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.
In equity from an early period, contracts except those in which the personality of the adversary party was material, were regarded as forms of property rather than as purely personal relations; and, accordingly, assignment was recognized in equity long before its recognition in common law,1 though occasionally with some doubt as to the wisdom of its action.2 Equity would give specific performance of the contract of assignment in favor of the assignee as against the assignor.3 In equity, rights arising under most contracts can therefore be assigned, and the assignee may enforce his rights by a suit in equity in his own name, if the facts, independent of the assignment, are such as to entitle him to equitable relief.4 If the remedy to which the assignee is entitled is equitable, such as specific performance,5 including specific performance against the assignor - at least if the debtor, who is a party to the action, pays his debt into court without objection,6 redemption from a mortgage,7 foreclosure,8 accounting,9 setting aside a fraudulent conveyance,10 or settling the estate of a decedent in equity,11 the assignee may sue in equity in his own name.
1 Y. B. 37 Hen. VI 13, pi. 3.
2 Penson v. Higbed, 4 Leon. 09. (No decision was rendered, as it did not appear clearly what was assigned.)
3Penson v. Higbed, 4 Leon. 99.
5 Backwell v. Litcott, 2 Keb. 331.
6 Y. B. 34 Hen. VI 30, pl. 15. 7 Y. B. 15 Hen. VII 2, pl. 3.
1 "Choses in action are assignable in equity though not in law." Squib v. Wyn 1 P. Wms. 378.
"Though the law does not admit an assignment of a chose in action, this court does." Row v. Dawson, 1 Ves. Sr. 331.
2 "The court has gone a great way, perhaps too far, in permitting persons to assign over, for what is called valuable consideration, • • • rights in accounts to be taken." Spragg v. Binkes, 5 Ves. Jr. 583.
3 Wright v. Wright, 1 Ves. Sr. 409.
4 England. Brown v. Heathcote, 1 Atk. 160; Chandos v. Talbot. 2 P. Wms 601.
United States. Chicago, etc, Ry. v. Ry., 143 U. S. 596, 36 L. ed. 277.
If the cause of action against the debtor is an action at law, the assignee's remedy is to bring an action at law against the debtor in the name of the assignor in jurisdictions in which he can not sue in his own name; and he can not bring a suit in equity against the debtor, since his legal remedy, if available, is adequate.12 If the assignee was unable to make use of the legal remedy of bringing an action at law in the name of the assignor, equity would permit him to sue in his own name.13 If the only remedy allowed to an indorsee at law is an action against his immediate indorser, and if such indorser is insolvent, equity will permit the indorsee to file a bill in equity against a remote indorser.14 If the assignor is dead and no administrator has been appointed,15 or the administrator is a non-resident,16 or if the assignor is a corporation which has been dissolved,17 or which has expired by efflux of time,18 the remedy of bringing an action at law in the name of the assignor is not available, and the assignee may sue in his own name in equity.
Delaware. Illinois Finance Co. v. Interstate Rural Credit Association, - Del. - , 101 Atl. 870 (obiter).
Illinois. Brownell Improvement Co v. Critchfield, 197 111. 61, 64 N. E. 332.
Massachusetts. Dix v. Cobb, 4 Mass. 508.
Michigan. Up River Ice Co. v. Denier, 114 Mich. 296, 68 Am. St. Rep. 480, 72 N. W. 157.
New Jersey. Bleakley v. Nelson, 56 N. J. Eq. 674, 39 Atl. 912.
New York. Chambers v. Lancaster. 160 N. Y. 342, 54 N. E. 707.
Oregon. Stott v. Franey, 20 Or. 410, 23 Am. St. Rep. 132, 26 Pac. 271.
Tennessee. Morrison v, Deaderick, 29 Tenn. (10 Humph.) 342.
Wisconsin. Varney v. Bartlett, 5 Wis. 276.
5 Brett v. Warnick, 44 Or. 511, 102 Am. St. Rep. 639, 75 Pac. 1061; Bullion v. Campbell, 27 Tex. 653; Hagar v. Buck, 44 Vt. 2S5, 8 Am. Rep. 368.
6 Brett v. Warnick, 44 Or. 511, 102 Am. St. Rep. 639, 75 Pac. 1061.
7 Mayo v. Carrington, 60 Va. (19 Gratt.) 74.
8 Caldwell v. Meshew, 44 Ark. 564; Slaughter v. Foust, 4 Blackf. (Ind.) 379; Bigelow v. Willson, 18 Mass. (1 Pick.) 485.
9 Pendleton v. Wambersie, 8 U. S. (4 Cranch) 73, 2 L. ed. 554; Gleason & Bailey Mfg. Co. v. Hoffman, 168 111. 25, 48 N. E. 143; Hobart v. Andrews, 38 Mass. (21 Pick.) 526.
10 Moorer v. Moorer, 87 Ala. 545, 6 So. 289.
11Blackerby v. nolton, 35 Ky. (5 Dana) 520.
12 England. De Ghettof v. London Assurance Co., 4 Brown Cases in Pari. 436 [affirming, Dhegetoft v. London Assurance Co., Mosely 83]; Rolt v. White, 31 Beav. 520 [affirmed, Rolt v. White, 3 Deg. J. & S. 3601; Rose v. Clarke, 1 Y. & Col. Ch. 534; Fall v. Chambers, Mosely 193; Cator v. Burke, 1 Bro. Ch. 435; Motteux v. London Assurance Co., 1 Atk. 545; Hammond v. Messenger, 9 Sim. 327.
United States. Riddle v. Mandeville. 9 U. S. (5 Cranch) 322, 3 L. ed. 114; Hayward v. Andrews, 106 U. S. 672, 27 L. ed. 271; New York Guaranty Co. v. Memphis Water Co., 107 U. S. 205, 27 L. ed. 484; Smith v. Bourbon County, 127 U. S. 105, 32 L. ed. 73; Glenn v. Marbury, 145 U. S. 499, 36 L. ed. 790.
Arkansas. Baker-Matthews Mfg. Co. v. Grayling Lumber Co., 134 Ark. 351. 203 S. W. 1021.
Whether the refusal of the assignor to permit the assignee to make use of his name in an action at law against the debtor gives to the assignee the right to file a bill in equity against the debtor, or whether his remedy in equity is to compel the assignor to permit him to use his name, is a question upon which there is little authority, and that little is divergent. It has been said that if the assignor interferes, equity will permit the assignee to sue in equity to compel the debtor to pay the debt to him.19 It has been held, on the other hand, that the assignee's remedy in equity is against the assignor, to compel him to allow his name to be used, and not against the debtor to compel him to pay the debt to the assignee.20
New York. Carter v. United Ins. Co., 1 Johns. Ch. (N. Y.) 463.
Vermont. Hagar v. Buck, 44 Vt. 285, 8 Am. Dec. 368.
Virginia. Moseley v. Boush, 25 Va. (4 Rand.) 392.
Contra, Dixon v. Buell, 21 111. 203; Dobyns v. McGovern, 15 Mo. 662; Townsend v. Carpenter, 11 Ohio 21.
13 Baker-Matthews Mfg. Co. v. Grayling Lumber Co., 134 Ark. 351, 203 S. \V. 1021; Walker v. Brooks, 125 Mass. 241 (obiter).
"As was said in Hayward v. Andrews, 106 U. S. 672, 675, 27 L. ed. 271: 'If the assignee of the chose in action is unable to assert in a court of law the legal right of the assignor which in equity is vested in him then the jurisdiction of a court of chancery may be invoked, because it is the proper forum for the enforcement of equitable interests, and because there is no adequate remedy at law; but when, on the other hand, the equitable title is not involved in the litigation, and the remedy is sought merely for the purpose of enforcing the legal right of his assignor, there is no ground for an appeal to equity, because by an action at law in the name of the assignor the disputed right may be perfectly vindicated, and the wrong done by the denial of it fully redressed. To hold otherwise would be to enlarge the jurisdiction of courts of equity to an extent the limits of which could not be recognized, and that in cases where the only matter in controversy would be purely legal rights.'" Smith v. Bourbon County, 127 U. S. 105, 32 L. ed. 73.
14 Harris v. Johnston, 7 U. S. (3 Cranch) 311, 2 L ed. 450; Riddle v. Mandeville, 9 U. S. (5 Cranch) 322, 3 L. ed. 114.
He could not maintain assumpsit against a remote indorser. Mandeville v. Riddle. 5 U. S. (1 Cranch) 290, 2 L. ed. 112.
15 Taylor v. Reese, 44 Miss. 89. (It is said that the plaintiff could sue in equity as equitable assignee even if there were an administrator.)
16Cobb v. Thompson, 8 Ky. (1 A. K. Mar.) 507.
17 Baker-Matthews Mfg. Co. v. Grayling Lumber Co., 134 Ark. 351, 203 S. W. 1021; Person v. Barlow, 35 Miss. 174. 72 Am. Dec. 121.
18 Lenox v. Roberts, 15 U. S. (2 Wheat.) 373, 4 L. ed. 264.
Equity would enjoin the assignor from interfering with the attempt of the assignee to enforce the contract by an action in the name of the assignor.21 If the assignor threatened to dismiss the action which the assignee had brought in the name of the assignor, equity would enjoin the assignor from dismissing it.22
As far as law has adopted the theory of assignment which was held originally by the courts of equity, the classes of contracts which could be assigned at equity can be assigned at modern law; circumstances." Hammond v. Messenger, 9 Sim. 327.
19"If this case were stripped of all special circumstances it would be simply a bill filed by a plaintiff who had obtained from certain persons to whom a debt was due a right to sue in their names for the debt. It is quite new to me that, in such a simple case as that, this court allows, in the first instance, a bill to be filed against the debtor by the person who has become the assignee of the debt. I admit that, if special circumstances are stated, and it is represented that, notwithstanding the right which the party has obtained to sue in the name of the creditor, the creditor will interfere and prevent the exercise of that right, this court will interpose for the purpose of preventing that species of wrong being done; and, if the creditor will not allow the matter to be tried at law in his name, this court has a jurisdiction, in the first instance, to compel the debtor to pay the debt to the plaintiff - especially in a case where the act done by the creditor is done in collusion with the debtor. If bills of this kind were allowable, it is obvious that they would be pretty frequent; but 1 never remember any instance of such a bill as this being filed unaccompanied by special and they will be discussed in connection with the modern-law theory.23
This statement is obiter, since the court found no special circumstances which justified a resort to equity. It has been repeated in a number of cases in obiter. See Walker v. Brooks, 125 Mass. 241.
20 "But if the trustee really refuses his name, this indeed is a foundation for the court to compel him, but not to decree against the debtor; his refusal can not alter the nature of the action against him. He has a right to have the witnesses examined viva voce at a trial, where their evidence can be more thoroughly sifted, and considered by a judge and jury, than on a commission." (Argument of counsel, apparently adopted by court.) Fall v. Chambers, Mosely 193.
The fact that the assignor "did not care to permit his name to be made use of" does not enable that assignee to sue the debtor in equity. De Ghet-tof v. London Assurance Co, 4 Brown Cases in Parl. 436 [affirming, Dhegetoft v. London Assurance Co., Mosely 83]
21 Deaver v. Eller, 42 N. Car. (7 Ired. Eq.) 24.
22 Deaver v. Eller, 42 N. Car. (7 Ired. Eq.) 24.
In equity the assignee is the real party in interest and he can not bring a suit in equity to which he is not a party in the name of the assignor.24 If the assignment is total and absolute, it is not necessary to make the assignor a party, since he has no interest in the outcome of the litigation between the assignee and the debtor.25