McDowell, Pyle & Co. v. Hopfield

AVaesii, J., delivered the opinion of the Court. Tlie question to be determined in this case is whether or not the claim of a prior assignee of a chose in action, where no notice of the assignment was given to the debtor, is superior to the claim of a subsequent attaching creditor who has secured a judgment of condemnation against the debtor as garnishee. ⁸⁶ McDowell, Pyle & Company of Baltimore City became indebted to Wirth Concord Ade Company of Providence, Rhode Island; in the sum of $332.86 for merchandise purchased at various times .in July, 1923. The money thus due from McDowell, Pyle & Company. was assigned by Wirth Concord Ade Company for value on the day following each sale to The Commercial Credit Company of Hew York, a corporation engaged in the business of purchasing accounts receivable on the non-notification basis. Subsequent to these assignments, Carl F. Hopfield, the appellee, issued a non-resident attachment against Wirth Concord Ade Company for money due him for services rendered as a salesman prior to the assignments, the attachment was laid in the hands of McDowell, Pyle & Company, and on August 13'th, 1923, a judgment of condemnation nisi Was entered against it as garnishee.

On August 14th, 1923, the garnishee, having no notice of the assignment to the Commercial Credit Company of the money it owed Wirth Concord Ade Company, filed an answer: admitting assets, and on September 20th, 1923, the judgment of condemnation nisi was made absolute against the garnishee for the amount confessed. The accounts purchased from Wirth Concord Ade Company were due in September, 1923, and, payment for them not having been received, the'Commercial Credit Company, on October 8th, 1923, notified McDowell, Pyle & Company of the assignments of the accounts 'to it. On October 18th, 1923, it learned from McDowell, Pyle & Company of the attachment and judgment of condemnation, and on October 20th, 1923, the last day of the term at which the judgment was entered, it filed a petition in the attachment suit asking that the judgment be stricken out and that it be allowed to intervene as claimant, and on the same day McDowell, Pyle & Company, Inc., filed a petition asking that the judgment of condemnation against it as garnishee be stricken out. It is admitted that at the time these petitions were filed no part of the judgment had actually been paid, nor had any execution been issued.

The learned court ⁸⁷ below dismissed both petitions, and from this action both the garnishee and the assignee have appealed, the two eases being in one record. The question thus presented deals with the conflicting claims of a prior assignee, who has not given notice, and a subsequent attaching creditor who has obtained a judgment of condemnation, and the rule applicable to such a situation is thus stated in 5 Corpus Juris, 972: “By the weight of authority, the assignment will be complete as against creditors of the assignor garnishing the chose after assignment and before notice of the assignment to the debtor, provided notice of the assignment is given to the debtor in time to permit him to disclose the assignment in his answer to the garnishee process.” The first part of this rule, namely, that “the assignment will be complete as against creditors of the assignor garnishing the chose after assignment and before notice of the assignment to the debtor,” has been adopted by a large majority of the courts. See 2 R. C. L., 629, and note in L. R. A., 1916E, 82. And it was held to be the law of this State in Brady v. State, 26 Md. 290, 311 , in which case the Court said: “It is not necessary as the law now stands in Maryland that the assignee of claims or monies shall give notice by registration or otherwise in order to shield his claim from' an attaching creditor.” See also Baldwin v. Wright, 3 Gill, 241, 247 ; Cramer v. Roderick, 128 Md. 422 ; and Getz v. Johnston, 143 Md. 543, 549 .

The second part of the rule, which provides that in order to secure a better right to the chose in action the prior assignee must give notice to the debtor “in time to permit him to disclose the assignment in his answer to the garnishee process,” is also said to be supported by the weight of authority, but an examination of the comparatively few decisions on the point shows a rather close division. L. R. A., 191.6E, supra. The majority rule is supported by the following cases: Walters v. Washington Insurance Co., 1 Iowa, 404 ; Richards v. Griggs, 16 Mo. 416 ; Newman v. ⁸⁸ Manning, 79 Ind.