Rock Island Plow Co. v. State Bank of Boscobel ( 1911 )

Timlin, J.

Tbe appellants began this action against tbe bank setting forth in substance tbe following: Plaintiffs were creditors of a partnership known as Henderson & Brainerd, and tbe latter on December 7, 1908, sold, assigned, and delivered to tbe plaintiffs all their notes, accounts, and credits for the purpose of securing plaintiffs on notes, accounts, etc., held by plaintiffs against Plenderson & Brainerd in tbe amounts set forth in tbe assignment. This assignment was made subject to tbe payment of a claim owing by Henderson & Brainerd to tbe bank, and tbe bank has possession of all tbe assigned notes, accounts, and credits except such as it has collected. The prior claim of tbe bank and all other prior claims, if any, have been fully paid and discharged, and the plaintiffs are entitled to possession of all the notes, accounts, and credits assigned to them and held by the bank, and they made demand therefor. The bank collected large amounts of money on these notes, accounts, and credits, far exceeding the amount due by Henderson & Brainerd to the bank, and plaintiffs demanded an accounting and payment of the amounts so ■collected. These demands were refused by the bank. The plaintiff asked judgment against the defendant bank for the notes, accounts, and credits assigned by Henderson & Brain-erd to the plaintiffs and left in possession of the bank, except such as had been collected, and for an accounting as to all moneys collected thereon, etc.

The bank answered averring, among other things, that prior to and since the assignment to plaintiffs the firm of Henderson ■& Brainerd made several assignments of the notes, accounts, .and credits held by the bank. One of these on November 16, 1908, to the Automatic Oarrier Company of Juneau, Wisconsin, to secure an indebtedness of $196; one on November 21, 1908, to Howe & G-ilman to secure and pay the following claims: W. A. Patterson Company, $194.65; Gale Manufacturing Company, $6.05; B. Herschel Manufacturing Company, $44.43; W. W. Gilman■, $19. It was further averred that after the assignment to the plaintiffs and about December 7, 1908, the plaintiffs acting through their attorney, J. J. Blaine, and other creditors acting through their attorneys, Howe & Gilman, entered into an agreement to the effect that after the payment of the claim of the bank, that of the Automatic Carrier Company, and that of W. A. Patterson Company, all other claimants to whom assignments of such notes, credits, etc., had been made or would thereafter be made should prorate in all collections that might be made by the bank, and that the notes, etc., should remain in the possession •of the bank for collection. Thereafter the following assignments of tbe same notes, credits, etc., were made by Henderson & Brainerd, wbo were insolvent, viz.: December 15, 1908, to tbe Alma Manufacturing Company to secure $84.82; December 21, 1908, to tbe J. I. Case Plow Wor7ss to secure $201.04; same date to Howe & Gilman to secure $1.25; February 17, 1909, an assignment to Hudson & Tlmrber Company to secure $42.70; same date to T. H. Cochrane & Company to secure $113.11; same date to F. Blochi Company to secure $4; April 2, 1909, assignment to Parsons Band Cutter and Self Feeder Company to secure $133.25. It was further averred tbat tbe claims of tbe baulc and of W. A. Patterson Company bad been paid out of collections made upon sucb notes, accounts, etc. Tbe defendant bank further averred it bad no interest in tbe notes, accounts, etc., and was willing to. deliver all sucb to whomsoever tbe creditors named in tbe various assignments should agree upon. It prayed tbat tbe complaint be dismissed and tbat tbe court appoint a receiver to collect tbe notes, etc., and distribute tbe proceeds among tbe several creditors.

Tbe plaintiffs made proof of tbe assignment to them and of tbe prior assignments and of tbe securities on band and those collected, and upon cross-examination of plaintiffs’ witness tbe defendant, over objection, was allowed to show tbe assignments subsequent to December 7, 1908, set forth in tbe answer. Tbe defendant offered evidence tending to. show tbat tbe attorney for tbe plaintiffs wbo procured tbe assignment to them agreed with Mr, Gilman and Mr. Howe, attorneys wbo represented other creditors bolding assignments of these notes made prior to December 7, 1908, tbat except as to tbe Patterson Company claim the’ creditors of Henderson & Brainerd should prorate in the proceeds of these securities, and tbat it was agreed tbat other claims against Henderson & Brainerd which might thereafter come in should prorate with those wbo then bad assignments; tbat tbe claim of tbe W. A. Patterson Company and tbat of tbe bank and one other claim should be paid first, and that all the other creditors of Henderson & Brainerd, including those whose claims were still to come into the hands of the attorneys, should prorate in the securities. This testimony is attacked on various grounds. It is said there was no consideration for that agreement, and the case of Mygatt v. Tarbell, 85 Wis. 457, 55 N. W. 1031, is cited to support that proposition. But this overlooks the fact that there was'also the testimony of Mr. Brainerd, one of the assignors, who testified that prior to the assignment to plaintiffs he consulted a member of the firm of Howe & Grilman and thereby authorized them to confer with Mr. Blaine with reference to all the creditors prorating, and that he signed the assignment under which plaintiffs claim in the firm name with the understanding that this matter had been arranged and that all the firm creditors were to prorate in the proceeds of these notes, credits, etc. Acting on this belief he apparently made the subsequent assignments.

It is quite evident that if a man assign his property upon condition that it shall be prorated among all his creditors, that act is a sufficient consideration for the promise of the assignee to hold the property as security for the claims of himself and other creditors of the assignor. No rebutting evidence was offered and no further hearing had. At the close of the evidence the attorney for plaintiffs declared that he had no rebutting testimony and would not offer any. The court then,, without deciding the case on the testimony before it, ordered all the parties who had assignments of these credits and who were not then parties to the action to be brought in as parties defendant. They came in and answered substantially the same as the bank had answered. Seven months then elapsed and nothing was done, although a motion was made by the plaintiffs and never brought to hearing, and the plaintiffs noticed the ease for trial but never brought it to trial, whereupon the circuit court made and filed its findings and judgment, which required all of the remaining creditors to prorate. We have seen there was evidence to support this. The answer of the incoming-defendants was substantially the same as that of the bank, and they were brought in apparently only in order that they might be bound by the decree. The incoming defendants offered no evidence. After they were made parties the circuit court made exactly the same decree he should have made on the evidence had they never been brought in. The appellants have nothing to complain of because of the bringing in of these parties. They have had a full trial of the same issues between themselves and the bank, and no valid grounds for reversing this judgment appear.

By the Court. — Judgment affirmed.