Bank of Dallas v. McCanless

*363 BeogdeN, J. What are tbe rights of tbe parties upon an assignment of payments to become due on a road contract, duly made by a subcontractor to a bank furnishing money for said project to such subcontractor, when the assignment is unconditionally accepted by the contractor, and thereafter the subcontractor, after properly completing a major portion of the work, abandons the contract and the contractor proceeds to finish the work at a loss ? Various aspects of assignments have been discussed in the books and by appellate courts, but the question of law in this case involves the rights of the assignee of a defaulting subcontractor, against the contractor, who accepted the assignment and agreed to pay according to the terms thereof. Hence, equities arising from the relationship of assignee, assignor and acceptor play no part for the reason that the written instruments state the explicit engagements of the parties. Therefore, the correct interpretation of the written agreements determines the rights of the parties upon this particular record. It is disclosed that the subcontractor, assignor, executed and delivered notes to the plaintiff bank in pursuance of the assignment and acceptance. The wording of the acceptance signed by the defendant is unconditional. The assignment directs the defendant “to pay over to the said Bank of Dallas any and all sums which may hereafter become due and owing from him to the said Mowry Construction Company,” and the defendant expressly engages “to pay over any and all sums which may become due to said Mowry Construction Company under contract for paving known as Highway Project No. 630-B, as directed by the said Mowry Construction Company.” An analogous situation arose in the case of Snow v. Commissioners, 112 N. C., 335, 17 S. E., 176. In disposing of the rights of the parties in that ease the Court said: “The effect of the arrangement between these parties was as if Brewster had drawn a draft on Ellington, Royster & Co. in favor of Snow for the sum mentioned in the note, to be paid out of the contract price, and Ellington, Royster & Co. had accepted the draft.” Likewise in the case at bar the unconditional language of the assignment and acceptance works out a result imposing liability upon the defendant. The various rights of assignees, assignors and acceptors in construction contracts, where default occurred, are discussed in the following cases: Salt Lake City v. O'Connor et al., 249 Pac., 810, 49 A. L. R., 941; O'Connell v. Root, 150 N. E., 160; Weber v. Wilson, 215 N. W., 674; Fidelity and Deposit Co. v. City of Auburn, 272 Pac., 34; Norton v. MacAtee & Sons, 16 S. W. (2d), 517; Twentieth Street Bank v. Summers, 110 S. E., 478; Jefferson County Savings Bank v. J. C. Car *364 land, 11 Southern, 704; Finklestein v. Morse, 115 N. E., 667; Lynip v. Alturas School District, 141 Pac., 835. Under these decisions, if the acceptance of the assignment was conditional, that is to say, if the wording of the acceptance is to the effect that the payments are conditioned upon the completion of the work in a proper and satisfactory manner, then in such case the rights of the assignee would be subject to the rights of the contractor who was compelled to complete the project. Upon the other hand, if the acceptance is unconditional and constitutes a promise to pay the assignee all funds coming into the hands of the contractor, then the assignee is entitled to recover in an amount, of course, not exceeding the funds in the hands of the contractor. A reasonable construction of the assignment and acceptance leads unerringly to the conclusion reached by this Court in the Snow case, supra. See, also, Hall v. Jones, 151 N. C., 419, 66 S. E., 350; Insurance Co. v. Board of Education, 194 N. C., 430, 140 S. E., 31; Trust Co. v. Construction Co., 191 N. C., 664, 132 S. E., 804. Reversed.