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owner of the obligation that he had the ability, though not the right, to destroy the assignee’s right under the power of attorney; he had only to execute a release of the obligation, which would, of course, be a bar to any subsequent action by the assignee, in the assignor’s name, against the obligor, even though the latter were a party to the wrong. Such a destruction of the assignee’s right would be a tort, and a court of equity would, at the instance of the assignee, either restrain its commission or compel the assignor to surrender to the assignee whatever he had collected of the obligor. This is the real significance of the statements, sometimes made, that a power, though revocable at law, is irrevocable in equity, and that a chose in action is assignable in equity, although not assignable at law. In the absence of any actual or threatened tort the assignee of a chose in action was entitled to no relief in equity; and for the simple reason that he could, by virtue of his power of attorney, enforce payment of his claim at common law. It seems clear, therefore, that, even though the assignor committed a breach of trust in granting to the assignee this power of reducing the chose in action to possession, a court of equity ought not to deprive him of it, if acquired by honest purchase. If this principle is sound in the case of an assignee whose power is only to sue in the name of the assignor, it applies a fortiori in favor of an assignee, who, by statute, is permitted to sue in his own name. The authorities are, however, hopelessly irreconcilable. In England the assignee finds no protection, whether the assignor was an express trustee or a constructive trustee, e.g., a fraudulent assignee. In this country, on the other hand, as also in Scotland, the assignee is, as a rule, protected from all latent equities (except, of course, those in favor of the obligor). The English rule that the assignee takes subject to latent equities is followed in New York; but a qualification is made in favor of an assignee whose assignor is himself an
- Cator v. Burke, 1 Bro. C. C. 434; Hammond v. Messenger, 9 Sim. 327; Hayward v. Anderson, 106 U.S. 672; Walker v. Brooks, 125 Mass. 241.
- Moore v. Jervis, 2 Coll. 60; Brandon v. Brandon, 7 D., M., & G. 365; Cory v. Eyre, 1 D., J., & S. 149; Re European Bank, 5 Ch. 358.
- Cockell v. Taylor, 15 Beav. 103; Barnard v. Hunter, 2 Jur. n. s. 1213.
- Bell, Principles of Law (6 ed.), 637.
- Cas. on Trusts, 552–553.
- Schafer v. Reilly, 50 N.Y. 61; Trustees v. Wheeler, 61 N.Y. 88, and other cases cited in Cas. on Trusts, 552, n.