Milford State Bank v. Parrish , 88 Utah 235 ( 1935 )

A divorce action against Charles R. Parrish, the defendant herein, as defendant in that action had proceeded to judgment. The interpleaded defendant in this action was plaintiff in the divorce action. That action forms the background of this case here for review. The cases of Parish v. Parish, 84 Utah 390,35 P.2d 999, and Parish v. McConkie, 84 Utah 396,35 P.2d 1001, were recently decided by this court. Certain proceedings in those cases and a writ of garnishment in the instant case furnish the controversial issues.

The facts and the order of events are: On February 2, 1931, the plaintiff in this action, the Milford State Bank, loaned to the defendant, Charles R. Parrish, $800, and took his note secured by certain building and loan stock not the stock of the Investors Syndicate involved in the issues herein. This note became due May 2, 1931. On October 14, 1931, the plaintiff, Milford State Bank, in this action was served with a restraining order in the case of Parish v. Parish, supra. On April 12, 1932, a decree of divorce was entered upon a stipulated property settlement and the testimony of the plaintiff in that case.

The defendant, Charles R. Parrish, having failed to conform to the terms of the decree as to alimony and payment of money or transfer of property as claimed by the plaintiff, was cited before the court on an order to show cause why he should not be punished for contempt. At that hearing held on January 4, 1933, certain conversations were had and transactions occurred which respondent here, plaintiff in the divorce action, contends effected an equitable assignment of a fund of $856.75, funds of defendant Charles R. Parrish, and then in the possession of Investors Syndicate, garnishee herein. The divorce action was pending in the Third district court, Salt Lake county.

On February 2, 1933, an action entitled Milford State Bank,plaintiff, v. Charles R. Parrish, defendant, was filed in the Fifth district court, Beaver county, Utah, and judgment therein taken by confession. On February 9, 1933, a writ of garnishment issued in that cause was served upon the Investors Syndicate by the Milford State Bank. The Investors Syndicate answered the writ and alleged that it held the principal sum of $835.19 and interest in the sum of $21.56, the total thereof being the cash surrender value of an installment investment certificate surrendered to it by Charles R. Parrish. That Edna Parrish, the former wife of Charles R. Parrish, claimed to be the owner and entitled to the possession of said money, and, pursuant to statute, prayed that Edna Parrish be interpleaded, and asked for an order permitting said garnishee to pay the funds in its possession into court and thereupon to be discharged from all liability.

Edna Parrish became the interpleaded defendant. Issues were made up by answer and reply and the cause was tried to the court, resulting in findings and judgment in favor of the interpleaded defendant. Plaintiff appeals and assigns error.

Appellant groups the errors assigned and argues them under three propositions:

1. That the trial court allowed the interpleaded defendant to introduce evidence taken in the case of Parrish v. Parrish then pending in the Third district court.

The general rule of evidence subject to some exceptions is that where the parties to the suit in which the findings of fact, conclusions of law, motions, orders, proceedings, and testimony of another action may be offered in evidence 1, 2 are not the same nor in privity, the record of the former suit may not be introduced to establish the facts upon which a judgment was rendered or order made. Appellant has cited authorities to support the general principle above stated. Respondent concedes that appellant's authorities support such general statement as an accurate statement of the law. 4 Jones Comm. on Evidence, § 1818.

The parties stipulated "that the record or any part thereof in the case of Edna Parrish v. Charles R. Parrish may be read into evidence and no objection will be raised concerning the competency of such testimony." This stipulation, when considered in connection with the allegations, admissions, and denials of the parties, and especially when it is shown that the question of an equitable assignment, alleged to have been made as a part of and intimately connected with the proceedings in the case ofParrish v. Parrish was the principal issue in the hearing on a contempt proceeding based upon the judgment in that case, put the parties in such position that the evidence affecting the main issue as offered was properly admitted.

2. Appellant contends that the proof is insufficient to support a finding that there was an equitable assignment made of the funds held by the Investors Syndicate.

The evidence relating to this primary and 3, 4 controlling question is brief and free from conflict. The law as to what constitutes an equitable assignment is well settled. The application of the law and the facts is sometimes difficult.

In the case of Nickerson v. Hollet (National Bank of Goldendale, Intervener) 149 Wash. 646, 272 P. 53, Tolman, J., quotes the law and cites authority as follows:

"``In order to work an equitable assignment there must be an absolute appropriation by the assignor of the debt or fund sought to be assigned to the use of the assignee. The intention of the assignor must be to transfer a present interest in the debt or fund or subject matter; if this is done the transaction is an assignment; otherwise not.' 5 C.J. 909."

"``The assignor of a chose in action must part with the power of control over the thing assigned; if he retains control it is fatal to the claim of the assignee.' 5 C.J. 912. See, also,Hossack v. Graham, 20 Wash. 184, 55 P. 36."

This court, speaking by Mr. Justice Thurman, in the case ofStewart v. Heywood, 62 Utah 466, 220 P. 717, 719, after quoting other authorities, refers to 1 Freeman on Executions (3d Ed.) at page 359, and quotes:

"``It is not essential that the assignment should be perfect at law. It is sufficient if it is a good equitable assignment; and it is a good equitable assignment whenever, by its terms, the person to whom an obligation is due authorizes the payment thereof to another, either for his own use, or for that of some other person, or authorizes any one to receive or hold moneys and to apply them to any specific purpose other than for the use or benefit of the assignor.'

"Again, on page 860, the same author says:

"``An equitable assignment may be made by parol, or by mere agreement between the debtor and creditor that the debt shall be paid to some third person.

"``No doubt, an order made by the creditor, directing the debtor to pay the debt to some third person, is after its acceptance, a good and sufficient assignment of the amount therein directed to be paid. And, though this has sometimes been doubted, the majority of the authorities show that its acceptance is not essential to enable such an order to withdraw funds from the reach of the creditors of the drawer.'

"To the same effect is 2 R.C.L. at page 615, cited by appellant, in which it is said:

"``The true test of an equitable assignment is whether the debtor would be justified in paying the debt to the person claiming to be assignee.'"

The trial court from the evidence found an equitable assignment. The evidence submitted to the trial court on that question in substance is:

Charles R. Parrish had been cited to appear before the court to show cause, if any he had, why he should not be punished for contempt for failure to perform or pay according to the terms of judgment and divorce decree. At that hearing before the Third district court, Salt Lake county, the parties appeared. One Pearl Miller, office manager of the Salt Lake City Branch office of the Investors Syndicate had been subpoenaed 5 as a witness and required to bring certain records and papers, among which was a check payable to Charles R. Parrish for the sum heretofore stated. Miss Miller was called as a witness in this action. She testified as to what took place when she was in court on the former action relating to the assignment claimed by the interpleaded defendant. She testified that she went to court with the records and files; that she had the check and a letter written to send out with the check to Dr. Parrish. The check and letter were marked as exhibits. They were surrendered to the court. After the proceedings were over, she had a conversation with Judge McConkie and also heard a conversation between Mrs. Parrish's attorney, Mr. Tanner, and Judge Whittaker, attorney for Charles R. Parrish, the defendant in that action, in which the witness also participated. That she heard Mr. Tanner ask that the check be impounded; that he wanted the check given to Mrs. Parrish as a partial payment on the $2,900 judgment. That she heard Judge Whittaker say: "You can have the check, we are not trying to avoid that debt, we want to pay it, you can have it." That subsequent to this conversation she asked Judge McConkie for the check and that he told her the "check would be paid to Mrs. Parrish, that it was for Mrs. Parrish." That he told her "to deliver it to Mr. Tanner in the presence of Mr. Whittaker." That no demand prior to the serving of the writ of garnishment had been made for the check by Dr. Parrish or any one acting in his behalf.

Mr Tanner testified that when he made the motion to impound the check, Judge Whittaker, attorney for Dr. Charles R. Parrish, said: "That is not necessary, you can have that, and we will take care of the balance of it within a few days." That under that arrangement there was no necessity of pressing the motion. That at that time he asked that Miss Miller be permitted to take the check back to the office.

Whether or not Dr. Charles R. Parrish was present at the time the various conversations referred to took place does not affirmatively appear from this record. The fact that the proceeding was upon an order issued to Dr. Parrish to appear and show cause may furnish some reason to infer that he was, and, if so, that he approved what his counsel had agreed to. The trial court was in a position to know and we may not presume he was not. The trial court could have ordered Dr. Parrish to indorse the check, the evidence of the indebtedness, or to make delivery of the fund, and had resistance been made or suggested, no doubt such an order would have been made except for the understanding arrived at by respective counsel at the time.

We are of the opinion the trial court was justified in finding that there had been an equitable assignment of the fund held by the Investors Syndicate to Mrs. Parrish. The trial court held both hearings, saw the parties, and was in better position to appreciate the situation and interpret what was presented, being thus more fully advised than we are, and having weighed and interpreted the evidence. We think we should not disturb the finding.

3. The third and last proposition submitted by appellant is:

"That a conveyance by a husband to his wife of all his property without consideration is fraudulent and void as to creditors, even though the wife does not 6, 7 participate in the fraud and no actual fraud on the part of the husband is shown, and the fact that the transfer is a result of a stipulated decree does not constitute a consideration."

A discussion of the proposition above stated, in so far as this case is concerned, would be academic. An attempted attack upon the judgment in the case of Parrish v. Parrish, collateral if it may be termed an attack, can form the only basis for the proposition in this case. It is argued that a stipulated judgment whereby a husband divests himself of his property to his wife even in a divorce action is fraudulent. That such action may be made a basis of attack upon a judgment may be conceded. No such attack is made, and if it were there is not sufficient proof to show there was any fraud involved in that action. That judgment is a valid and subsisting judgment. No direct attack is made upon it. The proposition that the assignment of the fund in possession of the Investors Syndicate in partial liquidation of that judgment does not constitute a consideration needs no discussion.

The judgment of the trial court is affirmed. Respondent to recover costs.