The transfer of something of an incorporeal nature is accomplished by assignment. Assignment may signify (1) a sale; (2) a pledge to secure a loan; (3) a gift; (4) a transfer for some special purpose.
In the law of contracts we must ask to what extent one may assign his rights and obligations to another. Obviously this introduces the question whether the adversary party to the contract consents or doesn't consent. If there is a contract between A and B and B with A's consent assigns to C, the assignment is effectual to transfer to C whatever the assignment purports to cover. But if A's consent is lacking, to what extent may B assign? This is the problem of the cases. In the following topics upon the subject of what may be assigned let us therefore assume that the consent of the adversary party (A) has not been procured.
We know that B's agreement with A has resulted in mutual obligations, or in other words, that A owes to B, and B owes to A, certain obligations and that what B attempts to assign to C must necessarily be what A owes to B or B owes to A, that is, his right against A or his obligation to A.
Can B, without A's consent assign his rights and obligations or either of them?
Now we must remember that a contract is an agreement between parties who have chosen each other for reasons of their own. That one may choose with whom he will contract is a basic principle in contract law. Hence it would seem, to begin with, that there could be no assignment by either party to the contract without the consent of the other. But it is another policy of the law that he who has an asset of any kind should be able to traffic in it if he thereby does not unduly disturb the right of any other person. And it is apparent that one may have a contractual right against another the delivery of which he may direct without unduly disturbing the contractual relationship between the contracting parties; and out of these conflicting policies has resulted the law that one may assign his rights under a contract without the consent of the other party to the contract when such transfer does not involve the personality of the assignor and assignee, as we shall hereafter notice.
A contracting party may assign his rights under the contract when such assignment does not involve the credit, skill or other personality of the assignor. His rights to another's personal service he can never assign.
If one has a right under a contract to receive money or goods upon conditions that do not involve his credit, skill or other item of personality, he may assign such a right.
Example 74- A assigns to L his right to receive his salary from E. E must honor this assignment when he receives notice thereof from L.
In the illustration the real contract, one of service between the parties is not affected.
A right to another's services, a person can never assign. Thus in the above case E could not assign to another his rights to A's services.
Generally speaking, there is no power to assign contractual obligations.
One's obligations under a contract he can not assign because he could thus make the other contracting party look to one for the rendition of obligations with whom he did not contract and perhaps, indeed did not care to contract.
Example 75. A owes B a sum of money. A cannot assign this obligation to C without B's consent. It is true that C by contract with A may assume the payment of the debt to B, and, as we have seen, B may sue on this contract; but B need not accept C's obligation in place of A's if he does not want to.
Contractual rights cannot be assigned if they are coupled with liabilities or involve the credit, skill or personal confidence of the assignor.
One cannot assign his rights under a contract if such rights are connected with liability or other personal element. "You have the right you anticipate from the character, credit and substance of the party with whom you contract." Humble v. Hunter, 12 Q. B. 310.
Example 76. Dunton Lumber Co. sold to K. Co. the entire output of white pine lumber for 1901, except such as it should need for its retail trade in Rumford Falls. The K. Co. were to pay within 10 days from receiving invoice. The K. Co. attempted to assign to Demarest, but the Dunton Co. would not recognize him, and he brought suit. The court held the contract not to be assignable.160
One may assign any right under an existing contract, but cannot assign rights under a contract not yet made.
One cannot assign to another what he has not got himself, because assignment supposes present transfer of title. But it is sufficient within this rule that the contract is actually existing, although it might be terminated by either party at any moment.
A is employed by B. He borrows money from L, and as security assigns to L his salary from B, also any salary he may make from any other employer. A's employment with B is from day to day and B could let him go at any time without liability to A. The assignment of wages to be earned under the contract with B is good, but the assignment as to other employers is ineffectual.161
The assignor of an obligation still remains responsible to the other party for the due performance of the contract. Assignment of rights divests the assignor of such title as he had.
If one assigns obligations he still is responsible for the performance of the contract, even though the consent of the other party has been secured; but this must be understood as not referring to a case of novation or where the other party has, instead of permitting an assignment, been a party to a novation. Thus, if one leases a building and afterwards, with or without the assent of the landlord, assigns his lease to another, and that other fails to pay the rent, the original lessee can be held.162
160. Demarest v. Dunton Lumber Co., 161 Fed. 264.
161. Mulhall v. Quinn, 67 Mass. 105; Mallin v. Wenham, 209 111. 252.
162. Grommes v. St. Paul Trust Co., 147 111. 634.
After assignment of a right the assignor loses his right to receive the benefits under the contract. The assignee for that purpose has a right to step into his place.