Joint School District No. 2 v. Marathon County Bank

Vinje, C. J. The defendant assigns as errors (1) that the court erred in finding that the school district board did not consent to the assignment of funds thereafter to become due the contractor, and (2) that the court erred in finding that the school district was not indebted to the bank in the sum of $5,000 out of moneys thereafter becoming due under the architect’s certificates to the contractor. ■ The defendant’s right to recover turns upon the question whether it obtained an assignment from the Otrich-Shrop420 shire Company that it could enforce against the plaintiff. Assuming, but not deciding, that a written assignment consented to in writing by the school board would bind the district, it is clear from the testimony that no such assignment was made. The trial court so aptly and clearly discusses this question that we adopt that part of his opinion as our own. He says: “It satisfactorily appears that notice of the assignment by Otrich-Shropshire Company to the bank was brought home to all members of the school district board in such a way as to constitute notice to the district, because the board was in full charge of the construction of the schoolhouse and payment of the money. If this assignment was good at law so as to give the bank a right of action against the school district for any moneys thereafter due the contractor from the district up to $5,000, the bank was in position to hold the district and therefore authorized to charge to the district’s account the $5,000 at the time when it did. “But the school board never took any action in which it attempted to accept responsibility to pay the $5,000 to the bank. It neither authorized nor attempted to make any promise to pay the bank, nor did it give any official assent to the splitting up of whatsoever, might become due the contractor, nor consent to pay its obligation in part to the bank. The most shown by the evidence is conversation between the cashier of the bank and the clerk of the school district in which it may be claimed the school clerk assented to, or at least did not object to, the assignment. But such conduct or conversation of the clerk could not bind the school board. And the clerk understood the assignment to relate to amounts withheld until completion of building. “The contract of plaintiff with Otrich-Shropshire Company provided that ‘neither party to the contract shall assign the contract without the written consent of the other, nor shall the contractor assign any moneys due or to become due him hereunder without the previous written consent of the owner.’ “There is nothing in writing, either authorized or unauthorized by the board, that purports to be a consent to an assignment to the defendant. At most there is an acknowl [421] edgment of notice of the making of an assignment, and that acknowledgment is signed by the clerk and on his own responsibility. “The claims paid by the contractor by means of the $5,000 loan are not even shown to have been for labor or materials upon plaintiff’s building, nor to be lienable thereon. “In this state of the facts it seems that the case is ruled by Skobis v. Ferge, 102 Wis. 122, 78 N. W. 426, and Cook v. Menasha, 103 Wis. 6, 79 N. W. 26. These cases are very similar to the one át bar. In the Skobis Case the court said: ‘While an assignee of the whole fund may, by virtue of the Code provisions that the party in interest shall sue, maintain an action at law directly against the debtor, the relaxation has not been extendéd so as to take away the protection of the other rule that a debt cannot, at the will of the creditor, without the consent of the debtor, be split up, and several suits maintained thereon, whether by assignment or otherwise. ' The debtor has a right to pay his debt in solido, and to refuse to be subjected to suits by several claimants; and no notice of an assignment of a part of a debt, no matter how complete in equity as between the assignor and assignee, can destroy this right of the original debtor without his consent.’ “This rule was applied with rigor to the defeat of the plaintiffs in the two cases. In the Skobis Case the situation was strongly analogous. The contractor there was entitled to payments from time to time. The orders given to subcontractors amounted to equitable assignments. The debtor, the board of regents, through its committee and secretary was fully informed and went as far as the school board did in this case, to recognize such assignment's." But it was held that the board of -regents was not liable on the assignments though payments had been made to the contractor of sums becoming due, leaving insufficient to pay claims under the assignments. “The situation in the Cook Case was also analogous except only that there appears to have béen no obligation of the city of Menasha to pay any instalments. There was, however, in that case as much or more evidence of assent of the city to the splitting up of the contractor’s demand. “In the case at bar there was no assignment of a specific sum or instalment coming due the contractor, but only an [422] assignment of a gross sum of $5,000 out of balance due or to become due. It was a very plain attempt to split up a demand. It was undoubtedly in equity, as between the Otrich-Shropshire Company and the bank, a good assignment, but could not operate to give the bank a direct action at law against the school district. Such being the situation, the bank had no right to take from the funds of the district which were not funds of the Otrich-Shropshire Company and were not funds due to the Otrich-Shropshire Company, any sum whatever to apply on the assignment.” By the Court. — Judgment affirmed. Rosenberry, J., took no part.