American Lithographic Company vs. Charles L. Ziegler & others

Massachusetts Supreme Judicial Court1914-01-08

216 Mass. 287

Summary · law.co

Holding. The court overruled the defendants' exceptions and upheld the assignment, holding that a written assignment of money due under a contract is valid even if the same assignment document contains an unexercised and unenforceable clause attempting to transfer personal performance duties, provided the assignee did not undertake to perform those duties and the assignor completed the required work.

American Lithographic Company sought to collect payment from Chester Suspender Company for a magazine advertisement under a contract originally made with Klausner. Klausner assigned his rights under the contract to American Lithographic for one dollar, with the assignment containing language that both transferred future payment obligations and purported to grant American Lithographic the right to perform Klausner's duties. Chester Suspender Company refused payment, arguing the magazine did not meet specifications, and also contended the assignment was invalid because it attempted to delegate personal performance obligations that could not be assigned.

The court held that even though the assignment contained language attempting to transfer performance duties (which would have been unenforceable), the separate clause assigning the right to collect money due under the contract was valid and enforceable. Because Klausner actually performed the underlying work and American Lithographic never attempted to exercise the personal performance obligations, the void clause did not invalidate the monetary assignment. The trial court properly instructed the jury to treat the case as if Klausner were the original plaintiff, allowing recovery based on substantial performance of the advertising contract.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Validity of assignment of contract rights before performance is completed
Whether an assignment containing both enforceable and unenforceable clauses is entirely void
Assignment of monetary obligations versus delegation of personal performance duties
Standing of assignee to bring action in own name

Procedural posture

The defendants appealed by exceptions to a jury verdict and judgment in favor of the plaintiff assignee in an action to recover payment under an assigned contract.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Loring, J.

This is an action upon a written contract by which the defendants, doing business under the name of the Chester Suspender Company, agreed to pay one Klausner $600 for a two-page advertisement of Chester suspenders, in a new magazine which Klausner was then proposing to publish. The contract sued on was dated October 8, 1909, and on October 30, 1909, Klausner executed and delivered to the plaintiff an assignment of it in these words: “In consideration of One Dollar, the receipt of which is hereby acknowledged, I hereby sell, assign and transfer, unto American Lithographic Company, all my right, title and interest in and to this contract, and all benefits to accrue thereon.” On the same day (October 30, 1909), Klausner notified the defendants that he had assigned “your order” to the plaintiff, who would “render bill.” When the stipulated publication had been made, the plaintiff sent the defendants a bill which they refused to pay on the ground that the magazine published was not what Klausner agreed that it should be.

At the trial the defendants also set up the defense that the work of getting up and publishing the proposed new magazine was a personal undertaking to be performed by Klausner, and so not a contract which could be assigned before performance; that the assignment made was .an assignment of the right to perform the contract as well as an assignment of the amount due when the contract had been performed, and so was invalid.

But there was no evidence that the plaintiff undertook to act upon that part of the assignment which entitled it to publish the proposed magazine. The evidence was uncontradicted that this was done by Klausner. One of the defendants testified that they knew of the proposed assignment to the plaintiff, and that they understood "that it was a sort of security so that they [the plaintiff] would get their money for it [the printing].”

In this state of the evidence the presiding judge instructed the jury “that that assignment was an assignment that could be made by Klausner to the Lithograph Company. It was for the purpose, as the papers in the case show — and it is not in dispute — of securing the Lithograph Company for the expense of printing. Now you will treat this case just the same as if Klausner was suing the partnership consisting of the two Zieglers and Van der Pyl . . .; so I repeat, you will try this case just the same as if Klausner were suing the. Chester Suspender Company, which consists of the three men who appeared here on the stand.”

Had there been any evidence that the plaintiff had undertaken under this assignment to do the work which Klausner was to do under the original contract with the defendants,- this instruction would have been wrong. But there was no such evidence in the case. The plaintiff and Klausner never had acted under that clause in the assignment; they had acted under the other clause by which Klausner assigned to the plaintiff "all benefits to accrue [to him] thereon.”

To find for the plaintiff as they did the jury under this charge had to find that Klausner had performed his contract with the defendants. In other words, the jury had to find that those things had taken place which the defendants contended ought to have taken place to make them liable under the contract to some one. The defense now insisted on is purely technical. It is this: That although the assignment contained a clause which carried to the plaintiff as assignee the money due under their contract with Idausner, it (the assignment) contained another clause which undertook to give the plaintiff a right to do what Idausner was to do under the original contract, and that that clause is void. Their contention is that the existence of this void clause in the assignment, although never acted upon by the parties to it, renders the other clause of the assignment void. We are of opinion that the contention is pot sound.

E. V. Grabill, for the defendants.

V. J. Loring, (J. P. Sylvia, Jr., with him,) for the plaintiff.

The right of the plaintiff to bring this action as assignee in its own name depends upon the law of the forum. See, for example, Leach v. Greene, 116 Mass. 534. The first ruling asked for was rightly refused. The view which we have taken of the case renders the other rulings immaterial. We have found nothing in the cases cited by the defendants which requires notice.

We are of opinion that a written assignment of money to be due under a contract made before performance is within R. L. c. 173, § 4.

Exceptions overruled.

Aiken, C. J.

The first ruling asked for was as follows: “1. The construction, validity and effectiveness of the assignment from Klausner to the plaintiff are to be determined by the law of the State of New York.”