Close v. Independent Gravel Co.

NIXON, P. J. This case was tried nisi on the following agreed statement of facts: “The plaintiff, F. D. Close, is a hardware merchant in Webb-City, Missouri. On the 3d day of January, 1910, J. W. Patrick gave plaintiff the following written assignment: ‘For a valuable consideration, to me in hand paid by the Webb City Stove Company, the receipt of which is hereby acknowledged, I do hereby transfer, assign and set over to the said Webb City Stove Company, its successors or assigns, all wages or claims for Avages, commisions, credits and demands of every nature •and kind due and to become due from my present employment or from- any subsequent employer, up to and including the last day of January, 1911, not to exceed [415] --dollars. I hereby constitute the said Webb City Stove -Company, its successors or assigns, my attorney in name, with full power of substitution, to take all legal measures which may be proper and necessary for the complete recovery and enjoyment of the claim hereby assigned, and I hereby authorize and empower and direct the said employer to pay the said demand and claim for wages, commissions, credits and all demands of every nature and kind hereof to said Webb City Stove Company, its successors or assigns, and hereby authorize and empower it to receipt for same in my name. I have read the above assignment and power of attorney and understand what it means. Dated 3rd day of January, 1910. Witnesses: E. B. Finley, J. B. Johnston. (Signed) J. W. Patrick.’ “Patrick was by occupation a miner and owed the plaintiff, at the time of giving the assignment, $29.50. “On the 26th day of February, 1910, a written notice of the assignment with a copy of the same attached was served on the Independent Gravel Company. Defendant refused to recognize the assignment and paid the money due Patrick as wages, to him. “At the time of making the assignment Patrick was not in the employ of the Independent Gravel Company. He was not employed by defendant Gravel Company, but ivas employed by a mining company. He was not employed by defendant until February 14, 1910. At the date of giving the notice of the assignment to .defendant, he was in the employ of the defendant company. “The amount due Patrick from defendant at the time said notice was served upon it was $9.25, and the amount earned by said Patrick thereafter while in the employ of defendant Avas $25.50. Patrick was employed by the day by the defendant and was paid at the end- of each Aveek, and could be discharged at any time.” Plaintiff recovered' judgment in the justice of the peace court for $29.50, the balance due on the stovel Defendant appealed and-on trial anew in the circuit [416] court, the court sitting as a jury, judgment was entered for plaintiff for the sum of $29.50. The defendant has appealed. It will thus be seen that the litigation arose out of the attempted assignment of future wages not growing out of an existing contract of employment. The questions for our consideration are, (1) Did the assignment given by Patrick operate as an equitable assignment of the wages earned after he changed employers? (2) If so, in a suit at law in a justice of the peace court the proper mode of proceeding or is plaintiff compelled to resort to a court of equity? The trend of modern decisions is in the direction of enlarging and protecting more fully the rights of assignees of dioses in action. This is especially true in states like our own where the reformed procedure has been adopted which requires actions to be brought-in the name of the real party in interest, and the assignee of a thing in action is required to sue in his ovm name in a legal action brought for its recovery. The necessary effect of this legislation is to change to a large extent the right acquired by the assignee of such chose in action from a purely equitable into a legal title, interest and OAvnership; and when the thing in action is itself legal the interest, right and title under the assignment is a legal one. [Van Doren v. Rolfe, 20 Mo. 455; Hax v. Acme Plaster Co., 82 Mo. App. 1. c. 454; Dickey v. Porter, 203 Mo. 1, 101 S. W. 585; Price v. Mining Co., 83 Mo. App. 1. c. 476; Kuhn v. Schwartz, 33 Mo. App. 610; Boyer v. Hamilton, 21 Mo. App. 520; 3 Pom. Eq. Jur. (3 Ed.) sec. 1274; 1 Pom. Eq. Jur. (3 Ed.), secs. 137, 281, 356; Dickerson v. City of Spokane (Wash.), 66 Pac. 381.] The general principles have been applied by courts to that class of cases which have arisen out of assignments of prospective wages to be earned under contracts of existing employment which import to them a potential existence, although the contract may be indefinite as to time and amount, if made in good faith and for [417] a valuable consideration, whether such assignment was intended as a mere security for present or future advances, or an outright sale. [Leahy v. Dugdale’s Adm’r., 27 Mo. 437; Hax v. Acme Plaster Co., supra; Leitch v. Northern P. R. Co. (Minn.), 103 N. W. 704; Kane v. Clough (Mich.), 24 Am. Rep. 599; O’Connor v. Neehan (Minn.), 49 N. W. 982; Thayer v. Kelly (Vt.), 65 Am. Dec. 220; Morrill v. Noyes (Me.), 96 Am. Dec. 486; Metcalf v. Kincaid (Iowa), 54 N. W. 867. But in the case under consideration there was no existing contract of employment between the debtor and this defendant as to the wages sought to be affected by this action. There was nothing to assign but a contingent interest arising from mere hope or expectation resting on probability alone. An assignment of such an expectancy is supported and enforced in equity for the reason that equity construes the instrument as imposing a lien upon' the res when produced or acquired, leaving the legal title still in the grantor, who may by some act ratify the same, as by a delivery of the property; and then the legal title is complete in the vendee. [Everman v. Robb (Miss.), 24 Am. Rep. 682.] “The reason that it may be different in equity is not that a man conveys in praesenti what does not exist, but that what is in form a conveyance operates in equity by way of present contract merely, to take effect and attach to the things assigned as soon as they come in esse; to be regarded before that time as only an agreement to convey, and after that time as a conveyance.” [Emerson v. Railroad (Me.), 24 Am. Rep. 39; Edwards v. Peterson (Me.), 14 Atl. 936; Rodijkeit v. Andrews (Ohio), 77 N. E. 747; Wright v. Bircher, 72 Mo. 179, 186; Keating v. Hannenkamp, 100 Mo. 1. c. 167; Mitchell v. Winslow, 2 Story 630.] Although a sale or mortgage of property to be acquired in the future does not operate • as an immediate alienation at law, it operates as an equitable assignment of the present possibility, which changes into an assign [418] ment of the equitable ownership as soon as the property is acquired by the vendor or mortgagor; and because this ownership thus transferred to the assignee is equitable, and not legal, the jurisdiction by which the right of the assignee is enforced and is turned into a legal property, accompanied by possession, must be exclusively equitable; a court of law has no jurisdiction to enforce a right which is purely equitable. [3 Pom. Eq. Jur. sec. 1288.] Hence there is a distinction between the assignment of an equitable lien or equitable right and the assignment of a legal demand. The former is only valid and can only be enforced in a court of equity. Without a present contract, there cannot be a valid assignment either at law or in equity of wages to be earned in the future for the reason that under such circumstances future earnings constitute a mere possibility not coupled with an interest. [Bell v. Mulholland, 90 Mo. App. 612; Billings v. O’Brien, 45 How. Pr. 392; Herbert v. Bronson, 125 Mass. 475; Edwards v. Peterson (Me.), 14 Atl. 936; Cooper v. Douglass, 44 Barb. (N. Y.), 409; 4 Cyc. 18.] The wages for this reason could not, strictly speaking, be assigned, but the attempted assignment would create an equitable right. A justice of the peace has no jurisdiction over the foreclosure of an equitable lien because it could be enforced only in a court of equity which would be a strictly equitable proceeding”—in the words of section 7397,. Revised Statutes 1909. In the present case the plaintiff’s right of action does not grow out of a contract of employment existing, with this defendant at the time of the assignment of the future earnings and hence he has no title to them which could be enforced in an action at law. It follows from what has been said that the plaintiff had no such title as would enable him to maintain a suit on the account before a justice off the peace, and' the judgment is therefore reversed. All concur.