of his life policy, because they have no right to keep the policy alive.1 The decision in that case was sufficiently favorable to the assignees, because they had not kept the policy alive, and yet claimed its fruits of the bankrupt's wife, who had. But they might, with the consent of the creditors or of the court, have kept it alive, and have collected the full amount, though the statute gives no power to the assignees to require the bankrupt to be examined with a view to procuring such insurance.2

§302. Assignees as Owners. The assignees own the property, and their deed, though for a nominal consideration, passes an indefeasible title. Any law or rule of court which requires that they shall enforce their rights in a certain way is directory and not a condition precedent. It was held in a few cases under the law of 1841 that if the assignees failed to obtain an order of court before making sale of the assets, or failed to conform strictly to the order, the sale was void. These decisions are unsound, because third persons have no concern with the mode in which the trust is executed, as it is a trust and not a mere power. If assignees are required to obtain leave of court or a vote of creditors before bringing suit, it is no defence to a suit by them that they have failed to obtain such order or vote; and so of any other act. If they are required to sell by auction, their sale by private contract passes a good title. They may make contracts which are beneficial to the estate and aid in its settlement. If they are bound to record the assignment, their title is better than that of even a

1 Re McKinney, 15 Fed. Rep. 535. See Act of 1898, § 70 (5), infra, § 533. 2 Re Garnett, 16 Q. B. D. 698. 8 Gove v. Learoyd, 140 Mass. 524. 4 Osborn v. Baxter, 4 Cush. 406; Cleveland v. Boerum, 27 Barb. 252; Gray v. Heslep, 33 Mo. 238; Holbrook v. Coney, 25 Ill. 543.

5 Doe v. Spencer, 3 Bing. 203; Dance v. Wyatt, 6 Bing. 486; Lee v. Sangster, 2 C. B. N. s. 1; Jones v. Yates, 3 Y. & J. 373; Ex parte May, 4 Dea. 60; Casborne v. Barsham, 6 Sim. 317; Peircy v. Roberts, 1 Myl. & K. 4; Spooner v.

Payne, 2 De G. & S. 439; Ex parte
Wyld, 2 De G. F. & J. 642; Reed v.
Harvey, 5 Q. B. D. 184; Wilson v.
Winslow, 145 Mass. 339. See Palmer
v. Morrison, 104 N. Y. 132; Coombs v.
Persons, 82 Maine, 326.

6 Mather v. Priestman, 9 Sim. 352; Doe v. Evans, 1 C. & M. 450; Tuite v. Stevens, 98 Mass. 305; Crowley v. Hyde, 116 Mass. 589.

See Abbott v. Stearns, 139 Mass. 168; International Tr. Co. v. Boardman, 149 Mass. 158.

bona fide purchaser, though they have not recorded it.1 Their liability as assignees to account in the court of bankruptcy for any failure of duty is another matter.

§ 303. Rights in Action. All actions and rights of action. for money, property, damages to property, or penalties vest in the assignees. For instance, a right of entry on land for condition broken; a personal action of tort for waste; an action for a penalty given to the loser at play; a statutory right of action for the purely pecuniary damage by the death of a relative.5

4

§ 304. Statutory Penalties. A statutory penalty for usury goes to the borrower's assignees. A fortiori if it be only a right to recover the excess of interest.7 A few decisions deny this; but they overlook the fact that the penalty is not the solutium for a personal injury, but a part of the law of debtor and creditor.

8

Whether the assignees can, in their turn, assign to a third person this right, or any not ordinarily assignable, is doubtful.9 Where extraordinary remedies were given the borrower, such as the right to recover his securities without paying the sum actually borrowed, it has been held that the assignees could not avail of them, and that the bankrupt, buying of them, took only their rights.10 This position seems untenable. The as

1 Cole v. Coles, 6 Hare, 517; Hall v. Whiston, 5 Allen, 126; Merrick v. Bragg, 102 Mass. 437; Davis v. Anderson, 6 N. B. R. 145, Fed. Cas. No. 3623. 2 Stearns v. Harris, 8 Allen, 597; Smith v. Coffin, 2 H. Bl. 444.

Bullock v. Hayward, 10 Allen, 460. 4 Brandon v. Pate, 2 H. Bl. 308; Brandon v. Sands, 2 Ves. Jr. 514; Carter v. Abbott, 1 B. & C. 444; Meech v. Stoner, 19 N. Y. 26.

5 Quin v. Moore, 15 N. Y. 432.

Gray v. Bennett, 3 Met. 522; Tamplin v. Wentworth, 99 Mass. 63; Wheelock v. Lee, 15 Abb. Pr. N. s. 24; 64 N. Y. 242; Moore v. Jones, 23 Vt. 739; Stevens v. Lincoln, 7 Met. 525; Thomas v. Watson, Taney, 297, Fed.

Cas. No. 13,913; Wright v. First Nat.
Bank, 8 Biss. 243, Fed. Cas. No. 18,078.

7 Crocker v. Nat. Bank, 4 Dillon, 358, Fed. Cas. No. 3397; Tiffany v. Boatman's Inst., 18 Wall. 375.

8 Nichols v. Bellows, 22 Vt. 581; Lafountain v. Savings Bank, 56 Vt. 332; Bromley v. Smith, 2 Biss. 511, Fed. Cas. No. 1922.

9 McNeal v. Leonard, 1 Allen, 399; Schermerhorn v. Talman, 14 N. Y. 93. The case of Miner's Bank v. Roseberry, 81 Penn. St. 309, depends upon estoppel. Tufts v. Matthews, 10 Fed. Rep. 609.

10 See Wheelock v. Lee, 64 N. Y. 242; Bromley v. Smith, 2 Biss. 511, Fed. Cas. No. 1922; Schermerhorn v. Talman, 14 N. Y. 93.

signees are the borrowers in respect to all property and rights of action except as hereinafter explained.1

$305. Test of Assignability in Bankruptcy. — Judges and writers have sometimes applied as tests of the title of assignees in bankruptcy to the debtor's rights of action, whether they are such as would survive to an executor; whether they are assignable in equity; whether the damages are compensatory or vindictive. According to these writers, if these questions are answered in the affirmative, they are assignable in bankruptcy, and otherwise not.

The tests are not absolutely accurate, though they represent close analogies. 1. The law of bankruptcy made many things in action asssignable before they were made to survive; 2 and, on the other hand, the modern statutes in some States give survivorship of causes of action which are not assignable in bankruptcy, such as actions for injury to the person. 2. It is safe to say that all causes of action which are assignable at law or in equity except future acquisitions pass by the decree, and therefore we may cite a few such cases to illustrate our position, but there are a few rights held non-assignable, even in equity, by solvent persons, which yet go to assignees in bankruptcy. Expectations may be assigned in equity by way of covenant, or in law by estoppel, which a decree in bankruptcy does not reach.

The true test is whether the right of action is for property or damage to property, on the one hand; or to the feelings or person, on the other. The former go to the assignees, and the latter do not. Actions for damage to property pass, whatever the rule of damages.

The assignees

§ 306. Assignees may recover Full Damages. may recover of third persons full damages for breach of a contract with or duty to the bankrupt, though they may be able to pay only a small dividend or none to some other person to whom the bankrupt was responsible in respect to the same

1 See Seear v. Lawson, 15 Ch. D. 426.

2 See Row & Dawson, 1 White & Tudor's Lead. Cas. Eq., 7th ed., 93.

3 Compare Prosser v. Edmonds, 1 Y. & C. Ex. 481, and Seear v. Lawson, 15 Ch. D. 426.

matter; for instance, the assignees of an underwriter may recover the whole of a reinsurance,2 or full damages for a breach of covenant to pay debts of the bankrupt. So of injury to the property in which the bankrupt had only a special interest and is liable over to a stranger.3

If one is bound by a valid contract to pay money to a bankrupt, it is no defence to an action by his assignees that the bankruptcy has deprived the defendant of some expected benefit not amounting to a breach of covenant or technical failure of consideration.4

§ 307. Actions for Damage to Property Vest in the Assignee. -There were decisions in England that rights of action for trespass to property do not pass; but those decisions cannot be sustained, excepting as they may have depended on points of pleading, or on the ground that the mere possessory right of the bankrupt who was in possession after his bankruptcy was alone involved. Since the elaborate and instructive discussion of the subject in Beckham v. Drake, it is held that actions for damage to property, real or personal, vest in the assignees. So do actions for false representations or other deceit sounding in damages; and for maliciously procuring the debtor to be adjudged bankrupt, and this though special damage to the feelings be alleged. So of actions against an attorney for negligence. The right of a defendant to review an action. vests in his assignees.9

1 Sullivan v. Bridge, 1 Mass. 511; Barstow v. Adams, 2 Day, 70.

2 Herckenrath v. Am. Mut. Ins. Co., 3 Barb. Ch. 63; Re Cleveland Ins. Co., 22 Fed. Rep. 200.

3 Hill v. Smith, 12 M. & W. 618; Ashdown v. Ingamells, 5 Ex. D. 280. These cases overrule Porter v. Vorley, 9 Bing. 93.

4 Akhurst v. Jackson, 1 Swanst. 85; Carey v. Nagel, 2 Biss. 244, Fed. Cas. No. 2403; Re West. Ins. Co., 6 Ben. 159, Fed. Cas. No. 17,435.

5 Brewer v. Dew, 11 M. & W. 625; Rogers v. Spence, 12 Cl. & Fin. 700, 11 M. & W. 191, 13 M. & W. 571.

6 2 H. of L. 579.

7 Metropolitan Bank v. Pooley, 10 App. Cas. 210; Warder v. Saunders, 10 Q. B. D. 114; Wetherell v. Julius, 10 C. B. 267; Stanton v. Collier, 3 E. & B. 274; Ouchterlony v. Gibson, 5 M. & G. 579; Hodgson v. Sidney, L. R. 1 Ex. 313; Morgan v. Steble, L. R. 7 Q. B. 611; Wadling v. Oliphant, 1 Q. B. D. 145. But see Tufts v. Matthews, 10 Fed. Rep. 609; Byxbie v. Wood, 24 N. Y. 607.

8 Re Daines, 16 L. T. N. s. 127; Crauford v. Cinnamond, Irish R. 1 C. L. 325.

9 Zollar v. Janvrin, 49 N. H. 114.

१

§308. Assignees are like Judgment Creditors. The saying of Lord Hardwicke that the assignment in bankruptcy is a statutory execution in favor of all the creditors has been often quoted and suggests a useful analogy. The assignees are like judgment creditors, and have all the right of such creditors at law and in equity; and like them they take subject to all valid liens and incumbrances.2 If, however, there is any sort of equitable right or chose in action which even judgment creditors cannot reach, it passes to the assignees if the debtor could assign it.3

§ 309. Unrecorded Deeds. -The assignees are bound by an unrecorded deed of land, because registration is not necessary as to purchasers with notice. Some of the States have statutes by which unrecorded mortgages of chattels are not good even against persons having actual notice. Under these laws it has been held that such mortgages are not valid against assignees. But recent decisions of the Supreme Court have sustained such titles, on the broad ground that excepting in cases of actual fraud the assignees are the bankrupt. The apparent conflict of decisions may be reconciled to some extent by the difference in the statutes which deal with mortgages, some of

1 Re Duncan, 14 N. B. R. 18, Fed. Cas. No. 4131; Re Leland, 10 Blatch. 503, Fed. Cas. No. 8234; Platt v. Matthews, 10 Fed. Rep. 280; Southard v. Benner, 72 N. Y. 424; Kruger v. Wilcox, Amb. 252; Brown v. Heathcote, 1 Atk. 160; Taylor v. Plumer, 3 M. & S.

562.

2 Mitford v. Mitford, 9 Ves. 87; Grant v. Mills, 2 V. & B. 306; Ex parte Coppard, 4 Dea. & Ch. 102; Mitchell v. Winslow, 2 Story, 630, Fed. Cas. No. 9673; Cook v. Tullis, 18 Wall. 332; Hauselt v. Harrison, 105 U. S. 401; Ratcliff v. Sangston, 15 Md. 391; Plume Co. v. Caldwell, 136 Ill. 163; Longdale v. Swift, 91 Ky. 191; Peterborough Bank v. Hartshorn, 33 Atl. Rep. 729 (N. H.); Helm v. Gilroy, 20 Ore. 517; Re McKay, 1 N. B. N. 133.

3 Supra, §§ 301, 303, 304..

4 Stewart v. Platt, 101 U. S. 731; Hardin v. Osborne, 94 Ill. 571; Laughlin v. Calumet Dock Co., 65 Fed. Rep. 441.

5 Leavenworth Bank v. Hunt, 11 Wall. 391; Bank of Alexandria v. Herbert, 8 Cranch, 36; Edmondson v. Hyde, 2 Sawyer, 205, Fed. Cas. No. 4285; Bingham v. Jordan, 1 Allen, 373.

6 See Stewart v. Platt, 101 U. S. 731; Donaldson v. Farwell, 93 U. S. 631; Jerome v. McCarter, 94 U. S. 734; Gibson v. Warden, 14 Wall. 244; Cook v. Tullis, 18 Wall. 332; Mitchell v. Winslow, 2 Story, 630; Fed. Cas. No. 9673; Lloyd v. Foley, 6 Sawyer, 424; Johnson v. Patterson, 2 Woods, 443, Fed. Cas. No. 7403; Ex parte Dalby, 1 Lowell, 431, Fed. Cas. No. 3540; Coggeshall v. Potter, Holmes, 75, Fed. Cas. No. 2955.