Appeal from the Circuit Court of Cook County, Law Division;
the Hon. CHARLES S. DOUGHERTY, Judge, presiding. Affirmed.
MR. JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT.
Rehearing denied April 16, 1968.
This is an appeal from an order finding defendant Weidmann's rights to certain assets prior and superior to those of plaintiff.
On July 6, 1965, plaintiff recovered a judgment by confession against defendant Whitehead in the amount of $8,501.98, plus costs. Execution was dated July 7, 1965, and was returned marked "defendant moved, cannot serve." The note on which the judgment was based was signed by Whitehead individually.
Plaintiff next filed citations to discover assets directed against, among others, defendants Amdur, Cosmopolitan National Bank (Cosmopolitan) and Fried. Examinations pursuant to the citations were held in September, 1965. At those proceedings it was revealed that defendants Whitehead and Fried entered into a partnership agreement on June 1, 1963. The purpose of said partnership was the purchase, remodeling and operation of a building on Wellington Street in Chicago.
On April 28, 1965, Fried and Whitehead entered into a contract for the sale of the Wellington property to Amdur as agent for Cosmopolitan. Among other provisions, $15,000 was payable to the partners on November 1, 1965. By a court order entered on October 29th Amdur and Cosmopolitan were enjoined from transferring or disposing of any money to which Whitehead might be entitled under the contract of sale.
On November 17, 1965, the court ordered Baird & Warner, managing agent of the Wellington property under the Fried and Whitehead ownership, to pay over to plaintiff 60% of the funds from operation of the building.
On December 29th plaintiff filed a petition for a turnover order against Amdur and Cosmopolitan. On January 7, 1966, Amdur and Cosmopolitan filed their answers which stated that on July 8, 1965, they had received notice that the interest of Fried and Whitehead in the contract was assigned to defendant Weidmann on June 28th and that another person subsequently claimed rights in 60% of the funds under an assignment by Whitehead.
Defendant Weidmann was given notice of the proceedings and filed her verified answer on February 7, 1966. She stated that, for good and valuable consideration, by a written instrument signed by Fried, she had been assigned the interest of Fried and Whitehead, as co-partners, under the contract of sale. She further stated that the consideration was the overdue balance of the purchase price of certain property in Chicago.
On October 31, 1966, the trial court entered an order finding the rights of Weidmann to be prior and superior to the rights of plaintiff and vacating the injunction order of October 29, 1965. Plaintiff was found to have a lien on Whitehead's interest in the contract which was inferior to Weidmann's claim. Plaintiff appealed.
Plaintiff contends on appeal that: (1) defendants are estopped by their silence from raising the assignment as a defense; (2) the attempted assignment of the partnership assets must fail for lack of consideration, and (3) the assignment by one partner of all the partnership assets without the consent or ratification of the co-partner is a nullity.
Defendant Weidmann claims that the assignment to her is not subject to attack by plaintiff.
Plaintiff first contends that defendants are estopped by their silence from raising the assignment as a defense. It is pointed out that Fried was a party to the proceedings and testified twice in September, 1965, but did not mention the assignment in favor of Weidmann. The existence of such was revealed only after plaintiff filed a turnover petition against Amdur and Cosmopolitan. Fried also was silent as to the existence of the assignment at the time the order was entered directing Baird & Warner to pay over Whitehead's share of the net rents to plaintiff.
Weidmann argues that the estoppel theory is inapplicable to her for two reasons. First, Fried's testimony related to funds held by Baird & Warner, not those held by Amdur and Cosmopolitan, and the order entered referred only to rental funds and made no reference to the contract of sale of the property. Secondly, at the time Fried failed to speak up Weidmann was not a party to the action and she was given no notice of the proceedings until January, 1966. Any comments or failure to comment by Fried cannot bind or prejudice Weidmann. She refers us to Lamm v. Armstrong, 95 Minn. 434, 104 N.W. 304, a Minnesota case wherein the assignor of a contract of sale of land agreed with the purchaser to cancel the contract. The court held that the assignment of the contract created a lien on the land in favor of the assignee which could not be destroyed by the subsequent actions of the assignor and the purchaser. The assignee was not bound by the acts of the assignor. Analogously, the fact that an assignor (Fried) made no mention of the assignment of the contract rights, when he was questioned only as to rents collected and operating expenses, can hardly be said to estop the assignee from asserting her rights in the proceeds of the ...