Vol. 12 · pages 251–255

230 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 1. In the two former cases the competition was between a legal right and an equitable right. In the third case the competition is between two equitable rights. Cave vs. Cave, (1880) 15 Ch. D. 639. Facts : A Trustee & B a beneficiary. A purchased land from trust-monies in breach of trust and executed a legal mortgage thereof to C. C had no notice of the trust. Later by an equitable mortgage transferred the same land to There are three persons who have acquired rights. C, who has a legal right, is mortgagee, being a legal mortgage. B has an equitable right flowing out of A’s right which has been transferred. D has an equitable right flowing out of A’s right. What is the position of the parties ? 1. As between C and B, although B’s Equitable right is prior to C’s legal right as C had no notice, C takes priority. 2. As between C and D, C takes priority, because C is not party to a fraud in creating the rights of D. 3. As between B and D, their rights are equitable rights: whose right prevails ? B’s right. The rule is that where there is a competition between two equitable rights, the right earlier in origin prevails over the subsequent right. 4. This rule applies only where the equitable rights have equal equities on their side. If the equities are unequal, the better of the two prevails. Rice vs. Rice. 2. Drewry, 73 (76-78). A sells land to B and without receiving purchase money (1) conveys land to B, (2) signs a receipt for moneys and (3) delivers title-deeds to B. B subsequently mortgages the property to C who has no notice of A’s claim. Between A and

231COMMON LAW C although A’s equitable right is earlier than that of C, yet the equities are unequal. A is guilty of negligence, therefore, C’s Equity is better and will prevail although later in time. 5. In some cases conflict as to priority between two equitable interests by the respective times at which the interest was transferred. In other cases, it is determined by the respective times at which written notice is given to the proper person or persons of the interest transferred (e.g. in the case of the assignment of chose in action). Sum up. Three maxims of Equity. 1. Where equities are equal, the law prevails. 2. Where equities are equal, the first in time prevails. 3. Where equities are unequal, the better equity prevails. Explanation 1. The first proposition has reference to cases where there is conflict between an equitable right and a legal right and applies to both classes of cases : (1) where the equitable right is prior to the legal right as well as to cases (2) where the equitable right is subsequent to the legal right. 2. Law prevails means that legal right prevails over an equitable right where no inequity can be attributed to the owner of a legal right. — Such as notice or fraud. 3. Propositions two & three have reference to cases where there is a conflict between two equitable rights. Equitable Assignment I. General 1. Although the subject is called Equitable Assignment, it is an abreviation. The subject is equitable assignment of a chose in action. 2. There are three matters of a preliminary character which must be dealt with at the outset : (1) What is an assignment (2) What is a chose in action. (3) Necessity for the study of the subject.

232 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES (1) What is an assignment 1. Under the English Law of Property, property is classified as Realty and Personality. 2. In connection with the transfer of rights over Realty, the word used is Conveyance. In connection with the transfer of rights over Personality, the word used is either Transfer or Assignment. 3. Assignment, therefore, means the transfer by a person of his rights over personal property and particularly one form of it, namely, chose in action. (2) What is a chose in action 1. Under the English Nomenclature, Personality is divisible into two classes : (i) Moveable goods of which one can take physical possession. (ii) Personal rights of property which can only be claimed or enforced by action and not by taking physical possession. 2. The former are called : (i) Choses in Possession—Things in Possession, (ii) Choses in Action—Things in Action. 3. The definition of a chose in action— (1902) 2 K. B. 427 (430)—Channell J. It is really speaking a debt. 4. The word assignment is used in respect of chose in action. It is something which you can only sign it away if you want to transfer it. You cannot deliver possession of it. (3) Necessity of Studying Equitable Assignment 1. An assignment is a transfer of a right by its owner, subsisting against another, to a third person to whom the person against whom it was subsisting, becomes bound. Illustration. A is creditor. B is debtor. A assigns his right to debt against B to C : B becomes bound to C and C gets a right to recover it from B.

233COMMON LAW 2. Three persons are involved in an assignment : (i) The original owner, (ii) The person bound to the original owner, (iii) The person to whom the original owner has transferred the right. 3. The right, i.e., the chose in action may be legal or equitable such as a legacy or an interest in a trust fund. 4. Assignment of a chose in action was differently treated by Equity and by the Common Law. Common Law and Chose in Action 1. There could be no assignment in Common Law of a Chose in action. Not only there could be no assignment of an equitable chose, there could be no assignment even of a legal chose. 2. The reason was the fear of multiplicity of suits. 3. Statute law and Special law made certain kinds of Choses of action assignable : (i) Negotiable Instruments became assignable by the law merchant (ii) Policies of Life Insurance and Marine Insurance were made assignable by Statute. (iii) Section 25(6) of the Judicature Act : all legal Choses in Action have been made assignable. Equity and Chose in Action 1. In Equity, a chose in action was always assignable. Not only an equitable Chose was assignable in Equity but a legal Chose was also assignable in Equity. 2. If the Chose was equitable, the assignee could bring his proceedings to recover it in a Court of Chancery in his own name. 3. If it was a legal Chose, the proceedings had to be taken in the name of the assignor and the way the Court of Chancery interfered, was to restrain the assignor from objecting to this use of his name on the assignee giving him a proper indemnity against costs.

234 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 4. There were, however, some Choses in action to the assignment of which equity did not give effect on the ground of public policy : (i) assignment of pay and half pay of public officers paid out of the National Exchequer. (ii) Assignment of alimony to a wife. (iii) Assignment affected by maintenance of property. Conclusion 1. There are thus two ways of making an assignment— (i) Legal, (ii) Equitable. 2. Although the Judicature Act has laid down the form and procedure for the legal Assignment of a legal Chose, it has not abrogated the rules of Chancery relating to Equitable assignment of a legal Chose. So that if an assignment is ineffective in law by reason of some defect, it will be good if it conforms with the rules of equity. Secondly, the Judicature does not touch the assignment of an Equitable Chose in action. Categories of cases to be considered There are three categories of cases to be considered in connection with the assignment of a Chose in action : (i) Legal assignment of a legal Chose in action, (ii) Equitable assignment of a legal Chose in action, (iii) Equitable assignment of an Equitable Chose in action. Requisites of a legal assignment of a Legal Chose 1. Assignment must be absolute, i.e., it must amount to a complete divesting of his right by the assignor. The debt must be certain and must be of the whole amount. 2. The assignment must be in writing signed by the assignor. It need not be by deed. It need not be for value. 3. Express notice must be given to the debtors of the assignment.