Court Opinion

ID: 5465754
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:52:10.445433+00
Date Added: 2024-06-11T08:33:06.109938
License: Public Domain

*209
By the Court,

Nelson, Ch. J.
The plea, I think, constitutes a good answer to the breach assigned in the declaration to which it has been pleaded.
The condition of the bond, in substance, obligated the defendants to refund the two sums of money received by A.
F. Dunham, in case any claim was brought against the estate of the deceased, entitled to a preference over him to the money under the will.
The breach assigned is a judgment against the estate in favor of Caroline Dunham, which is avered to have preference, and that the money is wanted for the purpose of being applied towards the payment of it.
In answer to which, the plea sets úp a release and discharge executed by the said Caroline to the said Alfred, by which she releases and discharges the two sums of and from the effect and operation of the judgment—in effect, the payment of the money—for the release, being under seal, imports this much on its face. A payment to the cestui que trust, and discharge by her to the debtor under the circumstances extinguished the demand.
The question then turns upon the effect of the replication. That sets up an assignment of the judgment by Caroline to a third person previous to the payment of the money to her, and discharge of the obligors in the bond.
It is insisted this is no answer to the plea for the reason. 1. There is no averment of a consideration paid by the assignee. 2. Nor, of notice to the defendants before the execution of the release to them; and 3. No averment that the suit is brought on account, and for the benefit, of the assignee.
1. As to consideration.—That point was expressly decided in Prescott v. Hall, 17 Johns., 285. There, it is true it did not appear from the replication, that the assignment was founded upon any consideration. Here the assignment being under seal imports a consideration. The court say, it ought to have been avered in the replication that the debt had been assigned for a full and valuable consideration: and go on to state the reason, namely, that the creditor of the payee who was there seeking to apply the demand to the payment *210of bis debts, showed an interest in it unless assigned bona fide, and for a valuable consideration.
The court also refer to and approve of Perkins v. Parker, 1 Mass., 117, where the necessity of this averment was directly held by all the judges; and, also, that the acknowledgment of valúe received in the assignment was not sufficient; that a 'consideration expressing a mere formal value was ineffectual to protect the assignee against conflicting equities or claims to the chose in action; and that the assignment on this account must be founded upon a good and adequate consideration.
In Winch v. Keely, 1 T. R., 619, the consideration for the assignment is set out in the replication, though the instrument was under seal.
The case of the assignee is analogous, in principle, to that of a bona fide purchaser without notice, who in equity must aver a valuable consideration paid, independently of the recital in the purchase deed, to overcome the equity made out against him. (Sugd. Vend., chap. 18, pp. 757—760, and cases.)
2. As to notice.—I apprehend that is not necessary, in this case, in order to protect the assignee. If payment had been made by the judgment debtor, or the executor who represents the .party, before notice from the assignee, it would have been effectual and valid against him. The defendants are not parties to the judgment, and stand in no way connected with the security, so as to. apprise him of their obligation, and enable him to give the notice. No default, therefore, in this respect, can be imputed, and in the conflict of equities, the rule, which is the same at law as in equity, qui prior est tempore, potior est jure, applies. The defendants stand in no more favorable position than a person who had taken a subsequent assignment of the judgment for value paid, without notice of the previous one. In that case his interest is not protected. Notice to him from the first assignee is impracticable in the nature of things. It is, equally, so in this case. (Muir v. Schenck, 3 Hill, 228, and cases there cited.)
3. As to the necessity of an averment that the suit was *211brought on account of and for the benefit of the assignee. That was expressly held to the essential in Prescott v. Hall, and in the cases there refered to.
Judgment for the defendants on demurrer, leave to amend on the usual terms.