Fritz Jahncke, Inc. v. Fidelity & Deposit Co.

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

On Motion to Dismiss. This is a motion by H.W. Bond Bro. to dismiss the appeal herein taken by John Thatcher Son, the sole appellants, on the ground that said appellants have no interest in prosecuting said appeal.

This appeal was taken from a judgment amending, and approving as amended, the report of a special commissioner appointed to hear and make recommendations in these concursus proceedings. The proceedings arose over the distribution of a fund deposited in the registry of the court, which fund grew out of a building contract between the Benevolent Association of Elks, as owner, and John Thatcher Son, as contractors.

The parties to the concursus are (or were) the aforesaid owner and contractors, the surety on the contractors' bond (the defendant named in the caption), and a host of subcontractors and furnishers of material, including the plaintiff above named and the mover herein.

I. The alleged want of interest on the part of appellants is (1) that, prior to the inauguration of this concursus proceeding, they had assigned to the Lawyers' Title Trust Company of New York $22,000 out of the last payment due them on the building, which last payment constituted the fund deposited in court, and of which only some $10,000 remains undistributed; and (2) that the interest of said John Thatcher Son "in the fund in court" has been seized under certain garnishment processes issued against them.

II. It does not appear from the record what was the nature of the assignment above mentioned. Appellants admit (Tr. 182) that there was such an assignment, and also that they are "[still?] indebted unto the Lawyers' Title Trust Company of New York in the sum of $22,000," from which it rather appears that said assignment was made only as security for a debt of like amount. But, at any rate, in the assignment of any credit, the assignor warrants atleast that the credit is fully due him. Thus, "even where the words without recourse are added in an assignment of a chose in action, there still remains an implied warranty that the right transferred is what it purports to be; namely, that it is a valid and genuine obligation of the parties. * * *" 2 R.C.L. 627. Cf. 5 C.J. 966, and R.C.C. § 2646.

So that appellants, as warrantors, have a manifest interest in protecting the fund as far as possible for their assignee. Under such circumstances they would have a right of appeal herein even had they not originally been parties to the suit. C.P. 571.

III. Movers have evidently confused the seizure of a party's interest in a pending suit, with the seizure under garnishment of a fund then in the hands of some third person and afterwards deposited by him in court for distribution, as was the case here.

Where a party's interest in a pending suit, i.e., his whole interest therein, has been seized, this deprives him of subsequent full control over the trial thereof, if the seizingcreditor insist upon it; but nevertheless even such seizure does not divest him of his whole interest in that suit until an actual sale thereof takes place. See Garlick v. Williams Med. Surg. Inst., 132 La. 670, 61 So. 732, and particularly the concluding words of the decree.

But when, as here, a number of persons have seized a fund in the hands of some third person, and such third person deposits said fund in court for distribution, it would be absurd to say that the person to whom said fund primarily belongs has no interest in protecting the same, even though the sum total of claims presented may exceed the whole amount of such fund; for that would be the same as to say that a claim presented against a fund deposited in court cannot be contested by the owner of that fund.

Decree. The motion to dismiss is therefore denied.

On the Merits.