Illinois Finance Co. v. Interstate Rural Credit Assn.

• Court: Court of Chancery of Delaware
• Writing for the Court: THE CHANCELLOR.
• Citation: 101 A. 870
• Parties: ILLINOIS FINANCE CO. v. INTERSTATE RURAL CREDIT ASSN.
• Decision Date: 07 August 1917

101 A. 870

ILLINOIS FINANCE CO.
v.
INTERSTATE RURAL CREDIT ASSN.

Court of Chancery of Delaware.

Aug. 7, 1917.

101 A. 871

Suit by the Illinois Finance Company against the Interstate Rural Credit Association. On demurrer to the bill. Demurrer sustained.

Statement of the Case.

In substance the bill shows that E. H. Watson had made a contract with the defendant company, by which he was given an exclusive agency to sell shares of stock of the defendant company, collect from the purchasers payments for the stock, pay all the expenses of making the sales, such as agents' commissions, office expenses, etc., and retain from the proceeds as his compensation a fixed percentage thereof of any sales made by him, or otherwise made. It was agreed that the contract could be assigned by Watson. The capital stock of the company of one million dollars had not then been sold. This contract was afterwards assigned to the complainant, with the knowledge of the defendant company. Thereafter the complainant company sold a large amount of stock of the defendant company, and received certain moneys therefor. Later the defendant company denied that the complainant company had any interest in the contract, and prevented the further performance by the complainant of it, though the specific nature of this claim was unknown to the complainant. It was alleged that over $750,000 par value of the stock of the defendant company was unsold, and that the complainant had a right to sell all of this stock and retain commissions amounting to at least $500,000, but that the defendant company deprived the complainant of the profits which would have accrued to it under the contract, and has refused to pay the same to the complainant, and owed the complainant at least $50,000 more for sales made by the complainant, making the aggregate of the claim of the complainant against the defendant $550,000.

The prayers of the bill were (1) to ascertain and establish the rights of the complainant in and to the contract; (2) to cancel a supposed subsequent assignment of the contract by Watson to the defendant company; and (3) that the defendant account for and pay over to the complainant all sums due under the contract.

Attached to the bill were general interrogatories as to what contracts, assignments and other papers relating to the matters contained in the bill are in the possession of the defendant company or any agent, officer or other person subject to the control of the company.

To this bill the defendant demurred (1) for want of jurisdiction, there being a remedy at law; (2) because Watson is a necessary party; and (3) there is no ground for equitable relief.

Marvel, Marvel, Wolcott & Layton, of Wilmington, for complainant. Robert H. Richards and James I. Boyee, both of Wilmington, for defendant.

THE CHANCELLOR. The complainant is the assignee of a contract, by its terms made assignable, and the other party to the contract had notice of the assignment. Choses in action are not assignable at common law, and the statute which makes assignable certain kinds of evidences of indebtedness otherwise not assignable and gives to the assignee a right to sue thereon in his own name, does not apply to the contract under consideration. Revised Code of 1915, § 2627, p. 1271.

An assignee of an unassignable contract can sue in equity on the...