It is "a rule of general jurisprudence that if a person enters into a contract, and, with out notice of any assignment, fulfills it to the person with whom he made the contract, he is discharged from his obligation ;" L. R. 5 C. P. 594, per Willes, J.
Whether a prior assignment of a chose in action will be protected when no notice of it is given to the subsequent assignee or to the trustee or debtor, is a question somewhat complicated by the adherence of the English courts to a doctrine known as the rule of Dearle v. Hall, 3 Russ. 1, adopted also in Loveridge v. Cooper, id. 30. This rule is that an assignment of an equitable interest„ or of a chose in action, without notice to the person having legal dominion of the subject matter, will be postponed to one made sub. sequently, of which notice is given. In ap plying this rule the English courts have held that inquiry by the later assignee is imma terial; 3 Cl. & Fin. 456 ; and that it is also immaterial that there was no trustee or per son having dominion of the fund to whom the first assignee could give notice; [1904] 2 Ch. 385 (where it was said that "Dearle v. Hall is indisputable law, although many judges have said that they will not extend it") ; that knowledge bf the first assignment accidentally acquired by the trustee would protect it where there had been no formal notice; L. R. 3 Ch. App. 488 ; and that, in case of inquiry by the subsequent assignee, the trustee is not bound to answer ; [1891] 3 Ch. 82 ; that notice to one of several trustees was sufficient, he not being the assignor; 4 De G., F. & J. 147; but knowledge of the as signor, being one of the trustees, did not avail in default of notice to the other two; 4 Drew. 635 ; [1901] 1 Ch. 365, where Cozens Hardy, J., said: "I do not profess to be able to discover any definite principle upon which the rule in Dearle v. Hall is founded. Nevertheless it must now be recognized as a positive rule, though it is not one to be ex tended." This rule was recognized as law in [1893] A. C. 369, but it was critically exam ined and discussed by both L. Ch. Herschell and Lord Ma ghten and it is manifest that nothing of the rigor of the lish observance the doctrine of stare deci sis has maintained its authority.
The rule of the English courts was ap plied to an assignment of an interest in an English trust, made by one domiciled in New York; [1905] 2 Ch. 117, where the court ad
mitted the validity of the assignment under the lex loci contractus, but considered that the law of the court administering a trust fund should settle the order of payment as between claimants.
The English rule requiring notice to the holder of the legal title or trustee of an as signment of the equitable interest or chose in action, has been followed in Judson v. Corcoran, 17 How. (U. S.) 614, 15 L. Ed. 231; Methven v. Power Co., 66 Fed. 113, 13 C. C. A. 362 ; Spain v. Hamilton's Adm'r, 1 Wall. (U. S.) 604, 17 L. Ed. 619; Burck v. Taylor, 152 U. S. 634, 14 Sup. Ct. 696, 38 L. Ed. 578; Vanbuskirk v. Ins. Co., 14 Conn. 141, 36 Am. Dec. 473 ; Phillips' Estate, 205 Pa. 515, 55 Atl. 213, 66 L. R. A. 760, 91:, Am. St. Rep. 746 ; Murdoch v. Finney, 21 Mo. 138 (and see Thomas v. Liebke, 13 Mo. AN 389); Merchants' and Mechanics' Bank of Chicago v. Hewitt, 3 Ia. 93, 66 Am. Dec. 49; Graham Paper Co. v. Pembroke, 124 CaL 120, 56 Pac. 627, 44 L. R. A. 634, 71 Am. St. Rep. 26; Meier v. Hess. 23 Or. 602, 32 Pac. 755. In other cases the assignment is held to be effectual without notice even against a sub sequent assignment of which notice was given; Putnam v. Story, 132 Mass. 205; Good ing v. Riley, 50 N. H. 408; Garland v. Har rington, 51 N. H. 409 ; Fortune° v. Patten, 147 N. Y. 277, 41 N. E. 572; Central Trust Co. of New York v. Imp. Co., 169 N. Y. 314, 62 N. E. 387. The cases are collected in 1 Perry Trusts, § 438, note. In Clodfelter v. Cox, 1 Sneed (Tenn.) 339, 60 Am. Dec. 157, it is said that there is an irreconcilable con flict in the American cases, and though the weight of authority seems to be against the English rule, the latter is considered more reasonable and safe and therefore followed. In a note to 14 Conn. 141, the view of the Tennessee court in that case as to the weight of authority is questioned and it is suggest ed as more correct to say that "by the pre ponderance of authority," an assignee of a chose in action without notice is protected against creditors of the assignor but not as against a subsequent assignee for value and in good faith, and this is said to be the Eng lish rule properly stated; 36 Am. Dec. 476 note.