Union Pacific Railway Company v. Douglas County Bank
| Decision Date | 07 November 1894 |
| Docket Number | 5495 |
| Parties | UNION PACIFIC RAILWAY COMPANY, APPELLANT, v. DOUGLAS COUNTY BANK ET AL., APPELLEES, IMPLEADED WITH J. ADAMS ET AL., EMPLOYES, APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court of Douglas county. Heard below before WAKELEY, J.
REVERSED AND REMANDED.
Chas Offutt, for employes, appellants:
Any assignment of the contract was subject to all equities, not only between the parties thereto, but to all equities which third persons could enforce against the assignor. (2 Pomeroy Equity Jurisprudence [2d ed.], secs. 703, 708, 709; Davies v. Austen, 1 Ves. [Eng.], 247; Bush v Lathrop, 22 N.Y. 535; Trustees of Union College v. Wheeler, 61 N.Y. 105; Green v. Warnick, 64 N.Y. 220; 2 Wharton, Contracts, sec. 842.)
The employes have an equity in the contract or fund representing it. (1 Pomeroy, Equity Jurisprudence [2d ed.], sec. 59; Daggett v. Rankin, 31 Cal. 321; Loney v. Courtnay, 24 Neb. 584; Neeson v. Clarkson, 4 Hare [Eng.], 97; Norris v. Caledonian Ins. Co., L. R., 8 Eq. [Eng.], 127; Gill v. Downing, L. R., 17 Eq. [Eng.], 316.)
Similar equities are recognized and enforced by positive statutes. (Comp. Stats., ch. 54, art. 2; Wilson v. Taylor, 8 So. Rep. [Ala.], 149.)
Similar equities have been recognized and enforced by courts of chancery. (Meyer v. Johnston, 53 Ala. 237; Fosdick v. Schall, 99 U.S. 235; Miltenberger v. Logansport R. Co., 106 U.S. 286; Union Trust Co. v. Souther, 107 U.S. 591; Burnham v. Bowen, 111 U.S. 776; Union Trust Co. v. Illinois M. R. Co., 117 U.S. 434; Dow v. Memphis & L. R. R. Co., 124 U.S. 652; Union Trust Co. v. Morrison, 125 U.S. 612; Farmers Loan & Trust Co. v. Missouri I. & N. R. Co., 21 F. 265; Reyburn v. Consumers Gas, Fuel & Light Co., 29 F. 562; Tooth v. Hallett, L. R., 4 Ch. App. [Eng.], 242; Bristow v. Whitmore, 9 H. L. Cas. [Eng.], 392.)
Where money coming due on a contract is assigned, the assignee's claim is subject to all the conditions and terms of the contract. (Tooth v. Hallett, L. R., 4 Ch. App. [Eng.], 242; Bristow v. Whitmore, 9 H. L. Cas. [Eng.], 391.)
The nature of the contract in question is such that it was not assignable. (Pollock, Contracts [4th ed.], 425; Arkansas Valley Smelting Co. v. Belden Mining Co., 127 U.S. 379.) If there was an assignment of future earnings of the contract, it was void.
John M. Thurston and W. R. Kelly, for Union Pacific Railway Company, appellant.
Lake, Hamilton & Maxwell, for appellees:
The employes had no contractual relations, expressed or implied, with the railway company, and can have no claim against it for their labor. The contract was signed alone by the railway company and S. F. Wells.
The appellees, Douglas County Bank, Joseph R. Clarkson and C. S. Parrotte, are entitled as creditors of S. F. Wells to receive the money in the hands of the railway company acknowledged by it to be due and owing under the transfer contract. (Pomeroy, Remedies & Remedial Rights, 184; Field v. Mayor of City of New York, 6 N.Y. 179; Lawson, Rights, Remedies & Practice, sec. 2652; Wade v. Bessey, 76 Me. 413; Hawley v. Bristol, 39 Conn. 27; Augur v. New York Belting & Packing Co., 39 Conn. 536; Payne v. Mayor of Mobile, 4 Ala., 333; Bradley v. Root, 5 Paige Ch. [N. Y.], 632; Bower v. Hadden Blue Stone Co., 30 N. J. Eq., 171; Nimocks v. Woody, 97 N. Car., 1; Bank of Commerce v. Bogy, 44 Mo. 13; Wheatley v. Strobe, 12 Cal. 92; Fonner v. Smith, 31 Neb. 107; Ruple v. Bindley, 91 Pa. St., 296; Mc Williams v. Webb, 32 Iowa 577; Moore v. Lowrey, 25 Iowa 336.)
The appellees are not liable to the employes for any unpaid balance due the latter for labor performed which was necessary to carry out the provisions of the contract.
The facts are stated by the commissioner.
In 1887 Mrs. S. F. Wells entered into a contract with the Union Pacific Railway company, whereby Mrs. Wells undertook to load, unload, and transfer from car to car all freight necessary to be so transferred, to and from the cars of the Union Pacific Railway and its connecting lines at Council Bluffs. Mrs. Wells was required to furnish all employes necessary for the purpose, and the railway company provided certain facilities in the way of platforms, tools, and switching. The compensation for this work was at a specified rate per ton and was payable monthly, not later than the tenth day of each month for the month preceding. While the contract was signed by Mrs. S. F. Wells and the business was carried on in her name, it was in fact conducted by her husband, Charles Wells, and in all transactions connected with this business which we shall have occasion to refer to Charles Wells was the person who actually performed all acts in the Wells' interest, but they were performed in the name of S. F. Wells. No question arises as to Charles Wells' authority to so represent Mrs. Wells. On the 10th of August, 1888, Wells requiring money to carry on the business, C. S. Parrotte and Joseph R. Clarkson made their joint note to the Douglas County Bank for $ 3,600, payable in thirty days. The proceeds of this note were passed to Mrs. Wells' credit. At the same time there was indorsed on the contract referred to the following:
Clarkson, in his turn, again indorsed the contract as follows:
JOSEPH R. CLARKSON.
The contract bearing these indorsements was then delivered to Parrotte, who was president of the bank. The note referred to was undoubtedly executed by Parrotte and Clarkson solely for the accommodation of Wells, and the object of the assignment of the contract to Clarkson was to secure him and Parrotte in the matter, while the assignment from Clarkson to the bank was, as stated, for the purpose of affording collateral security to the note. On the 10th of September, 1888, a check was drawn by the Union Pacific in favor of the Douglas County Bank for the amount then due Mrs. Wells under the contract. With the sum realized the note referred to was paid and the remainder of the check passed to Mrs. Wells' credit. Immediately upon the payment of this note, and the same day Wells besought Parrotte and Clarkson to renew the transaction for another month. This they did, making a new note for $ 3,600, and delivering the contract with the same indorsements to Parrotte. The evidence is very indistinct as to the details of this occurrence. The business was conducted chiefly by Wells and Parrotte. Wells' testimony was not procurable, or at least was not procured at the trial, and the evidence shows that Parrotte's mental condition was then such that he could not testify. Sufficient appears, however, to indicate that there was an intention, whether or not it was well executed, to deposit the contract primarily as security to Parrotte and to Clarkson on the note, and secondarily as security to the bank against overdrafts which, as a matter of fact, accrued during the currency of the note to the amount of $ 1,600. About the time of the second loan the parties to the contract, acting under a provision thereof, arranged for its termination at the end of thirty days, to-wit, October 10th. When that day came Wells did not appear and his employes were not paid. The employes, through a committee appointed for the purpose, made a demand upon the railway company that they should be secured the wages earned by them out of the moneys then owing by the railway company under the contract. In the meantime Mrs. Wells had executed an order upon the local treasurer directing the payment of the money to the Douglas County Bank. In this state of affairs the Union Pacific Railway Company filed its petition in the district court of Douglas county in the nature of a bill of interpleader, making defendants the Douglas County Bank, Clarkson, Mrs. Wells, and Charles Wells, and the employes referred to, one hundred and thirteen in number. These employes have joined in the proceedings throughout and will be hereafter referred to simply as the "employes." The petition set up the facts practically as above stated, averring that there was due under the contract the sum of $ 5,119.23; that Clarkson and the bank were claiming said sum on one side and that some of the employes had already begun suit to recover their money and garnished the railway company, and that the other employes were about to do so. The prayer was that the railway...
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