(11 F. (2d) 948.) In New Jersey, as early as 1834, in the case of King v. Berry, 3 N. J. Eq. 44, the matter here under consideration was involved. In that case the assignee of a pecuniary legacy brought a bill in equity against the executors of an estate for an accounting and payment to him of the legacy, and was allowed to recover. The Chancellor, speaking for the court, said: "They [the assignors] were legatees under a will. Their rights were not common-law rights. . . . For a long series of years legacies have been suable in the Court of Chancery, and that court has now, if it has not always had, a concurrent jurisdiction with the spiritual court. That they may now be sued for in the common-law courts, by the statute, does not alter their essential character. They do not change their nature to suit the law of the court, but the court changes its law, and accommodates itself to their peculiar character. When suits for legacies were first prosecuted in Courts of Chancery they were obliged to adopt the law of the spiritual forums; and so it has been with the courts of common law. Keily v. Monck, 3 Ridgew. Ir. P. C. 243. "The character of the right, then, is not altered by making it cognizable, under certain circumstances, in the common-law courts. It remains essentially an equitable interest. It is not barred by the statute of limitation; at least such was the law, and such it is still, in England. "The claim to a legacy is essentially an equitable, and not a legal claim. That it is an assignable interest cannot be doubted, and the assignment, if it passes anything, must pass the whole right of the assignor." And therefore "it was not necessary to make the assignors parties to this suit." In 1864 the conclusion reached in King v. Berry was affirmed in Kennedy v. Parke, 17 N. J. Eq. 415. In that case it appeared that a pecuniary legatee, whose legacy was to be paid to him when he reached 23, became 23 on April 11, 1862; that in 1860, when he was 21 years old, he assigned his legacy to the petitioner, Parke; that January 29, 1861, he again assigned the legacy to one Vliet, who gave notice to the executors; and that Vliet assigned it to Kennedy, one of the executors. The right of the first assignee was upheld. It was there said: "The defense is based on the idea that the legacy, like any other chose in action, is not assignable at law; that a mere equitable interest passed by the assignment, the legal title remaining in the assignor; and that, the money having been paid by the executors to the second assignee, without notice of the first assignment, they cannot be prejudiced by the secret equity of the first assignee. But the title to the legacy is not a common-law right. It was held by the Chancellor, in King v. Berry, 3 N. J. Eq. 54, that a claim to a legacy is essentially an equitable, not a legal, claim, and that the assignment must pass the whole right of the assignor; that there does not remain in the assignor, after the assignment of a legacy, a distinct, subsisting right, capable of being assigned, but that the entire interest passes." Jenkinson v. New York Finance Co. 79 N. J. Eq. 247, 258, 82 Atl. 36, was a case where a residuary legatee had made partial assignments of his legacy to four assignees, and the sum of the partial assignments exceeded the amount of the legacy. In that case all the assignees, as well as the assignor and the executor, were made parties' to the bill. And the two previous cases were affirmed. See Voyle v. Hughes, 2 Smale & G. 18, 65 Eng. Reprint, 283; Lambe v. Orton, 1 Drew. & S. 125, 62 Eng. Reprint, 325; Matson v. Abbey, 141 N. Y. 179, 36 N. E. 11; Orth v. Kaesche, 222 N. Y. 612, 118 N. E. 1071; Heise v. Wells, 211 N. Y. 1, 104 N. E. 1120; Ensign v. Kellogg, 4 Pick. 1; 1 Williston, Contr. p. 839, § 439. In contrasting the present view 218 of the law with that formerly enter- 2 Id. In Brown v. Fletcher, 235 U. S. 589, 59 L. ed. 374, 35 Sup. Ct. Rep. 154, the rights of a legatee in two trust funds established under a will were held not choses in action within the meaning of § 24 of the Judicial Code (Comp. Stat. § 991), and that his assignee (the time having arrived under the trust established by the will when the legatee was entitled in one instance to the whole of a trust fund and in the other to $25,000), who had brought a bill in equity against him and the trustee, was not enforcing a contract right or chose in action, but an interest in property. It was there said: "If the funds [of the trust estate] had been invested in tangible personal property, there is, as pointed out in the Bushnell Case, 9 Wall. 387, 19 L. ed. 736, nothing in § 24 to prevent the holder by virtue of a bill of sale from suing for the 'recovery of the specific thing or damages for its wrongful caption or detention.' And if the funds had been converted into cash, it was still so far property-in fact, instead of in action that the owner, so long as the money retained its earmarks. could recover it or the property into which it can be traced, from those having notice of the trust. In either case, and whatever its form, trust property was held by the trusteenot in opposition to the cestui que trust so as to give him a chose in action, but-in possession for his benefit in accordance with the terms of the testator's will." In answer to the argument that the case related to an assignment of merely a chose in action based on a contract, the court said: "But here there was no contract and this is not a suit for breach of a contract. For whatever may have been the earlier view of the subject (Holmes, Common Law, 407, 409) the modern cases do not treat the relation between trustee and cestui que trust as contractual. The rights of the beneficiary here depended, not upon an agreement between him and Braker, but upon the terms of the will creating the trust and the duty which the law imposed upon the trustee because of his fiduciary position. And a proceeding by the beneficiary or his assignee for the enforcement of rights in and to the property, held-not in opposition to, but-for the benefit of the beneficiary, could not be treated as a suit on a contract, or as a suit for the recovery of the contents of a chose in action, or as a suit on a chose in action. "The instrument by virtue of which that alienation was evidenced whether called a deed, a bill of sale, or an assignment,-was not a chose in action payable to the assignee, but an evidence of the assignee's right, title, and estate in and to property. Assuming that and to property. the transfer was not colorable or fraudulent, the federal statutes have (11 F. (2d) 948.) always permitted the vendee or assignee to sue in the United States courts to recover property or an interest in property when the requisite value and diversity of citizenship existed [citing cases]. The equity jurisdiction of such courts extends to suits by heirs against executors and administrators [citing cases] and to suits against trustees for the recovery of an interest in the trust property by the beneficiary or his assignee." To the same effect, see Ingersoll v. Coram, 211 U. S. 335, 53 L. ed. 208, 29 Sup. Ct. Rep. 92; Stotesbury v. Huber (D. C.) 237 Fed. 413; Deshler v. Dodge, 16 How. 622, 631, 14 L. ed. 1084, 1088; Bushnell v. Kennedy, 9 Wall. 387, 391, 19 L. ed. 736, 738; Hotchkiss's Appeal, 89 Conn. 420, 95 Atl. 26. Gift-of equi It has long been recognized that equitable interests table interest. in property may be assigned by way of gift, that the assignment may be of the whole or a part of the assignor's interest, and that the only material question is whether the circumstances show a completed transaction-an intention to pass a present interest and such delivery of the subject-matter as its nature permits, and that, if they do, the gift is irrevocable. Kekewich v. Manning, 1 De G. M. & G. 176, 187, 188, 189, 42 Eng. Reprint, 519; Henry v. Graves, 16 Gratt. 244; Ellison v. Ellison, 6 Ves. Jr. 656, 31 Eng. Reprint, 1243; Sloane v. Cadogan, Sugden, Vend. & P. (Appx. 1820, Am. ed.) p. 40; Collinson v. Pattrick, 2 Keen, 123, 48 Eng. Reprint, 575; Bentley v. Mackay, 15 Beav. 12, 51 Eng. Reprint, 440; Donaldson v. Donaldson, Kay, 711, 69 Eng. Reprint, 303; Curriden v. Chandler, 79 N. H. 269, 108 Atl. 296; Heise v. Wells, 211 N. Y. 1, 104 N. E. 1120; Grover v. Grover, 24 Pick. 261, 35 Am. Dec. 319; Tarbox v. Grant, 56 N. J. Eq. 199, 39 Atl. 378; Voyle v. Hughes, 2 Smale & G. 18, 65 Eng. Reprint, 283; Lambe v. Orton, 1 Drew. & S. 125, 62 Eng. Reprint, 325; Matson v. Abbey, 141 N. Y. 179, 180, 36 N. E. 11, same case, court below, 70 Hun, 475, 24 N. Y. Supp. 284; Re Thompson, 116 Misc. 453, 190 N. Y. Supp. 125; Orth v. Kaesche, 222 N. Y. 612, 118 N. E. 1071; Thornton, Gifts, §§ 105, 198, 271, 294; 28 C. J. (Gifts) § 45, p. 649; 1 Williston, Contr. § 439, p. 839; Lewin, Trusts, p. 77. While we are of the opinion that a legatee's right is an equitable interest in property, nevertheless, if it be assumed, as the defendants contend, that his right is a legal chose in action, we are further of the opinion that, according to the weight of author -of legacy as ity, he may make a chose in action. valid and irrevoca ble gift of his right or interest, which equity will uphold. In 3 Pomeroy, Eq. Jur. § 1280, the author, after stating the doctrine of the common law that no action of contract can be maintained, unless there is privity of contract between the plaintiff and the defendant, and supposing the case where B. is indebted to A., or has in his hands a fund belonging to A., who assigns the debt or fund to C., says: "Equity recognizes an interest in the fund, in the nature of an equitable property, obtained through the assignment, or the order which operates as an assignment, and permits such interest to be enforced by an action, even though the debtor or depositary has not assented to the transfer. In order that the doctrine may apply, and that there may be an equitable assignment creating an equitable property, there must be a specific fund, sum of money, or debt, actually existing, upon which the assignment may operate, and the agreement, direction for payment, or order must be, in effect, an assignment of that fund, or of some definite portion of it. The agreement, direction, or order being treated in equity as an assignment, it is not necessary that the entire fund or debt should be assigned; the same doctrine applies to an equitable assignment of any defi 220 nite part of a particular fund. The In substantially all the cases in- Rep. 371), by an insurance policy The theory upon which the de- The theory of these de- (11 F. (2d) 948.) dies, a consideration will not render the power irrevocable. His death will revoke it. This matter was given most thorough consideration by the Supreme Court more than 100 years ago in the case of Hunt v. Rousmanier, 8 Wheat. 174, 5 L. ed. 589, in an opinion delivered by Chief Justice Marshall. In that case it appeared that Lewis Rousmanier gave two notes to Hunt for loans of money, and offered to give a bill of sale or mortgage on his interests in the brig Nereus and schooner Industry as security for the notes; that Hunt declined to take either, but took a power of attorney, which recited that it was given as collater. al security for the payment of the notes, and that, in case Rousmanier failed to make payment, the notes and all expenses were to be paid out of a sale of his interests in the vessels, which the power of attorney authorized Hunt to make. The vessels were at sea. Before they came to port, Rousmanier died. On the return of the vessels, Hunt took possession of them, and offered Rousmanier's interests for sale, which Rousmanier's executors forbade. To a bill in equity brought by Hunt against the executors to establish his right in the vessels, and setting out the foregoing facts, the executors demurred. It was held that, as no bill of sale, assignment, or mortgage of Rousmanier's interest in the vessels was executed and delivered, and as the transaction was finally consummated in the form it was because the plaintiff, Hunt, declined to take such security, no in-. terest in the vessels passed; that, because of this, the power was a naked one, and was revoked upon Rousmanier's death. It was pointed out that what is meant by a power coupled with an interest is an interest in the subject on which the power is to be exercised, and not an interest in that which is produced by the exercise of the power. The court said: "We hold it to be clear that the interest which can protect a power, after the death of a person who "But the substantial basis of the opinion of the court on this point is found in the legal reason of the principle. The interest or title in the thing, being vested in the person who gives the power, remains in him, unless it be conveyed with the power, and can pass out of him only by a regular act in his own. name. The act of the substitute, therefore, which, in such a case, is the act of the principal, to be legally effectual, must be in his name, must be such an act as the principal himself would be capable of performing, and which would be valid, if performed by him. Such a power necessarily ceases with the life of the person making it. But if the interest, or estate, passes with the power, and vests in the person by whom the power is to be exercised, such person acts in his own name. The estate, being in him, passes from him, by a conveyance in his own name. He is no longer a substitute, acting in the place and name of another, but is a principal, acting in his own name, in pursuance of powers which limit his estate. The legal reason, which limits a power to the life of the person giving it, exists no longer, and the rule ceases with the reason on which it is founded." |