McHose v. Dutton

Rothrook, J.

1. assign-awe ? instrument I. If the averments of the plaintiff’s petition to the effect that the defendant at the commencement the suit had $18,000 of the court house fund in his hands are true, it is difficult to understand why he' did not garnish the defendant when he issued, execution on the judgment against Randall.

The question to be determined here, and upon which plaintiff’s right to maintain an action depends, is, did the written instrument executed by Randall operate as an assignment to Dutton of the amount of money due on the contract, for the benefit of all who might have claims for labor and material furnished in the erection of the courthouse? If it was such an assignment, and Dutton accepted it, he was bound to discharge the trust thus reposed in him, and use the funds in his hands in payment of the beneficiaries. It is well settled that a third party may maintain an action on a promise made to another for his benefit. Counsel for appellant have cited a large number of authorities in support of this proposition. This court has repeatedly so held. See Thompson v. Bertram, 14 Iowa, 476; Hull & Co. v. Alexander, 26 Id., 569; Johnson v. Knapp, 36 Id, 616, and other cases. In section 1041 of Story’s Eq., the rule is well stated in a quotation in this language: “ If a man gives goods or chattels to another to deliver them to a stranger, chancery will oblige him to do it.”

But the question presented in this case is, did Randall by this instrument unconditionally assign over this fund to Dutton to be paid in discharge of all claims for labor and materials arising from the construction of the building? Or in *731 other words did Dutton, by accepting the order for the funds and. drawing the money, bind himself to pay the laborers and material men? We think he did not. It appears from the petition that Dutton is a banker. The order given to him upon the county was no more than authority to him to receive the money and hold it for Eandall. It authorizes and instructs Dutton to pay any claims for labor due or material furnished, and directs him to pay the balance to Eandall or place it to his credit. This is no more than providing that Dutton was to be the agent of Eandall and should disburse the fund to. any (not all) of the laborers and material men. It was a private arrangement between the principal and his agent that the agent should receive and hold the money, and pay any claims for labor and materials and account for the balance to liis principal. It was not an undertaking upon the part of Dutton that he would become liable to Eandall’s creditors, and Eandall was not, as between him and Dutton, discharged from the payment of any of his debts. Plaintiff did not release Eandall. On the contrary about the time or after Dutton received the money plaintiff commenced an action against Eandall and obtained judgment. It is true he alleges that he was ignorant of the existence of the written instrument. In Story’s Eq., Vol. 2, Sec. 1015, it is said: “ In regard to the other classes of cases above suggested, namely, those where the question may arise of an absolute appropriation of the proceeds of an assignment or remittance, directed to be paid to particular creditors, courts of equity, like courts of law, will not deem the appropriations to the creditors absolute until the creditors have notice thereof, and have assented thereto; for, until that time, the mandate or direction may be revoked or withdrawn, and any other appropriation made by the consignor or remittor of the proceeds.”

It was in the power of Eandall at any time before the rights of the creditors attached to revoke the order to Dutton. Whether he did so or not does not appear. The fact as alleged in the petition, if it be a fact, that Dutton still holds *732 the funds, is not inconsistent with a revocation of his authority to pay the creditors. We think the demurrer to the petition was properly sustained. . r r 1 J Affirmed.