The Bridgeport MacHine Company v. Early

• Decision Date: 09 May 1931
• Docket Number: 29,942
• Citation: 133 Kan. 137,298 P. 796
• Parties: THE BRIDGEPORT MACHINE COMPANY, Appellee, v. DALE E. EARLY, Defendant (THE BOUCHER OIL COMPANY, Interpleader, Appellant)
• Court: Kansas Supreme Court

298 P. 796

133 Kan. 137

THE BRIDGEPORT MACHINE COMPANY, Appellee, v. DALE E. EARLY, Defendant (THE BOUCHER OIL COMPANY, Interpleader, Appellant)

No. 29,942

Supreme Court of Kansas

May 9, 1931

Decided January, 1931.

Appeal from Sedgwick district court, division No. 4; ISAAC N WILLIAMS, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. GARNISHMENT -- Property Subject -- Effect of Unauthorized Assignment. Where a defendant contracted to drill an oil and gas well to a depth of 4,250 feet at $ 4 per foot, and took the contract in his own name, and where it was expressly stipulated that he could not assign or sublet the contract without the written consent of the other party, and where the contractor prosecuted the work until near its completion, at which time garnishment was served upon the other party by proceedings instituted by plaintiff, who was a creditor of the contractor, and where neither the plaintiff nor the garnishee then knew that a third party claimed to be the owner or assignee of the drilling contract or that the contractor had undertaken to perform it in behalf of such undisclosed third party, the interplea of the latter was insufficient to defeat the rights of the plaintiff to have satisfaction of its due out of funds already earned by the contractor and held by the garnishee.

2. MINES AND MINERALS--Drilling Contract--Assignment. Various objections against the judgment noted in the opinion considered and not sustained.

John Madden and John Madden, Jr., both of Wichita, for the appellant.

D. W. Eaton, of Wichita, for the appellee.

OPINION

DAWSON, J.:

This was an action by the plaintiff against Dale E. Early to recover the sum of $ 5,154.18 on a check which he had issued to plaintiff on November 15, 1929, and which was dishonored by the bank on which it was drawn because of insufficient funds.

The action was begun on December 12, 1929, and on the following day garnishment process issued to the Continental Oil Company, which answered that it did not then owe Early any money and held no assets belonging to him, but that it did have a business transaction with him to this effect: On July 5, 1929, the garnishee and Early made a contract wherein it was agreed that Early as contractor should drill, case and complete an oil and gas well to the depth of 4,250 feet for the consideration of $ 4 per foot, unless the garnishee should order drilling operations stopped at a lesser depth. The drilling rig and certain specified equipment were to be supplied by the garnishee and it was likewise to pay for ordinary repairs. Early, the contractor, was to furnish the rest of the equipment for the prosecution of the enterprise.

On December 20, 1929, the Boucher Oil Company of Oklahoma filed a verified interplea in the action, alleging that the drilling contract which had been effected between the garnishee and Early was in fact made by Early as an officer and representative of the Boucher Oil Company, interpleader, and in its behalf; that Early had no personal interest in the contract; that he had prosecuted the work of drilling the well with the tools and equipment of the Boucher Oil Company; that it had expended large sums of money in the performance of the contract; and that it was entitled to the agreed consideration of $ 4 per foot for the drilling, totaling $ 16,812.

On a showing satisfactory to the court and the parties concerned the amount due for the drilling of the well (which was completed on January 5, 1930) less the sum garnished in this action was paid over to the Boucher Oil Company; and this litigation proceeded to a determination of the rights of precedence between plaintiff and the interpleader.

Plaintiff's answer to the interplea traversed all its material allegations which conflicted with the rights asserted by plaintiff concerning its claim to the sum held by the garnishee. Plaintiff set up the written contract between Early and the garnishee, which specifically provided that the contract could not be assigned by Early nor the drilling sublet by him without the written consent of the garnishee. No such consent had been given at the time the service of garnishment was made on December 13, 1929.

The cause was tried by the court which made findings of fact, the most significant of which were that no notice of any assignment of the contract by Early to the Boucher Oil Company had been given to the Continental Oil Company prior to the service of garnishment on December 13, 1929; that at no time prior to December 28, 1929, did the garnishee have a right to pay any money due Early to the Boucher Oil Company; that at no time prior to the latter date had there been any assignment of the contract by Early in conformity with its specified terms; and that the plaintiff never had any notice or knowledge that the interpleader claimed an interest in the drilling contract until after the institution of the garnishment proceedings.

On these findings of fact and on conclusions of law deduced therefrom the trial court rendered judgment for plaintiff.

The Boucher Oil Company, interpleader, appeals, its main contention being that the provision in the drilling contract that Early, the contractor, could not assign it without the written consent of the Continental Oil Company was nugatory. It argues that Early was the vice president of the Boucher Oil Company when he made the contract on July 5, 1929, and that he used that company's tools in performing the contract and that it paid the expenses of the drilling enterprise. As between Early and his...