Cooper v. McClun

Scales, C. J. This case seems to present circumstances of hardship, upon the defendants, nevertheless, we think complainants are entitled, by principles of equity and justice, to a recovery. In the case of Howell et al. v. Edgar et al., 3 Scam. R. 417, this court held that a failing debtor has a right to prefer one creditor over another, when he does so in good faith, and the decision, we think, is sustained by the current of authorities. If this assignment was good, and we see nothing in the record to question it, the plaintiffs took a beneficial interest in equity, under it. Courts of law will take cognizance of the equitable interests of assignees of dioses in action, so as to protect them, to a certain extent, within their power. Chapman v. Shattuck, 3 Gil. R. 49. But it is the peculiar province of a court of equity, to deal with and enforce trusts ; and while they might not compel a trustee to take upon himself the burthens of a trust, without compensation ; they would, when voluntarily assumed, compel him to a faithful execution of it, for the preservation of rights depending upon, and derivable from it. Switzer et al. v. Skiles et al., 8 Gil. R. 529; Gross v. Petree, 10 B. Monroe R. 413. It is difficult to distinguish this case in principle, and it varies but little in facts, from Lawrence v. Lane, 4 Gil. 354, where the court held the plaintiff liable to pay the true owner of the debt, although he had been condemned to pay the same to another, by a garnishment on attachment process. And the court there truly distinguishes that case from the cases of Holmes v. Remsen, 4 Johns. Ch. R. 467; same on error, 20 Johns. R. 229 ; Embree and Collins v. Hanna, 5 Johns. R. 101; Hull v. Blake, 13 Mass. R. 153, in this, that “ in all those cases, the proceedings were against the party whose interests were to be affected by the judgment or decree, and there was either actual or constructive notice given to the party whose money or effects were to be appropriated, not in payment of another’s, but of his own debt. They were contests between creditors of the same debtor, in which garnishees, who owed the debtor, or had effects of his in their hands, had, upon a proceeding, directly against the debtor, under a judgment of a court of competent jurisdiction, been compelled to pay to one, and in which the courts very properly determined, that such payment, or a judgment without payment, would bar any subsequent claim against him for the same demand.” This reasoning applies very forcibly to this case. For this interest in the debt, had already passed by the equitable assignment, to the plaintiffs. And their rights and property are not to be taken from them, and applied to the payment of another’s debt, even if he was their assignor in a proceeding in which they were not parties, had no notice, and could not have been heard. The judgment cannot bind them, nor determine their rights. Allen, administrator, etc., v. Dundas, 3 Term R. 125, sustained payment to the executor of a forged will, after probate, and before repeal of the probate. The court had jurisdiction of the subject matter, and while the probate remained, the party was executor de facto, and a payment to him was held good, as being under the sanction of the law, as to the proper person to receive it. But in Myers v. Unch, 1 Binney R. 25, a payment under a garnishment on attachment, made without taking the stipulation required by statute, was not sustained, as made under the process of law. In this case, the property passed by the assignment, and direction, and from that time, if afterwards assented to, and could not be taken for the assignor’s debts. It was so noted in Wilt v. Franklin, assignee, etc., 1 Binn. R. 502; and also in Lippincott et al. v. Barker, 2 Binn. R. 174, upon the performance of the condition, to wit, the execution of a release, and took effect from such acceptance. Judge Story held such assignment good, against a subsequent attachment of creditors ; although none of the creditors were parties to the original assignment, it was held sufficient that they afterwards assented. Brown and Ives v. Minturn and Champlin, 2 Gallison R. 557. Under these views, it is very clear, that the interest in the moneys due on the note assigned to defendant, passed equitably to the plaintiffs by the assignment and subsequent direction of payment. Defendant accepted the trust voluntarily, entered upon the discharge of its duties, and gave his written promise to pay over the proceeds in part, to plaintiffs. Without discussing or determining the merits of the judgments on the garnishments, we are of opinion that these moneys belonged to plaintiffs, and were not subject to or liable for the debts of the assignors. Plaintiffs were not parties nor privies to those proceedings, and are not concluded or bound by them, nor the adjudication of the ownership of the property, and may therefore assert their rights by bill in equity, to compel the performance of the trust by the defendant. Decree will be reversed and the cause remanded for further proceedings. Decree reversed.