James v. City of Newton

• Decision Date: 08 September 1886
• Citation: 8 N.E. 122,142 Mass. 366
• Parties: JAMES v. CITY OF NEWTON, Defendant, and another, Assignee.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

142 Mass. 366

8 N.E. 122

JAMES v. CITY OF NEWTON, Defendant, and another, Assignee.

Supreme Judicial Court of Massachusetts, Middlesex.

September 8, 1886

COUNSEL

C.C. Powers, for complainant.

W.S Slocum, for defendant City of Newton.

W.B Durant, for defendant Gilkey, Assignee.

OPINION

FIELD J.

The assignment in this case is a formal assignment, for value, of "the sum of six hundred dollars now due and to become due and payable to me" from the city of Newton under and by virtue of a contract for building a grammar-school house and it is agreed that this sum "shall be paid out of the money reserved as a guaranty by said city," and the assignee is empowered "to collect the same." There is no doubt that it would operate as an assignment to the extent of $600 if there can be an assignment, without the consent of the debtor, of a part of a debt to become due under an existing contract; and the cases that hold that an order drawn on a general or a particular fund is not an assignment pro tanto unless it is accepted by the person on whom it is drawn, need not be noticed. That a court of law could not recognize and enforce such an assignment except against the assignor, if the money came into his hands, is conceded. The assignee could not sue at law in the name of the assignor, because he is not an assignee of the whole of the debt. He could not sue at law in his own name, because the city of Newton has not promised him that it will pay him $600. The $600 is expressly made payable "out of the money reserved as a guaranty by said city," and, by the contract, the balance reserved was payable as one entire sum, and at law a debtor cannot be compelled to pay an entire debt in parts, either to the debtor or to assignees of the debtor, unless he promise to do so. Courts of law originally refused to recognize any assignments of choses in action made without the assent of the debtor; but now, for a long time, they have recognized and enforced assignments of the whole of a debt, by permitting the assignee to sue in the name of the assignor under an implied power which they held to be irrevocable. Partial assignments such courts have never recognized, because they hold that an entire debt cannot be divided into parts by the creditor without the consent of the debtor. It is not wholly a question of procedure, although the common-law procedure is not adapted to determining the right of different claimants to parts of a fund or debt. The rule has been established, partially at least, on the ground of the entirety of the contract, because it is held that a creditor could not sue his debtor for a part of an entire debt; and if he brought such an action, and recovered judgment, the judgment was a bar to an action to recover the remaining part. There must be distinct promises in order to maintain more than one action. Warren v. Comings, 6 Cush. 103.

It is said that in equity there may be, without the consent of the debtor, an assignment of a part of an entire debt. It is conceded that, as between assignor and assignee, there may be such an assignment. The law that, if the debtor assents to the assignment in such a manner as to imply a promise to the assignee to pay to him the sum assigned, then the assignee can maintain an action, rests upon the theory that the assignment has transferred the property in the sum assigned to the assignee as the consideration of the debtor's promise to pay the assignee, and that, by the promise, the indebtedness to the assignor is pro tanto discharged. It has been held by courts of equity which have hesitated to enforce partial assignments against the debtor that if he brings a bill of interpleader against all the persons claiming the debt or fund, or parts of it, the rights of the defendants will be determined and enforced, because the debtor, although he has not expressly promised to pay the assignee, yet asks that the fund be distributed or the debt paid to the different defendants according to their rights as between themselves, and the rule against partial assignments, established for the benefit of the debtor. Superintendent of Public Schools v. Heath, 15 N.J.Eq. 22; Fourth Nat. Bank v. Noonan, 14 Mo.App. 243.

In many jurisdictions courts of equity have gone further, and have held that an assignment of a part of a fund or debt may be enforced in equity by a bill brought by the assignee against the debtor and assignor while the debt remains unpaid. The procedure in equity is adapted to determining and enforcing all the rights of the parties, and the debtor can pay the fund or debt into court, have his costs if he is entitled to them, and thus be compensated for any expense or trouble to which he may have been put by the assignment. But some courts of equity have gone further, and have held that, after notice of a partial assignment of a debt, the debtor cannot rightfully pay the sum assigned to his creditor, and, if he does, this is no defense to a bill by the assignees. The doctrine, carried to this extent, effects a substantial change in the law. Under the old rule, the debtor could with safety settle with his creditor, and pay him, unless he had notice or knowledge of an assignment of the whole of the debt; under this rule, he cannot, if he have notice or knowledge of an assignment of any part of it. It may be argued that, if a bill in equity can be maintained against the debtor by an assignee of a part of the debt, it must be on the ground not only that the plaintiff has a right of property in the sum assigned, but also that it is the debtor's duty to pay the sum assigned to the assignee, and that, if this is so, it follows that after notice of the assignment the debtor cannot rightfully pay the sum assigned to the assignor.

The facts of this case, however, do not require us to decide whether a bill can be maintained after the debtor has paid the entire debt to his creditor, although after notice of a partial assignment. The city of Newton, in its answer, says that it "is willing to pay said balance to such person or persons as should be justly entitled to receive the same, whether said plaintiff or said Gilkey, as such assignee," and prays "that said plaintiff and said Gilkey may interplead and settle and adjust the demands between themselves, and that the honorable court shall order and decide to whom said sum shall be paid." This is in effect asking the aid of the court in much the same manner as if the city of Newton had brought a bill of interpleader, and the proceedings are not open to the objection that the court is compelling the city of Newton to assent to an assignment against its will. This is the first bill in equity to enforce a partial assignment of a debt which has been before this court. It has been often declared here that there cannot be an assignment of a part of an entire debt without the assent of the debtor, but the cases are all actions at law, and in the majority of them the statement was not necessary to the decision.

In Tripp v. Brownell, 12 Cush. 376, the action was assumpsit to recover the amount of the plaintiff's lay as a mariner on a whaling voyage. The defense was an assignment of the balance due, made by the plaintiff and accepted by the defendants. This was held a good defense; the court saying: "It is in terms an assignment of the whole lay. It must be so by operation of law. It is not competent for a creditor to assign part of the debt, or create any lien upon it. The debtor or holder of the assignable interest cannot, without his own consent, be held legally or equitably liable to an assignee for part, and to the original creditor or another assignee for another part. Mandeville v. Welch, 5 Wheat. 277; Gibson v. Cooke, 20 Pick. 15; Robbins v. Bacon, 3 Greenl. 346."

Gibson v. Cooke, ubi supra, was assumpsit, brought in the name of Gibson for the benefit of Plympton, to whom Gibson had given an order on the defendant to pay Plympton $175.33 "as my income becomes due." The defendant held property in trust to pay over the "net proceeds once a quarter" to Gibson and others. The court held that it did not appear that "at the time of the assignment, or at any period since, the whole amount due to Gorham Gibson would correspond with the amount of the draft," and that "a debtor is not to have his responsibilities so far varied from the terms of his original contract as to subject him to distinct demands on the part of several persons, when his contract was one and entire."

Knowlton v. Cooley, 102 Mass. 233, was trustee process, and the trustee had in his hands $147 due the defendant as wages, and the claimant held an order given by the defendant, before the wages were earned, for the payment to him of the defendant's wages "as fast as they became due, to the amount of $150," which the trustee had accepted. The court held that the order was an assignment of wages, and, not having been recorded, was invalid against trustee process by St.1865, c. 43, § 2. The court say that "the acceptance of the order by Barton (the trustee) does not change its character. His assent was necessary to give it any validity even as an assignment. Gibson v. Cooke, 20 Pick. 16."

Papineau v. Naumkeag Steam Cotton Co., 126 Mass. 372, was an action of contract, and the court say: "The order of Couillard on the defendant in favor of the plaintiff was not an order for the payment of all that should be due the drawer at the several times when the installments were to be paid. It was not, therefore, an assignment of wages to the plaintiff, unless the defendant saw fit to assent to it as such, but a mere order for money."

It is settled that an assignment of a part of a debt, if assented to by the debtor in such a manner as to imply a promise to pay it to the assignee, is good against ...