Edwards v. Peterson , 80 Me. 367 ( 1888 )

Haskell, J.

Bill in equity to uphold an assignment of wages expected to be earned in the future, but not under an existing employment or contract.

When the assignment was made, the assignor was in the employ of the respondent steamboat compary, but was discharged the next day. The assignment covered wages to be earned in the employ of the steamboat company between the day of its date, October 14, and April 1, following, and was recorded as required by R. S., c. Ill, § 6.

Both the assignor and the steamboat company expected the former’s services would be again required by the latter, and that his employment would then begin. It did begin November 1st, and continued later than April 1st. The assignor was decreed an insolvent debtor January 21st, and, on that day, the assignee demanded from the steamboat company the wages to be earned thereafter during the time covered by the assignment. The wages were earned, and amounted to more than the debt secured by the assignment. The transactions throughout were open and above board, and not tinctured with fraud.

It is settled at law in this state, that " the mere expectation of earning money cannot, in the absence of any contract on which to found such expectation, be assigned. Future wages to be earned under a present contract imparting to them a potential existence may be assigned, although the contract may be indefinite as to time and amount.” Wade v. Bessey, 76 Maine, 413; Farrar v. Smith, 64 Maine, 74; Emerson v. E. & N. A. Railway Co. 67 Maine, 392. These o-.ses were all actions at law, and, as said in the last case ¡deed, were decided upon " legal, and not equitable rules.” a

" It is common learning in the law, that a man cannot grant or charge that which he hath not.” Looker v. Peckwell, 9 Vroom, 253. But, as said by the Chief Justice in Emerson v. The Railway Co., "the reason that it may be different in equity is, not that a man conveys in presentí what does not exist, but that which is in form a conveyance operates in equity by way of present contract merely, to take effect and attach to the things assigned as soon as they come in esse, to bo regarded before that time as only an agreement to convey, and after that time as a conveyance.”

So it was held in Field v. The Mayor, etc. of New York, 2 Seld. 179, that the assignment of a claim against the city for work to be done and materials to be furnished, not founded upon an existing contract and having- no potential existence, was valid inequity. The court says, page 187, "The better opinion, I think, now is, that courts of equity will support assignments, not only of choses in action, but of contingent interests and expectations, and of things which have no present actual existence, but rest in possibility only, provided the agreements are fairly entered into, and it would not be against public policy to. uphold them.”

• So in Williamson v. Colcord, 1 Hask. 620, it was hold that the-mere expectancy and possibility of indemnity for the destruction, of a vessel by a rebel cruiser was subject to donation, even before, the Geneva commission was agreed to by England and the United. States.

An assignment of a legacy expected from a living person was-held valid in equity after the legacy became payable. The court says : " Even a naked possibility or expectancy of an heir to his. ancestor’s estate may become the subject of a contract of sale, if made bona, fide, for a valuable consideration, and will be-enforced in equity after the death of the ancestor.” Bacon v. Bonham, 6 Stew. 616; S. C. 12, C. E. Gr. 209.

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 nofr 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.” Smithurst v. Edmunds, 1 McCart. 416; Langton v. Horton, 1 Hare, 549; Robinson v. McDonnell, 5 M. & S. 228; Whitworth v. Ganyim; 3 Hare, 416; Apperson v. Moore, 30 Ark. 56.

Nor can injustice result from this doctrine. If the res come-to the hands of the assignor subject to liens or incumbrances, the assignee must take it subject thereto. Williamson v. N. J. S. R. R. Co. 2 Stew. 311; Wellenk v. Marres Canal Co. 3 Gr. Ch. 377 ; Dunham v. Railway Co. 1 Wall. 254; Galveston R. R. Co. v. Cowdrey, 11 Wall. 459 ; U. S. v. N. O. R. R. Co. 12 Wall. 362.

' The invalidity of a grant at law of a mere expectancy imports no more than that it is ineffectual to pass the legal title. Equity construes the instrument as imposing a lien upon the res when produced or acquired, leaving the legal title still in the grantor, who may by some act ratify the grant, as by delivery of the property, and then the legal title is complete in the vendee. Everman v. Robb, 52 Miss. 653.

So in Deering v. Cobb, 74 Maine, 332, a mortgage of a stock of goods covering new goods, purchased with the proceeds of the stock sold was held valid at law, after possession taken by the mortgagee, as against the assignee in insolvency of the mortgagor.

The rule laid down by Judge Story in Mitchell v. Winslow, 2 Story, 630, seems to have been very generally followed by all chancery courts in this country. He says, <:It seems to me a .dear result of all the authorities that, whenever the parties by .their contract intend to create a positive lien or charge, either upon real or personal property, whether then owned by the assignor or contractor or not, or if personal property, whether it is then in esse or not, it attaches in equity as a lien or charge upon the particular property, as soon as the assignor or contractor acquires a title thereto, against the latter and all persons asserting a claim thereto under him, either voluntarily, or with notice, or in bankruptcy.” This rule has been followed in Pennoch v. Coe, 23 How. 117 ; Seymour v. C. & N. F. R. R. Co. 25 Barb. 288 ; Sellers v. Leister, 48 Miss. 524; Butt v. Ellett, 19 Wall. 544; Apperson v. Moore, 30 Ark. 56; McCaffrey v. Woodin, 65 N. Y. 459 ; Barnard v. N. & W. R. R. Co. 4 Clif. 351; Brett v. Carter, 2 Low. 458 ; Gregg v. Sanford, 24 Ill. 719 ; S. C. 76 A. D. 719, with an elaborate note citing many authorities, p. 723 ; Walker v. Vaughn, 33 Conn. 577 ; Wilcox v. Daniels, 15 R. I. 261.

The case of Halroyd v. Marshall, 10 H. L. C. 223, seems to extend the rule stated further than Judge Story. Iu that case it is said : " Whatever doubts, therefore, may have been formerly entertained upon the subject, the right of priority of an equitable mortgagee over a judgment creditor, though without notice, may now be considered to be firmly established.”

Our own court has laid down the rule: " At law, property non existing but to be acquired at a future time, is not assignable. In equity it is so.” Hamlin v. Jerrard, 72 Maine, 77 ; Morrill v. Hoyes, 56 Maine, 458 ; Griffith v. Douglass, 73 Maine, 532.

The assignment set up in this case was given to secure the payment for groceries furnished and to be furnished to the assignor and his family. It is of wages to bo earned of a certain employer within a specified time. It ivas seasonably recorded. No claim is made under it, until actual notice had been given to the employer. No other creditor intervenes an attachment or otherwise objects to the validity of the assignment. The controversy is practically between the immediate parties to it. 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.

Whether such an assignment would be valid against subsequent attaching creditors, with or without notice, it is not here necessary to decide; nor is the effect of the record of such an assignment as notice to the employer or to attaching creditors considered ; nor is an assignment upheld where it appears to have been given without a meritorious consideration, or to have operated to hinder or delay creditors, indicating a want of equity.

From the authorities cited the court is clearly of opinion that the assignment must be upheld, and, therefore, agreeable to the stipulation of the parties, ordered,

Exceptions sustained. Demurrer overruled. Judgment against both respondents for the sum of ‡54, and interest from April 1, 1886, with costs. Decree beloto accordingly.

Peters, C. J., Walton, Virgin and Foster, JJ., concurred.