Under the rules of evidence, proof may be submitted to show that a transfer, such as the indorsement in blank of a non-negotiable instrument, which, on its face, purports an assignment carrying full title and ownership, was in reality only a transfer as security for a loan of money, or otherwise by way of mere bailment or trust; 1 for assignment may be for a special purpose, as concerns all parties affected by notice thereof.2

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§ 81. The Subject continued; Assignee's Rights and Remedies. But what is the assignee's position under a valid assignment? To use the common phrase, he stands in the assignor's shoes that is to say, he takes the incorporeal money-right, or right in action, subject in general to all equities and offsets which at the time of assignment prevailed against his assignor; acquiring no more and no less than the assignor's rights, save so far as qualified by active fraud or the debtor's failure to receive immediate notice of the assignment. For no one can transfer a better right than he himself possesses. This rule is of universal application to assignments; 3 and consequently the bona fide assignee for value of a money-right without notice of an infirm title is much less favored than the corresponding holder of negotiable paper by indorsement, as we shall presently see. It is further held, notwithstanding the distinction taken by some authorities between "latent equities," so called, and those prevailing between the original parties to the instrument, that the equities existing between the assignor and assignee of incorporeal personalty attend the title transferred to a subsequent assignee for

Belden v. Meeker, 47 N. Y. 307. Cf. Tallman v. Hoey, 89 N. Y. 537, where no actual assignment could be said to have taken place, and the presumption of the text was repelled.

1 Baldwin v. Ely, 9 How. (U. S.) 580; Gerrish v. Sweetser, 4 Pick. 374; Owens v. Miller, 29 Md. 144; Cuthbert v. Wolfe, 19 Ala. 373. And as to the interpretation of particular assignments, see U. S. Digest, 1st Series, "Assignment," §§ 351-523.

2 Ib.

3 Mangles v. Dixon, 3 H. L. 702; Story Eq. Jur. § 1047; Bush v. Lathrop, 23 N. Y. 535; Ketchum v. Foot, 15 Vt. 258; Scott v. Shreeve, 12 Wheat. 605; Smith v. Rogers, 14 Ind. 224; Leathers v. Carr, 24 Me. 351; Decker v. Adams, 4 Dutch. 511; Faull v. Tinsman, 36 Penn. St. 108; Shotwell v. Webb, 23 Miss. 375; Jack v. Davis, 29 Ga. 219. * §§ 83, 84.

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value and without notice, the latter taking the exact position of his seller.1

It follows that the assignor will not be allowed to impair or defeat his bona fide assignee's rights, whether the assignment be enforceable at law, or only in equity; that the assignee of incorporeal personalty will be protected against the assignor's hostile acts and declarations subsequent to the transfer; and that, the transfer once made bona fide, the assignor's right of subsequent interference without his assignee's consent is limited to the right of requiring indemnity against costs in proper cases where suit is brought on the debt or demand in his name by the assignee, and of preventing experiments from being made at his risk in a litigation which concerns the debtor and assignee only.4

The assignee's rights against the debtor, too, are virtually those of the assignor previous to the assignment. Notice of the assignment of incorporeal personalty not negotiable, given by the assignee to the debtor (which has been shown. essential to the transfer of a full title), fixes the latter's liability from the time he gets the notice, and cannot defeat any equity or offset then existing. But it appears to be the duty of the debtor, upon receiving notice, to inform the assignee promptly of such equity or offset on his part as is evidently unknown to the latter.6 After receiving notice

1 Bush v. Lathrop, 22 N. Y. 535. See Ohio Life Ins. Co. v. Ross, 2 Md. Ch. 25; Davis v. Barr, 9 S. & R. 137.

2 Chapman v. Haley, 43 N. H. 300; Blin v. Pierce, 20 Vt. 25; Parker v. Kelly, 10 Sm. & M. 184.

3 Kimball v. Huntington, 10 Wend. 675; Halloran v. Whitcomb, 43 Vt. 306.

4 Reed v. Nevins, 38 Me. 193; Gordon v. Drury, 20 N. H. 353. But as to fraudulent assignees, see Atkinson v. Runnells, 60 Me. 440.

5 Leahi v. Dugdale, 34 Mo. 99; Huntington v. Porter, 32 Barb. 300; Kugler v. Taylor, 19 La. Ann. 100; supra, § 78.

6 See Scott v. Jones, 1 Brock. 244;

In re Hercules Ins. Co., L. R. 19 Eq. 302. But see Decker v. Adams, 4 Dutch. 511. Qu. as to how far this duty extends, beyond an obligation on the debtor's part not to mislead the assignee to the latter's disadvantage. The assignee of a chose in action, or security of any kind, where there has been no fraud, stands in the same situation as the assignor as to the equities arising upon it. He must be taken to be cognizant of them. It is his duty to make inquiries, and, as a general rule, the creator of the security thus assigned is not bound, on receiving a simple notice of the assignment, to volunteer information. If a loss arises, it

1

under a bona fide assignment, the debtor must make payment to the assignee, and recognize him as owner, until correspondingly notified of a sub-assignment and further change of ownership; and equities between himself and the assignor later than the assignment and receipt of notice are unavailable.2 In the case of various partial assignments duly recognized by the debtor, assignees have liens in the order of the respective assignments. And should the debtor prove insolvent, all rights of priority which the assignor may have had, pass to his assignee.

Where it becomes necessary to sue the debtor, the old rule of the common law requires an assignee to sue in the name of the assignor, but for his own benefit: and there are numerous decisions which prohibit the assignee from bringing the suit in his own name upon certain non-negotiable choses; unless, indeed, an express promise has passed from the debtor to himself which may serve as the basis of the suit. But this awkward rule, which exposes the assignor to hazard while forcing the assigneee into a circuitous pro

falls upon him whose duty it was to make the inquiries, and who has not made them. Cator v. Burke, 1 Bro. C. C. 434; Turton v. Benson, 1 P. Wms. 496; Chambers v. Goldwyn, 9 Ves. 264. But if the notice given by the assignee discloses, on the face of it, that which induces the belief that he has been deceived in accepting the assignment, the creator of the security is bound to inform the assignee of the real circumstances; and, if he should not do so, he may be bound to perform the stipulations of the security, without being allowed to take advantage of the equities existing as between the assignor and himself. Duke of Beaufort v. Neeld, 12 Cl. & Fin. 248. Yet, where no fraud exists, nothing to lead to a conclusion in the creator's mind that the other party has been deceived, he is not bound to volunteer information to the assignee. Mangles v. Dixon, 3 H. Ld. Cas. 702.

1 Myers v. South Feather, &c. Co., 14 Cal. 268; Leahi v. Dugdale, and other cases supra.

2 See Bartlett v. Pearson, 29 Me. 9; Cummings v. Fullam, 13 Vt. 434; Daviess v. Newton, 5 J. J. Marsh. 89; Upton v. Wallace, 44 Vt. 552.

3 Chester v. Jumel, 125 N. Y. 237. Otherwise where not recognized. Ib. See § 82, post.

4 McAvity v. Lincoln Co., 82 Me. 504.

5 Pollard v. Somerset Fire Ins. Co., 42 Me. 221; Skinner v. Somes, 14 Mass. 107; Mt. Olivet Cemetery v. Shubert, 2 Head, 116; Ruckman v. Outwater, 4 Dutch. 571; McKinney v. Alvis, 14 Ill. 33; De Barry v. Withers, 44 Penn. St. 356; Clarke v. Thompson, 2 R. I. 146; Smilie v. Stevens, 41 Vt. 321. See Reed, J., in De Barry v. Withers, supra, as to the debtor's express promise to the assignee.

cedure, has been much altered under our local practice acts, so as to permit of an action at law by the beneficial owner in his own name.1 Equity treats the assignee as the party in interest, and has afforded him relief, where it could properly take jurisdiction, in proceedings in his own name: but an assignee should not go into equity, if the law furnishes an appropriate remedy; 2 nor is the assignor an unnecessary party to a bill in equity, if he has an interest which may be affected by the decree. Where one does not take a full assignment (e.g. of security as well as the principal claim), he is not in a position to sue in his own name. What the debtor can set up in defence of the assignee's suit is substantially what might have been set up against the assignor himself. And accordingly, the consideration of the assignment cannot be questioned or disputed by the debtor when the assignee sues, unless special cause can be shown for doing $0.6

Instances may arise where the assignee, who has diligently pursued his remedies against the debtor, and sustained loss, has a right to turn and pursue the assignor. But the courts are reluctant to admit, upon an assignor's part, any intention to stand as indorser or guarantor of the incorporeal thing

1 Dickinson v. Burr, 15 Ark. 327; Warner v. Wilson, 4 Cal. 310; Iage v. Bossieux, 15 Gratt. 83; Bacon v. Bates, 53 Vt. 30; Gordon v. Downey, 1 Gill, 41; Cook v. Bell, 18 Mich. 387; Harper v. Butler, 2 Pet. 239; Myers v. Davis, 22 N. Y. 489.

As to foreign attachment, garnishee or trustee process, which affords to creditors under local legislation a means of reaching credits and other incorporeal property of a debtor in a third person's hands, irrespective of a valid assignment, see Bouv. Dict. "Trustee Process;" Merrill v. Englesby, 28 Vt. 150; Story Eq. Jur. § 1040 a. A discretionary right to sue either as at common law or in one's own name is permitted in various State codes. Hampson v. Owens, 55 Md. 583.

2 Hooker v. Eagle Bank, 30 N. Y. 83; Adair v. Winchester, 7 Gill & J. 114; Haynes v. Thompson, 34 Miss. 17; Dixon v. Buell, 21 Ill. 203.

3 Montague v. Lobdell, 11 Cush. 111; James River, &c. Co. v. Littlejohn, 18 Gratt. 53.

4 Batchelder v. Jenness, 59 Vt. 104. 5 See Johnson v. Irby, 8 Humph. 654; Allen v. Miller, 11 Ohio St. 374; Myers v. Davis, 22 N. Y. 489; Henry v. Brown, 19 Johns. 49. The assignee's remedy after the assignor's death is protected; though the practice of the different States is not uniform. See Grover v. Grover, 24 Pick. 261; Moar v. Wright, 1 Vt. 57; Seeley v. Seeley, 2 Hill, 496; Andrews v. Rue, 34 N. J. L. 402; 61 Vt. 213.

6 Barnett v. Ellis, 34 Neb. 539; 43 La. Ann. 1036; 99 Mo. 102.

transferred; and mutual intention is doubtless material in such an issue. Where consideration was paid the assignor, the case appears to be subject to the rule of ordinary sales as to title, genuineness, and warranty or condition precedent generally; 1 otherwise, where the transfer was gratuitous. If the assignment was by way of mere security, the assignee's remedy on the assignor's principal obligation follows the usual rule of collateral security or pledge. If the assignee took the risks absolutely, and was not defrauded by the assignor, the latter is not liable; and, even supposing the assignor to have undertaken to stand towards his assignee as a guarantor, the assignee can have no recourse against him, unless he has pursued his remedies against the debtor with such diligence as the circumstances required, and without success.2

§ 82. Subject of Assignment as regulated by Statute. This whole subject of assignment of incorporeal rights is to a great extent regulated and controlled in these days by statute. Registry acts are quite common in the United States; especially with reference to mortgages, whether of real or personal property, which are given to secure a debt, and in

1 See 2 Sch. Pers. Prop. §§ 318, 373; Stout v. Stevenson, 1 South. 178; Flynn v. Allen, 57 Penn. St. 482; Mackie v. Davis, 2 Wash. (Va.) 219; Fant v. Fant, 17 Gratt. 11; Emmerson v. Claywell, 14 B. Mon. 18; Furniss v. Ferguson, 15 N. Y. 437. By assigning for consideration a chose in action at its face value, the assignor warrants by implication that the maker is liable. Daskam v. Ullman, 74 Wis. 474.

2 Graham v. Goudy, Add. (Pa.) 55; Greenlee v. Young, 1 Hayw. 3; Weaver v. Beard, 21 Mo. 155; Lewis v. Hoblitzell, 6 Gill & J. 259; Chambers v. Keene, 1 Met. (Ky.) 289. An express undertaking of the assignor to be liable as indorser requires the demand upon the debtor and notice, customary in the case of negotiable paper. Ellis v. Dunham, 14 Ark. 127. The as

signee under a sealed contract does not presumably become liable on the contract. 149 Mass. 381.

Whether one signed over in blank by way of guaranty or indorsement, rather than simple assignment, is matter of mutual agreement and open to proof. Welsh v. Ebersole, 75 Va. 651.

3 The English Act, 36 & 37 Vict. c. 66, § 25, pronounces any absolute assignment by writing under the assignor's hand of any debt or other legal chose in action, of which express notice in writing shall have been given to the debtor, &c., sufficient to transfer all the assignor's legal rights and remedies to the assignee from the date of such notice. The debtor may thus discharge the debt without the assignor's concurrence; saving rights of protection by interpleader in case of conflicting claims of right.