Clatworthy v. Ferguson

On Petition for Rehearing.

Mr. Justice Allen.

The plaintiff in error claims that no distinction exists between the instant case and Moore v. Jacobucci, 70 Colo. 171, 197 Pac. 1015, because the garnisheeing creditor in that case had to rest his claim on the title of the principal defendant just as did the assignee in the instant case. In the Moore case, at the time of the garnishment the lien of the mortgage had terminated. The opinion there does not indicate that the mortgagee had any lien, of any kind whatever, against the proceeds of the beets.' On the other hand, in the instant case, the mortgagee of the beets had, under the circumstances described in the opinion, an equitable lien against the proceeds of the beets. If the plaintiff in error was a garnishee instead of an assignee (and he claims his rights are the same in either event) then we would have to say that “a garnishment proceeding cannot displace prior valid and bona fide existing rights and claims against the debt or property involved.” 28 C. J. 255. We therefore adhere to the opinion filed in this case, and still regard the Moore case as not decisive of the instant case.

It is further claimed that this court erred in holding that defendant in error Ferguson had an equitable lien against the proceeds of the beets. To support this contention, the *265plaintiff in error invokes the rule, stated in Silent Friend Mining Co. v. Abbot, 7 Colo. App. 73, 42 Pac. 318, that an equitable assignment is not created by an agreement to pay out of a particular fund. The rule is not applicable here, for the reason that the defendant in error is not relying on an agreement on the part of the beet grower to receive the fund from the sugar company and out of it pay her. Instead she is relying on the custom of the sugar company to pay over the fund jointly to all parties entitled thereto. Equitable liens are created from considerations of justice. It seems that we can regard the defendant in error Ferguson either as having an equitable assignment of the funds, or as the holder of an equitable lien against the proceeds of the beets. The beet grower, Engel, did not have such control of the funds as to prevent Ferguson from being an equitable assignee of her part thereof. In 5 C. J. 915, is found the following, in note 38, which meets with our approval:

“Where a mortgagee consented to the sale of mortgaged property by the mortgagor on condition that the purchaser should pay the purchase money to him it was held that this would operate as an equitable assignment of the vendor’s claim to the purchase money, even though the purchaser knew nothing of the conditional assent. McIntyre v. Hauser, 131 Cal. 11, 63 Pac. 69.”

We adhere to the former opinion also as to the matter of the equitable lien.

The petition for rehearing is denied.