Chase Nat. Bank of New York v. Sayles

11 F.2d 948 | 1st Cir. | 1926

11 F.2d 948 (1926)

CHASE NAT. BANK OF NEW YORK et al.
v.
SAYLES et al.

No. 1882.

Circuit Court of Appeals, First Circuit.

March 29, 1926.

Eldon Bisbee, of New York City, and Charles F. Choate, Jr., of Boston, Mass. (Herbert M. Sherwood, Arthur M. Allen, Sidney Clifford, Roger T. Clapp, Sherwood, Heltzen & Clifford and Hinckley, Allen, Tillinghast & Phillips, all of Providence, R. I., on the brief), for appellants.

Robert B. Dresser and Claude R. Branch, both of Providence, R. I. (Samuel Williston, of Cambridge, Mass., and Edwards & Angell, of Providence, R. I., on the brief), for appellees.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

BINGHAM, Circuit Judge (after stating the facts as above).

The defendants have not briefed or argued the first four objections assigned in their motion to dismiss, and we do not purpose to consider them at length.

The jurisdiction of the court as a federal court is adequately stated, for the bill alleges diversity of citizenship, and that the amount in controversy exceeds, exclusive of interest and costs, the sum of $3,000.

Then, again, if the validity of the assignment and the rights of the plaintiffs therein could be determined in the probate court of Rhode Island, that in no way affects the general chancery powers of this or of the District Court, the rights of citizens of different states being involved. Waterman v. Canal-Louisiana Bank Co., 30 S. Ct. 10, 215 U. S. 33, 54 L. Ed. 80; Atwood v. Rhode Island Hospital Trust Co. (C. C. A.) 275 F. 513, 24 A. L. R. 156. The proceeding being of the nature stated, it in no way interferes with the due administration of the estate in the probate court, and any decree which may be entered will operate, so far as the executors are concerned, against them personally. Allen v. United States (C. C. A.) 285 F. 678, 683, 684.

In support of the fifth and sixth grounds stated in the motion to dismiss, the defendants contend that, inasmuch as it appears in the bill of complaint that the executors did not promise to pay the assignee, Rupprecht, or his assignee, the bank, there was no novation, and, as no consideration was paid for the assignment, and the assignment was not of the whole, but a part, of the legacy, this proceeding cannot be maintained. The reason asserted for this contention is that the right of a pecuniary legatee is not an equitable chose in action or an equitable right in property, but is a legal chose and a right of the same nature as that of a creditor against his debtor; that the legal title to such a chose cannot be parted with, and no equitable right or interest in or to it passes by assignment without consideration, whether the assignment purports to be total or partial. In other words, their position is that the possessor of a legal title to property cannot part with an equitable title therein, except by way of a declaration of trust, or create therein an interest in the nature of an equitable lien, except by contract based upon consideration; that in this case there was no declaration of trust, so no equitable property interest passed to the assignee, and that, no consideration having been paid, no equitable lien arose; that, had the assignment purported to have been of a total interest, the law would imply a power to sue in the name of the assignor and, if for consideration, the power would be irrevocable although no interest in the subject-matter passed; and that, if the assignment was partial and for consideration, although in such case no authority at law would be implied to sue in the name of the assignor, equity would afford relief because of the consideration paid, but would not aid a volunteer. In its final analysis their contention amounts to this: That the interest of a pecuniary legatee is a legal chose in action; that it cannot be the subject of a gift by way of a total assignment, because no present interest in the subject-matter would pass and the power to sue would be revocable; that, if the gift was a partial assignment, no present interest in the subject-matter would pass, and, being without consideration, equity would not lend its aid.

The plaintiffs' contention is that the interest of a pecuniary legatee is an equitable interest in property; that the executors stand as trustees of the decedent's estate, at least as to the personalty, (1) to pay debts; (2) to carry out the specific legacies; (3) to pay the pecuniary legacies; and (4) to distribute the balance of the estate, if any, among the residuary legatees; or, if the relationship between an executor and a pecuniary legatee is not strictly that of trustee and cestui que trust, nevertheless the right is not a legal chose such as exists between debtor and creditor, but an equitable chose, which the legatee may part with, and that in either case he can pass a present equitable title or interest in the whole or in a part of such legacy by gift or by sale; that, inasmuch as the legatee may part with a present equitable interest, whether that interest be in property or in an equitable chose, if it is by way of gift, and the transaction is executed so far as the nature of the subject-matter permits, as it was by assignment under seal in this case, the gift cannot be revoked, any more than it could have been, had the subject of the gift been a mere chattel; that to establish a completed gift by way of assignment of a pecuniary legacy, whether of the whole or of a part, it is only necessary to show an intention on the part of the legatee to give the whole or a partial interest, and an execution of that intent by such delivery as the nature of the subject-matter permits; that as the delivery of a deed of gift by the owner of chattels in the possession of a third party under a lease would be an adequate delivery in execution of the donor's intention to make a completed gift (Corning v. Records, 46 A. 462, 69 N. H. 390, 76 Am. St. Rep. 178), so here a delivery of a deed of assignment would be an adequate execution of the donor's intent to constitute a completed gift of a part of the legatee's interest in the legacy; that the essential feature of a gift is that its subject-matter be such that a present interest, legal or equitable, may be parted with by actual or symbolical delivery to the donee in execution of the donor's intent to give; and that equity is not hampered as to remedy, as is the law, in the enforcement of a gift of a part any more than of a gift of the whole.

After an extended examination of the questions involved, we have reached the conclusion that the contention of the plaintiffs, as above stated, is correct. Without stating the early conception of the law as to the relationship of an executor to creditors and legatees, or wherein it differed from that of a strict trustee, we regard it now settled that it is substantially that of a trustee; that, while his powers in the management and disposition of the property of the estate in some respects, perhaps, may be broader than those of an ordinary trustee, and a person dealing with him in the disposition of its assets may safely assume that he is acting in the line of his duty, unless upon the face of the transaction the contrary appears or he has knowledge of the executor's purpose to be guilty of a breach of trust, nevertheless, in the main, the relationship is that of a trustee and cestui que trust, and the legatee has such an equitable interest in the property of the estate that he may transfer it.

In Jeremy, Eq. Jur. (1828) p. 103, it is said:

"The original and ordinary jurisdiction, in matters testamentary, belongs to the ecclesiastical courts, and it is by virtue of the probate, letters of administration, or letters of administration with the will annexed, that such appointee obtains complete power over the personal estate of the deceased person whom he thus represents. From the conscientious duty, however, which necessarily follows such appointments, this court construes a trust to arise in the executor or administrator for the persons who are entitled to the property or are beneficially interested therein, and, without infringing upon the jurisdiction of the ecclesiastical courts, it enforces execution thereof."

In 1 Pomeroy, Eq. Jur. § 156, it is said:

"The theory of trusts, express and implied, having been established, it was easily extended to certain other analogous subjects, which were thus brought within the equitable jurisdiction. One of the most important of these was the administration of the estates of deceased persons. The relation subsisting between executors and administrators, on the one hand, and legatees, distributes, and creditors, on the other, has so many features and incidents of an express active trust, that it has been completely embraced within the equitable jurisdiction in England, and also in the United States, where statutes have not interfered to take away or abridge the jurisdiction. * * * This jurisdiction at length became firmly established and practically exclusive on this ground of trusts: That the relation between the executor or administrator and the parties interested in the estate is virtually one of express trust, which equity has always the power to enforce."

In Adair v. Shaw, 1 Schoales & L. 243, 262, it is said:

"The only thing to be inquired in a court of equity is whether the property bound by the trust has come to the hands of the persons who were either bound to execute the trust, or to preserve the property for the persons entitled to it, and the whole jurisdiction of courts of equity in the administration of assets is founded on the principle that it is the duty of the court to enforce the execution of trusts, and that the executor or administrator, who has the property in his hands, is bound to apply that property in the payment of debts and legacies, and to apply the surplus according to the will, or, in the case of intestacy, according to the statute of distributions. The sole ground on which courts of equity proceed in cases of this kind is the execution of trusts, and, if we advert to the cases on the subject, we shall find that trusts are enforced, not only against those persons who rightfully are possessed of the trust property as trustees, but also against all persons who come into possession of the property bound by the trust with notice of the trust, and whoever so comes into possession is considered as bound, with respect to that specific property, to the execution of the trust."

In Green's Adm'r v. Creighton, 23 How. 90, 106 (16 L. Ed. 419), it is said:

"In the court of chancery, executors and administrators are considered as trustees, and that court exercises original jurisdiction over them, in favor of creditors, legatees, and heirs, in reference to the proper execution of their trusts."

In Smith v. Ayer, 101 U. S. 320, 327 (25 L. Ed. 955), the court said:

"The executor, though holding the title to the personal assets, is not absolute owner of them. They are not liable for his debts, nor can he dispose of them by will. He holds them in trust to pay the debts of the deceased, and then to discharge his legacies, and, as in all other cases of trust, he is personally responsible for any breach of duty; and property thus held, acquired from him by third parties with knowledge of his trust and his disregard of its obligations, can be followed and recovered. The law exacts the most perfect good faith from all parties dealing with a trustee respecting trust property. Whoever takes it for an object other than the general purposes of the trust, or such as may reasonably be supposed to be within its scope, must look to the authority of the trustee, or he will act at his peril."

See, also, Sherburne v. Goodwin, 44 N. H. 271, 279, 280; M'Leod v. Drummond, 14 Ves. 353, on appeal 17 Ves. 152; Griffith v. Frazier, 8 Cranch. 9, 24, 3 L. Ed. 471; Blood v. Kane, 29 N. E. 994, 130 N. Y. 514, 15 L. R. A. 490; Marvel v. Babbitt, 9 N. E. 566, 143 Mass. 226; Mechanics' Savings Bank v. Waite, 22 N. E. 915, 150 Mass. 234; Davis et al. v. Newton, 6 Metc. (Mass.) 537, 541; Kent v. Dunham, 106 Mass. 586, 590, 591; Story's Eq. Jur. §§ 581, 593.

These decisions disclose the idea that a legatee has, in equity, in addition to a right in personam against the executor, an equitable interest in the property of the estate to the extent of his legacy, even though his interest may be subject to abatement in case the assets remaining after payment of the debts and expenses of administration may be less than enough to pay his legacy in full.

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. 3 Ridg. 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 Executors of Luse 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. Ex'rs of 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., 82 A. 36, 79 N. J. Eq. 247, 258, 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 Sim. & Giff. 18; Lambe v. Orton, 1 Dr. & Sm. 125; Matson v. Abbey, 36 N. E. 11, 141 N. Y. 179; Orth v. Kaesche, 118 N. E. 1071, 222 N. Y. 612; Heise v. Wells, 104 N. E. 1120, 211 N. Y. 1; Ensign v. Kellogg, 4 Pick. (Mass.) 1; 1 Williston on Contracts, p. 839, § 439.

In contrasting the present view of the law with that formerly entertained, the court in Henry v. Graves, 16 Grat. (Va.) 244, said:

"Formerly equitable estates and interests were considered as choses in action, and assignments of them were treated only as executory contracts. But a trust or equitable estate is not now considered a chose in action. It is a present interest or estate, and whatever would be the rule of law, if it were a legal estate, is applied in equity to a trust estate. The legal estate follows the trust or equitable estate as its shadow, into whose hands soever the legal estate may descend or be conveyed, except it pass to a purchaser for valuable consideration without notice. Id. 875. A trust or equitable estate or interest may therefore now be assigned in equity, as a legal estate or interest of the same kind might be at law; and effect is given to the assignment as an executed, and not an executory, contract. So that a voluntary assignment of such an estate or interest is valid, if it be complete. Id. 880, 907. So also a voluntary assignment of a chose in action will be effectual at law or in equity, if it be complete; the only question being as to what is necessary to make it complete."

In Brown v. Fletcher, 35 S. Ct. 154, 235 U. S. 589, 59 L. Ed. 374, the rights of a legatee in two trust funds established under a will were held not choses in action within the meaning of section 24 of the Judicial Code (Comp. St. § 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 section 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 fund 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 trustee — not 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 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 the transfer was not colorable or fraudulent, the federal statutes have 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, 29 S. Ct. 92, 211 U. S. 335, 53 L. Ed. 208; Stotesbury v. Huber (D. C.) 237 F. 413; Deshler v. Dodge, 16 How. 622, 631, 14 L. Ed. 1084; Bushnell v. Kennedy, 9 Wall. 387, 391, 19 L. Ed. 736; Hotchkiss' Appeal, 95 A. 26, 89 Conn. 420.

It has long been recognized that equitable interests 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; Henry v. Graves, 16 Grat. (Va.) 244; Ellison v. Ellison, 6 Ves. 656; Sloane v. Cadogan, Sugd. V. & P. (appendix, Am. Ed. 1820), p. 40; Collinson v. Pattrick, 2 Keen, 123; Bentley v. Mackay, 15 Beav. 12; Donaldson v. Donaldson, 1 Ky. K. & J. 711; Curriden v. Chandler, 108 A. 296, 79 N. H. 269; Heise v. Wells, 104 N. E. 1120, 211 N. Y. 1; Grover v. Grover, 24 Pick. (Mass.) 261, 35 Am. Dec. 319; Tarbox, Adm., v. Grant, 39 A. 378, 56 N. J. Eq. 199; Voyle v. Hughes, 2 Sim. & Giff. 18; Lambe v. Orton, 1 Dr. & Sm. 125; Matson v. Abbey, 36 N. E. 11, 141 N. Y. 179, 180; same case, court below, 24 N. Y. S. 284, 70 Hun, 475; In re Thompson's Estate, 190 N. Y. S. 125, 116 Misc. Rep. 453; Orth v. Kaesche, 118 N. E. 1071, 222 N. Y. 612; Thornton on Gifts, secs. 105, 198, 271, 294; 28 Corpus Juris (Gifts), § 45, p. 649; 1 Williston on Contracts, § 439, p. 839; Lewin on 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 authority, he may make a valid and irrevocable gift of his right or interest, which equity will uphold.

In 3 Pomeroy's 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 definite part of a particular fund. The doctrine that the equitable assignee obtains, not simply a right of action against the depositary, mandatory, or debtor, but an equitable property in the fund itself, is carried out into all of its legitimate consequences."

And in a note to this section it is said:

"Some cases and books speak of the interest as merely an equitable lien or charge. That it is more than a lien, and is an equitable property, is plain from the remedy allowed. An equitable lien is never enforced by a suit to obtain possession, much less dominion over the thing; the remedy is, at most, a sale of the thing, so that its proceeds may be applied upon the obligation secured. In this case, however, the assignee recovers possession and dominion of the fund as his own. The only equitable feature of the transaction is, in fact, the mode of transfer."

In substantially all the cases involving the assignment of a legal chose in action in the nature of a debt or deposit, whether by way of gift, sale, or as security, the assignment has been held to vest in the donee, purchaser, or creditor the equitable title in the fund or debt, when the transaction is completed by such delivery as the nature of the subject-matter permits. It has been so held when the debt or fund was evidenced by a note payable to A. or order, unindorsed (Jones v. Witter, 13 Mass. 304, 305, 307; Grover, Adm'r, v. Grover, 24 Pick. [Mass.] 261, 35 Am. Dec. 319; Wright v. Wright, 1 Cow. [N. Y.] 598; Stone v. Hubbard, 7 Cush. [Mass.] 595; Hopkins v. Manchester, 19 A. 243, 16 R. I. 663, 7 L. R. A. 387), by shares of stock (Stone v. Hackett, 12 Gray [Mass.] 227), by a savings bank book or certificate of deposit (Foss, Adm'r, v. Lowell Savings Bank, 111 Mass. 285; Westerlo v. De Witt, 36 N. Y. 340, 93 Am. Dec. 517; Hill v. Stevenson, 63 Me. 364, 18 Am. Rep. 231; Camp's Appeal, 36 Conn. 88, 4 Am. Rep. 39; Tillinghast v. Bradford, 5 R. I. 205; Pierce v. Boston Savings Bank, 129 Mass. 425, 432, 37 Am. Rep. 371), by an insurance policy (Gledhill v. McCoombs, 86 A. 247, 110 Me. 341, 45 L. R. A. [N. S.] 26, Ann. Cas. 1914D, 294; Clark v. Allen, 11 R. I. 439, 23 Am. Rep. 496); by an I. O. U. or due bill (Emley v. Perrine, 33 A. 951, 58 N. J. Law, 472; Phillips v. Wilson, 25 Ill. App. 427), or by a book account or claim (Curtis v. Walpole Tire & Rubber Co., 218 F. 145, 148, 134 C. C. A. 140; Gray v. Barton, 55 N. Y. 68, 72-74, 140 Am. Rep. 181; Gerrish v. Sweetser, 4 Pick. [Mass.] 374, 376; Weed v. Jewett, 2 Metc. [Mass.] 608, 609, 37 Am. Dec. 115). And, the transaction being completely executed, the assignment or transfer has been held to be irrevocable, whether by way of gift, sale, or as security.

The theory upon which the decisions have proceeded is that the assignment, on being completed, vests in the assignee an equitable interest in the debt or deposit with a power to sue and collect the same; that the power to sue and collect, being coupled with an equitable interest in the debt or deposit, cannot be revoked by the assignor in his life-time, and is not revoked by his death. The theory of these decisions — that the assignment vests in the assignee an equitable interest in the debt or fund — whether anomalous or not, is unquestionably the one upon which the decisions proceed, and is the only theory upon which many of them can be sustained, whether the assignment is by way of gift or of sale. For instance, it has been held that the assignee of a nonnegotiable note, or one payable to order unendorsed, whether the assignment be for value or not, might maintain an action after the death of the assignor in the name of the executor or administrator of the assignor and collect the claim. If this can be done, it must be upon the theory that an equitable interest in the debt passed to the assignee, and rendered the implied power to sue and collect in the name of the assignor irrevocable; for, if no interest passes by the assignment and the assignor 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 collateral 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 interest 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 creates it, must be an interest in the thing itself; in other words, the power must be ingrafted on an estate in the thing. The words themselves would seem to import this meaning. `A power coupled with an interest' is a power which accompanies, or is connected with, an interest. The power and the interest are united in the same person. But if we are to understand, by the word `interest,' an interest in that which is to be produced by the exercise of the power, then they are never united. The power, to produce the interest, must be exercised and by its exercise is extinguished. The power ceases when the interest commences, and therefore cannot, in accurate law language, be said to be `coupled' with it.

"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."

See, also, Hunt v. Rousmanier, 1 Pet. 1, 7 L. Ed. 27; Taylor v. Burns, 27 S. Ct. 40, 203 U. S. 120, 51 L. Ed. 116; Dickinson v. Central National Bank, 129 Mass. 279, 283, 37 Am. Rep. 351; Crowe v. Trickey, 27 S. Ct. 275, 204 U. S. 228, 240, 51 L. Ed. 454; Walker v. Walker, 8 S. Ct. 929, 125 U. S. 339, 343, 31 L. Ed. 769; Rufe v. Commercial Bank, 99 F. 650, 653-655, 40 C. C. A. 27; Michigan State Bank v. Leavenworth, 28 Vt. 209; Curtis v. Walpole Tire & Rubber Co. (1 C. C. A.) 218 F. 145, 147, 148, 134 C. C. A. 140.

The cases previously cited relating to voluntary assignments or gifts of choses in action could not be sustained on the defendant's theory that no interest in the debt or fund passed by the assignment, for the transaction would be incomplete; nor could the numerous cases where consideration was paid and the assignor died, for, as above stated, the power would be revoked by his death, and, such being the situation, it is "safer to travel the path which the law has trodden, instead of discovering another one, * * * unless it is very certain that the new path will enable us to reach, not only most of the results which have been reached by the old one, but all, or at least all which ought to be reached."

Equity is not hampered, as is the law, in the enforcement of an assignment of a part of a debt or demand. Such an assignment may be enforced in equity against the debtor, whether he accepts and assents to it or not, and by joining the assignor the interests of all parties can be determined in a single suit. This being so, the division of the debt or demand does not subject the debtor to burdens which his contract does not require him to bear. See Palmer v. Palmer, 91 A. 281, 112 Me. 149; Bank of Harlem v. Bayonne, 21 A. 478, 48 N. J. Eq. 246; Todd v. Meding, 38 A. 349, 56 N. J. Eq. 83, 92; Warren v. First National Bank, 38 N. E. 122, 149 Ill. 9, 23, 25 L. R. A. 746; Hinkle Iron Co. v. Kohn, 128 N. E. 113, 229 N. Y. 179; James v. Newton, 8 N. E. 122, 142 Mass. 366, 56 Am. Rep. 692; Voyle v. Hughes, 2 Sm. & Giff. 18; Pearson v. Amicable Assurance Office, 27 Beav. 229; Fowler v. Savings Bank, 21 N. E. 172, 113 N. Y. 450, 453, 4 L. R. A. 145, 10 Am. St. Rep. 479; Jacobs v. Jolley, 62 N. E. 1028, 29 Ind. App. 25; Green v. Langdon, 28 Mich. 221; Carpenter v. Soule, 88 N. Y. 251, 42 Am. Rep. 248; Rogers v. Penobscot Mining Co., 154 F. 606, 615, 83 C. C. A. 380; 16 Law Quarterly Review, 241.

The question whether, on the allegations of the bill, the donor, Mrs. Sayles, is estopped from setting up want of consideration as a defense has been argued at length; but, in view of the conclusion reached on the main questions, it is unnecessary to pass upon it.

The nature of Mrs. Sayles' right, though the result of a statutory compromise, is the same as it would have been had the will originally included such provision in her favor. She takes as a legatee. This is the meaning of the statutes of Rhode Island, as construed by its courts. Gen. Laws of R. I. (1909) c. 312, § 23; Barber v. Westcott, 43 A. 844, 21 R. I. 355.

The decree of the District Court is reversed, and the case is remanded to that court for further proceedings not inconsistent with this opinion, with costs to the appellants.