Geist's Appeal ( 1883 )

Mr. Justice Paxson

delivered the opinion of the court, January 7th 1884.

This was an appeal from the decree of the court below distributing- the assigned estate of Adolph Oberhelman. Among the assets of said estate was a claim against the city of Pittsburgh for $5,344.40. It was inventoried as “ a claim against the city of Pittsburgh on account of contract building bridge, assigned to different parties as collateral security.”

Prior to his assignment to Geist for the benefit of his creditors, Oberhelman had made partial assignments of this claim to various parties as collateral security. These partial assignments were never accepted nor recognized by the city of Pittsburgh, the debtor. The assignee for creditors disregarded them, collected the claim from the city, and used the proceeds for the general purposes of the estate. The Auditor held that the partial assignments did not bind the fund; that the respective assignees had no lien thereon, and gave the proceeds to the general creditors. Upon exceptions filed the court below reversed the Auditor and held that the holders of the partial assignments were entitled to payment out of the fund, and surcharged the general assignee with the amounts due them respectively. From this decree the said assignee and his surety have appealed.

It was decided in the City of Philadelphia’s Appeal, 5 Norris 179, that a municipal corporation is not bound to recognize a partial assignment of a claim against it. Applying that principle to this case, it follows logically that the respective assignees of portions of the claim could not have recovered against the city of Pittsburgh. It is equally clear that appellant, as general assignee for creditors of Oberhelman, had the right to recover it, and in point of fact he did proceed to collect it. Have the appellees, who are the holders of the partial assignments, a claim upon the fund which they can enforce as against the general creditors of Oberhelman? ,¥e think not. They have no lien. Oberhelman, prior to the assignments to appellees, could have collected the money from the city and paid-his general creditors, or any creditor, with it. The appellant, as his general assignee, has the same power. The partial assignments to the appellees were at most an agreement to pay them out of the fund. It was said by Mr. Justice Swayne in Christmas v. Russell, 14 Wallace 70: “An agreement to pay out of a particular fund, however clear in its terms,- is not an equitable assignment. . . . The assignor must not retain any control over the fund ; any authority to collect it, or any power of revocation ; if he does it is fatal to the claim of the assignee. The transfer must be of such a character that the fund holder can safely pay, and is compelled to do so though forbidden by the assignor.” The same doctrine is asserted in Gibson v. Stone, 43 Barb. 285; Rogers v. Hosack, 18 Wend. 319; Trist v. Child, 21 Wallace 447; Jermyn v. Moffit, 25 P. F. S. 399. In Mandeville v. Welch, 5 Wheaton 277, the rule is thus clearly stated by Mr. Justice Stouy : “ When the order is drawn on a general or a particular fund for a part only, it does not amount to an assignment of that part, or give a lien as against the drawee, unless he consent to the appropriation b}’ an acceptance of the draft.” It is useless to multiply authorities.

Aside from this it has been repeatedly held that upon the distribution of an assigned estate, a claimant upon the fund must claim by and through the assignment. He cannot claim adversely to it: Okie’s Appeal, 9 W. & S. 156; Jefferis’ Appeal, 9 Casey 39; Bush’s Appeal, 15 P. F. S. 366; Wylie’s Appeal, 11 Norris 196; Strickler’s Appeal, 10 W. N. C. 535; Williams Bros. Appeal, 5 Out. 474. In the last case it was said in the opinion of the court: “ An Auditor appointed to adjust and settle the accounts of a voluntary assignee for creditors is confined to the accounts between the assignee and the. cestui que trust. Third persons claiming adversely cannot interfere in the settlement, but must resort to adversary proceedings.”

The appellees are not claiming under the general assignment but against it. The fund consists of the proceeds of the assigned estate of Adolph Oberhelman ; the appellees are attempting to show that a portion of the fund does not belong to the assigned estate. This cannot be done. If the partial assignments to the appellees bind the fund, then to the extent of those ■assignments the fund does not belong to the assigned estate at all, and should not have been included in the account.

The decree is reversed at the costs of the appellees, and it is ordered that distribution be made in accordance with the principles indicated in this opinion.