71 Vt. 151 | Vt. | 1899
The plaintiff, assignee of the insolvent's estate, seeks to recover $900 paid by the insolvent within four months before filing the petition to have him adjudged to be ■
The contention is, whether, under the insolvent law in
If therefore the defendants and the insolvent performed their respective parts of the agreement, Brooks Brothers became obligated to make the payments which they did make to these defendants. The defendants and insolvent, respectively, performed their parts of the agreement, and thereby Brooks Brothers became obligated to make the payments sought to be recovered, and such payments were
“It is settled that an assignment, for a valuable consideration, of a sum of money due or to grow due on the performance of an existing contract, will, on notice thereof being given to the debtor, operate at once, or when the fund is created, as an equitable assignment of so much of the fund as is covered thereby, subject to.all valid prior charges. Superintendent of Schools v. Heath, 15 N. J. Eq. 22; Shannon v. Mayor, 37 N. J. Eq. 123; Kirtland v. Moore, 40 N. J. Eq. 106; Brokaw v. Brokaw, 41 N. J. Eq. 304; Lauer v. Dunn, 115 N. Y. 405; 3 Pomeroy’s Eq. Jur. § 1280. While,*158 properly speaking, an assignment cannot be made of a subject which does not exist, such as a fund to become due on the future performance of a subsisting contract, yet equity, on the possible debt ripening into an enforceable specific money liability, treats the agreement as an assignment, pro tanto, of the fund, and by force thereof vests the equitable title to the money in the assignee. Field v. Mayor 6 N. Y. 179: 57 Am. Dec. 435 and note; Hall v. Buffalo, 1 Keyes 193; Brill v. Tuttle, 81 N. Y. 454, 457: 37 Am. Rep. 515; Brown v. Dunn, 50 N. J. L. 111, 113; 3 Pomeroy’s Eq. Jur. §§ 1280, 1283, note 2. To impound the amount in the hands of the debtor, notice of the assignment must be given to him ; but no particular form of notice is required. Any writing or act which clearly indicates that the assignor intends to make over the fund belonging to him amounts in equity to an assignment of the fund. Bower v. Hadden Blue Stone Co., 30 N. J. Eq. 171; Lyon v. Bower, 30 N. J. Eq. 340; Shannon v. Mayor, 37 N. J. Eq. 123. On notice being given to the debtor, and the sums being earned under the contract, the debtor becomes trustee, or quasi trustee, for the assignee, as to the amount assigned, subject to existing equities and valid prior charges thereon. Hall v. Buffalo, 1 Keyes 193. From this it follows that neither payment to, nor a release or discharge by, the assignor, after notice of the assignment, can affect the rights of the assignee against the debtor. Jones v. Farrell, 1 De G. & T. 208; Brill v. Tuttle, 81 N. Y. 454: 37 Am. Rep. 515; Field v. Mayor, 6 N. Y. 179: 57 Am. Dec. 435; North Bergen v. Eager, 41 N. J. L. 184; 2 Pomeroy’s Eq. Jur. § 704. It is evident from this statement of the incidents of an equitable assignment, that acceptance by the debtor of the order or assignment is not, in equity, necessary to the validity as a transfer, pro tanto, of a fund in his hands. It takes effect from the acts of the assignor and assignee, and the debtor, so far as the right to the fund is concerned, is but the instrument through whom the transfer*159 is to be actually made. The debtor’s acceptance or promise gives the assignee an action of law against him, not on the assignment, but on the promise; in equity it neither creates, increases, or diminishes his [liability to the assignee. 3 Pomeroy’s Eq. Jur. § 1280 and note 1.”
On these principles, as the lumber was delivered from time to time under the contract, not only was the fund in Brooks Brothers’ hand increased to the extent of its value, but to that extent the fund became thereupon equitably the property of the defendants, and never the property of the insolvent. If the insolvent had refused or neglected to give the orders, equity would have seized so much of the fund in Brooks Brothers’ hands as had thus been appropriated to payment for the lumber, and applied it to that end, without the orders. The defendants, also, at law, could have enforced payment, on the promise of Brooks Brothers. While the doctrine of equitable assignment has not been so fully stated in any of our decided cases, so far as I am aware, it has been frequently applied, and always in harmony with the doctrine stated. Claflin v. Kimball, 52 Vt. 6; Hutchins v. Watts, 35 Vt. 360; Webster v. Moranville, 30 Vt. 701; Downer v. Marsh, 28 Vt. 558; Thayer v. Kelley, 28 Vt. 19; Spafford v. Page, 15 Vt. 490; Upton v. Moore, 44 Vt. 552; Bank v. Post, 65 Vt. 222; Trow v. Braley, 56 Vt. 560; Wescott v. Potter, 40 Vt. 271; Strong v. Strong, 2 Aik. 373; Lampson v. Fletcher, 1 Vt. 168. See also, Subject, Assignments, 2 Am. & Eng. Ency. of Law (2d ed.) pp. 1017, 1026, 1031, 1055, 1056, 1060.
Judgment reversed, and judgment for defendants to recover their costs.