Gibson v. Cooke , 37 Mass. 15 ( 1838 )

Dewey J.

delivered the opinion of the Court. Is the draft in question an equitable assignment of any funds of Gorham Gibson in the hands of the defendant, and available as such for the benefit of Plymptcn ?

The doctrine of equitable assignments has been gradually extending to meet the convenience of trade and business, and has been favorably viewed in the courts of law, subject however to the legal principle, that in such cases the assignee can enforce his claim only in the name of the assignor, unless there be an express promise by the debtor to pay the assignee. Under this limitation, choses in action generally may be the subject of an assignment; and debts which are contingent and money yet to become due, may well be assigned, these circumstances only operating to postpone the liability of the debtor until the contingency happens and the money becomes payable.

It seems also to be equally well settled, that a draft by the creditor on bis debtor in the form of a bill of exchange, to the amount of the debt or the whole fund in his hands, is a good and valid assignment of the debt, or fund. Crocker v. Whitney, 10 Mass. R. 318 ; Clarke v. Adair, cited in Master v. Miller, 4 T. R. 343 ; Cutts v. Perkins, 12 Mass. R. 209 ; Robbins v. Bacon, 3 Greenleaf, 346.

But the defendant insists that his liabilities to the assignor were not of such a nature as to authorize the assignment of them by Gibson. He claims that the funds of the assignor were placed in his hands as a personal trust, to be applied by him directly to the support and maintenance of Gibson.

Upon examining the will of Susan Gibson, the devise under which the defendant holds these funds appears to be a general one, to him as residuary devisee of all the estate, real, personal and mixed, of the testatrix, to bold in trust, to collect and receive the income thereof, and to pay over and divide equally the net proceeds thereof, once a quarter, to and among her seven children, of whom Gorham Gibson was one.

It would, we apprehend, be somewhat difficult to sustain the position, that this was a personal trust, to be exercised in any degree at the discretion of the trustee as to the time and mode of payment. The direction in the will is, that the income be divided equally among the children, and paid over once a quarter. There are no saving clauses, nor any allusion to the alleged bad habits of Gorham Gibson. His rights are, by the terms of the will, precisely the same as those of each of his brothers and sisters, and for any thing that appears, he may enforce them in the same manner. It is unnecessary however to express any decided opinion on this point, because upon another ground the defence is clearly sustained.

As regards the defendant, it is to be remembered the whole proceeding is in inuitmn, he not having accepted the draft, nor having been in any way instrumental in its creation, and there being no privity between him and the payee Plymp-' ton, except such as the law creates between one holding funds as a debtor or trustee, and a person to whom the creditor or cestui que trust may have assigned. The defendant is therefore fully authorized to resist this demand, upon any valid objections to the legal operation of the alleged assignment.

We have before remarked that courts of law, while they protect unnegotiable dioses in action in the hands of an assignee for a valuable consideration, do not give such force and effect to an assignment, not assented to by the debtor, as to authorize an action in the name of the assignee. Another rule adopted in courts of law having a direct bearing upon the present case, and which seems well sustained upon sound principle, as well as authority, is, that an order or draft for a part only of the debt or liability of the drawee does not, against his consent, amount to an assignment of any portion of the debt or liability, and does not authorize the institution of a suit in the name of the assignor for the whole, or any part of the sum due from the debtor. Robbins v. Bacon, before cited ; Mandeville v. Welch, 5 Wheat. 577.

The reason of this rule is the very obvious one, that a debtor is not to have his responsibilities so far varied from the terms of his original contract as to subject him to distinct demands on the part of several persons, when his contract was one and entire. While the equitable rights of an assignee can be enforced by one action, and that in the name of the original creditor, and for the whole amount due, but little if any hardship is imposed on the debtor ; but to ex' tend this liability to an indefinite number of persons, for any portion of the debt, or to authorize a suit to be instituted by one assignee for a part only of the debt, leaving the original creditor to enforce his claim for the residue in another suit, would be both unreasonable and oppressive.

To apply the rule to the case at bar, we must recur to the form of the draft upon the defendant. Gorham Gibson drew his bill of exchange for the sum of $175'33, “ to be paid as my income becomes due.” What were the funds in the hands of the defendant ? Gibson was entitled to one seventh part of the net income of the estate that passed to the defendant under the will of Susan Gibson, to be paid to him quarterly. The average quarterly amount, as appears by the statement of facts, would be about $37’50. It does notappear that at the time of the assignment, or at any period since, the whole amount due to Gorham Gibson would correspond with the amount of the draft. The liability of the defendant was limited to the payment of sums corresponding in amount with the net proceeds due at the expiration of each quarter. If he was liable to be called upon through the medium of an assignee holding a draft, that draft must be for the entire sum due, either at the expiration of one quarter or of several quarters united. Such does not appear to have been the case here. Any appropriation different from the rule above stated, and which would require a partial payment of the net proceeds of a quarter, is one which Gorham Gibson was not authorized to make, and which the law has not imposed on the defendant any liability to discharge.

Plaintiff nonsuit.