Mallin v. Wenham

• Decision Date: 20 April 1904
• Parties: MALLIN v. WENHAM et al.
• Court: Illinois Supreme Court

209 Ill. 252

70 N.E. 564

MALLIN

v.WENHAM et al.

Supreme Court of Illinois.

April 20, 1904.

Appeal from Appellate Court, First District.

Bill by James H. Mallin against Charles F. Wenham and another. From a judgment of the Appellate Court (103 Ill. App. 609) reversing a decree in favor of complainant, he appeals. Affirmed.

H. H. Reed (A. R. Urion and A. F. Reichmann, of counsel), for appellant.

Morse Ives and George I. Haight, for appellee.

In this case a bill is filed by appellant, Mallin, against appellee and Armour & Co. Mallin, for several years prior to the commencement of this suit, was employed continuously by Armour & Co. on a salary of $100 per month. He had no definite contract of employment, but was employed from month to month. Between October, 1897, and June, 1898, he from time to time borrowed money from appellee at usurious rates of interest. He obtained $342 more from Wenham than he ever paid back. On June 3, 1898, to secure his indebtedness to Wenham, he executed and delivered an assignment of wages, as follows:

‘For a valuable consideration to me in hand paid by C. F. Wenham, the receipt whereof is hereby acknowledged, I do hereby transfer, assign and set over to said C. F. Wenham, his heirs, executors, administrators or assigns, all salary or wages, and claims for salary or wages, due or to become due me from Armour & Co., or from any other person or persons, firm, copartnership,company, corporation, organization or official by whom I am now or may hereafter become employed, at any time before the expiration of ten years from the date hereof.

‘I do hereby constitute, irrevocably, the said C. F. Wenham, his heirs, executors, administrators or assigns, my attorney, in my name to take all legal measures which may be proper or necessary for the complete recovery and employment of the claim hereby assigned, and I hereby authorize, empower and direct the said Armour & Co., or any one by whom I may be employed as above, to pay the said demand and claim for wages or salary to the said C. F. Wenham, his executors, administrators or assigns, and hereby authorize and empower him or them to receipt for the same in my name.

‘J. H. Mallin.

‘Chicago, Ill., third day of June, 1898.’

On May 3, 1899, Mallin filed his petition in bankruptcy, and his indebtedness to C. F. Wenham was scheduled in his bankruptcy proceedings, and Wenham had notice thereof. On October 23, 1899, he obtained his discharge in bankruptcy. Subsequently Wenham brought suit in the name of Mallin, for the use of Wenham, against Armour & Co., claiming the wages of Mallin by virtue of the above assignment. Mallin thereupon filed his bill without offering to repay the $342, or any part thereof, and prayed that said assignment be declared null and void, and that Wenham be restrained from prosecuting any suit against Armour & Co. or in any manner interfering with Mallin's salary. It was so decreed by the trial court, which decree, on appeal to the Appellate Court, was reversed, and judgment entered in behalf of appellee. The Appellate Court having granted a certificate of importance, the case is now before this court. The appellant urges as error the action of the Appellate Court in refusing to affirm the decree of the circuit court in reversing said decree and in directing the circuit court to dismiss the bill of complaint. The assignments of error and the argument of appellant raise the following questions: (1) Whether an assignment transferring wages to be earned in the future under an existing employment is valid; (2) is such an assignment against public policy? (3) the effect of a discharge in bankruptcy of a debtor, upon security or liens created by assignment.

RICKS, J. (after stating the facts).

In respect to the first proposition mentioned, the authorities are ample and conclusive to the effect that an assignment of wages to be earned in the future, under an existing employment, is valid. This precise question has frequently been passed upon by the courts of the different states and of England, and, so far as we are advised, the courts of dernier ressort have, without exception, upheld such contracts, where they have been for a valuable consideration and untained with fraud. The authorities are to the effect that it is not necessary that there be an express hiring for a definite time, but the existence of the employment at the time of the assignment is sufficient. In the case at bar appellant was, and had been for some time previous, in the actual employ of Armour & Co. at a fixed price per month. It is true, such employment was not of any definite duration, and appellant might abandon the same at any time, or his employer might discharge him. The subject-matter of the contract had but a potential existence, but it was such a property right as might legally be disposed of. The remarks of the court in Thayer v. Kelley, 28 Vt. 19, 65 Am. Dec. 220, are very pertinent to the subject in hand, and we here quote them: ‘When the debtor is in the actual employment of another, and is receiving wages under a subsisting engagement, an assignment by him of his future earnings may be made, not only for the security and payment of a present indebtedness, but for such advances as he may find it necessary to obtain. This principle is fully established by the cases to which we were referred. Weed v. Jewett, 2 Metc. 608,37 Am. Dec. 115; Brackett v. Blake, 7 Metc. 335, 41 Am. Dec. 442;Field v. Mayor of New York, 6 N. Y. 187, 57 Am. Dec. 435;Emery v. Lawrence, 8 Cush. 151. The debtor in this case, at the time of his assignment to the claimants, was in the actual employment of the trustees under a subsisting contract, at a given price per day, and had in that manner labored for them for some two or three years previous; and though he had the right to leave their employment and they had the right to discharge him, yet so long as that relation existed between them we think the authorities are satisfactory in holding that the claimants were entitled to receive, under that assignment, his accruing wages in payment of the advances which they had made.’ In support of the above doctrine reference is made to the following cases: Kane v. Clough, 36 Mich. 436, 24 Am. Rep. 599;Manly v. Bitzer, 91 Ky. 596, 16 S. W. 464,34 Am. St. Rep. 242;Metcalf v. Kincaid, 87 Iowa, 443, 54 N. W. 867,43 Am. St. Rep. 391.

The second proposition urged by appellant is that the assignment in question is against public policy, and for that reason ought not to be upheld. This question was raised in the case of Edwards v. Peterson, 80 Me. 367, 14 Atl. 936,6 Am. St. Rep. 207, and the court there held such an assignment did not contravene public policy, and quoted with approval from the case of Smith v. Atkins, 18 Vt. 461, in which case it was said: ‘It is argued that such contracts are so much against public policy that they ought not to be supported, but we think they are rather beneficial, and enable the poor man to obtain credit when he could not otherwise do it, and that without detriment to the creditors.’ And, further, in the Edwards Case, supra, the court say, speaking of an assignment of wages to be earned in the future: ‘It cannot be said to contravene public policy. Smith v. Atkins, 18 Vt. 461. The consideration was most meritorious, and the assignment was not given to delay creditors.’ And, further: ‘The true doctrine seems to be that, to make a grant or assignment valid at law, the thing which is the subject of it must have an existence, actual or potential, at the time of such grant or assignment. But courts of equity support assignments, not only of choses in action, but of contingent interests and expectations, and also of things which have no present actual or potential existence, but rest in mere possibility only’-citing numerous cases. Appellant, in this connection, calls attention to the statutes and exemption laws of this state, and insists that the liberal provisions made by the Legislature for the indigent and poorer classes indicate the adoption of a broad and liberal public policy toward the classes named, and that it is the duty of this court to so construe the law that the class and individuals so favored by the statute shall be compelled to accept of its beneficent provisions. Such is not the province of this court. The citizens of the state have a right to contract, and there is no law forbidding one from selling or assigning any property he may have. A person has the same right to assign his wages that he has to mortgage his homestead or to mortgage personal property that is exempt from execution. The statute provides liberal exemptions, of which a person has the right to avail himself if he so desires, but, if he does not, the courts are powerless to help him. The duty of the courts in instances of this kind is well laid down in the case of Carroll v. City of East St. Louis, 67 Ill. 568, 16 Am. Rep. 632 (on page 579, 67 Ill., 16 Am. Rep. 632): ‘It is the legislative, and not the...