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it at law in the name of the assignor, unless there are special circumstances obstructive of the right of the assignee, which the courts of law are not adequate to remove (a).

A court of equity will not assist an assignee of a chose in action unless the assignment was made upon a valid consideration (b).

An equitable assignment may be made without any deed Form of equitable or writing, by any words or acts showing a clear intention to assignassign (c). An order made by a creditor upon his debtor ment. to pay the whole, or a portion of the debt, to another would amount in equity to an assignment of the debt to the person in whose favour it is made and to whom it is given. A trust would thereby be created in favour of the equitable assignee of the fund, and would constitute an equitable lien upon it (d). Such an order made in writing might constitute a bill of exchange and require a stamp; without which it would be inadmissible in evidence (e). An order made on a debtor to pay the debt to a third person, but not communicated to the latter, is inoperative until acted upon by the debtor, and may be revoked (ƒ).

ment.

The assignment is complete, as between the assignee and Notice of the assignor, without any notice to the debtor; but the as- assign signment is not complete as against the debtor until notice (g). This notice need not be given in any formal manner, or with the express purpose of completing the assignment; notice of the assignment, however acquired, being sufficient to affect the debtor with the trust, and the manner or purpose of giving or obtaining the notice being imma

(a) Story, Eq. Jur. § 1057 a; Hammond v. Messenger, 9 Sim. 327; Keys v. Williams, 3 Y. & C. Ex. 462, 466; Rose v. Clarke, 1 Y. & C. C. 534.

(b) Edwards v. Jones, 1 My. & Cr. 226; M'Fadden v. Jenkyns, 1 Hare, 458, 461; and the cases there cited; and see ante, p. 330.

(c) Row v. Dawson, 1 Ves. sen. 331; 2 White & Tudor, L.C., 3rd ed. 667 ; Howell v. MacIvers, 4 T. R. 690; Heath v. Hall, 4 Taunt. 326; Tibbits v. George, 5 A. & E. 107; Story, Eq. Jur. § 1047.

(d) Story Eq. Jur. § 1014, and

authorities there cited; Yeates v.
Groves, 1 Ves. jun. 280; Ex p. Al-
derson, 1 Madd. 53; Ex p. South,
3 Swanst. 392; Lett v. Morris, 4 Sim.
607; Burn v. Carvalho, 4 My. & Cr.
690, 702; Rodick v. Gandell, 1 De G.
M.&G.763; Bellv. London and North-
Western Ry. Co., 15 Beav. 548.

(e) Pott v. Lomas, 6 H. & N. 529;
39 L. J. Ex. 210; Hutchinson v. Hey-
worth, 9 A. & E. 375; Hamilton v.
Spottiswoode, 4 Ex. 200; and see
M'Gowan v. Smith, 26 L. J. C. 8.

(f) Scott v. Porcher, 3 Mer. 652;
Morrell v. Wootten, 16 Beav. 197.
(g) Story, Eq. Jur. § 1057.

Notice of assignment.

Assignee takes sub

ject to equities.

terial (a). Notice to one of several joint debtors or cotrustees is, in general, sufficient, so long as he continues a joint debtor or trustee (b); unless the one having notice is himself the assignor (c). Mere notice to the debtor, without concurrence or consent on his part, is sufficient to effect an assignment of the debt in equity; after notice of the assignment he cannot refuse to be bound by it (d).

Until the title of the assignee is perfected by notice to the debtor of the assignment, a subsequent assignee may acquire a priority of right by giving prior notice of his assignment, or the debt may be discharged by a bona fide payment to the original creditor (e). As the debtor would be justified in paying to, or to the order of, the assignor before notice, the debt or contract is held to remain until such notice in the order and disposition of the assignor with the consent of the assignee, so that in case of his bankruptcy it would pass to his assignees under the statute (ƒ). After notice to the debtor, the debt is no longer in the order and disposition of the assignor, and his assignees in bankruptcy acquire no claim (g). Notice of an assignment of a debt or fund given to the debtor or trustee, before the money is actually due, or the relation of trustee is created, is ineffectual to give priority over a previous assignment (h).

The assignee of a chose in action also takes it subject to all the equities of the debtor or trustee against the assignor, existing at the time of the assignment; as a right of set

(a) Smith v. Smith, 2 C. & M. 231; Meux v. Bell, 1 Hare, 73; Edwards v. Scott, 1 M. & G. 962 ; 2 Scott, N. R. 266; Tibbits v. George, 5 A. & E. 107.

(b) Smith v. Smith, 2 C. & M. 231; Meur v. Bell, 1 Hare, 73; Timson v. Ramsbottom, 2 Keen, 35.

(c) Browne v. Savage, 4 Drewry,
635; Willes v. Greenhill, 29 Beav.
376.

(d) Tibbits v. George, supra;
M'Gowan v. Smith, 26 L. J. C. 8;
Belcher v. Campbell, 8 Q. B. 1, 11;
Bell v. London and North-Western
Ry. Co., 15 Beav. 548.

(e) Story, Eq. Jur. § 1057; Dearle
v. Hall, 3 Russ. 1; Loveridge v.
Cooper, 3 Russ. 30; see Watts v.

Porter, 3 E. & B. 743; 23 L. J. Q'
B. 345.

(f) 12 & 13 Vict. c. 106, s. 125; Ryall v. Rowles, 1 Ves. sen. 348; 2 White & Tudor, L. C. 3rd ed. 670; Dean v. James, 1 A. & E. 809 (a); Buck v. Lee, 1 A. & E. 804; Belcher v. Campbell, 8 Q. B. 1; Edwards v. Martin, L. R. 1 Eq. 121; 35 L. J. C. 186; Lees v. Whiteley, L. R. 2 Eq. 143; 35 L. J. C. 412.

(g) Crowfoot v. Gurney, 9 Bing. 372; Hutchinson v. Heyworth, 9 A. & E. 375.

(h) Buller v. Plunkett, 1 Johns. & H. 441; 30 L. J. C. 641; Webster v. Webster, 31 Beav. 393; 31 L. J. C. 655; Somerset v. Cox, 33 Beav. 634; 33 L. J. C. 490.

off against the debt (a). If a person takes a negotiable instrument which is transferable by indorsement only, without that formality, he is in the position merely of an equitable assignee, and is affected with all the equities which attached to the instrument in the hands of the assignor (b). Where the assignee of a debt gave notice of his claim to the debtor and demanded payment, but the assignor disputed the alleged assignment, it was held that the debtor was justified in paying his original creditor, until the assignee obtained an injunction (c).

assignment

in law.

The courts of law recognize the validity of equitable as- Equitable signments of contracts for many purposes. An assignment of contracts of a chose in action has always been held a good considera- recognized tion for a promise (d). Thus, the benefit of a contract may be sold, and the assignment of the contract forms a valid consideration for a promise to pay the price, which may be recovered in an action at law (e). The forbearance by the assignee of a bond to sue the obligor is a good consideration for a promise by the obligor, on which the assignee may maintain an action in his own name (ƒ).

After the assignment of a contract the assignor may maintain an action on the contract as trustee for the assignee and for his benefit; thus, the assignor of a ship, together with a policy of insurance upon it, may sue upon the policy as trustee for the assignee, although he retains no interest in the ship or the policy (g). If, after an assignment of the beneficial interest in the contract to the assignee, the assignor becomes bankrupt, the contract does not pass to his assignees in bankruptcy, who take only his beneficial estate; but the right of action remains vested in him as trustee for the benefit of the assignee (h). In such action, a plea of the

(a) Story, Eq. Jur. § 1047; Ryall v. Rowles, 2 White & Tudor, L. C., 3rd ed., 670, 736.

(b) Whistler v. Forster, 14 C. B. N. S. 248; 32 L. J. C. P. 161; see post, p. 612.

(c) Aplin v. Cates, 30 L. J. C. 6. (d) Per Buller, J., Master v. Miller, 4 T. R. 340, 341.

(e) Price v. Seaman, 4 B. & C. 525; see Kintrea v. Preston, 1 H. & N. 357; 25 L. J. Ex. 287.

(f) Morton v. Burn, 7 A. & E. 19; and see Forth v. Stanton, 1 Wms. Saund. 210.

10.

(g) Powles v. Innes, 11 M. & W.

(h) Winch v. Keeley, 1 T. R. 619.

recognized

in law.

plaintiff's bankruptcy would be met by a replication that beEquitable assignment fore the bankruptcy he had assigned the debt, and that the defendant had notice of the assignment (a). So, after such an assignment the assignees in bankruptcy cannot maintain an action upon the contract assigned, even for the benefit of the assignee of the contract (b); and an action by the assignees would be met by a plea that the bankrupt had assigned away the debt before the bankruptcy (c). Notice of the assignment to the debtor before the bankruptcy would be necessary to complete the title of the assignee as against the assignees of the bankrupt assignor, for until such notice was given the debt would remain in the order and disposition of the bankrupt, and his assignees in bankruptcy would become entitled ().

May be

equitable grounds.

In an action brought in the name of the assignor of a contract, as trustee for and for the benefit of the assignee, the courts of law will protect the rights of the assignee and prevent collusion between the assignor and the debtor to defeat those rights; thus, if the assignor after assignment of the debt, in collusion with the debtor to defeat the right of the assignee, executes a release to the debtor, or accepts payment from him, the Court will not allow such release or payment to be pleaded (e).

Formerly in such action the assignee could only apply to pleaded on the summary jurisdiction of the Court to protect his equitable rights against the legal rights of the parties to the action, and could not assert his rights upon the record (ƒ). But since the C. L. P. Act, 1854, 17 & 18 Vict. c. 125, s. 83-86, has admitted pleadings on equitable grounds, the rights of the assignee, who is the real plaintiff, may also be asserted

(a) Dangerfield v. Thomas, 9 A. & E. 292; D'Arnay v. Chesneau, 13 M. & W. 796; Castelli v. Boddington, 1 E. & B. 66, 879; Monk v. Sharp, 2 H. & N. 540; 27 L. J. Ex. 29.

(b) Carpenter v. Marnell, 3 B. &

P. 40.

(c) Leslie v. Guthrie, 1 Bing. N. C. 697; see Pott v. Lomas, 6 H. & N. 529; 30 L. J. Ex. 210.

(d) See ante, p. 604.

(e) Legh v. Legh, 1 B. & P. 447; and see Innell v. Newman, 4 B. & Ald. 419; Barker v. Richardson, 1 Y. & J. 362; Phillips v. Clagett, 11 M. & W. 84; Rawstorne v. Gandell, 15 M. & W. 304; ante, p. 502.

(f) Ib.; and see Scholey v.. Mearns, 7 East, 148, 153; Alner v. George, 1 Camp. 392; Bauerman v. Radenius, 7 T. R. 663; 2 Smith's L. C. 5th ed. 342.

upon the record, where there is the opportunity; thus, to an action brought for the benefit of the assignee of a contract in the name of the assignor to which the defendant pleaded a discharge by the plaintiff before breach, and also payment, it was held to constitute a good replication on equitable grounds that the discharge was given, and the payment made, after notice to the defendant of the assignment, and with the intention of defrauding the assignee (a). So, if the assignor attempts to recover the debt for his own benefit, the debtor may assert the rights of the assignee; thus, to an action for a debt it is a good plea on equitable grounds, that the plaintiff had assigned the debt to a third party, who gave notice of the assignment to the defendant, and that the assignor was not suing for the benefit of the assignee, or with his consent (b).

It was also formerly held that the debtor, when sued at law by the assignor for the benefit of the assignee, could not plead that the assignee was the real plaintiff, for the purpose of claiming a set-off against him (c); nor could a defendant plead a set-off in respect of a debt of the plaintiff which had been assigned to him (d). But since the admission of pleadings on equitable grounds, under the C. L. P. Act, 1860, as above mentioned, it has been decided that a defendant may plead, on equitable grounds, a set-off in respect of a debt due from the plaintiff to a trustee for the defendant (e); therefore it seems probable that a defendant would be allowed to plead on equitable grounds a set-off in respect of a debt due to him from the person for whose benefit the nominal plaintiff is suing as trustee.

of debt by

The assignment of a debt may be effected in law, so as to Assignment give a right of action to the assignee, by means of a bind- agreement ing agreement between the assignor, the assignee, and the of all the debtor, to the effect that the debt shall be discharged as

(a) De Pothonier v. De Mattos, E. B. & E. 461; 27 L. J. Q. B. 260. (b) Jeffs v. Day, L. Rep. 1 Q. B. 372; 35 L. J. Q. B. 99.

(c) Isberg v. Bowden, 8 Ex. 852; overruling Bottomley v. Brook, cited

in Winch v. Keeley, 1 T. R. 619, €21,
and Rudge v. Birch, ib. 622.

(d) Wake v. Tinkler, 16 East, 36.
(e) Cochrane v. Green, 9 C. B. N. S.
448; 30 L. J. C. P. 97; and see
Elkin v. Baker, 31 L. J. C. P. 177.

parties.

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