chose in action by assignments from the same person, the one prior in point of time will be protected, although he has given no notice of his assignment to either the subsequent assignee or the debtor.

United States. See the reported case (SALEM TRUST Co. v. MANUFACTURERS' FINANCE Co. ante, 867) reversing (1922) 280 Fed. 803. Compare

Judson v. Corcoran (1855) 17 How. 612, 15 L. ed. 231; Spain v. Hamilton (Spain v. Brent) (1863) 1 Wall. 623, 17 L. ed. 625; Laclede Bank v. Schuler (1887) 120 U. S. 511, 30 L. ed. 704, 7 Sup. Ct. Rep. 644; Re Gillespie (1883) 15 Fed. 734; Methven v. Staten Island Light, Heat & P. Co. (1895) 13 C. C. A. 362, 35 U. S. App. 67, 66 Fed. 113; Third Nat. Bank v. Atlantic City (1903) 126 Fed. 413, reversed on other grounds in (1904) 65 C. C. A. 177, 130 Fed. 751; Re Hawley Down-Draft Furnace Co. (1916) 233 Fed. 451 (decision based on Pennsylvania law); Re Leterman, B. & Co. (1919) 171 C. C. A. 327, 260 Fed. 543, certiorari denied in (1919) 250 U. S. 668, 63 L. ed. 1198, 40 Sup. Ct. Rep. 14.

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New York. Bush v. Lathrop (1860) 22 N. Y. 546; Williams v. Ingersoll (1882) 89 N. Y. 523; Fairbanks v. Sargent (1887) 104 N. Y. 108, 56 Am. Rep. 490, 9 N. E. 870; Owen v. Evans (1892) 134 N. Y. 514, 31 N. E. 999; David Stevenson Brewing Co. v. Iba (1898) 155 N. Y. 224, 49 N. E. 677; Central Trust Co. v. West India Improv. Co. (1901) 169 N. Y. 324, 62 N. E. 387; Columbia Bank v. Equitable Life Assur. Soc. (1901) 61 App. Div. 594, 70 N. Y.

Supp. 767; Manufacturers' Commercial Co. v. Rochester R. Co. (1909) 117 N. Y. Supp. 993; Muir v. Schenk (1842) 3 Hill, 228, 38 Am. Dec. 633; Fortunato v. Patten (1895) 147 N. Y. 283, 41 N. E. 572, reversing (1893) 5 Misc. 234, 25 N. Y. Supp. 333. See also Hopkins v. Banks (1827) 7 Cow. 650; Niles v. Mathusa (1900) 162 N. Y. 546, 57 N. E. 184; Blanchard v. Evans (1888) 23 Jones & S. 543, 18 N. Y. S. R. 453. Compare Parks v. Innes (1860) 33 Barb. 37.

Oregon. See Meier v. Hess (1893) 23 Or. 599, 32 Pac. 755 (dictum). Texas.-Brander v. Young (1854) 12 Tex. 332; Harris County v. Campbell (1887) 68 Tex. 29, 2 Am. St. Rep. 467, 3 S. W. 243; Henke & Pillot v. Keller (1908) 50 Tex. Civ. App. 533, 110 S. W. 784; Hess & S. Engineering Co. v. Turney (1919) 110 Tex. 148, 216 S. W. 621, modifying (1918) Tex. Civ. App. —, 207 S. W. 171.

West Virginia. Tingle v. Fisher (1882) 20 W. Va. 497. See also Clarke v. Hogeman (1878) 13 W. Va. 718 (dictum); Turk v. Skiles (1898) 45 W. Va. 82, 30 S. E. 234 (dictum). Canada. National Trust Co. v. Trusts & Guarantee Co. (1912) 26 Ont. L. Rep. 279, 22 Ont. Week. Rep. 933, 5 D. L. R. 459.

In Hess & S. Engineering Co. v. Turney (1919) 110 Tex. 148, 216 S. W. 621, modifying (1918) Tex. Civ. App. 207 S. W. 171, the court said: "In our opinion the rule is sound which gives priority in rank to equitable assignments in the order of their dates, without regard to notice to the debtor. . . The debtor is fully protected because he is not affected by the assignment until notified, and the subsequent assignee, in dealing with a chose in action, is chargeable with knowledge that he can get no better right than that of his assignor. It increases uncertainty in the law's administration to substitute the date of notice to the debtor as the test of priority for the date of assignment; and we can see how grave harm would follow for us to now depart from our thoroughly established simple test of priority in

right from priority in time of the assignment."

"The rule as to the priority of the rights of several assignees of a fund is that the priority of the assignment, and not that of its notice to the fund holder, controls." Riensch v. Naylon (1908) 51 Tex. Civ. App. 45, 110 S. W. 781.

In Central Trust Co. v. West India Improv. Co. (1901) 169 N. Y. 314, 62 N. E. 387, the court said: "It is further the settled law of this state, though a different rule prevails not only in England, but in the Federal courts and in some of the states, that a bona fide purchaser for value of a chose in action takes it subject not only to the equities between the parties, but also to latent equities in favor of third persons, and that to secure his superiority it is not necessary that the earlier assignee should give any notice of his assignment to the debtor or trustee."

However, in Parks v. Innes (N. Y.) supra, a distinction was made between assignments of legal and equitable interests, and with respect to the latter it was held that a second assignee who first gave notice to the trustee had a right superior to that of the first assignee.

In Columbia Finance & T. Co. v. First Nat. Bank (1903) 116 Ky. 364, 76 S. W. 156, it was said: "The rule of caveat emptor applies to sales of choses in action as in other sales of personal property, and, if the seller has sold the thing to one person, and therefore has no title to pass to a second, the latter takes nothing by his purchase."

Moreover, in Massachusetts, a first assignment of a chose in action, though made for a pre-existing debt, takes precedence over a later assignment of which the debtor is first given notice. Putnam v. Story (1882) 132 Mass. 205.

Even in a jurisdiction where the minority view prevails, it has been held that a second assignee, who first gives notice to the obligor, is preferred to a first assignee who is negligent not only in failing to give notice to the obligor, but also in failing 31 A.L.R.-56.

to take possession of the written evidence of the obligation. Herman v. Connecticut Mut. L. Ins. Co. (1914) 218 Mass. 181, 105 N. E. 450, Ann. Cas. 1916A, 822 (decision with respect to assignments of an insurance policy).

In a New York decision by a special term of the supreme court it has been held that an assignment of a month's wages with the name of the month left blank, a later exercise of the authority to fill in the name of the month by the assignee, and notice by him to the debtor, did not give the assignee priority over a later assignee who received an assignment covering the same month and gave notice thereof to the debtor before the blank was filled or notice given by the first assignee. Erie R. Co. v. Smith (1910) 68 Misc. 136, 123 N. Y. Supp. 973, affirmed in (1911) 144 App. Div. 911, 128 N. Y. Supp. 1122.

In the reported case (SALEM TRUST Co. v. MANUFACTURERS' FINANCE Co. ante, 867) reversing (1922) 280 Fed. 803, the Supreme Court of the United States holds that mere priority of notice to a debtor on the part of a second assignee of a chose in action will not, in the absence of inquiry of the debtor, entitle him to priority over the first assignee. The court declares that there is no decision of the Supreme Court sustaining the contrary view. And, considering separately the cases of Judson v. Corcoran (1855) 17 How. (U. S.) 612, 15 L. ed. 231, Spain v. Hamilton (Spain V. Brent) (1863) 1 Wall. (U. S.) 604, 17 L. ed. 619, and Laclede Bank v. Schuler (1887) 120 U. S. 511, 30 L. ed. 704, 7 Sup. Ct. Rep. 644, it is said of each of them that it does not support the doctrine that mere priority of notice by the later of two assignees would confer on him priority of right. The better reasons; says the court, are against such a rule, for the rights of the assignor pass by the first assignment, and a subsequent assignee takes nothing, as there is nothing to give. A second assignee of a chose in action, who relies on the representations of his

vendor and is deceived thereby, cannot, it is held, shift his loss to the first assignee unless the latter is in some way responsible for the deception.

It will be observed, however, that a number of cases from the Federal courts seem to support the majority view as laid down in I., supra, that priority as to notice gives priority of right.

In Methven v. Staten Island Light, Heat & P. Co. (1895) 13 C. C. A. 362, 35 U. S. App. 67, 66 Fed. 113, the court, in discussing and adopting the majority view set forth in I., supra, said that the rule "is in obedience to the general principle which requires that all transfers of property must be rendered as complete as the nature of the action will permit, in order to make them valid as against subsequent bona fide purchasers for valuable consideration without notice."

In the case of Re Gillespie (1883) 15 Fed. 734, the court said: "The first purchaser of the chose in action who neglects to give notice to the debtor, or trustee holding the fund, and does not take possession of the evidence of the debt, acquires but an imperfect title as respects third persons, and by his laches is, in a sense, a contributory party to the fraud perpetrated by his vendor in the subsequent sale to another purchaser of the same debt or fund; and, where the latter has used all due diligence by inquiry and notice, the equity of the latter is to be preferred over that of the former."

The time of the receipt of a notice, and not the time of its posting, determines the priority between different assignees. Re Leterman, B. & Co. (1919) 171 C. C. A. 327, 260 Fed. 543, certiorari denied in (1919) 250 U. S. 668, 63 L. ed. 1198, 40 Sup. Ct. Rep. 14. In the case last cited notices sent by registered mail were presumed to have been received later than notices posted on the same day, but not registered.

The general question whether a preexisting debt is a valuable consideration is one on which the courts in

different jurisdictions are not agreed. As applied to the subject of this annotation the question is not settled. It has been held that priority in the time of giving notice to the debtor of an assignment of a chose in action other than a negotiable instrument does not confer priority of right on a second assignee, who takes the assignment in consideration of a preexisting debt. The Elmbank (1896) 72 Fed. 610. In the case last cited it was held to be immaterial that the first assignment was also in consideration of a pre-existing debt. The court explained that the first assignment was valid as against subsequent assignments, unless the subsequent assignments were made in good faith for a valuable consideration, and that a pre-existing debt is not a valuable consideration for a nonnegotiable obligation.

But in a decision based on the law of Pennsylvania it has been held that a creditor assignee who is the first to give notice to the debtor is in the same position as an assignee for value. Re Hawley Down-Draft Furnace Co. (1916) 233 Fed. 451 (decision with respect to assignments of book accounts).

III. Rule in Indiana and Saskatchewan.

In Indiana and Saskatchewan the view has been taken that, where the debtor has notice of the claims of both assignees before making payment to either, the prior assignee is entitled to the fund, although the subsequent assignee was first to give notice. White v. Wiley (1860) 14 Ind. 497; Re Miller (1908) 1 Sask. L. R. 91.

In White v. Wiley, supra, the court said: "We do not think that the fact that the subsequent assignee first notified the [debtor] of the assignment is of itself sufficient to change the rights of the parties. It is true that if the prior assignee had failed to bring his rights to the knowledge of the [debtor], before the payment of the money to the last assignee, he might, by his neglect, have rendered those rights of no avail."

IV. What law governs.

As the question under discussion is one of general jurisprudence, the Federal courts are not controlled by the decisions of the highest court of the state wherein they sit. Methven v. Staten Island Light, Heat & P. Co. (1895) 13 C. C. A. 362, 35 U. S. App. 67, 66 Fed. 113. See also the reported case (SALEM TRUST Co. v. MANUFACTURERS' FINANCE Co. ante,

867).

A stipulation in a contract of assignment that it is to be construed according to the law of a certain state is not binding as against a subsequent assignee. A Federal court will disregard such a stipulation in passing on the rights of a subsequent assignee, who is the first to give notice to the debtor. Re Leterman, B. & Co. (1919) 171 C. C. A. 327, 260 Fed. 543, certiorari denied in (1919)

250 U. S. 668, 63 L. ed. 1198, 40 Sup. Ct. Rep. 14.

In Hanna v. Lichtenhein (1918) 182 App. Div. 94, 169 N. Y. Supp. 589, the court stated that where all of the assignments were made in the state of New Jersey the question was controlled by the law of New Jersey. The law of New Jersey, however, was not found to differ from the law of New York.

In Kelly v. Selwyn [1905] 2 (Eng.) Ch. 117, [1905] W. N. 69, 74 L. J. Ch. N. S. 567, 53 Week. Rep. 649, 93 L. T. N. S. 633, it was held that the local law governed where it appeared that the fund was held in the jurisdiction of the forum by virtue of the will of a citizen, that the first assignment was made while the assignor was domiciled in a foreign jurisdiction, and that the subsequent assignment of which notice was given was made in the jurisdiction of the forum.