Assignment of Choses in Action

Property generally may be realty (real) or personalty (personal). Realty are characterized by geographical fixity(land) while personalty are generally mobile.

Personalty is also classified into tangible/corporeal and intangible/incorporeal. The former is capable of physical handling/possession/manipulation/enjoyment while the latter is incapable of any of these.

Incorporeal property is also called a chose in action which has been defined as a legal expression used to describe all personal rights of property which can only be claimed or enforced by action (in a court) and not by taking physical possession.

A chose generally is a thing capable of being owned. Choses in action may be legal or equitable. Legal choses in action are rights which were enforceable or recoverable only by an action at Common law. This category of choses includes debts, benefits under a contract, insurance policies, copyrights, patents etc.

Equitable choses on the other hand are rights over property which were only enforceable/recoverable/cognizable by the courts of Chancery. It could only be recovered by a suit in Equity and the rights under this category include interests of a beneficiary in a Trust, a legacy/reversionary interest under a will etc.

Choses in action may also be in respect of already existing things/property or things/property to be acquired at a future date but which are not yet in possession. The chose in action may be property in itself and it may also be a propriety right over property.

Assignment is the transfer of something from one person to another such that the assignee obtains rights of a nature that were hitherto exercisable only by the assignor. An assignment of a chose is thus the transfer of a chose in action from the assignor to the assignee such that the assignee obtains and becomes entitled to enjoy rights in respect of that chose, which were hitherto exclusively enjoyed by the assignor.

Assignment may be legal (statutory) or equitable.

Assignment and Novation

An assignment is quite distinct from a novation. Novation is essentially a legal device by which parties to a contract may legally vary/shift their obligations under the contract to third parties. Thus, A can agree with B, his creditor, that C, who owes him money, will pay that debt to B in full satisfaction of his own (A’s) debt.

Novation is however fundamentally different from assignment in three material aspects:

  • The consent of the parties is sine qua non since the original contract is rescinded by the novation. There must thus be consensus ad idem. There can be no novation otherwise. This is contrary to the case in assignment where there only need be communication to the assignee, his consent and that of the trustee of the liability are immaterial.
  • The original debt in novation must be totally extinguished under the new arrangement.

There is no such requirement for assignment to be valid.

  • For novation to be valid, there must be consideration in all cases as it is essentially a new contract. The requirement for consideration in assignment is much more relaxed.

Assignment and Equities

The general rule as regards assignment of choses in action is that an assignee takes, subject to the equities thar already apply to the chose in action (property) in question. Thus, anyone who has an interest (legal or equitable) in an assigned chose is entitled to a higher priority than that of the assignee.

The logic here is based on a recognition that the assignee cannot acquire a better title than that of the assignor. What he essentially gains by virtue of the assignment is a right to continue in the stead of the assignor in respect of that chose and nothing better.

In Re Knapman (1881) 18 Ch. D 300 the beneficiaries of a will brought an action against the executor seeking to revoke the probate. While the matter was in court, these beneficiaries assigned the right under the will to someone else.

Their action subsequently failed in court, the court ruled that the executor had a right to set off the costs of the suit against the estate. As such, since the right to this had already been assigned, the assignee has to settle this cost since he was assigned a property that had a pre-existing liability.

Claims of equities that arise after notice of the assignment has been given to the trustee would not affect the assignee however, except where the claim is very closely related to the original transaction upon which the chose came into existence.

The rule that the assignee takes subject to equities will not apply where the trustee is estopped, either by conduct or deed, from setting up equities against the assignee. It would not also apply where the agreement occasioning the original transaction includes a clause that the assignees of the assignor would take free from all equities.

Historically, assignment of choses in action was largely unrecognized at Common law. There was the fear that allowing such assignment would bring about Maintenance and even cases of Champerty as well as the risk of encouraging a litany of contentious matters on the same res.

Maintenance arises where a person who has no legal interest in a matter provides assistance by money or otherwise to a party to the suit while Champerty marries the foregoing with the prospect of reward out of the possible spoils of the suit.

Thus, no debt could be assigned at Common law unless the debtor specifically agreed to the assignment. The only exceptions allowed by Common law were in respect of choses in action assigned by or to the King and assignment of negotiable instruments in order to promote trade.

Equity has however always recognized the assignment of choses in action, both equitable and legal. It would not however allow the assignment of bare rights without accompanying interest in property. This was to avoid, as in the case of the Common law, situations that encourage Maintenance.

Assignability

Not all choses in action are assignable. The courts would not give effect to such assignments either on grounds of public policy or on account of the nature of the subject matter of the assignment.

Choses in action that are not assignable include:

  • Salaries of public officials. This is because it is perceived that if allowed to assign their salaries, they may deprive themselves of their means of sustenance and thereby impair the efficiency which is most desirable for the public service.
  • Alimony is not assignable on much the same grounds as salaries of public officials as the money is meant for the maintenance of the spouse.
  • Rights arising out of a contract of a personal nature i.e. contracts that require personal service like employment.
  • Expectancies (future choses) are not assignable at Common law based on the maxim: Nemo dat quod non habet. They are assignable in Equity although, such assignment must be for value.

Equitable Assignment

An equitable assignment is of a flexible nature. This flexibility makes it quite distinct from legal assignments as they do not require all of the formality required under the law. It may be in respect of a legal or equitable chose. Thus, there may be an equitable assignment of an equitable chose or an equitable assignment of a legal chose.

While there is no strict formality required for equitable assignments, certain criteria are instructive as to whether it would be considered valid or not.

For an equitable assignment to be considered as having been effected, there must be a clear intent to assign. While Equity does not require that the assignment be in writing or made in any particular format, there must be a clearly deducible intent to assign on the part of the assignor.

The intent to assign here will be construed from the words used and the particular circumstances of the case. If what is construed is a mere mandate/authority to hold onto certain property, no intent to assign may be ascribed by the court.

The position that Equity does not require writing for equitable assignments has however been affected by S. 9 of the Statute of Frauds and S. 78(1)(c) of the Property and Conveyancing Law which require that the assignment of any equitable interest or trust must be in writing.

The assignment is also required to be communicated to the assignee. Although, the assignee may still take in certain instances even without communication, subject to the right of the assignee to repudiate the transfer when he becomes aware of it.

The particular chose intended to be assigned must be identified. It is insufficient to give a vague representation of what is sought to be assigned. Such vagueness may impair the court’s construction of an intent to assign in such circumstance.

Consideration in equitable assignment depends on the circumstance. Where the assignment is complete in the sense that there is nothing left for the assignor to do to perfect the assignee’s title, there would be no need for consideration.

If it is incomplete though, consideration may be required. Consideration will also be required where the assignment concerns some future chose as the agreement in such instance can only be a contract to assign and all contracts must be backed by consideration.

No consideration is however required for assignment of existing choses.

There is no real requirement for notice of the equitable assignment to be given to the trustee of the liability. Notice is however useful to the extent that it puts the trustee on guard as to the change of rights affecting the chose and may prevent him from settling in favour of the assignor instead of the assignee.

It also makes the trustee liable to the assignee where he settles in favour of the assignor in spite of the notice given to him. Again, while the assignee generally takes subject to any prior equities affecting the chose, giving notice ensures that he would not be affected by any subsequent equities.

Most importantly, notice allows the assignee to establish the priority of his interest in consequence of the rule in DEARLE v HALL.

An equitable assignment of a chose in action has bearing on the manner in which the rights can be enforced in a court of law. The effect here is largely dependent on whether the chose in question is a legal or equitable chose and if the chose was absolutely assigned or not.

Where the assignment concerns a legal chose, the assignee cannot assert his title over the property in his own name. He must join the name of the assignor either as co-plaintiff, where he agrees, or as a defendant. Where the chose is equitable though, the assignee can sue in his own name.

An assignment is absolute when the assignor transfers his whole interest in the chose to the assignee. It is however non-absolute where it is made subject to some condition at the happening of which it would become inoperable or where only a charge is made on the chose, in favour of the assignee.

In this instance, only a part of the assignor’s interest is transferred. The effect of this is that in situations where the transfer was absolute, the assignee would be able to sue in his own name. Where it is not absolute however, he must join the assignor before he can enforce his rights over the chose.

Where the chose is legal though, it is immaterial whether it is absolute or not, the assignee must join the assignor.

Legal Assignment

The Common law rule against assignment of choses in action was only lifted in 1875 and this was via the provision of the Judicature Acts, particularly S. 25(6) . This provision is impari materia with S. 150(1) Property and Conveyancing Law .

The purport of those provisions is that there can be absolute assignments by writing of any debt or other legal thing in action when express notice in writing has been given to the trustee of the liability. Also, it shall be effectual to transfer the legal right to sue in respect of such thing, along with the legal and other remedies in respect of it and the power to give a good discharge for the chose without the assignor’s permission.

The provisions clearly contain ingredients that would make a legal assignment valid and these include the following:

  • The assignment must be in writing and signed by the assignor.
  • It must be in respect of some existing debt or other legal thing in action and this includes equitable choses in action.
  • It must be absolute.
  • There must be an express notice in writing given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive the debt or claim the thing in action.

The assignment takes effect from the date that notice is given. Failure to give notice at all or failure to give it in writing or failure to even execute the writing in the first place will not invalidate the assignment.

Rather, it becomes an equitable assignment instead of a legal one. Further, there is no requirement for consideration here.

The position at Common law before the Act amended it was that the assignee had no right independent of the assignor’s and was obligated to sue in the assignor’s name if he wanted to enforce his rights over the chose.

The Acts have however changed this and the assignee no longer needs to sue in the name of the assignor. He can sue all by himself.

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assignment of chose in action

  • ASSIGNMENT OF CHOSES IN ACTION

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assignment of chose in action

 Emmanuel Bassey

  • INTRODUCTION

As a general rule and based on the doctrine of privity a contract cannot confer rights or impose obligations on any person except the parties to the contract. Accordingly, a contract cannot be enforced by or against a person who is a stranger to it even if the contract is made for his benefit and purports to give him the right to sue or to make him liable upon it. The main reason for this is that it is the parties’ contract, and they are always free to vary or discharge it by agreement. The creation of a third party right would impede this freedom unless an agreement for such third party involvement has been made part of the agreement.

As with every general rule, there is always an exception. One of the exceptions to the doctrine of privity of contract arises in the assignment of choses in action where the owner of a contractual right can transfer same to a third party without the consent of the debtor (the counter-party to the contract), thereby enabling the third party to enforce the right against the debtor. The process of transfer of such a right is known as “assignment” and the types of property which are susceptible to this type of transfer are known as “choses in action.”

This article sets out to trace the evolution, incidence, and the conditions precedent for a valid assignment of choses in action under Nigerian law.

  • WHAT ARE CHOSES IN ACTION?

Choses in action is a legal expression used to describe all personal rights of property which can only be claimed or enforced by action and not by taking physical possession of them. They are also called “things in action” because they are things which a person is not possessed but has to bring an action in court in order to recover them. Choses in action may be legal or equitable. Legal choses in action are those which could historically only be enforced by an action at common law whilst equitable choses in action are choses in action which could only be enforced in the courts of equity- they arose out of property rights over which the Chancery Court formerly had exclusive jurisdiction. Examples of choses in action include debts, shares, negotiable instruments, policies of insurance, bills of lading, patents, copyrights, rights under trusts and legacies, benefit of a contract for sale of reversionary interest, rights to claim indefinite sums of money, as for compensation under Statute; damages for loss in which the assignee was the assignor’s insurer, a debt or benefit arising out of an existing contract, but payable at a future time and a claim for damages in tort. All these are intangible rights which cannot be physically possessed but only claimed or enforced by an action in court. They are in law permitted to be assigned by the holders (though they can neither be seen nor possessed) to third parties who would be able to enforce the rights against the debtors even though they were not parties to the original contract.

The term “assignment” refers to the act of transferring to another all or part of one’s property, interest, or rights.   The term denotes not only the act of transfer, but also the instrument by which it is effected. In Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd   the Court of Appeal held that “assignment means to give something to some body for their use or benefit. It also may mean to transfer right, property or title from the persons legally entitled to them to some body else for their benefit.”

The assignment of choses in action may be legal or equitable. Due to the vagaries of the historical evolution of law and equity, different considerations apply to the assignment of choses in action at law and in equity.

  • ASSIGNMENT AT COMMON LAW

Historically, under common law contractual rights were hitherto not assignable without the consent of both contracting parties since they were things in action as opposed to things in possession. This common law rule stemmed from the difficulty of conceiving of transfer of an intangible, and the desire to avoid maintenance and champerty. The only methods of assigning contractual rights at common law were by novation and by procuring the debtor’s acknowledgment that he held for the assignee, both of which required the consent of the debtor, unless the assignment was done by the king or it involved the assignment of a mercantile chose in action like a negotiable instrument which are transferrable by mere delivery. Accordingly, legal choses in action could only be assigned at law with the consent of the debtor. The assignor was however, required to be joined as a party to any action to enforce the assignment (either as a plaintiff if he consented or as a defendant in the absence of consent) since there was no privity of contract between the debtor and the assignee.

Given the rigors of assignment of legal choses in action under the common law, the courts of equity developed more flexible requirements for the assignment of equitable choses in action. However, the most significant intervention was introduced by the enactment of the English Judicature Act of 1873 which introduced the concept of statutory assignment.

  • STATUTORY ASSIGNMENT

The enactment of the Judicature Act, 1873 (a statute of general application in Nigeria) created an exception to the doctrine of privity of contract by introducing the concept of trust of a chose in action in section 25(6) of the Act, which provides as follows:

Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice;- (a) The legal right to such debt or thing in action (b) All legal and other remedies for the same and (c) The power to give a good discharge for the same without the concurrence of the assignor; Provided that if the debtor, trustee or other person liable in respect of such debt or thing in action has notice:- i. That the assignment is disputed by the Assignor or any person under him or; ii. Of any other opposing or conflicting claim to such debt or thing in action, he may if he thinks fit either call upon the person making claim hereto to inter plead concerning the same, or pay the debt or other in action in Court.

By section 25(6) of the Judicature Act, a contractual party could assign his rights under the contract subject to the conditions stated in the Act without any need for a novation or acknowledgment by the debtor.

  • CONDITIONS FOR A VALID ASSIGNMENT OF CHOSES IN ACTION

In order for Section 25(6) of the Judicature Act 1873 to apply, three conditions must be fulfilled:

6.1 The assignment must be absolute and not purport to be by way of charge only

An absolute transfer is a transfer of the whole not a part of the chose in action. The test to be applied in determining whether an assignment is absolute is whether the assignor has unconditionally transferred to the assignee for the time being, the sole right to the debt in question as against the debtor in which case the assignment is absolute. The fact that the assignee is to hold proceeds of the debts or the surplus proceeds beyond the stated amount, on trust for the assignor does not prevent the assignment from being absolute.

An assignment that purports to be by way of charge only is not an absolute assignment. The relevant test is to decide whether the assignment merely gives a right to the assignee to payment out of a particular fund by way of security rather than an unconditional transfer of the fund to the assignee. The judicial reasoning behind the requirement for an absolute assignment is that the debtor should not be put in doubt or jeopardy by the arrangements between the assignor and the assignee as to whom he is to discharge his obligations.

No particular form or mode is prescribed or required by law for a legal assignment as long as the assignor absolutely and unequivocally indicates the transfer of the benefit, interest or title to the assignee.

6.2 It must be in writing under the hand of the assignor

No particular mode or form is necessary as the writing can be informal, as for instance, a direction in writing by a creditor to his debtor to pay the assignee, handed to the assignee, may amount to an assignment but such a direction handed to the debtor may not by itself constitute an assignment unless there is evidence that the assignee has requested or consented to it. It is also the law that even if the debtor has the direction, it may not constitute more than authority to pay, and gives the assignee no rights unless the instructions can be said to amount to an irrevocable mandate to the debtor.

6.3 Express notice in writing thereof must be given to the debtor or trustee

This notice is not required to be in a separate document purposely prepared as a notice and described as such. What is needed is that information relative to the assignment shall be conveyed to the debtor, and that it shall be conveyed in writing. A written demand for payment sent by the assignee to the debtor has been held to be sufficient once the notice is unconditional and given to the debtor personally before the assignee commences his action. It has also been held that since a creditor can assign by directing his debtor to pay the assignee, a single written document would suffice to constitute both the Assignment as well as the notice envisaged by the Act. Furthermore, it is not necessary for the notice to the debtor to be given by the assignor or the assignee; it may be given by a third party.

  • LEGAL EFFECT OF A STATUTORY ASSIGNMENT

Once the above conditions have been fulfilled, certain legal consequences immediately follow:

  • The assignee can sue the debtor in his own name instead of having to sue in the name of the assignor and perhaps to go to the Court of equity to compel his joinder in the action.
  • Consideration is not required for the assignment.
  • The consent of the assignee is not required for the assignment. However, where it is the liabilities or the burdens under a contract that are to be assigned to a debtor, the consent of the assignee is required.
  • EQUITABLE ASSIGNMENT OF CHOSES IN ACTION

An equitable assignment of a chose in action arises in the event of an assignment of an equitable chose in action and where there has been a failure to comply with the statutory conditions for a valid assignment of a legal chose in action. Such an assignment which fails to comply with the requirements of the statute will not become invalid but will operate as an equitable assignment.

An equitable assignment may be in writing or oral. It may operate by way of a charge only or be part of the debt or chose. If there is an equitable assignment of an equitable chose in action the assignment being absolute, then the assignee is entitled to sue in his own name.

Any words will suffice provided they are unambiguous to the effect that an identifiable debt has been made over by the creditor to some third person. No privity of contract or consideration is required for equitable assignment provided that the assignor has, at the material time, done all that he can to perfect the gift.

An equitable assignment is binding even without notice to the debtor. However, as a matter of practice, notice to the debtor is very important for three reasons:

  • In the absence of notice the debtor is entitled to discharge his obligations to the assignor and not to the assignee, whereas if he has notice he does so at his own peril and he may well be required to discharge the obligation a second time to the assignee with no entitlement to recovery from the assignor.
  • The giving of notice to the debtor has an effect on prior equities. The general rule as regards assignment of choses in action is that an assignee takes subject to the equities that already apply to the property in question. Thus, anyone who has a prior interest (legal or equitable) in an assigned chose is entitled to a higher priority than that of the assignee. The reason for this is that the assignee cannot acquire a better title than that of the assignor. What he essentially gains by virtue of the assignment is a right to continue in the stead of the assignor in respect of that chose and nothing better.Claims of equities that arise after notice of the assignment has been given to the debtor would not affect the assignee, except where the claim is very closely related to the original transaction upon which the chose came into existence. The rule that the assignee takes subject to equities will not apply where the trustee is estopped, either by conduct or deed, from setting up equities against the assignee. It would not also apply where the agreement occasioning the original transaction includes a clause that the assignees of the assignor would take free from all equities.
  • The date of notice establishes the order of priority as between successive assignees. Thus, where there are two or more assignees of the same chose in action, the first to give notice has priority over the other assignees even if they were first in time.

Assignment of choses in action provides a veritable avenue for the exchange of contractual rights, especially when the assignor does not have the wherewithal to enforce the right in court. This creates a win-win situation for the assignor and the assignee, as the assignor is immediately able to receive value for his rights and the assignee is able to enforce the right to receive whatever benefit he has contracted for whilst the debtor’s position is not adversely affected. The parties, however, need to understand the applicable principles so that they would know the extent of any rights that they acquire in any given transaction.

______________________________

For further information on this article and area of law, please contact Emmanuel Bassey  at: S. P. A. Ajibade & Co., Lagos by Telephone (+234 1 472 9890), Fax (+234 1 4605092) Mobile (+234.703.805.9736, +234.815.088.2839) Email: [email protected] www.spaajibade.com

  • Emmanuel Abasiubong Bassey, Senior Associate in the Dispute Resolution Department of S.P.A. Ajibade & Co., Lagos, Nigeria.
  • Makwe v. Nwukor & Anor (2001) LPELR-1830(SC) (pp 25 – 25 paras D – E). See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors. (2013) LPELR-20870(CA) (pp 62 – 98 paras A – E). It was however, held that the benefit of a contract is only assignable in cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it. See, Tolhurst v. Associated Portland Cement Manufacturers Ltd (1902) 2 K.B. 660 at 668, (1903) A.C. 414 cited in Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 24 – 25 paras E – C).
  • I. E. Sagay, Nigerian Law of Contract (first published 1985, 2nd Edn, Spectrum Books Limited, Ibadan, 2000) 516.
  • See, https://mcmahonsolicitors.ie/choses-in-action/ [accessed on 14th December 2023.] Supra.
  • See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors (supra).
  • See, FCMB v. Essien (2022) LPELR-58699(CA) (pp 6 – 6 paras E – F).
  • See, FCMB v. Essien (supra).
  • Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 24 – 25 paras E – C).
  • The following choses are however not assignable: (1) Salaries of public officials. This is because it is perceived that if allowed to assign their salaries, they may deprive themselves of their means of sustenance and thereby impair the efficiency which is most desirable for the public service; (2) Alimony- because the money is meant for the maintenance of the spouse and (3) Rights arising out of a contract for personal service.
  • Maintenance occurs when a third-party provides support for litigation without a just cause, by providing, for example, financial assistance. Champerty is an aggravated form of maintenance, where a third-party pays some or all of the litigation costs in return for a share of the proceeds.
  • (36 & 37 Vict.) CHAPTER 66.
  • In Nigeria, a statute of general application refers to refers to statutes which were in force in England on the 1st of January, 1900. They were to be applied by the courts in Nigeria as far as local circumstances permit. However, the Western Region is now exempted by virtue of Law of England (Application) Law of 1959. The West African Court of Appeal stated in Young v. Abina that it was not necessary for the statute to be in force in all of the United Kingdom, but it only had to be in force in England. See, https://www.learnnigerianlaw.com/learn/legal-system/englishlaw accessed on 12th December 2023.
  • Section 25 (6) of the Judicature Act i873 which has now been repealed and replaced substantially by Section 136 of the English Law of Property Act, 1925, in England.
  • See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors. (supra). It has been held that the benefit of a contract is only assignable in cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it. See, Tolhurst v. Associated Portland Cement Manufacturers Ltd (1902) 2 K.B. 660 at 668, (1903) A.C. 414 cited in Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 24 – 25 paras E – C).
  • See, https://www.designingbuildings.co.uk/wiki/Legal_and_equitable_assignment [accessed on 14th December 2023].
  • See, Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 25 – 26 paras D – D).
  • See, Bateman v. Hunt, 20 T. L. R. 628.
  • See, Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (supra).
  • See, William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454.
  • If it is incomplete, consideration may be required. Consideration will also be required where the assignment concerns some future chose as the agreement in such instance can only be a contract to assign and all contracts must be backed by consideration. See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors (2013) LPELR-20870(CA) (pp 62 – 98 paras A – E).
  • The notice may be written or oral and the wording of the notice may be informal. A newspaper article may be a sufficient notice to the debtor. See, Lloyd v Banks (1868) LR 3. Ch App 488.
  • Re Knapman (1881) 18 Ch. D 300.
  • https://djetlawyer.com/assignment-of-choses-in-action/#:~:text=An%20assignment%20of%20a%20chose,legal%20(statutory)%20or%20equitable [accessed on 5 December 2023].
  • See, the rule in Dearle v Hall 3 Russell 1, 38 ER 475.

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chose in action

Chose in action: meaning.

A chose in action is:

  • an intangible property right or property
  • which is legally not in a person's possession
  • but is only enforceable by legal process.

The legal process begins with a chose in action and ends with a judgment or court order.

Therefore, a chose in action is a right to sue : a legal right. It's a property right. It's more often referred to as a cause of action .

A person owns a chose in action in the same way as someone owns the device you are using right now.

Choses in action comprise all personal rights of property which cannot be taken by possession of a physical object (ie a chose in possession). 

Depending on the cause of action, a person would be:

  • owed a sum of money (ie a creditor owed a debt), and the debtor must pay the money
  • entitled to performance of a contract
  • the owner of intellectual property rights and entitled to sue for infringement
  • entitled to a licence to use intellectual property rights

In turn, the remedy leads to the entitlement to enforce (aka "enjoy") the legal rights which flow from the chose in action, which is usually one or more of:

  • an injunction
  • specific performance

And suppose the debtor, did not pay the sum ordered to be paid, the creditor would be entitled to initiate action to enforce the judgment or order. 

For a chose in action to exist, there must be a remedy at common law or equity which recognises the chose.

So, if a remedy does not exist for the alleged chose in action, the chose in action cannot exist.

It's pronounced "ch-oh-se" in action.

Types of Choses in Action: Examples

Legal choses in action are enforceable in a court exercising its common law jurisdiction.

Well known forms of legal choses in action include:

  • claims for debts
  • patent rights
  • trade marks
  • design rights
  • confidential information
  • common design 
  • interference with contractual rights

Equitable choses include:

  • a share in a trust fund
  • the share of proceeds of sale in the hands of a mortgagee.

Choses in action are also able to be established by reliance upon vicarious liability , apparent or ostensible authority and the law of agency, where the facts of the case permit.

Chose in Action Examples

  • Chattels: One person can hand another a pen, and thereby pass possession of the pen. The pen is a physical object. In legal terminology, the pen is a chattel and a chose in possession, not a chose in action. 
  • a chose in action
  • which is personal property
  • which is owned by you 
  • which entitles you to sue the person for conversion
  • for damages or delivery up of a chattel
  • Copyright law: Suppose you own copyright in some software. The software is protected by copyright law. A person uses the software without your consent. As the person has not obtained a licence from you, it is an infringement of copyright law. Infringement entitles you to damages for your pecuniary loss and an injunction to restrain infringement (ie unlawful use of the software) in the future. The right to sue for infringement is a chose in action.
  • Conspiracy: Continuing the copyright infringement example above, a series of people combine with an intention to infringe the copyright of your software. A separate, freestanding tort of conspiracy arises to render each of the participants in the conspiracy liable for the conspiracy.

Assignments

  • Legal choses in action may be assigned in equity, at common law or by statute. 
  • Equitable choses can be assigned in equity or by statute.

For an assignment of a legal chose in action to be effective by statute:

  • it must be in writing,
  • be absolute (the whole of the chose, unconditional and not a security interest),
  • with notice to the debtor.

If an assignment is ineffective by statute (for instance, an assignment of part of a debt), it still may be effective in equity.

A deed of assignment or ordinary contract may be used to assign the property rights in a chose.

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Home » Dictionary » Chose in action

ASSIGNMENT OF LEASES, RENTS, NON DISTURBANCE AND ATTORNMENT: How To Differentiate Between Them

Date Posted: July 23, 2010 By Jeff Levy, HBSc, MBA, CFA, AMP, JD

The argument of Canada Life in the Goodyear case was that the assignment of future leases from Angeles to Canada Life operated to create privity of estate between Canada Life and Goodyear from day one. This was rejected by Madame Justice McKinley on the basis that the only way privity of estate could be created between Canada Life and Goodyear was if the reversionary interest of Angeles in the property was transferred to Canada Life, which could only occur after a foreclosure.

In this context, Madame Justice McKinley also dealt with the situation where a lease is absolutely assigned by the owner of land but the reversionary interest in the land is not transferred to the assignee. Though it is not clear how the owner of land could keep the reversionary interest while assigning absolutely the benefit and obligations under the lease to a third party, Madame Justice McKinley commented that if that was possible there would be no privity of estate between the assignee and the non-assigning party since the reversionary interest remained in the landlord. The point is that privity of estate can only apply between the parties who hold the estate or interest in the land, the fee simple and the leasehold estates. Further on, at page 336, Madame Justice McKinley stated:

“To the extent that he may have inferred that an absolute assignment of leases would have created privity of estate between the lessor and the mortgagee, I would not agree, unless that absolute assignment amounted to an assignment of the lessor’s reversionary interest in the land.”

Choses in Action

To understand the concepts arising out of assignments of rents, to follow some of the case laws in this area, and to comprehend the impact of Section 53(1) of The Conveyancing and Law of Property Act , it is necessary to understand what a chose in action means. It is a right arising out of a contract, which is enforced by the courts. However, a chose in action is not a physical thing, such as real property, chattels or equipment. It is basically every right or promise set out in a contract, such as a non-physical benefit or right.

There are two kinds of choses in action, legal and equitable. A legal type is a chose in action which was enforced by common law courts prior to the amalgamation of common law and equity courts. The equitable type is a chose in action which was enforced by the courts of equity before the amalgamation of common law and equity courts. The equitable chose in action is a promise or benefit arising out of a trust or fiduciary relationship. If a beneficiary had a trustee to convey an asset, such as real property, to it in certain circumstances, the right or benefit to have the asset conveyed to the beneficiary from the trustee would be an equitable chose in action. For this reason, the courts of equity always permitted an equitable chose in action to be enforced by assignees.

On the other hand, an assignment of rents is a legal chose in action. Traditionally, common law courts did not permit a legal chose in action to be enforced by assignees, and this created the doctrine of privity of contract. Thus, historically, an assignment of rents could not be enforced by the lender. To enable an assignee to enforce a legal chose in action, to get the benefit of the rents, the courts of equity intervened so that the assignor or the landlord/borrower could enforce the contract on behalf of the assignee, also known as the lender. Then, the assignor would in effect operate as a trustee for the assignee, which required a two-step litigation process. Firstly, the assignee would bring a claim in the courts of equity for an order requiring the assignor to enforce the contract. Secondly, with that order in hand, the assignee would ask the assignor to sue in the common law courts. Then, the legal chose in action in favour of the assignor would be enforced by common law courts and the doctrine of privity of contract would remain intact.

With the amalgamation of common law and equitable courts, these distinctions were eliminated and the courts permitted the assignee to sue the non-assigning party directly. It was introduced in Ontario following Section 53(1) of The Conveyancing and Law of Property Act and changes in the Rules of Practice. Section 53(1) states that a legal chose in action is enforceable by an assignee provided that

1) It is an absolute assignment and not a collateral assignment for security;

2) The assignment is in writing; and

3) Notice has been given to the non-assigning party.

Subject to these conditions, the assignee can enforce the contract on the non-assigning party. There are also Rules of Practice for assignees to proceed against a non-assigning party for recovery of a chose in action. Actually, the assignee can sue in its own name and not in name of the assignor. When the assignor retains a right of re-assignment, the assignor has to be a party to the claim because it continues to have a residual right in the chose in action.

Considering that an assignment of rents given as collateral security is not an absolute assignment, the lender cannot sue for rents until it becomes absolute. It becomes so when there is a default by the landlord/borrower and the lender takes steps to enforce the assignment of rents by taking possession, appointing a receiver, or demanding the rents through an attornment of rents.

Attornment Agreement vs. Non Disturbance Agreement

The differences between an attornment agreement and a non disturbance agreement are brought out in the Goodyear case. Both of them create privity of contract between the lender and the tenant, but a non disturbance agreement is one sided. It says that if the tenant pays rent to the lender, the lender will not kick the tenant out, but it cannot force the tenant to pay rent to the lender. Should the lease be first and the mortgage second, then the lender can take possession and ask the tenant for rent as either an agent of the landlord or as a mortgagee in possession. The lender can also do so upon acquiring the reversion through foreclosure or sale. The lender can attorn rents and the tenant has to pay rent to the lender. Should the lease be after the mortgage, then the Goodyear precedent is that:

1) The lender can ask the tenant to leave;

2) The tenant can leave on its own volition;

3) Should the lender allow the tenant to stay and the tenant stays, then:

(a) If the terms of the tenancy are not agreed upon, the tenant is an annual tenant on the same terms as the original lease; and

(b) If the parties agree on a different tenancy, then that agreement prevails.

4) If the tenant remains and does not pay rent, it does so at the sufferance of the lender; and

5) If the tenant stay put without any agreement, but the lender accepts rent, then an annual tenancy is created.

Know your legal rights as a tenant or a landlord. For more information about renting in Toronto, and how you or your business can use Ontario law to your advantage, contact the lawyers at Levy Zavet PC ( Levy Zavet ) in Toronto, Ontario.

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Home » Insights » Assigning the right to sue – the new provisions’

Assigning the right to sue – the new provisions’

Author: Thomas Russell

Service: Restructuring & Insolvency

External administrators of companies can now assign any right to sue that is conferred on them by the Corporations Act, for example voidable transaction claims and insolvent trading claims.

External administrators of companies can now assign any right to sue that is conferred on them by the Corporations Act, for example voidable transaction claims and insolvent trading claims. Previously these were considered rights that could only be utilised by the appointed liquidator and so could not be assigned. Now they can.

Thomas Russell ,  Partner  and  Brendan May ,  Lawyer  discuss these new changes and what they mean for insolvency practitioners.

When did this start?

  • This has already begun. It commenced on 1 March 2017.

What legislation brought this about?

  • The  Insolvency Law Reform Act 2016  (Cth) has introduced a  new schedule  to the  Corporations Act 2001  (Cth). The schedule is called “ Schedule 2 – Insolvency Practice Schedule (Corporations) ”( the Schedule ).
  • The external administrator is able to assign his or her right to sue under section 100-5 of the Schedule.
  • The  Bankruptcy Act 1966  (Cth) now also has a  Schedule 2  called “ Schedule 2 – Insolvency Practice Schedule (Corporations) . Section 100-5 similarly provides that any right to sue conferred upon a trustee of a debtor’s estate (including a bankrupt estate) can be assigned.

How does it happen?

  • In the usual way anything is assigned, for example by Deed of Assignment. The right is broad, and – subject to one or two things – allows the external administrator to assign “ any right to sue that is conferred on the external administrator by this Act ”.
  • if the external administrator’s action has already begun, the external administrator cannot assign the right to sue without the approval of the Court;
  • before assigning any right to sue, the external administrator must give written notice to the creditors of the proposed assignment; and
  • once assignment has been effected, a notice of assignment must be issued that complies with  s 12 of the  Conveyancing Act 1919  (NSW) . Note this is a piece of New South Wales legislation, however there are equivalent provisions in other state legislation.
  • if the right is assigned pursuant to an arrangement that will extend for more than three months, for instance an assignment in exchange for, among other consideration, an uplift or success fee upon the entry of judgment or recovery of monies; or
  • if the right being assigned is a debt due to the company (for instance a right to recover compensation for insolvent trading) and the circumstances of the assignment are such that this “debt” is effectively being compromised. There is (for obvious reasons) yet to be any case law on this situation but liquidators would be well advised to play it safe.

Who does this apply to?

  • It applies to “External Administrators”. This is defined in item 5-20 of the Schedule:

5-20 Meaning of external administrator of a company

A person is an external administrator of a company if the person is:

(a) the  administrator of the company ; or

(b) the  administrator under a deed of company arrangement  that has been entered into in relation to the company; or

(c) the  liquidator of the company ; or

(d) the  provisional liquidator  of the company.

Note: A person is  not  an external administrator of a company for the purposes of this Schedule merely because the person has been appointed as a receiver, receiver and manager, or controller in relation to property of the company.

Why could this not happen before?

  • The simple reason it couldn’t happen before is that people tried it, and the Courts said it couldn’t be done.
  • A right to sue is known as a  chose in action . The  common law  had long held a distrust of assignment of choses in action. However  equity  permitted it to happen, and over time it became accepted. However, the ability to assign a chose in action has always been the exception, rather than the rule.
  • The law has also had a historical wariness of “champerty” and “maintenance” – allowing a third party to meddle in and/or to profit off litigation. They used to be crimes and “torts” (unlawful acts).
  • section  588M  (insolvent trading) the statute provides “The company’s liquidator may recover from the director, as a debt due to the company, an amount equal to the amount of the loss or damage”, or
  • section  588FF  (voidable transactions) provides “Where, on the application of a company’s liquidator, a court is satisfied that a transaction is voidable…”

…and said that the statute says only a liquidator can bring the action, so we won’t let the liquidator assign it to someone else.

  • This has now changed.

What could an external administrator already assign before these provisions?

  • A liquidator of a company could (and still can) sell or otherwise dispose of, in any manner, property of the company pursuant to section  477(2)(c) .
  • Common law rights of action, vesting in the liquidator, are considered to be property of the company. So an external administrator always had a right at common law to assign debts, and some other causes of action which we will discuss shortly.
  • Likewise, straight-up debts (such as trading debts due by customers of the company) are, and always have been, assignable.
  • The only condition with debts and other legal actions is that notice of the assignment must be given to the debtor in order to effect a legal assignment pursuant to  section 12  of the  Conveyancing Act 1919  (NSW). Without this, it is only an “equitable assignment”, that is, a partly-completed assignment that still needs to be completed by compliance with the correct legal procedure.
  • Note that there is a general principle that claims for misleading and deceptive conduct cannot be assigned. The reason is that the relevant statutory provision giving a right to damages for loss suffered as a result of a breach (section 82 of the TPA, now section 236 of the  Australian Consumer Law ) does not provide for the award of damages in respect of a loss suffered by another, i.e. one that was not suffered by any party to the proceedings:  Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd  [2006] FCA 1352 .
  • The good news is that there is a line of authority, including in NSW ( CBD Prestige Property Holdings No 3 Pty Ltd v Metropolitan Local Aboriginal Land Council  [2013] NSWSC 1005 ), that suggests a liquidator is a special exception to the general principle above. The bad news is that this is in conflict with other authority from other states and at federal level on the same point, meaning that the position is not settled as far as the law is concerned.
  • If you are ever required to consider whether or not you are able to assign a claim for damages for misleading and deceptive conduct, specific legal advice should be sought and your advisor’s attention should be drawn to the two cases mentioned above.

What’s the big deal about notice and the  Conveyancing Act ?

  • It must be an absolute assignment (so you cannot legally assign part of something, e.g. half a bank account if it was a debt);
  • It must be in writing;
  • It must be signed by the assignor; and
  • Written notice must be given to the debtor or potential defendant. Note that the written notice has to come  after  the assignment, and it does not matter whether written notice comes from the assignor or the assignee, as long as somebody tells them ‘The right, title and interest to the claim against you has been assigned by  x  to  y ’.

What happens if notice is not given?

  • If notice is not given, you only have an equitable assignment, not a legal assignment.
  • This means legal title to that claim has not actually passed – only that (provided consideration has been paid) equity will treat it that it should have been passed. So the assignor technically retains legal title to the action, while the assignee has equitable title. The assignee can sue on the claim, but a rule of practice and procedure requires the assignor to be a party to the action.
  • If the assignor is not joined in such an action, there are decisions (see  Jennings v Credit Corp Australia Pty Ltd As Assignee From Citicorp Person To Person Financial Services Pty Ltd  [2000] NSWSC 210 ) which have held that until the legal assignor is joined or notice given, the equitable assignee cannot recover under the claim. The easiest way if notice hasn’t been given but proceedings have commenced is just to give notice. It is then perfected into a legal assignment and will operate retrospectively.
  • An equitable assignment is also susceptible of being defeated by other principles of equity (for example, if the equitable assignee does not come to court with ‘clean hands’).

Who will be interested in purchasing these claims?

  • Litigation funders would seem to be the most obvious market for these claims.
  • controlling the vote at a meeting of creditors (see Rule 75-110(4) of the bankruptcy IPRs re valuation of assigned claims, but note that no equivalent rule exists for corporations); or
  • ensuring the claim is under the control of a friendly party, for asset protection reasons or to obtain a tax benefit.

Should you have any questions, please contact either Thomas Russell or Brendan May.

Thomas Russell

+61 2 9253 9906

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assignment of chose in action

Chose in Action

Practical law canada glossary 0-621-0054  (approx. 2 pages).

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chose in action

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A right of proceeding in a court of law to obtain a sum of money or to recover damages. Examples include rights under an insurance policy, a debt, and rights under a contract. A chose in action is a form of property and can be assigned, sold, held in trust, etc. See also chose in possession.

From:   chose in action   in  A Dictionary of Business and Management »

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Taking security over choses in action

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Choses in Action (Volume 13 (2021))

If it's not in halsbury's then it's not the law..

Covering every proposition of the law of England and Wales, however niche, Halsbury's Laws provides all your legal answers in a single source.

1. Description and Classification

1. meaning of 'chose in action'., 3. classification as legal or equitable choses in action., 6. rights under a contract., 7. rights or causes of action., 9. intellectual property., 10. equitable rights., 12. rights which are not choses in action., 2. locality of chose in action., 4. other methods of classification., 8. shares etc., 11. leases over land., 2. assignment of choses in action, 13. historical development of the law of assignment., 15. modes of transfer., 16. assignments by and to the crown., 17. assignments by the law merchant., 18. transfer of shares and securities., 19. transfer of bills of exchange and other negotiable instruments., 20. assignment of rights under insurance policies., 21. transfer of intellectual property rights., 25. modes of assignment of choses in action in equity., 26. equitable assignment by way of charge., 28. mode and form of assignment in general immaterial., 29. when writing is required., 30. future choses in action., 31. distinction between existing and future choses in action., 32. communication to assignee of assignment., 35. rule that the assignor must have done everything necessary to transfer title to the assignee., 37. examples of equitable assignments., 38. examples of transactions which are not equitable assignments., 39. assignment of securities., 40. notice to debtor not necessary as between assignor and assignee., 42. payment to assignor before notice to debtor., 43. priority determined by notice to debtor., 44. absence of negligence on part of first assignee immaterial., 45. priority of competing equitable interests in land., 46. notice in writing., 47. when informal notice is sufficient., 48. form and time of notice., 49. to whom notice should be given., 50. notice of dealings with equitable interests in land and the proceeds of sale of land., 52. notice where there are several trustees of the fund., 53. indorsement on trust instrument in lieu of notice., 55. funds in court., 56. notice to company., 60. assignee subject to equities., 62. assignee of bond, mortgage debt or debenture., 63. set-off and cross-claims., 65. equities in case of trust funds., 68. right of assignee to sue in his own name., 70. liability of debtor after notice., 72. provisions for legal assignment of debts and other legal things in action., 73. general effect of statutory provisions., 74. meaning of 'debts'., 75. rights included in 'other legal things in action'., 76. necessity for assignment to be absolute and not to purport to be by way of charge., 79. form of assignment., 80. notice in writing., 81. transfer of legal right., 82. transfer of remedies., 83. transfer subject to equities., 84. stakeholder claim or application (formerly 'interpleader')., 85. payment into court., 87. bankruptcy and insolvency., 90. the third parties (rights against insurers) act 2010., 14. general power of assignment., 22. assignment of bills of lading., 23. assignment of leases etc., 24. recognition of assignment in equity., 27. assignment of part of a chose in action., 33. consideration, and voluntary assignment of an equitable chose in action., 34. consideration and voluntary assignment of a legal chose in action., 36. consideration and contracts to assign., 41. notice as between assignee and debtor., 51. nomination of trust corporation to receive notices., 54. stop notices as respects stocks and shares., 57. notice to solicitor., 58. duty of estate owner., 59. failure to give notice., 61. duty of debtor on receiving notice., 64. equities against intermediate assignor., 66. benefit of assigned contract subject to burdens., 67. release of equities., 69. right of assignor to sue., 71. when assignee may give valid discharge., 77. voluntary assignment., 78. object of assignment., 88. other statutory transfers., 89. subrogation generally., 91. court orders., 3. choses in action not capable of assignment, 92. public policy., 93. bankruptcy., 94. pensions and salaries to public officers., 95. salaries not assignable., 96. pensions, welfare benefits, etc., 97. maintenance., 98. bare right of action., 99. right of action incident to a right in property or assignee has genuine commercial interest in taking the assignment., 100. personal contracts and covenants., 101. provision in contract against assignment., to view this document in full, take a free 7 day trial of lexisnexis and benefit from:.

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§ 954 Form 1. Assignment—Chose in action | Secondary Sources | Westlaw

assignment of chose in action

§ 954 Form 1. Assignment—Chose in action

Cacf-civ § 954 form 1 jay e. grenig west's california code forms with commentaries, civil  (approx. 3 pages).

End of Document© 2024 Thomson Reuters. No claim to original U.S. Government Works.

IMAGES

  1. Assignment of Choses in Action

    assignment of chose in action

  2. Assignment of Action, chose in action,

    assignment of chose in action

  3. Assignment of Action, Chose in Action

    assignment of chose in action

  4. Definition of Chose in Action

    assignment of chose in action

  5. assignment of chose in action

    assignment of chose in action

  6. Assignment

    assignment of chose in action

VIDEO

  1. 2 Things to Consider before taking Decisions

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  4. WELCOME TO PARADIZE

  5. 3 Signs The Lord Chose You For a Special Purpose

  6. Countdown Animation

COMMENTS

  1. Assignment of Choses in Action

    A chose generally is a thing capable of being owned. Choses in action may be legal or equitable. Legal choses in action are rights which were enforceable or recoverable only by an action at Common law. This category of choses includes debts, benefits under a contract, insurance policies, copyrights, patents etc.

  2. Choses in Action

    An assignment of a chose in action will not confer upon the assignee a right of action in his/her own name against the original debtor. But if either the debtor expressly promises to pay the assignee or the assignment is made with the debtor's assent, then the assignee has the right to action in his own name. [ii] Further in Gillespie v.

  3. LAW OF EQUITY: CHOSES IN ACTION

    At common law the general rule was that unless the debtor agreed to it, a debt or other chose in action could not be assigned This is because chose...

  4. ASSIGNMENT OF CHOSES IN ACTION

    CONDITIONS FOR A VALID ASSIGNMENT OF CHOSES IN ACTION. In order for Section 25 (6) of the Judicature Act 1873 to apply, three conditions must be fulfilled: 6.1 The assignment must be absolute and not purport to be by way of charge only. An absolute transfer is a transfer of the whole not a part of the chose in action.

  5. 22. Assignment of choses in action

    Abstract. This chapter deals with the general law of assignment of choses in action. Beginning with the historically based difference between equitable and statutory assignment, it then explains what 'chose in action' and 'assignment' are before discussing the requirement that there be an existing and assignable chose in action or right as well as the requirement that a person who ...

  6. Bush v. Superior Court (Rains) (1992)

    Sanctioning the assignment of an American Motorcycle chose in action to the tort plaintiff fosters settlement with the tortfeasor most willing to settle. In this case the [10 Cal. App. 4th 1387] assignment appears to have been a valuable consideration to the Rains, since they bargained for it in the settlement agreement. fn. 2

  7. Choses in Action & Rights to Sue: legal rights to sue

    A chose in action is: an intangible property right or property. which is legally not in a person's possession. but is only enforceable by legal process. The legal process begins with a chose in action and ends with a judgment or court order. Therefore, a chose in action is a right to sue: a legal right. It's a property right.

  8. Chose in action

    A chose in action is capable of being assigned both at law and in equity. The transfer of property at law in NSW is governed by section 12 of the Conveyancing Act 1919 (NSW). In order for a chose in action to be validly assigned at law the transfer must: Not necessarily be supported by consideration. If an assignment of a legal chose in action ...

  9. Chose in Action--Gratuitous Assignment

    The most common method employed for a gratuitous transfer of a chose in action is by the delivery of a written instrument of such a nature as is capable of transferring the title to the donee without con-sideration. Taylor v. Purdy supra; City of Louisville v. Lenehan, 149 Ky. 537, 149 S. W. 932 (1912).

  10. Chose

    A chose in action or thing in action, also known as a chose in suspense, [7] [8] is a right to sue. It has been made trite law, since Torkington v Magee, that chose in action is a legal expression used to describe all personal rights of property which can only be claimed or enforced by action. It is therefore a categorisation of interests in assets, the enforcement of which cannot be secured ...

  11. Georgia Code § 44-12-22 (2020)

    No special form of words is necessary to make assignment of chose in action. - Any language, however informal, will be sufficient to vest the title in the assignee, if it shows the intention of the owner of the chose in action to at once transfer it so that it will be the property of the transferee. Southern Mut. Life Ins. Ass'n v.

  12. The Assignment of Choses in Action

    Defines the term "chose in action" and traces the history of assignment through the case law and statute law.

  13. Georgia Code § 44-12-24 (2020)

    Form of assignment of chose in action is immaterial; it is sufficient if it is in writing and manifests the intention of the owner to transfer to the assignee title in the chose in action. Lumpkin v. American Sur. Co., 69 Ga. App. 887, 27 S.E.2d 412 (1943). No joinder of assignor in suit by assignee.

  14. ASSIGNMENT OF LEASES, RENTS, NON DISTURBANCE AND ATTORNMENT: How To

    It was introduced in Ontario following Section 53(1) of The Conveyancing and Law of Property Act and changes in the Rules of Practice. Section 53(1) states that a legal chose in action is enforceable by an assignee provided that. 1) It is an absolute assignment and not a collateral assignment for security; 2) The assignment is in writing; and

  15. Assigning the right to sue

    A right to sue is known as a chose in action. The common law had long held a distrust of assignment of choses in action. However equity permitted it to happen, and over time it became accepted. However, the ability to assign a chose in action has always been the exception, rather than the rule.

  16. Chose in Action

    Chose in Action. Personal rights of property that can only be claimed or enforced by action and not by taking physical possession (as distinct from choses in possession, things capable of physical possession). Divided into legal and equitable choses in action, depending on whether they can be recovered or enforced by action at law (such as ...

  17. Chose in action

    chose in action. A right of proceeding in a court of law to obtain a sum of money or to recover damages. Examples include rights under an insurance policy, a debt, and rights under a contract. A chose in action is a form of property and can be assigned, sold, held in trust, etc. See also chose in possession.

  18. Taking security over choses in action

    A chose in action is an asset that can only be claimed or enforced by action at law or equity, rather than by taking physical possession of the asset. The note looks at how to take security over various types of choses in action such as rights under contracts, debts, financial instruments and cash deposits in bank accounts.

  19. Choses in Action

    Assignment of part of a chose in action. 33. Consideration, and voluntary assignment of an equitable chose in action. 34. Consideration and voluntary assignment of a legal chose in action. 36. Consideration and contracts to assign. 41. Notice as between assignee and debtor. 51. Nomination of trust corporation to receive notices.

  20. § 954 Form 1. Assignment—Chose in action

    Assignment—Chose in action CACF-CIV § 954 Form 1 Jay E. Grenig West's California Code Forms with Commentaries, Civil (Approx. 3 pages) West's Cal. Code Forms, Civil § 954 Form 1 (6th ed.)

  21. Choses in action

    A chose in action may be assigned by written instrument signed by the assignor that is absolute in terms and by notice in writing being given to the debtor (see section 100-5 of the Insolvency Practice Schedule). The Courts have confirmed the right of a trustee to sell a chose in action, including to a discharged bankrupt. ... Assignment of a ...

  22. The History of the Treatment of "Choses" in Action by the Common Law

    IV, Mich., pl. 34. King v. the Executors of Daccombe, Cro. Jac. 512 (1619) FITZHERBERT, ABRIDGMENT, Corone, pl. 343 (3 EDW. III). Co- lonial Bank v. Whinney, 11 A. C. 426, 439 (1886) Second Report of the commission to enquire into the Process Practice and System of Pleading of the Courts of Common Law, Parlt.