Court Opinion

ID: 8123423
Source: CourtListenerOpinion
Date Created: 2022-09-09 15:02:58.384181+00
Date Added: 2024-06-11T16:39:06.828602
License: Public Domain

Brown, J.
The question involved in the rival claims to this dividend has been differently decided by high authorities. The claim for the dividend is not a claim strictly upon the note against the maker, but a claim for payment from the assignee of the bankrupt upon the proof of the bankrupt’s notes made prior to assignment to either of the rival claimants. In this view I cannot distinguish it from the case of Muir v. Schenck, 3 Hill, 228, and Cooper v. Fynmore, 3 Russ. 60. And upon these authorities, Bedfield being prior in time, would have the prior right. On the other hand, the case last cited is certainly overruled in England by the lord chancellor in the carefully-considered cases of Dearle v. Hall and Loveridge v. Cooper, 3 Russ. 1, 57, 58; and the principle of these cases has been repeatedly adopted and approved by the supreme court, as shown by the cases of Judson v. Corcoran, 17 How. 612, 615; by Marshall, C. J., in Hopkirk v. Page, 2 Brock. 20, 41; in Spain v. Hamilton’s Adm’r, 1 Wall. 604; and Nat. Bank v. Texas, 20 Wall. 72, 89.
In Judson v. Corcoran, supra, the court say:
“ There may be cases in which a purchaser, by sustaining the character of a bona fide assignee, will be in a better situation than the person was of whom he bought; as, for instance, -where the purchaser, who alone had made inquiry and given notice to the debtor, or to a trustee holding the fund, (as in this instance,) would be preferred over the prior purchaser who neglected to give notice of his assignment and warn others not to buy.”
In Loveridge v. Cooper, 3 Russ. 58, the lord chancellor says:
*736“Where personal property is assigned, delivery is necessary to complete the transaction, not as between the vendor and the vendee, but as to third, persons, in order that they may not be deceived by apparent possession and ownership remaining in a person who, in fact, is not the owner. This doctrine is not confined to chattels in possession, but extends to choses in action, bonds, etc. In Ryall v. Rolles, 1 Ves. Sr. 348, it is expressly applied to bonds, simple contract debts, and other choses in action. In cases like the present, the act of giving the trustee notice, is, in a certain degree, taking possession of the fund; it is going as far towards equitable possession as it is possible to go; for, after notice given, the trustee of the fund becomes a trustee for the assisrnee who has given him notice.”
The principle of all these latter cases is that the first purchaser of the chose in action, who neglects to give notice to the debtor, or trustee holding the fund, and does not take possession of the evidences of the debt, acquires but an imperfect title as respects third persons, and by his laches is, in a sense, a contributory party to the fraud perpetrated by his vendor in the subsequent sale to another purchaser of the same debt or fund; and where the latter has used all due diligence by inquiry and notice, the equity of the latter is to be preferred over that of the former. 1 Dan. Neg. Inst. § 748a. Many of the authorities upon this general subject are reviewed in the opinion of the court, in McNeil v. Tenth Nat. Bank, 46 N. Y. 325.
The equities of Hatch & Sons in this case are plainly superior, through the laches of the first assignee, 'and an order should, therefore, be entered for the payment of the dividend to them.