This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The effect of an assignment, if valid, is controlled by the law of the place where it is made.1 Thus the question whether a wife acquires an absolute interest in an insurance policy on her husband's life by assignment from him,2 or whether an implied warranty of validity exists in a sale of bonds,3 is determined in each case by the law of the place where the contract is made. In many of the cases where this rule is laid down, the assignor was domiciled where the assignment was made.4 Assignment of contract rights may be forbidden by law on two different theories. (1) The nature of the contract assigned may itself prevent assignment. Whether an assignment is valid or invalid for a reason of this sort depends on the law of the place which controls the contract sought to be assigned.5 Thus a life insurance policy was executed in New York, and there payable. The insured was domiciled in Massachusetts, and there assigned such policy to his wife. It was held that New York law controlled as to whether the assignment had any validity.6 (2) The relic of the Common-Law rule forbidding assignments still prevents an assignee of a contract from suing in his own name in some states. In this form the rule is a mere matter of procedure, and concerns the remedy only. If this is the effect of the rule, the law of the forum controls.7
1 Colburn's Appeal, 74 Conn 463; 92 Am. St. .Rep. 231; 51 Atl. 139; Succession of Miller v. Ins. Co., 110 La. 652; 34 So. 723; May v. Wan-nemacher, 111 Mass. 202; In re Dal-pay, 41 Minn. 532; 16 Am. St. Rep. 729; 6 L. R. A. 108; 43 N. W. 564; Allen v. Bain, 2 Head. (Tenn.) 100.
2 Colburn's Appeal, 74 Conn. 463; 92 Am. St. Rep. 231; 51 Atl. 139.
3 Meyer v. Richards, 163 U. S. 385.
4 Davis v. Mills, 99 Fed. 39; Colburn's Appeal, 74 Conn. 463; 92 Am. St. Rep. 231; 51 Atl. 139; Consolidated, etc., Co. v. Collier, 148 111.
259; 39 Am. St. Rep. 181; 35 N. E. 756.
5 Colburn's Appeal, 74 Conn. 463; 92 Am. St. Rep. 231; 51 Atl. 139.
6 Colburn's Appeal, 74 Conn. 463: 92 Am. St. Rep. 231; 51 Atl. 139. (Massachusetts law, however, con., trols as to the effect of such assignment - i. e., whether by such assignment the wife acquired the entire interest in such policy.)
7 Leach v. Greene, 116 Mass. 534. Contra, that the law of the place where the assignment is made controls. Lanigan v. North, 69 Ark. 62; 63 S. W. 62.