assignment. Such a purchaser would also take subject to the annuity or rent charge. Finally, if the cestui que trust should convey his trust after charging himself with a sub-trust, or other equity, the innocent purchaser ought to take the trust discharged from the sub-trust, or other equity, as in the corresponding case the purchaser acquires an absolute title to the land. The analogy between the two cases would seem to be perfect. The cestui que trust of the equitable obligation stands in the same relation to the owner of that obligation which the cestui que trust of the land occupies towards the owner of the land. Each has an immediate claim against his trustee; neither has a direct claim upon the subject-matter of the trust. Just as the cestui que trust of the land must work out his rights through the owner of the land, so the cestui que trust of the equitable obligation must work out his rights through the owner of the obligation. As the trustee of the land is complete owner of the land, subject to a duty in favor of the cestui que trust of the land, so the trustee of the equitable obligation is complete owner of the obligation, subject to a duty in favor of the cestui que trust of the obligation. The conclusion seems unavoidable, therefore, that as the ownership of the land may be transferred discharged of the duty in the one case, so the ownership of the equitable obligation may be transferred discharged of the duty in the other case. What is true of a sub-trust, or equity, created by the will of the owner of the equitable obligation must, obviously, be equally true of a sub-trust, or equity, created by operation of law. For example, if the owner of the equitable obligation were induced by fraud or duress to convey the obligation the fraudulent vendee would become the owner of it; but the law would raise a duty in him to deal with it for the benefit of the defrauded vendor, in other words, would make him a constructive trustee of the obligation in favor of the vendor; but if he should convey the obligation to a purchaser for value, without notice of the constructive trust, the purchaser could not properly be charged with it.
None of the decisions, it must be conceded, have proceeded upon
- Lee v. Howlett, 2 K. & J. 531; Cas. on Trusts, 428, 432, n. 1. An exception is made in the case of the transfer of equitable interests in personalty in England, and in a few States in this country, where the peculiar rule of Dearle v. Hall, 3 Russ. 48, obtains. But this decision, which was virtually a judicial creation of a registry law, has not met with much favor in this country. Putnam v. Story, 132 Mass. 205; Williams v. Ingersoll, 89 N. Y. 508, 523; Cas. on Trusts, 429.
- Phillips v. Phillips, 4 D., F., & J. 208; Cas. on Trusts, 433.