Page v. Gardner

Ryland, Judge, delivered the opinion of the court. 1. It is contended by the counsel for the respondent, Gardner, in this case, and is, indeed, the chief ground of bis de511 fence to the plaintiff’s action, that Gardner, the assignee, holding the property as an officer of the law, is not responsible in his individual capacity to an action for the effects in his hands as assignee; but that a proceeding must be instituted, in the court having authority over this assignment, against the fund itself. The assignment by George K. Budd to Sanford B. Kellogg, trustee, to secure the payment of a debt to Page & Bacon, duly acknowledged and recorded, being taken and considered as valid, has the effect to pass the property and effects embraced in it to the said Kellogg, as such trustee, against the subsequent assignee. Assuming this to be so, then the proceeding to recover the' property claimed may be against the party having the property and effects in Ms hands, and need not (perhaps could not) be against the fund. Here, the plaintiff’s petition is proceeding upon the assumption that the effects now sought to be recovered constituted no part of the trust fund in the hands of Gardner, the second trustee. Courts of equity support assignments not only of choses in., action but of contingent interests and expectations, and also of things which have no present actual potential existence, but rest-on mere possibility only. (See Mitchell, Assignee of Ropes, v. Winslow et al., 2 Story’s Rep. 631.) A. and B. being engaged in 1839 in the manufacture of cutlery, borrowed of 0. a sum of money, payable in four years,, with interest semi-annually, and on the same day gave him a deed of all the machinery in their manufactory, with all the tools and implements of every kind thereunto belonging and appertaining, together with all the tools and machinery for the use of the said manufactory, which they might at any time purchase for four years from that date, and also all the stock which they might manufacture or purchase during the said four years. On the 26th of August, 1843, A. and B. filed their petition to be declared bankrupts, and subsequently were so declared, and' an assignee was appointed. On July [512] 16th, 1842, for breach of the conditions of the mortgage, the agent of C. took possession of the property, including the machinery, &c., which were in the possession of the manufac-tory when the mortgage was made, and also machinery, tools, and stock in trade, which had been made and purchased after the execution of the mortgage. On petition of the assignee in bankruptcy of A. and B. for an order of court authorizing him to take possession, it was held, upon this state of facts, 1st, that the mortgage and possession taken in July 16,1842, constituted such a lien in favor of the mortgagee to the property acquired subsequent to the time of executing the mortgage, as is protected under the provision in the second section of the bankrupt act; 2d, that such stipulations in a mortgage, in regard to property subsequently acquired, protect such property from ■■other creditors of the mortgagor. Judge Story, in his opinion, -■after stating the facts and general principles governing such 'transactions, says : “Here, the true question is not whether the assignment of the property to be acquired in futuro is good ■at law, but whether it is good in equity ; for if it be, then, independently of any fraud (which is not pretended) as the as-signee can take only what the bankrupt had a title to, subject to all equities, it follows, as a matter of course, that the petitioner, (the assignee,) has no claim on which he can found himself for relief under his petition. So that the question is, in reality, narrowed down to the mere consideration of this, whether the present mortgage, as to the future machinery, tools, and stock in trade to be put into the factory, (for there is no controversy as to those in esse at the time of the assignment,) is .valid or not against the mortgagor ?” \ He says : “ Upon the best consideration which I am able to ■give the subject, I think it good and valid. Courts of equity •do not, like courts of law, confine themselves to the giving of .effect to assignments of rights and interests which are absolutely fixed and in esse. On the contrary, they support assignments-not only of choses in action., but of contingent interests and expectancies, and also of those which have no pres [513] ent actual or, potential existence, but rest in mere possibility only.” In respect to the latter, it is true that the assignment can have no positive operation to transfer, in presentí, property in things not in esse ; but it operates by way of present contract, to take effect and attach to the things assigned, when and as soon as they come in esse ; and it may be enforced as such a contract in rem in equity. A different view has been taken by other courts, at law at least. (Moody v. Wright, 13 Metc. 27. Mogg v. Baker, 3 Mees. & Wels. 195. Gale v. Burrell, 7 Adol. & Ellis, N. S. 850.) We now have no distinction between law and equity. Taking, therefore, the deed of trust made in this case by Budd to Kellogg as being valid, (for there is no pretence of fraud in it,) then the sale by the trustee, Kellogg, conveyed the property and effects sold to the purchasers, and they have the right to sue for it, not by pursuing the fund, but any one in whose hands their effects and property may be found. The judgment below is reversed, and the cause remanded; the other judges concurring.