terms or spirit contrary to public policy, as in Parsons v. Trask, 7 Gray, 473, 66 Am. Dec. 502. But on the contrary, assignments of wages are recognized as valid by statute. Rev. Laws, c. 189, §§ 32, 33, 34; Id. c. 102, §§ 51, 57 to 67, both inclusive; Id. c. 106, § 63. The present case is not affected by St. 1905, p. 224, c. 308, or St. 1906, p. 366, c. 390.

Specific performance of contracts to labor like that in question will not be enforced. Arthur v. Oakes, 63 Fed. 310-318, 11 C. C. A. 209, 25 L. R. A. 414;Robertson v. Baldwin, 165 U. S. 275, 17 Sup. Ct. 326, 41 L. Ed. 715. It is only where labor has been voluntarily performed that the question now presented can arise. It is possible that an agreement to execute an assignment, falling short of the creation of a lien, is, when the wages have been actually earned, enforceable in equity, even after a subsequent bankruptcy or insolvency. We do not decide this, however. Edwards v. Peterson, 80 Me. 367, 14 Atl. 936,6 Am. St. Rep. 207;Stott v. Franey, 20 Or. 410, 26 Pac. 271,23...