Vol. 12 · pages 256–260

235COMMON LAW The Section does not say : (i) By whom is notice to be given—by the assignor or assignee. (ii) At what time notice is to be given so that it may be given, by the assignee after the death of the assignor. Effect of Want of Notice 1. Absence of notice does not disentitle an assignee of suing on the assignment. It only imposes certain disabilities and results in certain disadvantages. (i) The assignee cannot sue the debtor in his own name without making the original creditor a party to the action. (ii) The assignee will be subject to equities arising between the debtor and his original creditor before the date of the assignment and will lose his right against the debtor altogether if the debtor pays the original creditor. On the other hand, if the debtor pays the original creditor after receiving notice of assignment, the assignee could still recover the debt from him. (iii) The assignee, who fails to give notice to the debtor of his assignment, will be postponed to a subsequent assignee for value who has no notice of the previous assignment, and gives notice of his assignment to the debtor. Requisites of an Equitable assignment of a Legal Chose in action An Assignment which does not comply with the statutory requirements is not necessarily ineffectual, for it may operate as an Equitable Assignment. Two things are necessary : (1) There must be value given by the assignor. (2) A charge created by agreement between the debtor and the creditor upon specific funds or by an order given to the creditor upon a person holding money belonging to the debtor, will amount to an assignment. 1839. Burn vs. Carvallo 4 Hylve & Craig’s Reports. 690 Facts F was in the habit of sending consignments of goods to R, who was trading in a different town and used to draw Bills of Exchange upon R. It was arranged by F with B & Co. that they should endorse and negotiate his Bills drawn upon R against

236 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES consignment and they were to credit him with the amount and he was to draw upon it and B & Co. was re-imburse itself by recovering the amount from R. F drew for certain amounts on B &. Co. But R failed to meet the Bills on maturity. F, who was the debtor of the B & Co. by a letter to B & Co. promised that he would direct and by a subsequent letter did. direct to deliver the goods to V as the agent of B & Co. F wrote to R to transfer the goods in his possession to V, the agent of B & Co. in the town. R accordingly delivered the goods to V on the 30th of June 1829. On the 23rd of June 1829, F was adjudged insolvent for an act done on the 23rd of May 1829. His trustee in bankruptcy sued for the recovery of the value of the goods from B &Co. B & Co. contended that there was an equitable assignment of the value of the goods by F. Held the order of the debtor was a good assignment in Equity. Rodick vs. Gandell. (1851-2) 1 Degex. 763. 42. E. R. 749 Gandell was an Engineer and was indebted to a certain Bank for a large amount and the Bank was pressing for payment. Gandell was a creditor of a Railway Co. To induce the Bank not to press for payment and also to pay other drafts outstanding against him, it was arranged that Gandell should instruct his Solicitor to recover the amount due to Gandell from the Railway Co. and pay it to the Bank. G, by a letter to the Solicitors of the Company, authorized them to receive the money due to him from the Railway Co. and requested them to pay it to the Bankers. The Solicitors by letter promised the Bankers to pay such money on receiving it. Why—no agreement between debtor and creditor. The Solicitor recovered the amount from the Railway Co. but instead of paying it to the Bank, paid it to Gandell. Gandell became insolvent and his property was taken possession of by the official assignee. The Bank sued for a declaration that there was an equitable assignment by Gandell of his funds claimable from the Railway in favour of the Bank and collected by the Solicitor and the

237COMMON LAW Bank was therefore entitled to recover the amount from the official assignee. Held, this was not an equitable assignment. It was not an order given by the debtor to his creditor upon a person owning money or holding funds belonging to the debtor directing the person to pay such funds to the Creditor. There must be privity between the assignor and assignee in order to constitute an equitable assignment. If there is no privity then there is no assignment even in equity. Consequently, if the Principal directs his agent to collect money owing to the principal and pay it to a third person such third person is not an assignee in equity if the mandate is not communicated to him. It may be revoked by the principal. Similarly a Power of attorney or authority to collect money and to pay it to the creditor of the party granting the power does not amount to an equitable assignment. A cheque is not an equitable assignment or appropriation of money in the drawer’s Bank. Hopkinson vs. Forster, (1874) L. R. 19 Eq. 74. There can be no valid appropriation or assignment if no specific fund is specified out of which the payment is to be made. Percival vs. Dunn, (1885) 29 Ch. D. 128 Whether notice is necessary in the case of an equitable assignment ? 1. An equitable assignment is complete between the assignor and assignee although no notice is given to the debtor. 2. Notice of the assignment should, however, be given to the debtor for two reasons. (i) If there is no notice, the debtor will be free to pay to the assignor, the original creditor and will not be liable to the assignee. On the other hand, if he pays to the assignor in disregard of the notice, he will be liable to pay over again to the assignee. Stocks vs. Dobson (1853) 4 De. G. M & G. 11 (ii) If there is no notice, then the assignee will not be allowed to have priority over subsequent assignee of the same chose in action by the same assignor. This is called the rule in Dearl vs. Hall (1823) 1 Rsess 1=S. F. C. p. 57.

238 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES Facts : Peter Brown died and left a Will wherby he made a trust of his personal estate and of the monies to arise from the sale of his real estate and directed his executors to invest the same and pay interest to his son Zachariah Brown during his life. The income came to about £ 93 a year. On 19th December 1808, Brown, in consideration of £204 paid to him by William Dearle, assigned a part of his annuity of £ 37. On 26th September 1809, Brown, in consideration of £ 150, assigned another part of his annuity of £ 27 to Sherring, subject to the assignment in favour of Dearle. Neither Dearie nor Sherring had given notice of assignment to the executor. In 1812 Brown advertized the life interest of 93 pounds p. a. in trust funds for sale as an unincumbered fund. Joseph Hall proposed to purchase it and through his Solicitor investigated Brown’s title. He also made inquiries of the executors, who knew of no incumbrance affecting Brown’s interest. Thereupon Hall purchased Brown’s interest for £ 711 -3-6 and had it assigned to him. On the 25th April 1812, Hall gave the executors written notice of the assignment to him. On the 27th October 1812, Dearie and Sherring gave notice of their assignment to the executors. The executors refused to pay any one of the three until their rights were decided. Dearle and Sherring brought a Bill in chancery against Hall praying that the income of £ 93 should be applied in satisfying their’s before that of Joseph Hall. Dearle contended that the doctrine first in time is first in law should be applied and as he was first he should be preferred to Hall. Held No. Hall should be preferred.

239COMMON LAW Judgement of Plumer M. R. S. & C. p. 55 The rule was based on carelessness and negligence to perfect one’s claim. But the rule is now absolute and independent of conduct. The assignee who gives proper notice first will be paid first, whether the other assignee has been guilty of carelessness nor not. Re Dallas. (1904). 2 Ch. 385. The rule in Dearie vs. Hall has always applied to assignment of all equitable interests in personality. To whom notice should be given under the rule in Dearle vs. Hall 1. It must be given to the debtor, trustee or other person whose duty it is to pay the money to the assignor. Stephens vs. Green, (1895) 2 Ch. 148 2. Notice to the Solicitor will be effectual only if Solicitor was expressly or impliedly authorized to receive it. (1880) 14 Ch. D. 406. 3. If there are several debtors or trustees, notice to one is notice to all. 4. Fresh notice to new trustees is not necessary, if notice is given to old trustees. What should be the form of Notice 1. Formerly, notice need not be a formal notice and might have been by word of mouth. 2. But since 1925, it must be in writing. What title is acquired by the assignee by an Equitable assignment. 1. It has always been the rule of equity that the assignee of a thing in action cannot acquire a better right than the assignor had. 2. In other words, the assignee takes it subject to all the equities affecting it in the hands of the assignor.