BIRD, V. C.
Action by Jacob Kafes and another against George W. McPherson, receiver, and others, to determine plaintiffs' right to funds in the possession of the inhabitants of the city of Trenton. Decree for complainants.
Linton Satterthwait, for complainants.
W. Holt Apgar and George W. McPherson, for defendants.
BIRD, V. C. The complainants show that the defendant McPherson, as receiver, claims a prior lien upon certain funds in the possession of the inhabitants of the city of Trenton by virtue of a judgment which Packer obtained against McGovern, under a contract between McGovern and the inhabitants to remove the garbage from the city, but to which moneys they, the complainants, also claim title by virtue of an agreement between them and the said McGovern respectingthe removal of said garbage. The contract between the complainants and McGovern is to the following effect, as set forth in the bill: "That, should the said Thomas J. McGovern secure the said contract at the price named, which price was to be named in the bid of the said Thomas, T. McGovern for said contract, then, in that event, each of your orators and the said Thomas J. McGovern should furnish one-third of the teams, carts, appliances, and labor necessary for the performance of said contract, and that each of your orators and the said Thomas J. McGovern should receive one-third of the said sum of six thousand and fifty dollars, to wit, the sum of two thousand and sixteen dollars and sixty-six cents; that in accordance with the terms of said agreement or contract between your orators and the said Thomas J. McGovern your orators did in good faith enter upon the work of performing their respective parts of said contract, and did each, at his own personal solicitation and request, procure one bondsman for the said Thomas J. McGovern on his said contract, and did each furnish at his own expense one-third of the teams, carts, workmen, and tools necessary for the proper carrying out of said contract, and your orators did each perform fully and properly one-third part of said contract until the expiration of the period of twelve months from the date thereof." The contract for removing such garbage was awarded to McGovern, and it is fully established that the complainants performed their part of the alleged contract in every particular, doing all of the work required to be done. To them also was paid their proportion of the consideration money, month by month, except the last month's installment, no part of which has been paid, and except a portion of the prior month, which was actually paid to McGovern, as I understand the testimony. While this contract is established, it is insisted upon the part of the receiver that it is not binding as between the parties, even though acted upon, because not in writing; and that it was not binding upon the inhabitants, because they had no notice thereof; and, since no notice was given to the inhabitants of the city, it was not binding upon the creditors of McGovern.
First. I have never understood that it was necessary, in equity especially, as between the parties that an assignment of such an interest should be in writing. I do not think that any case can be found which lays down a principle so broad. When the principal consideration appears, and especially when the agreement of the parties has been acted upon, a suit in equity can be maintained upon a verbal assignment. For the general doctrine, see White & T. Lead. Cas. Eq. 1564, and cases there referred to. There is no valid reason whatsoever that a parol agreement of the nature contemplated in this case should not be sustained when the complainant shows that he has in every particular performed his part thereof. Nor is such an assignment impaired, as between the parties, from want of notice to the original debtor or stakeholder. Such want of notice will protect the original stakeholder to the extent that he may have discharged his obligations, but no further. White & T. Lead. Cas. Eq. 1579, 1641. Nor does there seem to be any valid reason for preferring a judgment creditor of the assignor to the assignee because the assignee has failed to give notice to the debtor or stakeholder. To this effect the law is declared in 2 White & T. Lead. Cas. Eq. 1667; Bisp. Eq. Jur. § 168. As between the parties to this controversy, the equities are wholly in favor of the complainants. They gave a full and complete consideration for the moneys which they now claim. They are in no sense volunteers as to these moneys, as is the defendant, who represents a judgment creditor. They entered into the agreement with McGovern by which they were each to do one-third of the work which he had contracted with the city to do, for which they were each to be paid one-third of the money that the city had contracted with McGovern to pay him for the whole of the work. In such case, unless fraud be shown, nothing could be more inequitable than to take these moneys from the laborer who earned them, and give them to a mere volunteer.
But it was urged at the hearing that there was no valid or binding assignment of these moneys by McGovern to the complainants, and that the case of Christmas v. Russell, 14 Wall. 69, should control, because McGovern retained the absolute control or disposition of these moneys as between himself and the complainant. The facts, as developed by the testimony, do not sustain this view. It is clear that the parties agreed that the city treasurer was to divide the money between them at the end of each month. To do this, sometimes the check was drawn in favor of McGovern, but immediately indorsed by him, and returned to the treasurer, and sometimes the treasurer indorsed the check as solicitor. In every instance for 10 months the money was distributed by the city treasurer according to the agreement. In one instance, after a new treasurer was elected, McGovern drew the money, and appropriated two-thirds of it to his own use. There can be no doubt but that in equity the complainants could have enforced this agreement against the city authorities, had they declined to recognize it. I have treated the rights of the parties as depending upon the doctrine of equitable assignments. One or more of the witnesses, however, spoke of the agreement between the parties as a partnership agreement. According to the testimony, after bids were solicited by the city authorities, the complainants and McGovern entered into an arrangement by which McGovern was to bid a certain sum for which the garbage of thecity was to be removed. McGovern was to execute the contract in his own name. Each of the complainants was to furnish a bondsman as surety for the performance of the contract by McGovern. Each of the complainants and McGovern were to furnish the teams and men to do one-third of the work of removing the garbage, which they ascertained by dividing the city into districts; and at the end of each month the one-twelfth of the whole amount bid was to be equally divided by the city treasurer amongst the three, which was done as already stated. There are many of the elements of a copartnership in this agreement. There was an equal amount of capital, of labor, of liability, and of interest. All that would seem to detract from this proposition are the facts that the capital was kept separate, and no common name was adopted, unless the use of the name of McGovern should be so regarded. But, if this view of the case should be considered for no other purpose, it is useful in illustrating the true relations of these parties, and the just claims that the complainants have to an equitable lien upon these funds prior to that of the individual creditors of McGovern. I think the complainants are entitled to the relief sought, with costs. I say with costs, because the defendant the receiver learned of the rights of the complainants in July, as the moneys which are now sought to be recovered were not due and owing from the city until August following; so that the defense which has been made was with full knowledge.