Crain v. Paine

Wilde, J.

This is an action of trover, for the conversion of a small building; and the question is, whether upon the facts reported, the plaintiff has proved a valid title to the. property.

The building, in September, 1833, was the property of one Alden Sibley, and was by him then sold to the defendant, who thereupon mortgaged it back as security for the payment of a certain note of hand to him, for $200, which was then due. In December, 1846, this mortgage was assigned in writing, by Sibley, to the plaintiff, whereby he acquired a legal title to the property mortgaged, provided Sibley had a right to make the assignment. The counsel for the defendant contends that he had not, and it was proved, that, in January, 1834, Sibley made a general assignment of all his property to certain assignees, in trust, for the benefit of his creditors. But it was also proved, that before that assignment, Sibley had delivered the note and mortgage to one Reckard, as security for a debt of $200; that the note and mortgage were afterwards by him delivered over to the plaintiff; and that Sibley, thereupon, without any new consideration, made a written assignment of the mortgage, as before stated, to the plaintiff.

Upon these facts, the question is, whether the delivery of the note and mortgage to Reckard, as security for a debt, without an assignment in writing, is to be considered as an equitable assignment, which is entitled to protection in a court of law. It has been long well settled, that if a note of hand is transferred by delivery, bona fide, and for a valuable consideration, this is a valid assignment in equity, which courts of law will regard and protect, although the assignee cannot maintain an action at law thereon in his own name. And the same principle applies to other choses in action. An equitable interest m a judgment may be assigned for a valuable consideration, by the delivery of the execution thereon to the assignee. Jones v. Witter, 13 Mass. 304; Prescott v. Hull, 17 Johns. 284; Henry v. Brown, 19 Johns. 95; Ford v. Stuart, 19 Johns. 342; Dunn v. Snell, 15 Mass. 481. The same principle applies also to the mortgage, which was *486delivered with the note as security. Indeed, if the mortgage had not been delivered with the note, the assignment of the note would, according to the doctrine held by courts of equity, draw after it the mortgaged property as a consequence. It was so held in Martin v. Mowlin, 2 Bur. 969, 978, by lord Mansfield, who also held the same principle to be applicable to mortgages of real estate, notwithstanding the statute of frauds. And so it was held in the case of Green v. Hart, 1 Johns. 580. The leading case on this point is that of Russel v, Russel, 1 Bro. C. C. 269. And this decision, Powell, in his treatise on the law of mortgages, says, had met with universal disapprobation, because (according to the language of lord Eldon) it was a virtual repeal of the statute ; nevertheless, it had been always acted on, and each succeeding case had added stability to a decree, which it had previously pronounced to be settled on spurious principles.” And it has been frequently decided by this court, that such an equitable assignment of a mortgage of real estate is not valid by our statutes, relating to the conveyance and transfer of real estates. But these decisions are confined to mortgages of real estates; and in Parsons v. Welles, 17 Mass. 419, the distinction is alluded to between mortgages of real and personal property, and the English doctrine as to the latter is impliedly if not expressly admitted.

But in this case, it is not necessary to decide, that the assignment of the mortgage debt would draw after it an equitable assignment of the mortgage; for the mortgage deed and the note were both deposited with Reckard for the same purpose, namely, to secure the payment of the debt; and this deposit amounts, according to all the authorities, to an equitable assignment of the note and mortgage. 3 Pow. Mortg. 1059, Rand’s ed.; Jones v. Gibbons, 9 Ves. 407, 411; Martin v. Mowlin, 2 Bur. 969 ; Green v. Hart, 1 Johns. 580; Parsons v. Welles, 17 Mass. 419.

By the laws of Massachusetts, such a deposit or delivery would not amount to an assignment of a mortgage of real estate; but the objections to such an assignment do not apply to mortgages of personal property. It appears by the *487eases already cited, that the delivery of a note of hand, or other chose in action, to an assignee, for a valuable consideration, without an assignment in writing, is a valid assignment in equity, which courts of law will take notice of and protect. And the assignment of a mortgage of personal' property by delivery stands on the same footing, and is entitled to the same protection. By such an assignment, however, the legal estate did not pass to the plaintiff, and this action could not be maintained in his own name, before the assignment in writing; yet he might maintain an action for the conversion of the property so equitably assigned in the name of Sibley, which action Sibley would have had no right to discharge.

Nor did the title to the mortgaged property pass by the general assignment of Sibley’s property for the benefit of his creditors; and it is manifest, that it was never intended to pass thereby ; for the assignees have settled that concern, and paid over the proceeds of the property assigned:, without claiming the mortgaged property, nor do they now claim it

We are therefore of opinion, that the legal title to the mortgaged property remained in Sibley until he conveyed it to the plaintiff, who had before acquired the equitable title thereto from Reckard.

It was argued by the defendant’s counsel, that the note has been barred by the statute of limitations; but this clearly cannot defeat the plaintiff’s title to the mortgage property, so as to bar the present action.

Judgment for the plaintiff on the verdict.