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Associated Metals & Minerals Corp. v. Ogelman

JUNE 28, 1955.




Appeal from the superior court of Cook county; the Hon. DONALD S. McKINLAY, Judge, presiding. Judgment entered May 26, 1954, affirmed; judgment entered July 22, 1954, reversed; and judgment entered here for plaintiff against garnishee for $3,509.96.


Rehearing denied July 19, 1955.

On October 28, 1953, the plaintiff recovered a judgment against the defendants (hereinafter called the Ogelmans) in the Supreme Court of New York for $539,834.34, and afterward, on November 19, 1953, in the superior court of Cook county, Illinois, filed its complaint in garnishment and interrogatories against the Lancaster-Fraser-Smith Corporation, as garnishee, charging that the garnishee was indebted to the Ogelmans. On January 15, 1954, the garnishee filed its sworn answers to plaintiff's interrogatories, denying that it was indebted to the Ogelmans. Upon plaintiff's traverse of the garnishee's sworn answers, the issues were joined. The cause was heard by the court and judgment was entered on May 26, 1954, discharging the garnishee. On the same day, plaintiff again filed its complaint and interrogatories against the garnishee, to which again, on June 21, the garnishee filed its sworn answers denying any indebtedness to the Ogelmans, and again, on July 22, the court entered a judgment discharging the garnishee. Plaintiff appeals from both judgments.

The only issue on the appeal, in this court's view of the controversy between plaintiff and the garnishee, is whether certain monies in the hands of the garnishee claimed by plaintiff in these proceedings were effectively assigned to one Stanley Suydam, another creditor of the Ogelmans, and placed outside the scope of these proceedings. The facts pertinent to an understanding and a determination of that issue follow.

The Ogelmans, who live in Istanbul, Turkey, entered into an agreement with the garnishee whereby they sold the garnishee a certain tonnage of chrome ore mined in Turkey. The garnishee advanced the expenses of mining, shipping the ore to the United States and other necessary expenses. Meanwhile, the garnishee entered into another agreement with the Vanadium Corporation of America for the sale and purchase of the ore. The purchase price was $186,051.80, payable 80% provisionally and the balance upon a determination of specified weights and analyses. The garnishee under its agreement with the Ogelmans was to deduct its advances from the purchase price and deduct further its commissions of approximately $7 a ton for every ton sold Vanadium. Vanadium made the provisional payment of $149,423.10 on December 7, 1953. It made a further payment to the garnishee on December 16 of $18,555.05.

On January 15, 1954, before Vanadium made the final payment to the garnishee, and after providing for the deduction of certain disbursements to the Ogelmans, garnishee's advances and commissions, the Ogelmans were indebted to the garnishee in the sum of $13,603.30.

Shortly after November 19, 1953, on the day that plaintiff had instituted its first garnishment proceeding, the garnishee received from one Stanley Suydam, a Washington attorney, two sworn statements dated November 18, 1953, reciting that there was due Suydam the sums, respectively, of $4,200 and $877.10 for professional services rendered in New York and Washington, D.C., from August 20 to November 17, 1953, and for certain disbursements made by him, on behalf of the Ogelmans, during the period from April 2 to November 17, 1953. On or about December 31, 1953, the garnishee received a letter of even date from the Ogelmans in Turkey which, after stating that they had received two invoices dated November 18, 1953, from Mr. Suydam, in the same sums as set out above, read as follows:

"Will you kindly pay Mr. Stanley [sic] the above amounts for our account from the balance due us as a result of the final settlement of chrome ores shipped to you by us."

In the latter part of January 1954, the garnishee received the last payment from Vanadium of $18,073.65. After charging the $13,603.30 indebtedness due it from the Ogelmans and certain other items, which are not in controversy, against that sum, the garnishee had in its hands the sum of $3,509.96 claimed by plaintiff. On April 30, 1954, garnishee drew its check to Suydam's order in the sum of $3,670.44. This check the garnishee retains and it has made no payment to Suydam.

The garnishee concedes the accuracy of the $3,509.96 figure, but contends that it has been effectively assigned to Suydam under the facts and circumstances hereinbefore set forth.

We may assume, without deciding, the correctness of the garnishee's contention that at no time between November 19, 1953, when the garnishee was first summoned in these proceedings, and January 15, 1954, when it first filed its answers to plaintiff's interrogatories, was the garnishee indebted to the Ogelmans.

The question therefore becomes whether the garnishee was indebted to the Ogelmans between May 26 and June 21, 1954, when, respectively, the garnishee was summoned for the second time and for the second time filed its sworn answers to plaintiff's interrogatories.

The creation and existence of an assignment is to be determined according to the intention of the parties and that intention is derived not only from instruments executed by them, if any, but from the surrounding circumstances. Angelina County Lumber Co. v. Michigan Cent. R. Co., 252 Ill. App. 82, 89. See also Holsinger, Theis & Co. v. Holsinger, 329 Ill. App. 460, 472-3; Corbin on Contracts (1951) sec. 879; Williston on Contracts (rev. ed. 1936) sec. 424. Required quite clearly, however, is the transfer of a designated or identified right, claim or fund. Pliley v. Phifer, 1 Ill. App.2d 398, citing cases; Corbin op. cit., supra, at sec. 879, p. 529.

Much of the confusion that arises in this case can be traced to the failure of the parties to distinguish and analyze the difference between an assignment, a third-party beneficiary contract and a trust. In a somewhat loose although not improper sense, all partake of the legal aspects of an assignment — e.g., an assignment in trust, or an assignment for the benefit of a third party. See Restatement, Contracts, sec. 159, comments and illustrations; ...

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