This section is from the book "The Law Of Land Contracts", by Asher L. Cornelius. Also available from Amazon: Michigan Law Of Land Contracts.
It has been held that an assignment as collateral security of a contract for the sale of land, by the vendee, does not violate a stipulation in the contract prohibiting assignment. Badger Lbr. Co. v. Parker, 85 Kan. 134, 116 Pac. 242, 35 L. R. A. (N. S.) 901.
Clauses Against Assignment of Contract Upheld by the Court
16. Lockerby v. Anion, et al., 64 Wash. 24. The court said: "It is not denied that stipulations of the character relied on in this case are lawful and binding upon the parties. Hunter Tract Imp. Co. v Stone, 58 Wash. 661, 109 Pac. 112. However, an engaging argument is made by appellant upon the theory that, although the parties had a right to so contract, the restrictive clause has performed its office, that Is, it being designed only to Insure payment of the purchase price, and that being tendered, there can be no reason for withholding the deed; and generally that, inasmuch as Swingle might have tendered and received a deed, and thereafter immediately conveyed to Johnson, equity, inasmuch as it regards substance rather than form, will compel the execution of a deed to the assignee. These arguments are not new and find some support in the authorities; but they have been rejected by a majority of the courts." (The court evidently refers to the validity of the restriction in contracts generally). "The privilege of selecting a grantee is an incident of ownership, and we cannot presume, as did the Supreme Court of Minnesota, that 'at most this stipulation against an assignment is merely collateral to the main purpose of the contract, designed as a means of securing and enforcing payment of what was undertaken by the vendor, to-wit: the prompt payment of the purchase money. When the vendor has re ceived all his purchase-money, he has received all he is entitled to, and all that the provision against the assignment was intended to secure.' Johnson v. Eklund, 72 Minn. 195, 75 N. W. 14.
"While this reasoning is entitled to consideration we cannot accept it as the end of the law. A vendor may have confidence that his vendee will not use the property to his disadvantage. It is his privilege to decline to deal with strangers, or, he may, by limiting the right of assignment, save any question as to the interest of intervening third parties, a result not altogether unlikely under our community property system. Or he may be unwilling to assume to pass upon the legal sufficiency of an assignment. The better rule is stated in Omaha v. Standard Oil Company, 55 Neb. 337, 75 N. W. 859. See also, Monographic Notes, 88 Am. State Rep. 201; Muel-
In examining the decisions appended in the note, it should not be overlooked that some states, like Indiana, have adopted the doctrine permitting a strict forfeiture of land contracts without any relief by way of redemption regardless of what the vendee may have paid under the contract. Such decisions are of doubtful authority in Michigan where the courts have gone ler v. Northwestern University, 195 111. 236, 63 N. E. 110, 4 Cyc. 20. "Whatever may have been the reasons for reserving the right to decline to deal with an assignee, such reservation contravenes no rule of public policy, and is enforceable."
In Martin v. Smith, 94 Ore. 132, the contract therein passed upon provided as a condition that: "He will not assign or transfer this contract, nor deliver the possession of said premises to any person or persons whomsoever without the consent in writing of the said first party." The defeasance clause also states, "or in case the said party of the second part shall fail or refuse to comply with all or any of the conditions, or agreements herein contained and by him to be performed, then and in such event this contract shall be void and thereupon said first party shall be entitled to the immediate possession of said premises." All payments were to be forfeited in case of such default and considered as rent for the use of the premises. The court said: "A contract may be defined to be an agreement between two or more parties competent to contract, upon a sufficient consideration, to do or not to do a particular thing which lawfully may be done or omitted. Hence the parties could provide that the contract should not be assigned without the written consent of one of them. There is nothing unlawful or contrary to public policy in such a stipulation and under proper conditions the same may be enforced. There are instances where the personal qualities of one of the parties form an element of the agreement, as where the personal services of a physician or of an actor, or a tenant for a certain share of crops as rent, are involved. There by operation of law the contract is not assignable without the consent of the employer. It is eqaully permissible for the parties to append the same condition by express contract, so that the inhibition against assignment arises from their covenant rather than by operation of law. For instance, in Behrens v. Cloudy, 50 Wash. 400, 97 Pac. 450, a lease contained covenants of the lessor to sell the land to the lessee in eight months at the latter's option, and also the covenant of the lessee not to assign any part of the lease. The plaintiff had taken an assignment of the option without a written consent as required by the contract, and sued to compel specific performance. The court held that the covenant against the assignment was lawful and that the purchaser without written consent acquired no rights. In another Washington case, Bond-Foster Lumber Co. v. Northern Pac. R. R. Co., 53 Wash. 302, 101 Pac. 877, it is laid down as a rule that: 'One who acso far in relieving the vendee from forfeiture in cases where the equities are strongly in his favor. Additional discussion as to the soundness of these conflicting doctrines may be found in the following section.
 
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