Re Brooks [1939] 1 Ch 993

Facts

• The case involved the purported assignment of future royalties from a literary work.
• The assignor sought to transfer rights to property that did not yet exist or had not yet been acquired at the time of the assignment.
• The Chancery Division considered whether such an assignment was valid either at law or in equity.
• The court examined the circumstances surrounding the assignment, focusing on consideration, intention, and definiteness.

Issues

1. Whether future property can be validly assigned at law or in equity.
2. What requirements must be satisfied for an equitable assignment of future property to be enforceable.
3. Whether the assignment in question, involving future royalties, was valid and binding in equity.
4. The distinction between legal and equitable interests with respect to assignments of property not yet acquired.

Decision

• The court reaffirmed that future property cannot be assigned at law due to the absence of a present interest.
• It held that equity may recognize assignments of future property where there is valuable consideration and a clearly manifested intention to create a binding obligation.
• The assignment of the future royalties in this case was found valid in equity, as the requirements were met.
• The court clarified that the equitable interest vests in the assignee once the property is acquired by the assignor.

Legal Principles

• Future property cannot be assigned at law due to the lack of a present interest.
• In equity, assignments of future property are enforceable if:
  • The assignment is supported by valuable consideration.
  • There is a clear intention by the assignor to create a binding obligation.
  • The property is sufficiently identified.
• Equity treats as done that which ought to be done, allowing the assignment to take effect when the property comes into existence.
• A legal and equitable distinction exists: legal interests cannot be created in future property, but equitable interests can arise when equity's requirements are satisfied.

Conclusion

Re Brooks [1939] 1 Ch 993 established that, while future property cannot be assigned at law, equity will recognize and enforce such assignments where there is consideration and a clear intention to bind, clarifying the necessary conditions for equitable assignments and shaping subsequent practices relating to both trusts and property assignments.