Ware, J., defines it as "a jus in re, a proprietory interest in the thing, which may be enforced directly against the thing itself by a libel in rem, in whosesoever possession it may be, and to whomsoever the general title may be transferred." The subject was elaborately considered by Curtis, J., on appeal in the same case, 2 Curt. 404. The definition of maritime liens, as stated by Ware, J., was affirmed, and the view of the nature of such liens, as expressed in the case of The Triumph, was shown to be unsound (p. 412). The same view was affirmed in the following year (1856) by the Supreme Court in the case of The Yankee Blade, 19 How. 82, 89, and has since then been universally recognized and followed.

66

In the case of The Lottawanna the Supreme Court say (21 Wall. 579): "A lien is a right of property, and not a mere matter of procedure." Ware, J., in the case of The Paragon, 1 Ware, 322, 330, held, according to this view of such liens, that when all the debts hold the same rank of privilege, if the property is not sufficient to fully pay all, the rule is that creditors shall be paid concurrently, each in proportion to the amount of his demand." Lowell, J., in the case of The Fanny, 2 Low. 508, says: 'The general rule in admiralty is that all lienholders of like degree share pro rata in the proceeds of the res, without regard to the date of their libels if all are pending together." The same view was taken by Judge Hall in the case of The America, 16 Law Rep. 264, 271. So in the cases of The Superior, 1 Newb. 176; The Kate Hinchman, 6 Biss. 367; The General Burnside, 3 Fed. Rep. 228, 236; The Arcturus, 18 id. 743; The Desdemona, 1 Swabey, 158, it was held that concurrent liens of the same rank should be paid pro rala, where the proceeds were insufficient to pay all, without regard to the date of the libel or the attachment of the vessel by either. Roscoe Adm. 101. Such is the provision also of the French law. Code de Com. 191.

The precise question here presented has not, so far as I can ascertain, arisen of late years within this district. In the eastern district, in the case of The Samuel J. Christian, 16 Fed. Rep. 796, the question seems to have been regarded by Benedict, J.,' as an open one. He there held that a lien for damages by collision was subject to the prior claims of material men, and did not acquire any priority over the latter through the prior filing of the libel; and he concludes his opinion by saying that "it is unnecessary to consider the question whether as between claims of equal rank a prior seizure of the vessel secures priority in the distribution of the proceeds."

The recent decision in the Circuit Court in this district however in the case of The Frank G. Fowler, 17 Fed. Rep. 653, accords in principle with the several cases recently decided, to which I have above referred, holding that mere priority of attachment does not entitle to a preference. That decision seems to me plainly incompatible with the rule adopted in the cases of The Triumph and The Globe,supra, and with the views upon which that rule was founded. In the case of The Fowler, damages in favor of different lienors had accrued by two collisions upon successive voyages of the same vessel. The libel for the last collision was filed three days before the libel for the previous collision; but the attachment of the vessel by the marshal was made upon both processes at the same time. The proceeds of sale being insufficient to pay both claims, this court held, for reasons which need not be here referred to, that the liens should he paid in the inverse order of the time at which they accrued. 8 Fed. Rep 331. On appeal, Blatchford, J., reversed this ruling, and held that the earlier damage should first be paid in full. Had the rule of priority depended upon the time of filing the libel, the judgment of the District Court should have been affirmed, since the libel on the last

lien was first filed; had priority depended upon the time of the arrest of the vessel alone, then, as the arrest upon both libels was at the same time, and the claims were of the same rank, neither had priority of the other, and the proceeds should have been divided pro rata between them. Neither of these courses was pursued. The decision, on the contrary, in awarding priority to the earlier lien, established for this Circuit the principle, which has been repeatedly affirmed elsewhere, that a lien is a vested proprietary interest in the res itself, from the time when it accrues; and also that failure to enforce such a lien by immediate suit, before the vessel proceeds on another voyage, is neither laches nor sufficient, by any equity or rule of policy, to displace its priority, as a vested proprietary interest, over a subsequent lien of the same rank upon which the vessel is arrested at the same time. The former rule in this district, which inade priority among liens of the same rank depend upon the date of filing the libel, or the arrest of the vessel in the proceeding to enforce it must be regarded therefore as superseded; not merely because the foundation upon which that rule rested has been wholly swept away, but also because the rule adopted by the Circuit Court in the case of The Frank G. Fowler is incompatible with its longer exist

ence.

Viewing maritime liens therefore as a proprietary interest in the vessel itself, and the filing of the libel and seizure of the vessel as proceedings merely to enforce a right already vested, it follows necessarily that as between different lienors any proceeds in the registry should be distributed according to the rightful priorities of the liens themselves, and not according to priority of the proceedings merely to enforce them. This rule permits all the equities of such liens to be considered and enforced, instead of subordinating these equites to a mere race of diligence.

Where the liens are of the same rank there is often an equitable priority among them arising out of the character of the liens themselves, or the time when they accrued. A later lien for salvage is entitled to priority over a former salvage, because the last service has preserved the benefit of the former. The same is true of successive repairs of a vessel on different voyages, or on different parts of the same voyage, or of liens on successive bottomry bonds. The later improvements or advances are for the preservation the former, or for further improvements upon the vessel; and they have therefore an equitable priority. As regards such liens therefore the rule is that they shall be discharged in the inverse order of their dates. 3 Kent, 197; The Eliza, 3 Hagg. 87; The Rhadamanthe, 1 Dods. 201; The Bold Buccleugh, 7 Moore P. C. 267; The St. Lawrence, 5 Prob. Div. 250; The Fanny, 2 Low. 508: The Jerusalem, 2 Gall. 345; The America, 16 Law Rep. 273; Roscoe, Adm. 98; The De Smet, 10 Fed. Rep. 489, note.

of

If the liens are of the same rank and for supplies, or materials, or services in preparation for the same voyage, or if they arise upon different bottomry bonds to different holders for advances at the same time, for the same repairs, such claims are regarded as contemporaneous and concurrent with each other,and they will be discharged pro rata. The Exeter, 1 C. Rob. 173; The Albion, 1 Hagg. 333; The Desdemona, 1 Swab. 158; The Saracen, 2 Wm. Rob. 458; The Rapid Transit, 11 Fed. 322, 334, 335; The Paragon, 1 Ware, 325, and cases first above cited. But if the liens arise from causes which are of no benefit to the ship, such as liens for damages by collision, or other torts, or negligence; and if the claims are such as cannot be treated as contemporaneous or concurrent; and if there are no equitable grounds for preferring the later liens, such as laches in the enforcement of prior ones, or other grounds of general policy-then, as stated by Story,J.,

in the case of The Jerusalem, "the rule would seem to apply qui prior est tempore, potior est jure" (2 Gall. 345, 350), and the liens should be satisfied in the order in which they accrue, as was held in this Circuit in the case of The Frank G. Fowler, supra; Macl. Shipp. 702, 703.

As maritime liens are secret incumbrances, and tend to mislead those who subsequently trust to the ship, unless they are enforced with diligence, according to the circumstances and the existing opportunities for enforcing them, they will be deemed either abandoned through laches as against subsequent lienors or incumbrancers, or postponed to the claims of the latter, as circumstances may require. There is no fixed rule applicable to all cases determining what shall be deemed a reasonable time, or what shall be considered as laches in enforcing such liens. In ordinary ocean voyages the preference allowed even to bottomry will be lost after a subsequent voyage, if reasonable opportunity previously existed for the arrest of the ship. Blaine v. The Carter, 4 Cranch, 332; The Royal Arch, 1 Swab. 269-284; The Rapid Transit, 11 Fed. Rep. 322, 334. Betts, J., held that the same rule should be applied to ordinary liens for supplies. The Utility, Blatchf. & H. 218, 225; The Boston, id. 309, 327. If this rule were strictly applied to vessels which make very short and frequent voyages, of only a few days' or a few weeks' duration, and which remain in port but a short time between such trips, the effect would be practically to destroy all credit to the ship, and to defeat therefore the very object for which maritime liens are allowed; since every lienor would be compelled to enforce his lien almost immediately, or run the risk of having it postponed to all subsequent ones. As respects liens arising in the course of navigation on the western lakes and rivers, where the voyages are short and frequent, the rule has been adopted to a considerable extent of making the division of claims by the successive open seasons of navigation, instead of by the separate voyages during each season. The Buckeye State, 1 Newb. 111; The Dubuque, 2 Abb. (U.S.) 20, 32; The Hercules, 1 Brown, Adm. 560; The Detroit, id. 141; The Athenian, 3 Fed. Rep. 248; The City of Tawas, id. 170; The Arcturus, 18 id. 743, 746. The uniform practice therefore has been there adopted of paying maritime liens for repairs and supplies accruing during the same season pro rata, without regard to the particular date or voyage at which they accrued. The Superior, 1 Newb. 176, 185; The Kate Hinchman, 6 Biss. 367; The General Burnside, 3 Fed. Rep. 228, 236; The Athenian and The City of Tawas, ut supra.

While this rule is neither strictly logical nor consistent with the theory of beneficial liens, yet, as applied to short and frequent voyages during the open season of each year, it is not merely convenient in application, but on the whole, as I think, it works out practical justice better than any other rule suggested. It occupies a middle ground, and is in effect a compromise between the theoretical right of priority of the material-man who furnishes supplies for the last voyage, on the one hand, and the corresponding obligation on his part to prosecute at once in order to retain that priority which commercial policy would disallow. The season of navigation is regarded as in the nature of a single voyage; and the rules applicable to a single ocean voyage are applied, as regards liens for supplies, to the navigation of a whole season. The City of Tawas, 3 Fed. Rep. 170, 173.

As respects liens arising under the State laws the decisions are at variance whether such liens stand upon the same footing as strictly maritime liens. While the greater number of decisions do not allow the same status to statutory liens (The Superior, 1 Newb. 176; The E. A. Barnard, 2 Fed. Rep. 712, 721, 722, and cases

there cited), the contrary view, according to later decisions, placing both on the same footing, seems the more likely to prevail. The General Burnside, 3 Fed. Rep. 228; The Guiding Star, 18 id. 263.

As the best practical rule attainable in such cases, and as a rule already supported by many decisions in the western districts, I think the pro rata rule of distribution should be adopted here as respects beneficial liens of the same class, in the case of canal boats and other similar craft which make short and frequent trips upon the canals and rivers, and are laid up during the winter season, when the canals and rivers are frozen over. The same considerations of convenience, justice and policy apply to this class of cases as in navigation upon the great lakes. They cannot be applied however to other craft navigating about this port, making short ocean voyages without interruption the year round.

The towage services rendered in this case hold the same rank as claims for necessary materials and supplies (The City of Tawas, 3 Fed. Rep. 170; The St. Lawrence, 5 Prob. Div. 250; The Athenian, 3 Fed. Rep. 248; The Constantia, 4 Notes Cas. 512; Macl. Shipp. 703), and on the above rule the claims should be paid pro

rata.

In one of the bills there is a credit of $130. This credit should be applied upon the earliest items. The costs of the first libel should first be paid out of the fund, and the residue should be divided pro rata between the claimants without regard to the dates during the season at which they accrued.

Where there are various lienors entitled to the fund, that the fund is small, no costs after the first libel beyond necessary disbursements should be allowed out of the fund. The Jerusalem, 2 Gall. 351; The Kate Hinchman, 6 Biss. 369; The Guiding Star, 18 Fed. Rep. 269. See The De Smet, 10 Fed. Rep. 490, note. Bonds for latent claims are not now required, except on special order, even in the English practice (Rule 29, Coote, Adm. Pr. 205; The Desdemona, 1 Swab. 159) and other parties, if any, who have liens, but have not appeared under the monition and after due publication, will be barred from the time of the final decree of distribution. The Saracen, 2 Wm. Rob. 451, The City of Tawas, 8 Fed. Rep. 170.

Since the foregoing was written I nave consulted the Circuit judge, and am authorized to say that a decision to the same substantial effect has been heretofore made by him in a case arising in the Northern district.

GIFT-SAVINGS BANK DEPOSIT-TRUST.

SUPREME COURT OF VERMONT.

POPE V. SAVINGS BANK.*

B., the plaintiff's executor, deposited $800 in the defendant savings bank in the name of C., but payable to himself. He took a deposit book, which he kept and controlled. He withdrew a little more than half of it, and in a few months directed the treasurer of the bank to add to the first entry, "Payable to S. Barlow," so as to make it read, "Payable to S. Barlow, during his life and after his death to Marion Cushing." B. made his will before the deposit, in which was this provision: "I hereby confirm all gifts I have made or shall make to any of my children." C. was a grandchild. It did not appear that B. did or said any thing else in relation to the deposit, or that indicated an intention to hold the pass book in trust for C. A bylaw printed in the pass book provided that no deposit could be withdrawn without the production of the book. The bank had no communication with C., and understood

*To appear in 56 Vermont Reports.

A

SSUMPSIT brought in the City Court of Burlington by the executor of Sidney Barlow's will against the defendant, in which action Marion Cushing was cited to appear as claimant under § 3578, R. L. Judgment for the plaintiff.

By the custom of the bank, to prevent frauds in case of loss of deposit book, no name of a depositor appeared on their deposit book, but merely a number. On a register, kept in the bank, these numbers were inscribed and against each number were seperate columns for the names, residence, occupation, age and date of birth of the depositor, together with such remarks or conditions as to the deposit as were directed to be entered.

Mr. Barlow made or executed no writing in respect to this deposit at any time or on said book, or the books of the bank; nor was there any evidence that he made any entry anywhere in respect to this deposit, except that some time before his death, it did not appear when, he wrote the initials M. C. in pencil upon the cover of the deposit book as they now appear; and these initials indicate the name of Marion Cushing.

The other facts are sufficiently stated in the opinion

of the court.

Roberts & Roberts, for claimant.

A. G. Safford, for certain heirs of B.

VEAZEY, J. I. The deposit by Barlow in the name of Marion Cushing, the claimant, cannot be sustained as a gift inter vivos. It was his money, and although deposited in her name, it was made payable solely to himself during his life, he retaining the pass book and having absolute control of the deposit, and she being neither a party to nor having any knowledge of the transaction. Where there are no conditions to a gift an acceptance may be implied; but a delivery is an indispensable requisite in order to constitute a completed gift; and as a general rule it must be such a delivery as terminates the donor's possession and dominion and control of the article. "A declaration of an intention to give is not a gift." "The donor must be divested of, and the donee invested with the right of property."

Appleton, C. J., in Northrop v. Hale, 73 Me. 66: "to constitute a donation inter vivos there must be a gift, absolute and irrevocable, without any reference to its taking effect at some future period. The donor must deliver the property, and part with all present and future dominion over it." Shepley, C. J., in Dole v. Lincoln, 31 Me. 428; Taylor v. Henry, 48 Md. 550; 2 Kent Com. 438.

In this State and some others this rule has not been rigidly adhered to in one class of cases, viz.: Where there is a donation of money or evidence of indebtedness, like notes or bonds, and the gift is perfect in all other respects, it is not defeated after the decease of the donor by a right reserved to recall a part or the whole of the gift during his life. Such a reservation is regarded as optional and personal to the donor, and the right expires with his life, and if not exercised, then by his death the gift is freed from the condition of defeasance, and the right of the donor becomes absolute. It is not strictly a modification of the general rule; because it is, in essence, a gift in trust, absolute and complete in respect to delivery, but providing, as

in all cases of trust, what the trustee shall do with the money. The provision that a part or the whole shall be subject to the use and call of the donor during his life, does not defeat the gift as to the part which remains at his decease. The donor by the transfer and actual delivery divests himself of the possession and title, subject only to be brought back into his estate by recall. This is the doctrine of Blanchard v. Sheldon, 43 Vt. 512; and Barlow v. Loomis, lately decided in the United States Circuit Court of this district. See also Davis v. Ney, 125 Mass. 590. Whether under the authority of these cases the transaction would have constituted a perfected gift inter vivos, if Barlow had delivered the deposit book to this claim ant, or some other person in trust, is not the question in the case at bar. Here there was no delivery whatever. If the deposit had been made in such a way and with such an understanding with the bank as to place it beyond recall or control of Barlow, then the transaction might, under the authority of Howard v. Savings Bank, 40 Vt. 597, be upheld as a complete gift, notwithstanding Barlow kept the deposit book. But the bill of exceptions in this case fails to bring it within the theory upon which that case was-decided.

II. Can this transaction be sustained as a trust, the bank being the trustee? This depends, first, on the relation between a depositor in a savings bank and the bank. Is it a trust relation or a debt and credit relation?

In a certain class of cases involving the question whether a savings bank could be taxed on its securities; and others, where the bank had become insolvent, and its business was being closed up by a receiver, and questions arose between the rights of depositors and creditors, courts have said, that as the design of the Legislature in granting the charter was to promote industry and frugality, and preserve the fruits of honest toil by enabling persons to invest in a safe and profitable manner, and contemplated no benefit to the managers, but looked only to the security and advantage of the depositors, a trust of a general or public character was created. Stockton v. Mechanics', etc., Bank, 32 N. J. Eq. 163, is an illustrative case of this kind.

Savings banks are not unfrequently called trustees in this class of cases; but I find no case where it is held that the relation of the bank to the depositor is a pure trust relation; but on the other hand it was lately decided in People v. Savings Institution, 92 N. Y. 7, that the primary relation of a depositor in a savings bank to the corporation, is that of creditor and not that of a beneficiary of a trust; that the deposit when made becomes the property of the corporation; that the depositor is a creditor for the amount of the deposit, which the corporation becomes liable to pay according to the terms of the contract under which it was made; that there is nothing like a private trust between the corporation or its trustees and the depositors, in respect to the deposits.

In Ide v. Pierce, 134 Mass. 260, it was held that money deposited in a savings bank, unless there is an agreement to the contrary, becomes the property of the bank, and the bank becomes a debtor therefor. We think this is the correct view. All the deposits are intermingled. The bank handles and invests them in its own name and as its own funds. No deposit could be traced. The recovery of a deposit by a depositor would be by suit at law, as in this case, not by bill in chancery to enforce a trust. It is not apparent what advantage could accrue to depositors from a trust relation. The managers are accountable then for their administration as trustees, the same as the managers or directors of a stock company are accountable to the stockholders.

Th statute, § 3575 R. L., provides an easy method of

making a deposit a trust for another, which was in force when the deposit in question was made. If a deposit in the depositor's name does not create a trust relation, no more would that relation be created by depositing in another person's name, or making it payable to another's order. The claimant therefore cannot stand on the ground that the bank became a trustee when the deposit was made without any declaration of trust.

III. But it is further insisted in behalf of this claimant, that the transaction created a trust between her and Barlow; that is, that the latter held the bank pass book as trustee for the claimant.

The general doctrine is now settled that a perfect and completed trust is valid and enforceable, as between the trustee and beneficiary, although purely voluntary. It is not essential that the beneficiary should have had notice. But a voluntary trust which is still executory, incomplete, imperfect, or promissory, will neither be enforced nor aided. A perfect or completed trust is created where the donor makes an unequivocal declaration, either in writing or by parol, that he himself holds the property in trust for purposes named. He need not in express terms declare himself trustee; but he must do something equivalent to it, and use expressions which have that meaning. If the intention is to make such a transfer as would constitute a gift, but the transaction is imperfect for this purpose, the court will not hold the intended transfer to operate as a declaration of trust; "for then every imperfect instrument would be made effectual by being converted into a perfect trust."

The act constituting the transfer must be consummated, and not remain incomplete or rest in mere intention; and this is the rule whether the gift is by delivery only, or by the creation of a trust in a third person, or in creating the donor himself a trustee. "An imperfect voluntary assignment will not be regarded in equity as an agreement to assign for the purpose of raising a trust."

In order to render a voluntary settlement valid and effectual, as a trust, it must appear from written or oral declaration, from the nature of the transaction, the relation of the parties and the purpose of the gift, that the fiduciary relation is completely established. These propositions are established in numerous cases. See Milroy v. Lord, 4 De G. F. & J. 264; Richards v. Delbridge, L. R., 18 Eq. 11; Heartley v. Nicholson, L. R., 19 Eq. 233; Young v. Young, 80 N. Y. 422 (citing many cases); Martin v. Funk, 75 id. 134; Webb's Est., 49 Cal. 541; Stone v. Hackett, 12 Gray, 227; 2 Pom. Eq., $996, et seq.; Urann v. Coates, 109 Mass. 581; Gerrish v. Bank, 128 id. 159; Clark v. Clark, 108 id. 522; Ray v. Simmons, 11 R. I. 266; Minor v. Rogers, 40 Conn. 512.

In the light of these settled rules, and of what Barlow did, the question is whether what he said constituted a declaration of trust. As stated by Lord Cranworth in Jones v. Lock, L. R., 1 Ch. App. 25: "The cases all turn upon the question whether what has been said was a declaration of trust, or an imperfect gift."

On the 15th day of January, 1880, Sidney Barlow deposited in the defendant bank $800, of his own money, and took therefor deposit book No. 10,973, issued by the bank, which he always kept and controlled. No name of a depositor appeared on any deposit book, but merely a number. He directed the treasurer to enter the name, Marion Cushing, this claimant, on the bank register as the person in whose name the deposit was made, and to enter, "Payable to S. Barlow"; and this was done.

In March and June following Barlow borrowed sums of money from this bank, giving his individual notes therefor, and pledging this pass-book as security; and

when the notes became due he withdrew from this deposit to apply in payment of the notes a sum which left the balance of the deposit less than $400. On August 20, 1880, Mr. Barlow, being in ordinary health, verbally directed the treasurer to add to the said entry. "Payable to S. Barlow," so as to make it read as follows: "Payable to S. Barlow during his life and after his death to Marion Cushing," which was done. It does not appear that any thing else was ever said or written by Mr. Barlow to any one in respect to this deposit, or his intentions in regard to it. A by-law printed in said pass-book provided that no deposit could be withdrawn without the production of this book. The treasurer understood this deposit was under Barlow's control, and regarded and treated him as the depositor and that it was his money; and the bank had no communication with Miss Cushing or any one else in respect to it. Nothing else occurred in regard to it previous to his death. He left a will, made before this deposit, in which was this provision: "I hereby confirm all gifts I have made or shall make to any of my children." Marion Cushing was a grandchild, living in California.

The money deposited was Barlow's. The pass-book was the evidence of the deposit, and took the place of the money in his hands. No species of property could be more easily transferred or delivered. Nothing was said indicating an intention to hold the book in trust other than the direction to make said entry on the bank register.

In Taylor v. Henry, 48 Md. 550, one H. deposited in a bank a sum of money belonging to himself, to the credit of himself and his sister M., so that the account was entered, "H. M. and the survivor of them, subject to the order of either, received $1,850." A short time after, H. drew out $50, and died in about a month, leaving the $1,800 on deposit. Held, that since H. retained the power and dominion over the money, there was not a complete gift, and the transaction did not constitute a valid declaration of trust in M.'s fa

vor.

Other leading cases to the same import are Mitchell v. Smith, 4 De G. J. & S. 422; Scales v. Maude, 6 De G. M. & G. 43; Jones v. Lock, L. R., 1 Ch. App. 25; Heartley v. Nicholson, L. R., 19 Eq. 233; Young v. Young, 80 N. Y. 422.

In Martin v. Funk, supra, cited by counsel for this claimant, the depositor declared at the time that she wanted the account to be in trust for the plaintiff (who was so claiming it), and it was so entered.

In Barker v. Frye, 75 Me. 29, the depositor informed the treasurer of the bank that she desired to make a deposit for each of four grandchildren, naming B. as one of them, to which she proposed to make additions, etc., and saying, "she wanted to do something for the children;" and took pass books in their names, though subject to the order of the depositor during her life-time.

In these cases it was held that the deposit created a valid trust, the depositors holding the pass books as trustees, but they differ from the case at bar: In the New York case there was a plain declaration of trust; in the Maine case the declaration, though not of a trust in terms, strongly imports the intent to create one. Two English cases, not cited by the claimant but tending to support her claim of a trust, viz.: Richardson v. Richardson, L. R., 3 Eq. 686, and Morgan v. Malleson, L. R., 10 Eq. 475, have been repeatedly criticised in this country and England, and are regarded as contrary to the doctrine settled by the weight of authority, and virtually overruled.

There is in other cases an apparent lack of harmony in some respects; notably as to the importance of notice to the beneficiary, and as to the effect of the do

NEW JERSEY COURT OF CHANCERY. MIDDLESEX FREEHOLDERS V. STATE BANK.* In April, 1877, one Short recovered a judgment at law against the defendants' receiver. He gave to his attorney a note for his costs and professional services in that action and in a foreclosure suit then pending in this court, and agreed that the attorney should hold the judgment as collateral security for the note. Short died in June, 1877, and nothing has ever been paid on account of the note. In August, 1878, the receiver obtained a decree for deficiency, against Short, in the foreclosure suit. Held, that the attorney was entitled to receive from the receiver payment of the costs of the suit at law, in full, with interest from the date of the judgment, and that he was entitled to receive the dividends on the rest of that judgment, or so much of them as will be sufficient to pay his note and interest, the receiver's claim to offset the decree for deficiency against the judgment being disallowed.

ON petition and stipulation as to facts and affidavits.

W. Strong, petitioner, in pro. pers.

A. V. Schenck, for receiver.

THE CHANCELLOR. James Short recovered a judgment in the Middlesex Circuit Court, April 24, 1877, against the receiver of the State Bank at New Brunswick, for $312.99 damages, and $66.33 costs, in an action of assumpsit brought against him by the bank before the appointment of the receiver. The suit was pending when the receiver was appointed, and he was substituted as plaintiff. Short's judgment was upon his set-off in the suit. The petitioner was his attorney in that suit.

In May, 1877, Short gave to the petitioner, for the amount of his counsel fee ($175) and costs ($66.33) in that suit, and his fee ($30) for his professional services in a foreclosure suit brought by Joseph Fisher against him, his note, dated the 31st of that month, for $221.33, payable at two months from date. Within a few days after the recovery of the judgment, and before the giving of the note, it was agreed between the petitioner and Short that the former should hold the judgment as collateral security for his whole claim against the latter (the items first mentioned), and that if he should be able to collect the money due thereon he should retain the amount due him (unless he should have previously received it from Short), and should pay over to Short the balance. Short died intestate June 19, 1877. He never paid the petitioner's claim nor anything on account of it. When the judgment was recovered there was pending in this court a foreclosure suit (the one before mentioned), brought by Joseph Fisher against Short, on a mortgage given by the latter to the bank and assigned by it to Fisher merely for the purpose of foreclosing it in his name. In * 11 Stew. N. J. (Eq.) 36.

that suit a final decree for foreclosure and sale of the mortgaged premises was made February 19, 1877. The decree also contained the usual decree for the payment of deficiency by Short. Execution for the sale of the mortgaged premises was issued April 20, 1877, and the property was sold under it November 13, 1877. The deficiency was not ascertained until August 19, 1878, when an order was made establishing it at $3,685.36, and directing that execution issue against Short to collect it. Short died, as has been stated, in June, 1877, which was long before the deficiency was ascertained. His administratrix, under the order of this court to limit creditors in this cause, in August, 1877, presented to the receiver her claim, under oath, to the money due on the judgment in the Circuit Court, subject to the petitioner's claim. It is understood that though the receiver has paid dividends to the creditors whose claims have been allowed, he has paid none on the Short claim, but has retained the dividends thereon in his own hands to await the judicial determination of the questions which are now before me. The petitioner insists that he is entitled to receive from the receiver the amount of the costs of the judgment in full, with the lawful interest thereon. and also dividends at the same rate as those paid to the other creditors upon the rest of the amount of the judgment. The receiver, on the other hand, claims that he has a right to set off so much of the decree for deficiency as is necessary for the purpose, against the judgment, and that under the circumstances the petitioner has no claim or equity superior to his.

The assignee of a judgment, who acquired his title to it before the recovery of a judgment by the defendant in the assigned judgment against the plaintiff therein, has an equity superior to such defendant's claim to set off the one judgment against the other. The agreement between debtor and creditor that the latter shall have a claim on a specific fund for the payment of his debt operates as an appropriation of the fund pro tanto to the payment of the debt, and as an equitable assignment of the fund to that extent. And the assignment of a chose in action may be by parol. In the case in hand it was agreed between Short and the petitioner that the latter should have a lien upon the judgment for the amount due him from the former. At that time the receiver had no judgment against Short, for the decree for deficiency in the foreclosure suit had not the force and effect of a judgment at law until the time when the amount of the deficiency was ascertained, which was not until August, 1878. The equity of the petitioner is superior to that of the receiver. He is entitled to payment of the costs of the judgment in full, with interest thereon from the date of the recovery of the judgment. They are costs which were awarded against the receiver in a suit prosecuted by him for the benefit of his trust, and were payable at once and in full. The petitioner is entitled to the dividends on the rest of the amount of the judgment, or so much of them as will be suffi cient to pay the balance due him from Short's estate on the note. In view of the fact that the assignment was by parol, merely, and therefore the receiver could not safely recognize the petitioner's rights without the direction of the court, no costs should be allowed to the petitioner.

NOTE. In the King's Bench, in England, the rule is that judgment between the parties cannot be set off so as to deprive the attorney of his lien for costs, Mitchell v. Oldfield, 4 T. R. 123; Randle v. Fuller, 6 id. 456; Glaister v. Hewer, 8 id. 69; Middleton v. Hill, 1 M. & S. 240; Mellville v. Leesom, 1 E., B. & E. 324; Simpson v. Lamb, 7 E. & B. 84; see Mercer v. Graves, L. R., 7 Q. B. 499.

But the rule is otherwise in the Common Pleas,