Stone v. Owens
Synopsis
Contracts for Construction—Assignment as Security—Liability of Pledgee—Assumpsit for Work and Labor.—An assignment of contracts for the construction of a section of seawall, thoroughfare, and wharf, and for the excavation of a cellar, as security for money advanced, accompanied by a power of attorney to the assignee to collect the money to become due under the contracts, is merely a pledge of the contracts, creating a lien thereon, subject to which the title and general property in the pledge remains in the pledgor; and such pledge and lien imply no obligation on the part of the pledgee to perform or to pay for the work which the pledged contracts required to be performed by the pledgors, and the pledgee is not liable to an action of assumpsit by employees of the pledgors for work and labor performed.
Id.—Acceptance of Benefit of Transaction—Construction of Code.— Section 1589 of the Civil Code, which provides that a voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, applies only to a transaction to which the person accepting the benefit is a party.
Id.—Parties to Contract—Pledgee.—The assignee of a contract who receives the assignment as collateral security for money loaned does not accept the beneft of the original contract otherwise than as pledgee, and does not become a party to the original contract, nor obligate himself to pay for work done under the contract.
The Court. In September, 1890, F. J. Owens and J. V. Owens, who were brothers and copartners, entered into a written contract with the state, through the harbor commissioners, to construct a section of the seawall and wharf on the water-front of the city of San Francisco.
On February 11, 1891, the Owens brothers assigned their said contract to defendant, Wood, as security for advances made and to be made by Wood to them, and constituted Wood their attorney in fact, with authority to demand and receive all warrants and moneys due or [294]to become due them under said contract, by the following instrument:
“For value received, we hereby assign and transfer to J. M. Wood all our right, title, and interest in, to and under the contract to construct section B of the seawall, thoroughfare and wharf on the water-front of the city and county of San Francisco, made by us with the proper authorities of the state of California, and dated September 22, 1890, at said city and county. This assignment is made by us to said Wood by way of security for advances made and ' to be made by said Wood to us, and we do hereby authorize and empower him, the said Wood, as our attorney in fact, to demand and receive and collect all certificates, warrants, and moneys due or to become due thereunder.
“ Witness our hands this eleventh day of February, 1891, at said city and county. Owens Beothees,
“ F. J. Owens,
“ J. V. Owens.”
On March 18, 1891, the Owens brothers entered into a contract with Reiley & Loane, whereby they agreed to excavate a cellar, which contract they also assigned to defendant, Wood, on March 19, 1891, by the following instrument:
State op Calipoenia, )
City and County of San Francisco.)
“ For value received, we hereby sell, assign, transfer, and set over unto J. M. Wood, as security for moneys advanced by him to us, our certain contract and agreement made with Messrs. Reiley & Loane, made on, to wit, March 18, 1891, to excavate a cellar at the southeast corner of Filbert and Sansome streets, in said city and county, amounting to the sum of $3,150, on land belonging to Mrs. Robert C. Johnson.
“ Dated March 19, 1891. F. J. & J. V. Owens.”
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