Reeg v. West

PEEK, J. Defendant appeals from a judgment arising out of an action instituted by plaintiffs under the provisions of section 720 of the Code of Civil Procedure.

The facts are not in dispute. On December 20, 1954, plaintiffs recovered a money judgment in the sum of $4,250 and [618]costs against Howard and Sam Neilsen, a partnership “doing business as • Neilsens Mill. On July 6, 1956, the partners assigned all of the money due them from the Placerville Lumber Company to Nick Neilsen, their father. This assignment was not recorded until August 9, 1956, and subsequent to plaintiffs’ present action which was filed on July 27, 1956. Plaintiffs’ action was based on the alleged invalidity of the assignment as to them by reason of defendant’s failure to comply with sections 3017 through 3029 of the Civil Code. On July 30, 1956, a restraining order was issued restraining the lumber company from disbursing any of the funds in its hands subject to the assignment. The trial court found in favor of plaintiffs and entered its judgment declaring the assignment invalid as to them and ordering the lumber company to pay to plaintiffs the sum of $4,112.33 in full satisfaction of plaintiffs’ prior judgment out of the sum of $4,848 then owing on said account and in the hands of the lumber company.

Defendant now contends (1) that the assignment was valid as against plaintiffs, and (2) that in any event the amount of recovery should be limited to the sum of $2,714.99, the sum set forth in plaintiffs’ complaint.

Section 3018 of the Civil Code provides in part that . .an assignment of an account shall be invalid as against any creditor of the assignor without actual notice unless notice of or intention to make the assignment as provided for in this chapter is filed at the time of or before the execution of the assignment or within five days thereafter.”

Here the record shows that plaintiffs were judgment creditors of Howard and Sam Neilsen for more than one and one-half years prior to the assignment to Nick Neilsen. Defendant, however, contends that because plaintiffs’ counsel had on previous occasions represented the lumber company, and through that representation obtained information concerning the assignment which plaintiffs’ counsel admits, such knowledge was therefore the knowledge of plaintiffs in the present proceeding. Under the facts disclosed herein it would appear that whether or not plaintiffs’ counsel knew of the assignment would be of no value to defendant since what knowledge if any counsel obtained was by reason of his prior, sporadic representation of one of the defendants herein, thePlacerville Lumber Company. Certainly any information so obtained and under such circumstances could not be imputed to plaintiffs. (5 Am.Jur., § 76, p. 304.)