Ex parte Tremont Nail Co.

LOWELL, District Judge. The agreement of the parties seems to have interpreted the contingency which has arisen of the shovel company becoming bankrupts, and, I think, they intended to leave the case as it would have been if Dunn had paid his debt into court, leaving the parties to interplead upon the -equitable title. In other words, that the payment should go for nothing. Virtually admitting that, considered as. an ordinary payment, it would be a preference. In this I have no doubt they were wise, for the payment was made under circumstances which would warrant a jury to find accordingly, on the part of the petitioner, that they were obtaining an advantage over the other creditors, and that the debtors were probably insolvent. The parties have acted throughout in the utmost good faith, and there is a strong moral equity, so to call it, for the petitioners; but the question is whether they had what, in equity as admitted in the courts, amounts to an assignment of part of the debt due from Dunn. A learned judge has said that the law of equitable assignments is brought to such an exquisite degree of refinement that it is by no means easy to understand it. Field v. Megaw, L. R. 4 C. P. 660, per Brett, J. And another judge, in a case which, in one aspect, resembles the one at bar, said that the lien might depend on whether the word used was “will,” or “shall,” in an oral agreement collateral to a negotiable instrument. Thomson v. Simpson, 5 Ch. App. 659. In the case first above cited, the decision was that a promise to pay when a certain debt is received is not an equitable assignment of the debt. Two of the judges in that case intimate that a promise to pay out of a particular debt, or fund, would work a transfer. A like dictum .was made by Lord Truro, in Rodick v. Gandell, 1 De Gex, M. & G. 763, and this was followed by a decision of a learned vice-chancellor, afterwards lord chancellor, founding himself 'solely on this dictum (Riccard v. Prichard, 1 Kay & J. 277); but he overruled the decision of a very eminent chancellor to the contrary (Bradley’s Case. Ridg. t. Hard. 194). The refinement appears in this: that while an agreement to pay out of a fund is on the border line, it is held both in England and the United States, that any order or assignment. oral oi written, to pay out of a particular fund, made upon the debtor or bolder of the fund, or an agreement to give such an order, or a mere oral direction to go and receive the money and pay such and such debts with it, does operate as an equitable assignment. See Diplock v. Hammond, 2 Smale & G. 141, affirmed 5 De Gex. M. & G. 320; Gurnell v. Gardner, 4 Giff. 626; Hunt v. Mortimer. 10 Barn. & C. 44; Ex parte Carlon. 4 Deac. & C. 120; Bank of U. S. v. Huth, 4 B. Mon. 423; Newby v. Hill, 2 Metc. (Ky.) 530; Richardson v. Rust, 9 Paige, 243. In the United States, it was held many years ago that a mere promise to pay out of a particular fund, when received, the promisor retaining control over the fund, and no notice being given to the person who is to pay it, would not work an equitable assignment. Rogers v. Hosack, 18 Wend. 319. This case was remarked upon by the chancellor in Richardson v. Rust, 9 Paige, 243; but it has been followed in all the cases which I have seen, and appears to be the settled law of this country. See Hoyt v. Story, 3 Barb. 202; Christmas v. Russell, 14 Wall. [81 U. S.] 69; Trist v. Child, 21 Wall. [88 U. S.] 441, per Swayne, J.; Christmas v. Griswold, 8 Ohio St. 558; Connely v. Harrison, 16 La. Ann. 41; Eib v. Martin, 5 Leigh. 132; Ford v. Garner, 15 Ind. 298; Pearce v. Roberts, 27 Mo. 179. With these cases before me, I cannot hold that the agreement between these parties gave any lien or charge on Dunn’s debt in favor of these petitioners, and their petition to stand as privileged creditors is denied.