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

2 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.

3 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, 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.

or

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.

1. The debtor is generally allowed to set off against the assignee not only claims existing at the time of the assignment, but those arising subsequently prior to the debtor's notice of the assignment.5 On the other hand a claim against the assignor acquired after notice of the assignment cannot be set off." There are a number of cases qualifying in one or another kind of case the right of set-off against the assignee, but the decisions need not be examined here, for all that is of importance to the present argument is that certainly everywhere the general rule is admitted that a claim matured at the time of assignment may be set off against the assigned claim. There seems no possible ground on which to support this general rule, except that the legal title to the assigned claim still is in the assignor, and that therefore when sued upon, the claim still is subject to set-off of a claim against him unless it is inequitable for the defendant to assert the right. It is certainly inequitable if the set-off was acquired after notice of the assignment, and it may be urged that it is also inequitable in any case for the defendant to assert his set-off when the real plaintiff in interest, whether the nominal plaintiff or not, is an assignee, unless the assignor is insolvent, since the defendant might collect his claim from the assignor who

5 Cavendish v. Geaves, 24 Beav. 163, 174 (1857); but see Stoddart v. Union Trust, Ltd., [1912] 1 K. B. 181; Tuscumbia, etc. R. Co. v. Rhodes, 8 Ala. 206 (1845); Adams v. Leavens, 20 Conn. 73 (1849); Hall v. Hickman, 2 Del. Ch. 318 (1864); Guerry v. Perryman, 6 Ga. 119 (1849); Gardner v. Risher, 35 Kan. 93, 10 Pac. 584 (1886); Adams v. Webster, 25 La. Ann. 117 (1873); Hooper v. Brundage, 22 Me. 460 (1843); Collins v. Campbell, 97 Me. 23, 28, 53 Atl. 837 (1902); McKenna v. Kirkwood, 50 Mich. 544, 15 N. W. 898 (1883); Hunt v. Shackleford, 55 Miss. 94 (1877); Ford v. O'Donnell, 40 Mo. App. 51 (1890); Lewis v. Holdrege, 56 Neb. 379, 76 N. W. 890 (1898); Sanborn v. Little, 3 N. H. 539 (1826); Wood v. Mayor, 73 N. Y. 556 (1878); First Nat. Bank v. Bynum, 84 N. C. 24 (1881); Metzgar v. Metzgar, 1 Rawle (Pa.), 227 (1829); Clement v. Philadelphia, 137 Pa. 328, 334, 20 Atl. 1000 (1890); Neal v. Sullivan, 10 Rich. Eq. (S. C.) 276 (1858). See also Bryne v. Dorey, 221 Mass. 399, 109 N. E. 146 (1915). Cf. Greene v. Darling, 5 Mason (U. S. C. C.) 201 (1868). So a particular credit item in a mutual account cannot be separately assigned. Heiliger D. Ritter, 78 N. Y. Misc. 264, 138 N. Y. Supp. 212 (1912).

• See cases supra, also Campbell v. Equitable Life Assur. Soc., 130 Fed. 786 (1904). And the debtor, if he had notice of a proposed assignment of a claim against him, and did not inform the person proposing to take the assignment of an existing right of setoff against the assignor, cannot set it up against the assignee. King v. Fowler, 16 Mass. 397 (1820). Cases involving the question of the right of the maker of negotiable paper to set off against a transferee after maturity claims against the payee or indorsee, though often decided as if depending upon the same principle, should be distinguished, since even after maturity the legal title to the note is transferable. As to such cases see: 23 L. R. A. 327, n; 39 L. R. A. (N. s.) 658, n.

really ought to pay it. This limitation, however, of the debtor's right of set-off does not seem to have prevailed.' It seems rather to have been thought equitable for the debtor to be allowed to assert the right and thus to compel the assignee then to sue the assignor for reimbursement.

2. The effect of equities of third persons against the assignee seems also to depend upon the legal or equitable character of the assignee's rights. Though it is well settled that an assignee is subject to the equities of the obligor, it is a matter of dispute how far the assignee is subject to equities of third persons against the assignor; as, for instance, where the assignor was himself an assignee of the chose in action under an assignment which he had procured by fraud, or where for any reason the assignor held the assigned claim subject to a trust, actual or constructive, in favor of a third person. It would be everywhere agreed that an assignee who takes the assignment with notice of the claim against the assigned right, and still more clearly if he undertakes when the assignment is made to satisfy the claim, holds his right subject to the prior claim; but even though the assignee paid value with no knowledge of any outstanding claim, it is still true that the defrauded original owner or person beneficially entitled to the assignment has an equity prior in time and, therefore, superior to that of the ultimate assignee, if the latter's right is merely equitable. If, however, the latter could be regarded as the owner of a legal right, his right would be superior to the original equity. In fact, the latent or collateral equity against the assignor of an intangible chose in action has prevailed over the right of the subsequent purchaser in good faith, in the absence of an estoppel, in England and in a majority of the United States where the question has been raised." In

7 See cases cited supra, n. 5.

8

Buffalo Glass Co. v. Assets Realization Co., 133 N. Y. App. Div. 775, 117 N. Y. Supp. 1087 (1909).

• Cockell v. Taylor, 15 Beav. 103 (1851); Barnard v. Hunter, 2 Jur. (N. s.) 1213; Sutherland v. Reeve, 151 Ill. 384, 38 N. E. 130 (1894); Pearson v. Luecht, 199 Ill. 475, 65 N. E. 363 (1902); Brown v. Equitable Life Assur. Soc., 75 Minn. 412, 78 N. W. 103, 671, 79 N. W. 968 (1899); Tripp v. Jordan, 177 Mo. App. 339, 164 S. W. 158 (1913); Bush v. Lathrop, 22 N. Y. 535 (1860); Cutts v. Guild, 57 N. Y. 229 (1874); Owen v. Evans, 134 N. Y. 514, 31 N. E. 999 (1892); Central Trust Co. v. West India Improvement Co., 169 N. Y. 314, 62 N. E. 387 (1901); Culmer v. American Grocery Co., 21 N. Y. App. Div. 556, 48 N. Y. Supp. 431 (1897); State v. Hearn, 109 N. C. 150, 13 S. E. 895 (1891); Gillette v. Murphy, 7 Okla. 91, 54 Pac. 413 (1898); Downer v.