Defendants-appellants, John Kilian and Olga Manske (whose name is now Olga Kilian by her marriage to her codefendant, John Kilian) are owners of the property at 2569 So. 90th street, West Allis, Wisconsin.
Defendant Ronald Cantrall was engaged in the building and contracting business as Ronald Cantrall Contracting Company. Plaintiff-respondent, United Contractors, Inc., is engaged in the same type of business in Waukesha county. Defendant Cantrall was a stockholder of United Contractors, Inc., and was also its vice-president during the period covered by this case.
On March 9, 1966, Kilian entered into a contract with Ronald Cantrall for the performance of certain construction work upon Kilian's premises for the sum of $1,040 to be paid upon completion of the work. Cantrall also entered into eight other contracts of a similar nature with other persons.
Later, Ronald Cantrall entered into an agreement with United Contractors, Inc. Cantrall agreed that he would assign the proceeds of the nine contracts, including the $1,040 from the Kilian contract, to United Contractors, Inc. In return, United Contractors agreed to furnish all work and materials necessary to complete the contracts, and to employ Cantrall as foreman for $190 per week, plus a bonus of one half of any profits obtained from the nine contracts, including Kilian's contract.
Upon completion of the contract, Kilian paid Cantrall the agreed sum of $1,040. Cantrall then executed and delivered to Kilian a receipt for this payment and a waiver of all claims for mechanic's liens. However, Cantrall did not deliver this payment to United Contractors, Inc.
As to the other eight contracts, Cantrall collected all of the proceeds but turned them over to United Contractors, Inc., for only five of the projects.
Thereafter, pursuant to provisions of sec. 289.02, Stats. 1965, United Contractors brought this action for foreclosure of a lien upon the property owned by the Kilians. On April 25, 1968, the court granted judgment in favor of United Contractors, Inc., and against the Kilians for $1,327.55 damages and costs, and directed the sale of the Kilians' property to satisfy the judgment.
The judgment of the court further provided that in the event of a deficiency arising from said sale, the court, upon confirming the sale, would render judgment against defendant Cantrall for the deficiency. The trial court also concluded that defendants Kilian were entitled to their cross complaint against Cantrall for all damages, plus costs and disbursements.
The Kilians appeal from this judgment.
WILKIE, J.
A single issue is dispositive of this appeal. It is: Does the fact that Ronald Cantrall was the authorized agent of United Contractors, Inc., to collect money due on the Kilian contract bar United Contractors from asserting a lien on the Kilian property by reason of work and material furnished by it for the Kilian job?
There is no question that, as between the Kilians and Ronald Cantrall, Cantrall was the contractor and responsible to the Kilians in that capacity. However, after entering into the Kilian contract, Cantrall entered into the agreement with United Contractors, whereby he agreed to assign a number of contracts, including the Kilian contract, to United Contractors, Inc. In return, United Contractors agreed to furnish all work and materials necessary for completion of the contracts and to employ Cantrall as foreman at $190 per week, plus a bonus based on the profits realized from the contracts.
It is well established that:
"A party to a contract cannot assign to another his personal duty to fulfill his obligations under the contract, in the absence of the consent of the other party . . . ."
Continental Ins. Co. v. Bahcall, Inc. (D.C. Wis. 1941), 39 F. Supp. 315, 318. See Johnson v. Vickers (1909), 139 Wis. 145, 148, 120 N.W. 837.
However, in Continental Ins. Co. v. Bahcall, Inc., the court concluded that a party to a contract could assign the proceeds of the contract.
"It needs no citation of authority to lay down the rule that a party to a contract may assign his benefits under the contract (assuming no express provisions to the contrary), but that he cannot avoid his obligations thereunder without the consent of the party with whom he had contracted."
Continental Ins. Co. v. Bahcall, Inc., supra, footnote 1, at page 318. See also 6 C. J. S., Assignments, p. 1060, sec. 15. Page 468
Thus it appears that Cantrall assigned the proceeds of the Kilian contract, but retained his status as contractor as between himself and the Kilians.
There is no question but what United Contractors is entitled to the proceeds of the Kilian contract. However, because Cantrall was expressly authorized by United Contractors to collect the proceeds of the Kilian contract, United Contractors must proceed against Cantrall, its agent, rather than against the Kilians. The Kilians have paid for the services rendered by United by giving $1,040 to Ronald Cantrall, United Contractor's employee and authorized agent for collection purposes. It is immaterial that the Kilians were unaware of the agreement between United Contractors and Cantrall. The fact is that because of the agreement between Cantrall and United Contractors, Kilian's payment to Cantrall was payment to United Contractors.
Because this agency issue disposes of the appeal, it is unnecessary for us to reach the Kilians' contention that the agreement between United Contractors and Ronald Cantrall created a joint-venture relationship between them with respect to the Kilian contract and thereby negated any attempted claim by United Contractors that it occupied the status of a subcontractor and could foreclose a mechanic's lien against the Kilian property by virtue thereof.
By the Court. — Judgment reversed, and cause remanded for further proceedings not inconsistent with this opinion.