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.
If before assignment the assignor has waived or modified his contract rights, his assignee is bound thereby.1 An assignee is bound by a contract of compromise and settlement made between the assignor and the original debtor.2 If the assignor has surrendered his contract to the adversary party conditionally, the assignee can not enforce such contract as against the adversary party except on failure of such condition.3 If the insolvency of the assignor has made impossible of performance a contract to secure a loan for him, his assignee takes no rights.4 If the rights of the assignor cease because of his death, the assignee has no greater right. Thus where A took out an insurance policy in favor of his wife, B, and if she died before him, to his children, and A and B assign the policy to X, and B dies before A, X takes nothing by the assignment.5
Defenses on the ground of non-performance of the contract may be interposed against the assignee.6 If the proceeds of the contract were to be applied in accordance with the manner specified in the original contract, the assignee can not claim a right to such proceeds, ignoring such provision as to the application thereof.7 If the assignor is to be reimbursed only out of a certain fund, his assignee can not enforce his claim unless such fund has been created.8 If the assignor has broken the contract and the damages due to his breach exceed the amount due thereon from the adversary party, the assignee can not recover the amount thus due and insist that the adversary party shall look to the assignor for damages.9 If the assignor has abandoned the contract and the adversary party has been obliged to expend an amount equal to or greater than the contract price in completing the contract, the assignee can recover nothing.10 If the assignor holds the non-negotiable claim solely to secure a debt, his assignee takes it subject to the right of the adversary party to redeem.11
13 Cowdrey v. Vandeburgh, 101 U. S. 572. 25 L. ed. 923; Stone v. Hart (Ky.), 66 S. W. 191; Follett v. Reese, 20 Ohio 546, 55 Am. Dec. 472.
14 Stone v. Hart (Ky), 66 S. W. 191. B's representations here were made after the assignment, but while A was alive and solvent, and he sought to defeat X's claim after A had died and his estate had become insolvent.
15 Morrison v. Beckwith, 20 Ky. (4 T. B. Mon.) 73, 16 Am. Dec. 136.
11owa. Soukup v. Investment Co., 84 Ia. 448, 35 Am. St. Rep. 317, 51 N. W. 167.
Kentucky. Shuttleworth v. Development Co. (Ky.), 60 S. W. 534.
Louisiana. Dannenmann v. Charlton, 113 La 276, 36 So. 965.
Nebraska. Hoover v. Bank, 58 Neb 420. 78 N. W. 717
Massachusetts. Homer v. Shaw, 177 Mass. 1. 58 N. E. 160.
2 Dannenmann v. Charlton, 113 La. 276, 36 So. 965.
3 Allen v. Detroit. 167 Mich. 464. 36 L. R. A. (N.S.) 890, 133 N. W. 317,
4 National Bank v. Security Co.. 50 Kan. 313, 31 Par. 1080.
5 Brown's Appeal, 125 Pa. St. 303, 11 Am. St. Rep. 900, 17 Atl. 419.
6 California. Pacific Rolling Mill Co. v. English, 118 Cal. 123, 50 Pac. 383.