Case Name: FICKEY, STEDMAN & FLACK v. B. S. & A. W. LONEY ET AL.
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1874-12
Citations: 1 Shan. Cas. 317
Docket Number: 
Parties: FICKEY, STEDMAN & FLACK v. B. S. & A. W. LONEY ET AL.
Judges: 
Reporter: Tennessee Cases with Notes and Annotations
Volume: 1
Pages: 317–321

Head Matter:
FICKEY, STEDMAN & FLACK v. B. S. & A. W. LONEY ET AL.
Nashville,
December Term, 1874.
1. ASSIGNMENT OF CHOSE IN ACTION. Notice as to judgments, etc.; none as to notes, etc.
"The law is settled in this state that the assignment of a judgment, or other like chose in action, where the legal effect of the contract is not to vest the leg'al title in the assignee, can only be perfected as against the debtor or party bound to pay, or his creditors, by notice given to such debtor or party bound, that such assignment has been made. This principle has no application where a note, bond, or bill or like evidence of debt is assigned and is transferred by actual manual delivery to the assignee, and this whether the legal title in this class of instruments passed by the assignment or not. If, however, the possession is not changed, and apparent ownership still with the assignor, so that he is enabled to hold himself out as owner of the paper, and if the debtor pay in good faith to the assignor thus in possession, he wiil be protected. [See notes 4-10 under sec. 3516 of the Code.]
Cited with approval: Clodfelter v. Cox, 1 Sneed, 338, 339; Insurance Co. v. Hamilton, 5 Sneed, 273; Sugg v. Powell, 1 Head, 222; Gayoso Savings Institute v. Fellows, 6 Cold., 471, 472.
2. SAME. Notice not effected by general assignment duly registered.
When notice of the assignment is required to be given to the debtor, it is not effected by a g-eneral assignment made and duly registered in another state, when the debtor lives in this state. [See notes 11-14 under see. 3516 of the Code.]
3. SAME. Same. Payment to assignor’s attorney and trustee as attorney of his attaching creditor, good.
Where a creditor of another state places in the hands of his attorney here a note ag-ainst his debtor here, to be collected or secured, and after the same was secured by land conveyed by deed of trust to the attorney, the creditor made a general assignment duly registered, assigning with all his other property this secured debt, but without notice to the debtor, whereupon a creditor of such assigning debtor resident in the same state with him, declining to accept the benefit of such general assignment, obtained judgment there, and filed attachment bill here against the debtor, trustee, and the assignor, and obtained decree fo-r the money, which was paid by the debtor to this attaching creditor’s attorney, who was the same person as the trustee and attorney for the assignor, this was a good x>ayment, and the assignees under the said general assignment could not recover the money, though still in the hands óf said attorney and trustee.

Opinion:
Freeman, J.,
delivered the opinion of the court.
A. L. Stamps, a resident of Bedford county, Tennessee, was indebted to various Baltimore merchants. He made an assignment of real estate to Edmund Cooper, as trustee, for their payment, 1st of December, 1860, the property being valued to the creditors art upwards of $1,200, but the notes were not to b© given until all incumbrances on the property were discharged. Stamps was indebted to Mercer, Manaban & Iieese, of Baltimore, in the sum, of about $1,800, due by promissory note', and this was one of the debts intended to be arranged by his deed to Cooper.
Mercer, Manahan & Beese made an assignment on the 20th of February, 1861, to complainants, as trustees, of all their property, real, personal, debts, choses in action, etc., which was duly registered in Maryland, the 22d of February, 1861. B. & A. Loney & Co., merchants of Baltimore, who declined to take under the last named deed of trust, in J863, recovered a judgment against Mercer, Manahan & Beese, and on the 2d of January, 1868, filed their attachment bill at Skelbyville, against said firm, Edmund Cooper, the trustee, and_Stamps, the debtor of Mercer, Manahan & Beese, seeking to subject so much of the debt of Stamps, due said firm, as would satisfy their judgment. At June term, 1868, a decree was had in favor of Loney & Co., for $64:1.50, the amount of their debt, and this amount due from Stamps and secured by the deed of trust, ordered to be applied to the discharge of the decree. Stamps, under this decree, paid or settled the amount with Cooper, who was the attorney of Loney & Co., as well as trustee, and who still holds the money. The complainants allege that they are entitled to this money as assignees under the trust deed of Mercer, Manahan & Beese, in preference to Loney & Co., the creditor of the firm, under his attachment and decree. It is proper to add that the claims of Mercer, Manahan & Beese, evidenced by note, had been placed in the possession of Mr. Cooper, in 1860, when the Stamps deed was made to him as trustee, and remained so> in his hands up to the time of his filing the attachment bill.
.The grounds on which the complainants claim this fund are, that the deed of trust to them transferred the debts to them as trustees, and being registered in Baltimore, where 'Loney Co. resided, it was notice to them of such assignment before filing their attachment bill, and also- that they probably had actual notice. A demurrer was filed to the bill on the ground that the bill did not allege notice of the assignment to Stamps, the debtor, or Cooper, the trustee. This was by the chancellor overruled, and raises the question on which the case turns.
The law is settled in our state that the assignment of a judgment or other like chose in action, where the legal effect of the. contract is not to vest the legal title in the assignee, can only be perfected, as against the debtor or party bound to pay or his creditors, by notice given to such debtor or party bound, that such assignment has been made. See Clodfelter v. Cox, administrator, 1 Sneed, 338-9; Mutual Protection Insurance Co. v. Hamilton & Goram, 5 Sneed, 273; Sugg v. Powell et al., 1 Head, 222. The latter case, however, holds that in case of a promissory note, where it was transferred and delivered as indemnity to a party bound for another, that no notice of the transfer was necessary. In other words, the principle has no application to the actual transfer and delivery, or actual negotiation of negotiable paper, or, in the language of Judge Andrews, in case of Gayoso Savings Inst. v. Fellows et al., 6 Cold., 471-2, it has no application where a note, bond or bill, or like evidence of debt, is assigned and is transferred by actual manual delivery to the assignee, and this, whether the legal title-in this class of instruments passed by the assignment or not. If, however, the possession is' not changed and apparent ownership still with the assignor, so that he is enabled to hold himself out as owner of the paper, it would be fraudulent as against creditors and subsequent purchasers in good faith. And if the debtor pay in good faith to the assignor thus in possession, or has submitted to judgment on garnishment, he could be protected. Ibid., 472. The principle thus laid down is applicable to the present case. Here the debtor, Stamps, having no notice of the deed of trust to complainant, the note evidencing the debt against him being in the hands of Mr. Cooper, in Tennessee, tbe agent of Mercer, Manaban & Eeese, or rather trustee, submits to a decree against him on the attachment bill, and has actually paid the money over to Cooper, as attorney of the attaching creditors. 'We hold, under such circumstances, the payment is valid, and the creditor can hold the money thus received, for if Stamps could rightfully pay it, the other can rightfully receive it. We need not discuss or examine the law of Maryland on this question, as the rule of comity would not require that we should enforce that law to the injury of our citizens in a case like the present, and we deean the rule necessary for their protection in paying debts under such circumstances. Eeverse the decree of the chancellor and enter a decree here in pursuance of this opinion. Costs to be paid by complainant.