Great Am. Indem. Co. v. Allied Freightways

• Decision Date: 03 April 1950
• Citation: 91 N.E.2d 823,325 Mass. 568
• Parties: GREAT AMERICAN INDEMNITY CO. v. ALLIED FREIGHTWAYS, Inc., et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

325 Mass. 568

91 N.E.2d 823

GREAT AMERICAN INDEMNITY CO. v. ALLIED FREIGHTWAYS, Inc., et al.

Supreme Judicial Court of Massachusetts, Suffolk.

April 3, 1950

Argued Nov. 8 1949.

F. T. Leahy Boston (S. Mondlick, Boston, with him), for Pilgrim Trust Company, Intervenor-Appellant.

M. Rosenthal Boston (A. P. Rudnick, Boston, with him), for Allied Freightways, Inc.

Before QUA, C. J and LUMMUS, RONAN, WILKINS and WILLIAMS, JJ.

QUA, Chief Justice.

Allied Freightways Inc., hereinafter called Allied, is in receivership in the Superior Court in this suit. Pilgrim Trust Company, hereinafter called Pilgrim, filed its petition in the suit, to establish its status as a secured creditor of Allied to the amount of the balance due it on notes given to it by Allied which it contends are secured by an assignment by Allied to it of moneys which were to become due to Allied from Holland Transportation Company, Inc., hereinafter called Holland, under a so called 'purchase agreement' between Allied and Holland. Allied and its receivers resisted Pilgrim's claim. The trial judge dismissed Pilgrim's petition, and Pilgrim appealed. The crucial facts are these. Allied and Holland were both interstate motor carriers. On August 14, 1946, they entered into the 'purchase agreement' by which Allied agreed to 'sell' and Holland to 'purchase' 'all of the operating authority granted and issued to Allied by the Interstate Commerce Commission in Docket No. M. C. 55821 and subs thereto, or as set forth in a Certificate of Public Convenience and Necessity, or as approved for transfer to the said Allied.' Holland agreed to pay Allied therefor the sum of $27,500, of which $5,000 was paid in escrow upon the execution of the agreement and the remainder was to be paid in ten days after the date of a final order of the commission 'authorizing or approving the transaction for purchase contemplated by this agreement.' The agreement was 'conditioned upon final approval of the Interstate Commerce Commission in all respects required by law.' Allied agreed to cooperate and assist Holland in preparing, presenting and filing an application seeking authorization and approval by the commission of the contemplated transfer. On September 30, 1946, Allied assigned to Pilgrim as security for its notes held by Pilgrim all Allied's 'right, title and interest in and to' its 'purchase agreement' with Holland 'together with any and all moneys due, or that may become due thereunder.' By letter dated October 3, Pilgrim notified Holland of the assignment, and on the following day Holland wrote Pilgrim that when the interstate commerce commission should authorize the 'sale' it would send the payments to Pilgrim. On February 20, 1947, the commission approved the transfer. The receivers were appointed for Allied on March 7, 1947, and thereafter were authorized to complete contracts made by Allied. After some litigation, which need not be described here, the 'purchase agreement' was carried out between the receivers of Allied and Holland, and the purchase money came into the receivers' hands. The balance of principal due to Pilgrim from Allied has been fixed as $8,334.41.

It is unnecessary to consider whether the privilege or license of interstate operation granted to Allied by the interstate commerce commission under the motor carrier act was in any true sense property capable of being sold and bought. See Jubinville v. Jubinville, 313 Mass. 103, 106-107, 46 N.E.2d 533, 144 A.L.R. 1008; Rigs v. Sokol, 318 Mass. 337, 345, 61 N.E.2d 538. At any rate, at the time of the assignment from Allied to Pilgrim, Allied had with Holland a good bilateral contract out of the subsequent performance of which a sum of money might become due from Holland to Allied. The receivers' contention, however expressed, amounts in substance to this: that the assignment to Pilgrim of the contract, upon which nothing was then due, is not operative against Allied's receivers afterwards appointed, since the receivers were not obliged to adopt the executory contract, and if they had not adopted it, nothing would ever have become due from Holland, and Pilgrim could have taken nothing by its assignment.

We do not feel bound to point out all the possible difficulties with this argument. It is true that Pilgrim took a security which might or might not become valuable. But the fact is that it did become valuable when the contract was carried out and the 'purchase' money was paid. The receivers could not take that money and then deny the prior claim upon it of the assignee. To permit them to do so would be to ignore the great weight of authority, including that of our own cases, which recognizes the validity of a present assignment of anticipated benefits under an executory contract. The existence of the contract by the terms of which something might become due was enough to support the assignment and to make possible a present transfer to the assignee of the right to receive that which might become due. The contract involved no intimate personal relationships or peculiar personal services with which, it is held, an assignment cannot be allowed to interfere. The breadth and inclusiveness of the principle of assignment of contracts are well illustrated by Restatement: Contracts, §§ 151, 154, 161, by Williston on Contracts (Rev. ed.) §§ 412, 413, 418, and by our decisions in American Lithographic Co. v. Ziegler, 216 Mass. 287, 103 N.E. 909; Commercial Casualty Ins. Co. v. Murphy, 282 Mass. 100, 184 N.E. 434; Federal National Bank v. Commonwealth, 282 Mass. 442, 451, 185 N.E. 9; Claycraft Co. v. John Bowen Co., 287 Mass. 255, 258, 191 N.E. 403; Graustein v. H. P. Hood & Sons, Inc., 293 Mass. 207, 217-218, 200 N.E. 14; and Bergson v. H. P. Hood & Sons, Inc., 300 Mass. 340, 343-344, 15 N.E.2d 196, 166 A.L.R. 951. Many more cases might be cited.

It follows...