Hutter v. Ellwanger

By the Court

Johnson, J.

The plaintiff’s order, on which this action was brought, clearly operated as an assignment of the funds of the drawer, due or to become due, on the building contract, if there were funds to that extent in the defendants’ hands which had not been previously appropriated or assigned by the drawer. That such an order upon a particular fund operates as an assignment of it, to the extent of the order, is not questioned, and is well-settled in this State. (Hall v. The City of Buffalo, 1 Keyes, 193.) The order is upon the defendants, to pay the plaintiff $670, “ and charge my account for building on Cypress street, when his work is accepted, it being the amount due him on settlement.”

The defendants had notice of the order, and at one time promised to pay it; but this promise was made under a mistake of facts as to the amount which would be due to the drawer from them on the completion of his contract with them for building on Cypress street. This mistake arose from the erroneous report of the architect to the defendants, that there would be due the drawer, when his work should be finished and accepted according to the contract, the sum of $2,400, when, in point of fact, there would be only $1,400 his due. The drawer of the order in question had previously drawn two other orders on the defendants, one for $500 and the other for $900, of both of which the defendants had had notice before the plaintiff’s order was drawn. These two orders first drawn covered the entire fund, if drawn upon it, and left nothing to be assigned to the plaintiff by virtue of his order. There was nothing remaining which he could take.

The previous order of $500 was clearly, upon its face, drawn, upon that fund; and the principal question on which the case turns is, whether the order of $900 is also ah order upon the same fund, and operates as an assignment of it, pro tanto, to the payees.

This order is as follows: “ Pay to the order of Luther Gordon & Co. $900, at the time of the completion and acceptance of contract, value received, and charge to account of” the drawer. This, it will be seen, is clearly an order, and not a bill of exchange, as it is payable upon a contingency which may never happen. It might never become due and payable. Neither of these orders had been in form accepted by the defendants. They had only been notified that they had been drawn. This $900 order, it will be seen, is payable generally out of any funds of the drawer in the hands of the drawees, or which might come to their hands thereafter. It does not specify any particular fund out of which payment is to be made, but is to be charged to the account of the drawer generally. Nor does it specify, in terms, what contract was to be completed and accepted when payment might be made.

An ordinary bill of exchange, before acceptance, is no assignment of funds in the hands of the drawee, and gives the holder no lien, legal or equitable, upon such funds. (Winter v. Drury, 5 N. Y., 525.) This order would be a bill of exchange but for the fact that the time of payment may never happen. An order drawn payable out of a particular fund is not a bill of exchange, although drawn in the form of a bill in other respects, but an order. It is, however, an assignment of the fund, or so much thereof as may be necessary to satisfy the amount ordered to be paid, and the drawer has no further control over it. If the drawee, after notice of the order, pay the fund to the drawer, he pays it in his own wrong, and is liable to the payee or his assigns. But it seems to be perfectly settled that, in order to constitute an assignment, the order must specify the particular fund upon which it is drawn. The cases on this subject are quite numerous. (Row v. Dawson, 1 Ves., Sen., 331; Burn v. Carvalho, 4 Mylne & Craig, 690; Rodick v. Gandell, 15 Eng. Law and Eq., 22; Weston v. Barker, 12 Johns., 276; Bradley v. Root, 5 Paige, 632; Morton v. Naylor, 1 Hill, 583; Field v. Mayor, &c., of New York, 6 N. Y., 179; Hall v. City of Buffalo, supra; Vreeland v. Blunt, 6 Barb., 182.)

In order to constitute an assignment, the order must specify the fund from which it is to be paid. If by its terms it is payable generally out of any money of the drawer which may come to the hands of the drawee, it does not operate as an assignment. (Philips v. Stagg, 2 Edw. Ch., 108; Watson v. The Duke of Wellington, 1 Russ. & Mylne, 602.) In the last case the master of the rolls said: “ I am not at liberty to conjecture what might have been the intention of the parties, except as it is to be collected from the expressions of the letter; and, giving the words of the letter their natural signification, I cannot there find any agreement on the part of the Marquis of Hastings to pay the debt out of this money.”

This answers the point made by the appellants’ counsel, that the referee should have held that the $900 was an assignment of the fund or debt for building, inasmuch as he has found that it was the intention of the drawer that it should be paid out of that fund, and that lie had no other funds in the hands of the drawees. But the mere intention never operates as an assignment. An assignment can only be made by language which constitutes an express assignment, or which, in' law, imports one. This order was clearly payable out of any moneys of the drawer which might come to the drawees’ hands; and, although it is found that, at the time the order was drawn, there was no other fund in their hands out of which it could have been paid, the court cannot see but that other funds might have come to their hands before the order became due and payable.

It is enough, however, that there are no words in the order ■which, either express, or in law, import an assignment of this fund. The reference to the contract in the order only fixes the time of payment, and, for that purpose, I have no doubt the fact might he properly shown, that there was but one contract existing between the parties at the time the order was drawn.

But the difficulty is, that the order directs the payment thereof to he charged- to the account of the drawer generally, and not to the fund growing out of the contract.

The decision of the referee, therefore, was right, and the judgment must he affirmed.

Judgment affirmed.