ferent principles from those which
apply to ordinary choscs in act inn.
A similar remark applies to the case
of Moore v. Holcombe, where the as-
signee took a legal title by virtue of
the provisions of an act of assembly,
and was therefore beyond the reach
of an equity, of which he had no no-
tice.

This is the more obvious, because
the rule which limits the title of the
buyer to that of the seller, is a ge-
neral one, and reaches beyond the as-
signment of choses in action, to that
of chattels personal, and real estate ;
ante, vol. 2, p. 72; The Commercial
Bank v. Colt, 15 Barbour, 506 ; the
only exception being, where the con-
test lies between a legal title on the
one side, and an equity on the other,



or between a purchaser, who has taken
every reasonable precaution, and an-
other, who has been guilty of a want
of due care; ante; Maybin v. Kirby,
4 Richardson, Eq. 105. It 'would,
notwithstanding, appear, that the as-
signor of a chose in action, cannot set
up an equity growing out of the as-
signment, to defeat a subsequent pur-
chaser without notice from the assig-
nee. Thus, the obligee of a bond,
who has assigned it absolutely, cannot
reclaim it from a subsequent pur-
chaser, who has paid his money on
the faith of the assignment, on the
ground of a subsequent failure of con-
sideration, as between himself and
the assignee ; Taylor v. Gift, 10 Barr,
4l> ; M ( Connell v. Wen rich, 4 Har-
ris, 865. For although the right
transferred in such cases is a mere
equity, yet the assignor who has done
all that lies in his power to transfer it
to the assignee, will not be allowed to
set aside the transfer subsequently, to
the injury of third persons, who have
acted upon it, the general rule being,
that sales which are voidable only for
fraud, or any other cause, cannot be
avoided after the rights of a bona fide
purchaser have intervened; ante, vol.
2, p. 81 ; Kingsfordv. Merry, 11 Ex-
chequer, 577; 1 Hurlstone& Norman,
503 ; Bujjington v. Gerrish, 15 Mass.
156; 1 Smith, Leading Cases, 489,
5th Am. ed. In Cockcll v. Taylor,
15 Law & Eq. 101, however, the point
was decided the other way, and the as-
signor of a bond, held entitled to set
aside an assignment, on the ground of
fraud practised by the assignee, even
after the instrument had been trans-
ferred to a third person, who had paid
for it in ignorance of the fraud ; ante,
vol. 2, p. 81.



ROW V. DAWSON. — RYALL V. ROWLES.



873



It is a necessary consequence of the
principles above stated, that the assign-
ment of a debt will not invalidate a
payment made to the assignor, unless
notice has been given to the debtor,
for he is obviously entitled to proceed
in accordance with his original under-
taking, so long as he is ignorant that
anything has occurred to vary its ope-
ration ; Mangles v. Dixon, 18 Eug.
Law & Eq. 82. But he will be bound
by the assignment, from the moment
he becomes aware of its existence, and
cannot set up subsequent payments or
equities between himself and the as-
signor, nor rely on any set-off which
may be acquired subsequently, as a
bar to the right of the assignee ; Bras-
hear v. West, 7 Peters, 608 ; Bean v.
Simpson, 4 Shepley, 49; Laughlin
v. Fairbanks, 8 Missouri, 867 ; Cum-
mings v. Fullam, 13 Vermont, 434 ;
The Northampton Bank v. Balliet, 8
W. & S. 311 ; Philips v. The Bank
of Lewistown, 6 Harris, 394 ; Stew-
art v. Kirkland, 19 Alabama, 162.
That a payment to a creditor will dis-
charge the debt, notwithstanding an
assignment of which the debtor is ig-
norant, is a necessary result of the
principle, that legal rights cannot be
varied by equities, unless notice is
given of their existence. But the
English authorities go much further,
and hold that the title conferred by
the assignment of a chose in action, is
incomplete until notice to the debtor,
not only as it regards him, but other
persons, and maybe avoided by a sub-
sequent assignment, either for value
or under the Statutes of Bankruptcy.
Thus it was held in Ryall v. Rowles,
(ante, 299,) that where the assignee
neglected to give notice of the assign-
ment to the debtor, the debt remain-



ed at the order and disposition of the
assignor, and would consequently pass
to his assignees in bankruptcy. And
it seems well settled in English juris-
prudence at the present day, that as
between successive purchasers of a
chose in action, he will have the pre-
ference, who first gives notice to the
debtor, although the date of his pur-
chase be subsequent to that of the
other; ante, 317.

The doctrine thus held, is of recent
adoption in England, and has not been
followed in some of the states of this
country. In arguing the case of Rcd-
feam v. Ferrier, 1 Dow, 50, in the
beginning of this century, Sir Samuel
Romilly treated it as unknown to the
English law, although well establish-
ed in that of Scotland. It can hardly
be said to have been expressly decided
in Ryall v. Rowles, which merely de-
termines, that when notice of the as-
signment is not given to the debtor,
the debt remains within the control
and disposition of the creditor, and
will therefore pass to his assignees in
bankruptcy. The point thus decid-
ed, turned on the express words of
the statute of James, and has little
bearing on the rights of assignees in
general. The necessity for notice of
the assignment, to complete the title
of the assignee, as against subsequent
claimants under the assignor, is, how-
ever, established in Connecticut, Ver-
mont, and some other parts of this
country; Campbell v. Day, 16 Ver-
mont, 358 ; Barney v. Douglass, 19
Id. 98; Ward v. Morrison, 25 Id.
593 ; Loomis v. Loomis, 26 Id. 201 ;
Cladfield v. Cox, 1 Sneed, 330;
Murdoch v. Finney, 21 Missouri,
138 ; Woodbridge v. Perkins, 3 Day,
364; Judah v. Judd, 5 Id. 534;



374



EQUITABLE ASSIGNMENTS.



BisJwp v. Halcomb, 10 Conn. 444 ;
Foster x. Mix, 20 Id. 395 ; Adams v.
Leavens, lb. 73; on the ground that
the title cannot be held to be out of
the assignor before notice, because
until then a payment to him will be
good both at law and in equity. Thus
in Van Buskirk v. The Hartford F.
Ins. Co., 14 Conn. 145, it was said to
be the well settled rule in Connecticut,
in accordance with the law of Eng-
land, that to perfect the assignment
of a chose in action against creditors
and subsequent bona fide purchasers,
notice must be given to the debtor
within a reasonable time after the as-
signment. The practical wisdom of
this rule is obvious, for it gives the
means of determining between con-
flicting equities, and affords purchas-
ers of choses in action, a security
which they cannot attain under a dif-
ferent system ; Clad field v. Cox. A
similar view was taken in Murdoch v.
Finney, and an assignee, who had
given notice, held to be entitled to
priority over prior claimants, who
had neglected this precaution ; while
in Campell v. Day, and Loomis v.
Loomis, the acts and admissions of
the assignor, were said to be equally
admissible in evidence against the
assignee, down to the period at
which the latter, by giving notice,
apprises the debtor that the debt
has passed into his hands, and out
of those of the original creditor. The
decisions of many of the states of
the Union, are however the other
way, and determine that the assign-
ment of a chose in action is complete
in itself, upon the mutual assent of
the assignee and assignor, and does
not gain additional validity as against
third persons, from notice to the



debtor; The United States v. Vaughan,
3 Binney, 394 ; Stevens v. Stevens, 1
Ashmead, 590 ; Bholen v. Cleve-
land, 1 Mason, 174; Warren v. Cope-
lin, 4 Metcalf, 594 ; Dix v. Cobb, 4
Mass. 508 ; Wood v. Partridge, 11 Id.
488; Littlefield v. Smith, 17 Maine,
327; Beckicith v. The Union Bank,
5 Selden, 211. Thus, in Muir v.
Schenck, 3 Hill, 228, the court were
clearly of opinion, that as between two
assignees of a debt, priority of notice
to the debtor, would not affect the
superiority of right growing out of
priority of assignment, and that a pro-
mise to the second assignee before no-
tice of the first, would not justify a
payment to him, after such notice had
been given.

The courts of New York regard a
mortgage as a mere chose in action,
and hold, in consequence, that the as-
signee takes no better title than the
assignor, and will be subject, not only
to the equities of the mortgagor, but
to those of third persons. Thus, where
lands were resold by a purchaser, who
took two mortgages for the purchase-
money, and assigned one of them to
the original vendor as security for the
amount due to him, with an under-
standing that it should have priority
over the other, it was held that this
understanding bound a subsequent
assignee of the second mortgage, al-
though without notice; Van Ren-
selaer v. Stafford, Hopkins, Ch. 569 ;
9 Cowen, 316; (ante, vol. 2, p. 81.)
And in Poitton v. Martin, 1 Sand-
ford, Chancery, 569, this doctrine
was carried to the extent of deciding,
that, where the assignment of a mort-
gage has been procured by fraud, it
may be set aside, not only as against
the assignee, but against subsequent



ROW V. DAWSOX. — RYALL V. ROWLES.



875



purchasers for value, and without
notice. The more recent cases of
Peabody v. Fenton, 3 Barbour, Ch.
451, and Sweet v. Van Wyck, lb. 647,
tend iu the same direction, although
decided chiefly on other grounds.
This course of decision seems to be
both unsound and dangerous. A mort-
gage is undoubtedly a chose in action,
but it is a chose in action, fortified and
supported by the possession of the
legal title in the estate mortgaged ;
Wiltshire v. Rabbits, 14 Simons, 76 ;
Andrew NeicporCs case, Skinner, 423;
Conard v. The Atlantic Ins. Co., 1
Peters, 386, 441 ; 1 Smith's Leading
Cas. 662, 5th Am. ed. It is true that
the assignment of a mortgage, is so far
within the rule which regulates the
assignment of other choses in action,
that the assignee is subject to the
state of the accounts between the
mortgagor and the mortgagee, not
only at the time of the assignment,
but subsequently, and until notice has
been given to the mortgagor; Matthews
v. Wallwyn, 4 Vesey, 118; Williams
v. Sorrell, lb. 389; Clute v. Robin-
son, 2 Johnson, 595; The Niagara
Bank v. Rosevelt, 9 Coweu, 409;
Fitch v. Cotheal, 2 Sandford, Ch. 29 ;
Eanley v. Carroll, 3 Id. 301; The
N. Y Life and Trust Co. v. Smith,
2 Barbour, Ch. 82; Reed v. Marble,
10 Paige, 409 ; Hodgdon v. Naglee,
5 W. & S. 217 ; MFarlane v. Griffith,
4 W. C. C. R. 585 ; The U. S. v.
Sturges, 1 Paine, 525 ; Watkins v.
Worthington, 2 Bland, 509; and will
be bound by payments after the as-
signment, but before the mortgagor is
aware that it has been assigned; Wil-
liams v. Sorrell, lb. 389 ; The iV". Y.
Life and Trust Co. v. Smith; Haw-
ley v. Carroll; Watkins v. Worthing-



ton ; and indeed by every act of the
latter which would have been good
had no assignment been made; ante,
373. This is obviously because the
right given by a legal title, is bound
by all equities, of which the holder
has actual or constructive notice, and
because the mortgage bears notice
on its face, of the right of the mort-
gagor to redeem his estate by the pay-
ment of the bond, and can subject the
assignee to no danger against which it
is not in his power to guard, by making
proper inquiries of the mortgagor, and
giving him notice. But it is equally
obvious, that the purchase of a mort-
gage does not imply notice of the
equities of third persons, and that it
must be impossible for the assignee to
ascertain their existence by inquiries,
which he has no clue to guide. It is,
therefore, both unjust and inexpe-
dient, to deprive him of the protec-
tion afforded by the possession of the
legal estate, against dangers from
which he cannot protect himself. It
is, accordingly, well settled iu Eng-
land, that the assignment of a mort-
gage for value, and without notice,
gives the assignee all the rights of a
bona fide purchaser, and exonerates
him from all other equities than those
of the mortgagor. And the law would
probably be held the same way in
most of the states in this country ;
M'Farlane v. Griffith, 4 W. C. C. R.
585 ; ante, vol. 2, p. 82. In Mott v.
Clark, 9 Barr, 399, it was decided,
that the assignee of a mortgage for
value, and without notice, was to be
considered as a purchaser, and was
therefore entitled to protection against
the equity of a third person, although
binding, both on the mortgagor and
mortgagee at the time of the assign



376



EQUITABLE ASSIGNMENTS.



merit. Similar ground was taken in
Philips v. The Bank of Lewistown,
6 Harris, 394, where the court said
that a mortgagee stood on the foot-
ins of a purchaser, and that his as-
signees would be protected against
latent equities of which he had no
notice. And in James v. Morey, 2
Cowen, 246, the court held that the
principle of Matthews v. Walwyn,
only applies in favor of the mort-
gagor, and that an assignee is not
bound by equities arising out of tran-
sactions between the mortgagee and
third persons. This doctrine accords
with the decisions of Chancellor
Kent in Livingston v. Dean, and
Murray v. Lylburn,, and must be re-
garded as law, notwithstanding the
cases which point the other way.

It has already been stated, that
the title conferred by the assignment
of a chose in action, is recognized at
law as well as in equity, and is
equally favored at the present day in
both jurisdictions ; Westoby v. Day,

2 Ellis & Blackburne, 605. From
the moment at which notice of the
assignment is given, the assignee be-
comes the owner of the debt, and en-
titled to protection against both the
assignor and the debtor, Morton v.
Naylor, 1 Hill, 583 ; Lovely v. Cald-
well, 4 Alabama, 684; Blin v. Pierce,
20 Vermont, 25 ; Bryant v. Dana,

3 Gilman, 343; Dunclclee v. The
Greenfield Mill Co., 3 Foster, 245,
who will both be compelled to use
their legal rights, in due subordina-
tion to his equity. A payment to the
assignor, after notice or knowledge of
the assignment, consequently, will not
be a defence to an action brought in his
name, but for the benefit of the assig-
nee ; and while the right of set-off can-



not be taken away or invalidated by a
notice given after it originates or is ac-
quired, the debtor will still be bound
to exercise it in good faith, and with-
out prejudicing the assignee, except
in so far as may be necessary to pro-
tect himself. Hence, when one of
two debts between the same parties is
assigned, and notice of the assignment
given to the debtor, he will be bound
to apply a set-off equally applicable to
both, to that which is still retained by
the original creditor, and will not be
entitled to pay the latter and then set
up the cross demand as an answer to
the other; Berry v. The Church, 7
Maryland, 564. " Courts of law,"
said Story, J., in Welch v. Mande-
ville, 1 Wheaton, 233, "take cog-
nizance of the assignment of choses
in action, and afford the assignee
every protection, not inconsistent with
the established principles and modes
of procedure, which govern tribunals
proceeding according to the course of
the common law. They will not,
therefore, give effect to a release pro-
cured by a covenous combination with
the assignor, in fraud of the assign-
ment, nor permit the assignor to in-
terfere injuriously with the conduct
of any suit brought to enforce tbe
rights passed under it." In accord-
ance with this doctrine, it is tho-
roughly well established, both in this
country and in England, that a re-
lease given by an assignor after the
assignment of a debt, is fraudulent
on his part, and will be void on that
of the debtor, if accepted by him
after notice of the assignment; John-
son v. Holdsworth, 4 Dowl. P. C 63
Payne v. Rogers, 1 Douglass, 407
Legh v. Legh, 1 Bos. & Pul. 447
Ilickey v. Burt, 7 Taunton, 48



ROW V. DAWSON. — RYALL V. ROWLES.



377



Mountstephen v. Broohe, 1 Chitty,
390; Innell v. Newman, 4 B. &
Aid. 419 ; Manning v. Cox, 7 Moore,
617 ; Barker v. Richardson, 1 Y. &
J. 362; Phillips v. Clagett, 11 M.
& W. 84; The Reservoir Co. v. Chase,
14 Conn. 123 ; Bulkley v. Landon,
3 Id. 76; Strong v. Strong, 2 Aiken,
373 ; Bartlett v. Pearson, 29 Maine,
9; Parker v. Kelly, 10 Smedes &
Marshall, 184; Webb v. Steele, 13
New Hampshire, 230 ; Anderson v.
Miller, 7 Smedes & Marshall, 586;
Andrews v. Becker, 1 Johnson, Cases,
411 ; iJtofce v. Buchanan, 22 Verm.
548 ; and this rule applies whenever
the circumstances are such as to make
it the duty of the creditor to assign,
although he may not have executed
an actual assignment; Hart v. The
Western Rail Road, 13 Metcalf, 99;
equity regarding that as done which
the parties ought and are compellable
to do. When a release is void for
fraud on the party releasing, the fraud
must be replied, and the question left
to the jury; Wild v. Williams, 6 M.
& W. 490. When, however, the
fraud is on the equitable rights of
third persons, claiming by assignment
under the nominal plaintiff, the ordi-
nary course in England is to set the
plea aside on motion ; Phillips v.
Clagett, 11 M. & W. 84. This prac-
tice was followed in Green v. Beatty,
1 Coxe, 142, where it was said to be
an absurdity, to plead the plaintiff's
own fraud in support of his action.
The usual course in this country has
been, notwithstanding, to reply, setting
forth the assignment as an equitable
bar to the operation of the release.
In Saij v. Dascomb, 1 Hill, 552, an
attempt was made to give the assign-
ment in evidence, in support of a tra-



verse of pleas of set-off and payment.
But it was held by the court, that
whenever an assignment is relied on
as an avoidance of a defence, which
would have been good as between the
original parties to the obligation, it
must be set forth specially in the re-
plication. " The plaintiff," said Bron-
son, J., "instead of taking issue on
the plea of payment, should have re-
plied the assignment and notice ; and
there should have been a like repli-
cation to the plea of set-off, instead
of a general denial of the matters
alleged in the plea. I am not aware
that this point has been directly ad-
judged, but in all the cases I have
noticed when a defence as against the
nominal plaintiff has been pleaded,
the replication has been special, set-
ting up the assignment and notice.
In Littlefield v. Storey, 3 John. R.
425, one of the pleas was payment.
In Raymond v. Squire, 11 Id. 47, a
release was pleaded; also an accord
and satisfaction. In Dawson v. Coles,
16 Id. 51, there were pleas of pay-
ment, release, and a former suit and
recovery by the plaintiff. In Briggs
v. Dorr, 19 Id. 95, a release was
pleaded, and there was a like plea in

Wheeler v. Wheeler, 9 Cowen, 34 ;
and in Wheeler v. Raymond, 5 Id.
231, satisfaction was pleaded. In
each of these cases the replication
was special, stating an assignment and
notice before the defence set up by
the plea arose, and averring that the
action was brought in the name of the
nominal plaintiff for the benefit of
the assignee." And in Eastman v.

Wright, 6 Pick, 316, it was decided
that the court will not interfere on
motion, and that whatever the nature
of the fraud relied on in avoidance of



378



EQUITABLE ASSIGNMENTS.



a release, its existence is a question
for the jury.

Although the assignee of a chose
in action, is regarded as the owner
both at law and in equity, he cannot
enforce his right by a suit in his own
name in either jurisdiction. This
rule is too well settled for comment
as it regards actions at law, and ad-
mits of few exceptions in equity.
The assignee of a debt cannot there-
fore file a bill for the purpose of com-
pelling payment, unless on special
grounds, or when the debt is of equit-
able origin ; Motteux v. The London
Assurance Co., 1 Atkyns, 545 ; The
Ontario Bank v. Mumford, 2 Bar-
bour, Ch. 596; Adair v. Winchester,
7 Gill & Johnson, 114; Gocer v.
Christie, 2 liar. & Johnson, 67 ; Car-
ter v. The United Ins. Co., 1 Johnson,
Ch. 463 ; Smiley v. Bell, Martin &
Yerger, 378 ; Doggett v. Hart, 5 Flo-
rida, 215. When, however, the de-
mand assigned is equitable in its own
nature, the assignee must necessarily
come into equity to enforce it, and
he may be entitled to adopt the same
course, when he has been deprived
of the power of redress at law, by
collusion between the assignor and
the debtor, subsequently to the assign-
ment; Lenox v. Roberts, 2 Whea-
ton, 373; Boush v. Mosehj, 4 Ran-
dolph, 392. The assignee has also been
held to have a foothold in equity
when the assignment is partial, or
when parcels of the same debt are
assigued to different persons, and a
court of law might be incompetent
to adjust the amount due to the dif-
ferent claimants ; Field v. The Mayor
of New York, 2 Selden, 179.

The refusal, both of law and equity,



to permit the party entitled to a well
recognized right, to enforce it in per-
son, or without a recourse to the fic-
tion of suing in the name of another
who has departed with all right, and
is allowed to have no control over the
action, which he is feigned to have
brought, may seem an anomaly in
jurisprudence, but it is the necessary
result of the course of legal proce-
dure, and of the peculiar relation in
which equity stands to law. If the
assignee of a chose in action were per-
mitted to sue in his own name, the
result would be to render the assignor
a competent witness, and thus the
oath of the actor in any controversy
would become admissible, on his go-
ing through the form of an assign-
ment, while that of the defendant
would be excluded; Thunnan v.
Wells, 18 Barbour, 500. And if an
assignee could ground a bill in equity,
on the equitable nature of his title
under the assignment, not only would
fictitious assignments be resorted to
for the purpose of giving jurisdiction,
but controversies properly of legal
cognizance, would be withdrawn from
the courts of law, by the act of one
of the parties, without the assent of
the other. Nothing, therefore, is
more necsssary, than the rule which
excludes an assignee from equity, and
compels him to sue in the name of the
assignor at law. The view thus taken
seems to have been verified by the re-
sults which have followed under the
new code of procedure in New York,
where we find the courts laboring to
restrict the right of assignment to
obviate the evil consequences which
have followed from allowing the as-
signor to sue in his own name, and



ROW V. DAWSON. — RYALL V. ROWLES.



879



call the assignee to support the claim
by his testimony ; Thurman v. Wells,
18 Barbour, 500 ; ante, 336.

It is stated above, by the English
editor, that the assent of the debtor
to the assignment of the debt, will
render him liable to the assignee at
law, and not merely as before in equi-
ty. This is, however, an over state-
ment of the law as held in England,
and even in this country ; Jessell v.
The Williamsburgh Ins. Co., 3 Hill,
88. A past debt is not a sufficient
consideration in itself, to sustain a
new promise to the creditor, and much
less to a third person ; Hojikins v.
Logan, 5 M. & W. 241 ; Vadahin v.
Soper, 1 Aiken, 287 ; 2 American
Leading Cases, 182, 4th ed. Hence,
the English cases require, in order to
give an assignee of a debt a right of
suit against the debtor, not merely an
express promise on the one side, but
a new consideration moving from the
other. Such a consideration may be
found, in the forbearance or extin-
guishment of an antecedent right of
suit against the assignor, or any other
person. When, therefore, the assign-
ment of one debt, is accepted in pay-
ment of another, the extinguishment
of the latter, is a sufficient considera-
tion to sustain a promise to pay the
former; Wilson v. Coupland, 5 B. &
Aid. 228 ; Hodgson v. Anderson, 3
B. & C. 842 j Lacy v. MNeile, 4 D.
& R. 7. But, in the absence of a
new consideration, arising in this or
some other manner, the assent or even
the express promise of the debtor, will
not entitle the assignee to an action
in his own name, under the law of
England ; Cuxon v. Cliadley, 3 B.
& C. 591 ; Wharton v. Walker, 4 Id.
163; Fairlie v. Denton, 8 Id. 395.



Some of the English decisions
might lead to the inference, that to
sustain such a promise there must be
a tripartite agreement between the
debtor, the creditor, and the assignee,
and that the suspension or extinguish-
ment of a right of action on the part
of the assignee against the assignor,