Crouch v. Muller — 57 N.Y. St. Rep. 585

Majority

p. 585

George W. Crouch, Jr., App’lt, v. Gustave Muller, Resp’t.^[1]

(Court of Appeals,

Filed March 6, 1894.)

Headnote

1. Assignment—Equitable.

An order by the contractor upon the owner, directing him to pay a sum specified, and deduct the same from the amount of the contract, operates m equitable assignment pro tanto.

2. Same—Notice.

But in the absence of due prior notice thereof to the owner, he is only liable for the amount remaining unpaid on the contract when the action therefor is brought.

Appeal from judgment of the general term, of the supreme court in the fifth judicial department, entered upon an order made at the October term, 1892, which affirmed a judgment in favor of defendant entered upon a verdict directed by the court.

This action was brought to recover upon the following instrument :

“ Rochester, N. Y., Oct 18, 1889.

“Mr. G. Muller:

“ Dear Sir—Please pay to George W. Crouch, Jr., one thousand dollars ($1,000.00) and deduct the same from the amount of my contract for building your house on Sullivan street.

“ J. B. Scheuch.”

The complaint alleged, and it appeared, that said order was given to plaintiff in payment for materials furnished, to be used

p. 586

by Scheuch in erecting a house for defendant under a contract between them. The complaint alleged that on the day of the delivery of the instrument it was presented to defendant, notice given him of its contents and payment demanded, but that no payment had been made upon it. Defendant denied the presentation or any notice of the giving of the instrument prior to the last payment on the contract; he admitted that there was still due upon the contract the sum of $153.90, and this amount, with interest from the completion of the contract, he made an offer to pay. A verdict was directed and rendered for that amount.

Further facts are stated in the opinion.

C. F. Dean, for app’lt; J. W. Taylor, for resp’t.

The order drawn by the contractor upon the defendant, by its terms and under the circumstances, operated as an equitable assignment of the sum expected to become due upon the owner’s contract with the builder. Brill v. Tuttle, 81 N. Y., 457 . There would be no doubt of plaintiff’s right to recover the whole of such sum if due notice of the assignment had been given to the drawee; but the trial court and the general term have concurred in the conclusion that no such notice was given, and have so held as matter of law upon the evidence. It is that ruling which is assailed "on this appeal.

If .there was no proof except that given by the two persons who presented the order to the defendant it would be easy to uphold the decision made, for the defendant did not understand English, and was not fully or correctly informed of the contents of the paper by Miller, who sought to explain it in German. Both of these persons described it as a paper to be signed by the defendant, and he must necessarily have understood it to be, if not a note, as he testified, at least an order depending for its effect upon his signature and acceptance, and so not an equitable assignment of the fund which could operate without his assent. The agents of the plaintiff, therefore, misled him, and failed to give him the requisite notice. They knew he could not read English, and came prepared for that emergency, but instead of translating the order itself into German they described in that language their own mistaken idea of its legal effect, and instead of leaving the order or a correct copy of it with him, so that he might procure it to be translated into his own language, they took the instrument away and left him with an incorrect understanding of the paper, and without means of correcting it.

But the question becomes closer and more difficult when we come to the testimony of the defendant himself. He says at first that Babcock said to him, “ Here I bring a note of a thousand dollars,” which he wants me to sign and I wouldn’t do it. He adds, “ Babcock read it and Miller translated it into German for me.” . How Miller had translated it he had himself testified, and what the defendant meant by such translation became apparent when he stated in answer to the court what it was that Miller said. His statement was: “ Miller said, ‘ Here I bring a note of a thousand dollars and I want you to sign it’ ” So far it is quite

p. 587

clear that no such idea as that of an equitable assignment had been conveyed to the mind of the defendant, or had been understood or comprehended by him, but, on the contrary, the notice was of an order requiring an acceptance and signing by him as essential to its operative force. The trouble arises from what he further said. He testified, “ I told Miller I wanted to see my architect and my lawyer. I saw my attorney and my architect both afterwards. I went to the architect and asked, who do I owe the money ? Who am I to pay this money to, the contractor or to Crouch ? ” It is argued that this inquiry of the defendant justifies a possible inference that he knew and understood the true character of the order; that he realized that Crouch in some manner had asserted a claim upon him for the balance to become due, and that for such reason he sought to ascertain to which of the two he ought to make payment; and so a question arose as to the real tenor and effect of the notice which should have been submitted to the jury. The point is somewhat close, but I am, inclined to think that the defendant’s statement does not change the situation, and is consistent with all that preceded it The defendant did know, for he had been told, that his contractor had drawn an order upon him which he was asked to accept, and we must assume that he went to his attorney and architect with that statement, and that he understood the order to be an effort to divert his future payments to Crouch; so that his inquiry was whether that effort did or did not make him debtor to Crouch instead of the contractor. He was told it did not. If he had not been misled, if a correct description of the order had been given him, or it had been literally transcribed into German, or a copy had been given him to take to his advisers, who could read it, his inquiry would have had a different answer. I think the question he asks does not indicate, in opposition to all the other evidence in the case, that the defendant understood the order to be something different from the description given of it, or to be one which transferred the right to the fund, but that, on the contrary, he thought it to be what was described to him, but the effect of which, and the propriety of his refusal to accept it, he thought it prudent to submit to the judgment of his advisers.

I am disposed, therefor, to approve the conclusion of the courts below, and the judgment should be affirmed, with costs.

All concur.

Judgment affirmed.