law: assignable discouraging maintenance and litigation (a): but there can be at common little or no doubt that it was in truth a logical consequence of probable the primitive view of a contract as creating a strictly personal origin of the rule. obligation between the creditor and the debtor (b). Anyhow, it has been long established that the proper course at common law is for the assignee to sue in the name of the assignor. It appears from the Year Books that attempts were sometimes made to object to actions of this kind on the ground of maintenance, but without success (c). The same rule is very distinctly stated by Gaius as prevailing in the Roman law (). In equity assignee may sue. Legal right of assignee under Judicature Act, 1873. In equity the right of the assignee to sue in his own name has been recognized for some considerable time; it is perhaps impossible to say precisely for how long, but at any rate since the rules of equity have been at all systematic (e).. The Supreme Court of Judicature Act, 1873, (s. 25, sub-s. 6), creates a legal right modelled on the equitable right, but confined to cases where the assignment is absolute, and by writing under the hand of the assignor, and express notice in writing has been given to the debtor. (a) Lampet's ca. 10 Co. Rep. 48a. For exposition of the rule in detail see Dicey on Parties, 115. (b) Spence, Eq. Jurisd. of Chy. (c) Y. B. 9 H. 6. 64, pl. 17; 34 (d) Gai. 2. 38, 39. Quod mihi ab dicitur novatio obligationis. Sine hac vero novatione non poteris tuo nomine agere, sed debes ex persona mea quasi cognitor aut procurator meus experiri. In later times the transferee of a debt was enabled to sue by utilis actio in his own name. This seems to have been first introduced only for the benefit of the purchaser of an inheritance, D. 2. 14. de pactis, 16 pr., C. 4. 39. de hered. vel act. vend. 1, 2, 4-6, and afterwards extended to all cases, C. eod. tit. 7, 9. See too C. 4. 10. de obl. et act. 1, 2, C. 4. 15. quando fiscus, 5, Arndts, Lehrbuch der Pandekten, § 254. curious case in (e) There is a Y. B. 37 H. 6. 13, pl. 3, from which it seems that equitable assignments were then unknown (see p. 155 above). For collec tions of authorities on the modern doctrine of equitable assignments in general, see Lewin on Trusts, 575 sqq.; Leake 601; and notes to Ryall v. Rowles in 2 Wh. & T. L. C. more ex These restrictions are but partly known in equity. By the In equity Statute of Frauds (29 Car. 2, c. 3, s. 9) "all grants and assign- tensive : ments of any trust or confidence" must be in writing signed by how far governed the assignor, and by s. 7 equitable interests in land must be by Stat. of created by writing. S. 9 does not at all events require writing Frauds, qu. for the creation in the first instance by the legal owner or creditor of an equitable interest in personal property or a chose in action: and it may be argued perhaps that its operation is altogether confined to interests in land by the context in which it occurs. The writer is not aware of any decision upon it (a). As for the notice to the debtor, the rule of equity is that it must be express but need not be in writing (b). There remain, therefore, a great number of cases where the right is purely equitable, although the enlarged jurisdiction of every branch of the Supreme Court makes the distinction less material than formerly. cases by Several partial exceptions to the common law rule have been In other made at different times by modern statutes, on which however it special seems unnecessary to dwell. The more important instances are statute. these : East India bonds, 51 Geo. 3, c. 64, s. 4, which makes them negotiable. Mortgage debentures issued by land companies under the Mortgage Debenture Act 1865, 28 & 29 Vict. c. 78, amended by 33 and 34 Vict. c. 20. Policies of life assurance: 30 & 31 Vict. c. 144. Policies of marine assurance: 31 & 32 Vict. c. 86. Things in action of companies (Companies Act 1862, s. 157) and bankrupts (Bankruptcy Act 1869, s. 111) assigned in pursuance of those acts respectively. As to the effect of registration under the present acts of previously existing companies, &c., in transferring the right to sue on the contracts made by the company or its officers in its former state, see the Companies Act 1862, s. 193, Lindley 1. 507, note (u). Local authorities (including any authority having power to levy a rate) may issue transferable debentures and debenture stock under the Local Loans Act 1875, 38 & 39 Vict c. 83. In ordinary cases rights under a contract derived by assign- Limita (a) See 1 Sanders on Uses (5th ed.) 343. (b) Re Tichener, 35 Beav. 317. tion of assignee's ment from the original creditor are subject, as already stated, to rights. the following limitations: Rules of equitable debtor. 1st. Title by assignment is not complete as against the debtor without notice to the debtor, and a debtor who performs his contract to the original creditor without notice of any assignment by the creditor is thereby discharged. 2nd. The debtor is entitled as against the representatives, and, unless a contrary intention appears by the original contract, [this modification has been introduced, as we shall see, by a series of quite recent decisions] as against the assignees of the creditor, to the benefit of any defence which he might have had against the creditor himself. 1. As to notice to the debtor. Notice is not necessary to comassignment plete the assignee's equitable right as against the original creditor in general. himself, or as against his representatives, including assignees in Notice to bankruptcy (u): but the claims of competing assignees or incumbrancers rank as between themselves not according to the order in date of the assignments, but according to the dates at which they have respectively given notice to the debtor. This was decided by the case of Dearle v. Hall and Loveridge v. Cooper (b), the principle of which was soon afterwards affirmed by the House of Lords (c). The same rule prevails in the modern civil law (d) and has been adopted from it in the Scottish law (e): and the true reason of it, though not made very prominent in the decisions which establish the rule in England, is the protection of the debtor. He has a right to look to the person with whom he made his contract to accept performance of it, and to give him a discharge, unless and until he is distinctly informed that he is to look to some other person. According to the original strict conception of contract, ("à ne considérer que la subtilité du droit" as Pothier (f) expressed it) his creditor or his creditor's assignee cannot even require him to do this, any more than in the converse but substantially different case a debtor can require his creditor to accept another person's liability, and his assent (a) Burn v. Carvalho, 4 M. & Cr. 690. (b) 3 Russ. 1, 38, 48. (c) Foster v. Cockerell, 3 Cl. & F. (d) See Pothier, Contrat de Vente, SS 560, 554 sqq. (e) Erskine Inst. Bk. 3, Tit. 5. (f) Contrat de Vente, § 550. must be expressed by a novation (as to which see p. 189 above). Such was in fact the old Roman law, as is shown by the passage already cited from Gaius. By the modern practice the novation is dispensed with, and the debtor becomes bound to the assignee of whom he has notice. But he cannot be bound by any other assignment, though prior in time, of which he knows nothing. He is free if he has fulfilled his obligation to the original creditor without notice of any assignment; he is equally free if he fulfils it to the assignee of whose right he is first informed, not knowing either of any prior assignment by the original creditor or of any subsequent assignment by the new creditor (a). It is enough for the completion of the assignee's title "if notice be given to the person by whom payment of the assigned debt is to be made, whether that person is himself liable or is merely charged with the duty of making the payment" (b) e.g. as an agent entrusted with a particular fund. Notice not given by the assignee may be sufficient, if shown to be such as a reasonable man would act upon (c). All this doctrine of notice has no This does application to interests in land (d): but, subject to that excep- to interests not apply tion, it applies to rights created by trust as well as to those in land; created by contract: the beneficial interest being treated for this but does to purpose exactly as if it were a debt due from the trustee. In equitable interests. the case of trusts a difficulty may arise from a change of trustees: for it may happen that a fund is transferred to a new set of trustees without any notice of an assignment which has been duly notified to their predecessors, and that notice is given to the new trustees of some other assignment. It is still unsettled which of the assignees is entitled to priority in such a case: but it has been decided that the new trustees cannot be made personally liable for having acted on the second assignment (e). (a) See per Willes, J. L. R. 5 C. P. at p. 594. Per Knight Bruce, L. J. Stocks v. Dobson, 4 D. M. G. 11, 17. (b) Per Lord Selborne, C. Addison v. Cox, 8 Ch. 76, 79. (c) Lloyd v. Banks, 3 Ch. 488. (d) Although the exception is fully established there is good authority for thinking it not very reasonable see Lewin 581. Its effect is that equitable interests in land stand on a different footing from personal rights: see this re lied on as the ground of the ex- (e) Phipps v. Lovegrove, 16 Eq. all other Assignee takes sub The rules as to notice apply to dealings with future or contingent as well as with present and liquidated claims. "An insurance office might lend money upon a policy of insurance to a person who had insured his life, notwithstanding any previous assignment by him of the policy of which no notice had been given to them" (a). ject to equities: double meaning of the rule. 2. As to the debtor's rights against assignees. The rule laid down in the second explanation is often expressed in the maxim "The assignee of an equity is bound by all the equities affecting it." This however includes another rule founded on a distinct principle, which is that no transaction purporting to give a beneficial interest apart from legal ownership (b) can confer on the person who takes or is intended to take such an interest any better right than belonged to the person professing to give it him. If A. contracts with B. to give B. something which he has already contracted to give to C., then C.'s claim to have the thing must prevail over B.'s, whether B. knew of the prior contract with C. or not. And if B. makes over his right to D., D. will have no better right than B. had (c). And this applies not only to absolute but to partial interests (such as equitable charges on property) to the extent to which they may affect the property dealt with. Again, by a slightly different application of the same principle, a creditor of A. who becomes entitled by operation of law to appropriate any beneficial interest of A.'s (whether an equitable interest in property or a right of action) for the satisfaction of his debt can claim nothing more than such interest as A. actually had, and he can gain no priority by notice to A.'s trustee or debtor even in cases where he might have gained it if A. had made an express and unqualified assignment to him (d). But we are not concerned here with the development of these doctrines, and we return to the other sense of the (a) Ib. at p. 88. (b) Certain dicta in Sharples v. Adams, 32 Beav. 213, 216, and Maxfield v. Burton, 17 Eq. 15, 19, go even farther; but it seems at least doubtful whether they can be supported. (c) See Pinkett v. Wright, 2 Ha. 120, affd. nom. Murray v. Pinkett, 12 Cl. & F. 784; Ford v. White, 16 Beav. 120; Clack v. Holland, 19 (d) Pickering v. Ilfracombe Ry. Co. L. R. 3 C. P. 235, overruling virtually Watts v. Porter, 3 E. & B. 743, 23 L. J. Q. B. 345, see Crow v. Robinson, L. R. 3 C. P. 264; judgment of Erle, J. (diss.) in Watts v. Porter. BODL EHAN |