CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE.

Year Book for 1916.

Washington. pp. xvii, 204. CONNECTICUT: WORKMEN'S COMPENSATION. Compendium of Awards of the Commissioners for the Years 1914 and 1915 and for the Months of January to May Inclusive of the Year 1916. (1 Connecticut Compensation Decisions.)

ENGLISH INFLUENCE ON THE UNITED STATES. By W. Cunningham. New York: G. P. Putnam's Sons. 1916. pp. xii, 168.

DEPARTMENT OF COMMERCE: BUREAU OF CORPORATIONS: TRUST LAWS AND UNFAIR COMPETITION. By Joseph E. Davies. Washington: Government Printing Office. 1916. pp. liv, 832.

THE ELEMENTS OF INTERNATIONAL LAW. By George B. Davis. Fourth Edition, revised by Gordon E. Sherman. New York: Harper & Brothers. pp. xxiv, 668.

THE LAW OF PROMOTERS. By Manfred W. Ehrich. Albany: Matthew Bender and Company. 1916. pp. lxi, 645.

TOWARD THE DANGER MARK: Administration of Justice in the United States. Evils Causes - Remedies. By Cairoli Gigliotti. Chicago. pp. xxv, 167.

MAGNA CARTA AND OTHER ADDRESSES. By William D. Guthrie. New York: Columbia University Press. 1916. pp. vi, 282.

THE LAW OF INTERSTATE COMMERCE AND ITS FEDERAL REGULATION. By Frederick N. Judson. Third Edition. Chicago: T. H. Flood and Company. 1916. pp. xxix, 1066.

JEWISH DISABILITIES IN THE BALKAN STATES. American Contributions toward their removal, with particular reference to the Congress of Berlin. By Max J. Kohler and Simon Wolf. Baltimore. 1916. pp. xi, 169. LIBERTY AND DISCIPLINE: A Talk to Freshmen. By A. Lawrence Lowell. New Haven: Yale University Press. 1916. pp. 16.

AMERICAN DEBATE: A History of Political and Economic Controversy in the United States, with Critical Digests of Leading Debates. By Marion Mills Miller. Two Volumes. New York: G. P. Putnam's Sons. 1916. NAVAL WAR COLLEGE: INTERNATIONAL LAW TOPICS: Documents on Neutrality and War, with Notes, 1915. Washington. 1916. pp. 122. JURISPRUDENCE. By John W. Salmond. Fifth Edition. London: Stevens and Haynes. 1916. pp. xv, 512.

THE LAW OF TORTS: A Treatise on the English Law of Liability for Civil Injuries. By John W. Salmond. Fourth Edition. London: Stevens and Haynes. 1916. pp. xxxiii, 605.

PUBLIC WORKs in Medieval LAW. Volume I. Edited for the Selden Society by C. T. Flower. London: Bernard Quaritch. 1915. pp. xxxviii, 343. TOWARDS AN ENDURING PEACE: A Symposium of Peace Proposals and Programs 1914-1916. Compiled by Randolph S. Bourne. New York: American Association for International Conciliation. pp. xv, 336.

THE LAW OF THE PUBLIC SCHOOL SYSTEM OF THE UNITED STATES. By Harvey Cortlandt Voorhees. Boston: Little, Brown and Company. 1916. pp. lvii, 429.

BELGIUM AND THE GREAT POWERS: Her Neutrality Explained and Vindicated. By Emile Waxweiler. New York and London: G. P. Putnam's Sons. 1916. pp. xi, 186.

HARVARD

LAW REVIEW

VOL. XXX

DECEMBER, 1916

No. 2

IS THE RIGHT OF AN ASSIGNEE OF A CHOSE IN ACTION LEGAL OR EQUITABLE ?

THE interesting article by my friend, Professor Cook, in a re

cent number of this REVIEW,' on the alienability of choses in action leads me to make some suggestions in opposition to his argument that the assignee of a chose in action should be regarded as having a legal rather than an equitable right. Perhaps most lawyers would agree with him offhand, but I think generally without appreciating the full implications of their conclusion.

In discussing equitable rights there is always danger of confusion between the essential character of the right and the tribunal in which it is enforced. The fundamental characteristic of an equitable obligation is that it binds primarily a particular person, and binds others only when their relation to that person is such that in conscience they should be subject to his duties. The Court of Chancery has been the tribunal where such duties have ordinarily been enforced. But even in jurisdictions where the distinction between legal and equitable courts is still preserved, courts of law to-day enforce a great variety of equitable rights and duties without thereby changing their essential characteristics. To call such rights legal in antithesis to equitable merely because a court of law enforces them, is a natural tendency but a dangerous one. Of course no such confusion exists in the argument of Professor Cook. His view seems to be that the extent of the powers of the assignee

1 29 HARV. L. REV. 816.

of a chose in action involves the conclusion that he has more than that personal right which is typical of equitable ownership and should rather be designated as a legal owner, his ownership being qualified, to be sure, by certain limitations, as legal ownership often is.

Though legal ownership is conceived fundamentally as a right good against all the world, actual instances of such ownership are often much more narrowly limited. The owner of a chattel which has been stolen from him is likely to find his right against the world considerably qualified if the thief is in a place where the principles of market overt prevail. In the law of sales of chattels, the legal title passes to the buyer, without transfer of possession, if the parties so intend; yet in many jurisdictions the seller in possession can destroy the buyer's right by a resale, and even the seller's attaching creditors are often allowed a right superior to that of the buyer. On the other hand, where statutory provision is made for giving effective public notice of an equitable right, the equitable owner may acquire rights good against the world. The recording system thus enables one who has an equitable easement or other equitable right in real estate, based on contract, to protect himself against the world. It follows that one whose title is equitable may have in a particular case much more comprehensive ownership than another person who has a legal title. One who has a recorded contract for the transfer of Blackacre, especially if he has paid the price and the time for conveyance has come, has more comprehensive rights than the grantee under an unrecorded deed of Whiteacre who has not paid the price and whose estate is subject to a vendor's lien. Yet the former has an equitable and the latter a legal title.

Doubtless the reasons which have led to limitations of legal ownership have often been fundamentally the same as those controlling the habitual limitations of equitable ownership. In the case suggested above of a purchaser of a chattel without delivery, the reason why a purchaser in good faith from the seller in possession has been protected by courts of law, is the same reason which has led equity habitually to protect purchasers for value. The limitations set by recording statutes on legal titles have a similar foundation. Nevertheless, the methods by which such results are obtained at law and in equity are fundamentally different. The law achieves the result by imposing limitations on a title which would otherwise

be absolute. Equity achieves the result by extending to others, so far as is conscientious, an obligation which is primarily personal to one. It may be conceded that even this distinction of method is not always observed, and that instances may be found where equitable ownership is treated in a way analogous to legal ownership, but, nevertheless, the fundamental distinction exists.

Whether in a theoretical system of jurisprudence it is worth while to have two roads by which the same result may be achieved is rather beside the point in England and America, for we have the two systems and the roots of the equitable theory of ownership sink too deep to make it possible to tear them up. Moreover, an attempt to do so is likely to cause more confusion and incorrect conclusions than advantage in a body of law which has developed for centuries with the double system.

The history of the law governing the assignment of choses in action after the earliest periods is tolerably plain. The assignee possessed by implication a legal authority or power to enforce in the name and stead of the assignor the claim against the debtor. This involved no legal right to the claim itself. He was further regarded in equity as the owner of the claim. If it were not for the first of these rights the assignee would have been obliged to resort to equity in every case to enforce the claim. If it were not for the second principle, his authority to collect might be disregarded or destroyed by the debtor's paying the assignor in spite of notice of the assignment, by the bankruptcy of the assignor, or in other

ways.

About the end of the eighteenth century courts of law recognized the equitable right of the assignee and gave the same protection to him that a court of equity would have done, still recognizing, however, that his ownership was equitable, not legal.3

The assignee has often been called the agent of the assignor, but it has been pointed out that the assignee is acting on his own behalf and not for another. The criticism seems just, but so far as concerns the question here discussed, it is merely verbal. The owner of property, tangible or intangible, may give another the power or authority to reduce the property to possession and, by so doing and not before, to become the owner of it.

* In Winch v. Keeley, 1 T. R. 619 (1787), Ashhurst, J., said: "It is true that formerly the Courts of law did not take notice of an equity or a trust; for trusts are within the original jurisdiction of a Court of equity; but of late years, it has been found productive of great expense to send the parties to the other side of the Hall; wherever this Court have seen that the justice of the case has been clearly with the

This condition of affairs continued so long certainly as the assignee was compelled to bring action against the debtor in the name of the assignor. So long as that procedure prevailed, it was hardly possible to argue, and it was not argued, that the assignee was the legal owner of the right. Yet, during this period, all the powers and rights upon which Professor Cook relies as showing a legal title on the part of the assignee were established. Every one of them dates back at least to the early part of the nineteenth century. The truth is that these powers and rights may belong to the assignee whether a court travels on the theory that he has a legal ownership or on the theory that he has a legal power to collect but only equitable ownership. Under such circumstances it is always safer to travel the path which the law has trodden instead of discovering another one which seems equally good for the purpose, unless it is very certain that the new path will enable us to reach not only most of the results which have been reached on the old one, but all, or at least all which ought to be reached. Professor Cook, himself, calls attention to the fact that the equitable origin of the assignee's rights "must never be lost sight of if we are to understand the present state of our law." The best way never to lose sight of this is to recognize that the assignee's ownership is still equitable; if it were not, there would be no danger for any one but a historian in losing sight of its origin.

But there are at least three classes of cases the proper decision of which seems to turn upon the answer to the inquiry whether the right of the assignee is still equitable as distinguished from legal ownership, namely cases involving:

1. The debtor's right to set off against the assignee claims against the assignor;

2. The effect of latent equities;

3. The effect of a subsequent total assignment on a prior partial assignment.

Professor Cook refers to two of these classes of cases, but postpones discussion of them. Had I not understood that this postponement was for a somewhat indefinite period, I should have delayed the expression of my views.

plaintiff, they have not turned him round upon this objection. Then if this Court will take notice of a trust why should they not of an equity?"

4 29 HARV. L. REV. 831.