Gilbert Paper Co. v. Whiting Paper Co.

• Decision Date: 10 January 1905
• Parties: GILBERT PAPER CO. v. WHITING PAPER CO. ET AL.
• Court: Wisconsin Supreme Court

123 Wis. 472

102 N.W. 20

GILBERT PAPER CO.

v.WHITING PAPER CO. ET AL.

Supreme Court of Wisconsin.

Jan. 10, 1905.

Appeal from Circuit Court, Winnebago County; Geo. W. Burnell, Judge.

Action by the Gilbert Paper Company against the Milwaukee Lithographing & Engraving Company (Oscar M. Fritz, garnishee), in which the Whiting Paper Company and others were ordered to interplead. From a judgment holding the garnishee liable to plaintiff, the interpleaded parties appeal. Reversed.

On June 6, 1902, the Milwaukee Lithographing & Engraving Company, principal defendant, being indebted to a large number of persons--but whether solvent or insolvent, the record is silent--delivered to the garnishee, Fritz, its check for $5,000, accompanied by the following communication:

“Milwaukee, Wis., 6/20/02. Oscar M. Fritz, Esq., Milwaukee, Wis.--Dear Sir: Pursuant to authority duly conferred by the board of stockholders, as well as the board of directors, there is hereby assigned to you in trust for the several parties and creditors mentioned in the annexed schedule, the aggregate sum of five thousand dollars ($5,000), to be distributed and paid forthwith to the several parties named in detail stated, by order of the board of directors. Yours truly, Milwaukee Lithographing & Engraving Co. By Fred Brosius, Prest.” Annexed was a list of creditors, specifying against each the amount of his entire debt, and the amount to be paid him out of that $5,000, which in each case was about 15 per cent. of the total debt. Fritz, who was secretary of the corporation, but did not receive the money in that capacity, deposited it in his own bank account, and drew checks payable to each of the creditors for their respective amounts, which he retained in his possession, but about June 21st sent to each a notice that there stood to his credit, as a creditor of the lithographing company, a percentage on his claim of ______ dollars, which might be had by calling on Fritz. Most of the creditors called, and received their checks to the amount of about $4,800; and certain other creditors, after learning that receipt in full would not be required of them, notified Fritz that they would accept, but had not received their checks, while others had made no response at all up to July 8, 1902, when plaintiff, who was one of the creditors named in the list, and had not received its dividend, commenced suit against the lithographing company, and garnished Fritz, who answered, stating the facts above narrated, and that the several other creditors named claimed the respective amounts specified in said schedule. Upon order of interpleader, service was made upon all of the unpaid creditors, and the appellants interposed answers claiming ownership of their respective dividends. Creditors whose dividends aggregated about $150 did not appear. The court adjudged the money in Fritz' hands to belong to the lithographing company, and held him liable as garnishee to the plaintiff for the whole amount thereof, except $100 for expenses incurred by him; such balance being apparently less than the amount of plaintiff's judgment. It, however, also adjudged recovery of any surplus in favor of one Fick, a subsequent garnishing creditor. From this judgment the several interpleaded creditors appeal.Carroll & Carroll, A. J. Eimermann, A. Cothausen, and C. T. Hickox, for appellants.

J. C. Kerwin, for respondent.

DODGE, J. (after stating the facts).

The first question which presents itself is whether the money placed in Fritz' hands, accompanied by the writing set forth in the statement of facts, remained the money of the principal defendant, subject to its control, direction, and recall, or whether it was so transferred to Fritz as an individual, distinct from the corporation, to hold for the benefit of the persons named as recipients, that they acquired rights therein as against him. This subject is considerably confused in respondent's brief by the citation of numerous authorities declaring the right of revocation and recall to exist in the grantor of a fund or of property placed in the hands of another upon his agreement to do something for the benefit of third persons, until such third persons have accepted. Indeed he cites numerous cases requiring complete novation before a right of action arises against the new promisor. These authorities give but little aid in solving the question, for the nonsignificance of an acceptance by one for whose benefit a contract is made between two others may be considered fully settled in Wisconsin by the case of Tweeddale v. Tweeddale, 116 Wis. 517, 93 N. W. 440, 61 L. R. A. 509, 96 Am. St. Rep. 1003. Prior to that case there had been variant, if not conflicting, language in the decisions of this court as to the necessity of such an assent by the third person to a contract made for his benefit, in order to preclude the donor from revocation, and probably upon no subject are both the declarations and holdings of other courts more in conflict. The rule of that case has since been followed in Security Nat. Bank v. St. Croix P. Co., 117 Wis. 211, 221, 94 N. W. 74;Peterson v. C. N. W. Ry. Co., 119 Wis. 197, 204, 96 N. W. 532.

Of course, if this money did not pass out of the corporation, but was simply deposited with Fritz as one of its officers and agents, to be handled according to the direction of his principal, there could be little doubt that any direction given was revocable until fully acted on. But we think the...