• Personal Profile
  • See all online law products
  • Guided Tour
  • Subscriber Services

Oxford Legal Research Library

  • Financial Law [FBL]
  • International Commercial Arbitration [ICMA]
  • Private International Law [PRIL]
  • International Commercial Law [ICML]

Recently viewed (0)

  • Save Search
  • Share This Facebook LinkedIn Twitter
  • Collapse All
  • Foreword to The Third Edition
  • Foreword to the Second Edition
  • Foreword to the First Edition
  • Preface to The Third Edition
  • Preface to the First Edition
  • Summary Contents
  • Detailed Contents
  • Table of Cases
  • Statutory Instruments
  • Netherlands
  • United States
  • Conventions
  • Regulations
  • International Conventions
  • List of References
  • List of Authority Abbreviations
  • Preliminary Material
  • Part III.01

Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam erat volutpat.

Go to full text on:

  • United Nations

Treaty Establishing the European Community (as amended by other Treaties) (European Union) [2006] OJ 321 E/37 (Date signed: 25th March 1957)

  • External Link

Part II The Transfer of Intangible Property, 13 Equitable Assignment of Choses in Action

From: the law of assignment (3rd edition), marcus smith, nico leslie.

This chapter studies the requirements that are necessary for an effective assignment of choses in action. In order to effect the assignment or a chose in action: the assignor must have manifested an intention to transfer the chose; the thing being assigned must be a chose in action, in present existence, certain or capable of being ascertained; the identity of the assignee must be clear; and the appropriate forms and formalities must have been satisfied. These requirements apply both to legal and equitable assignments. However, since legal assignments can only be affected by statute, the forms and formalities required for a legal assignment are those set out in the relevant legislation, and addressed elsewhere.

  • [66.249.64.20|185.66.14.133]
  • 185.66.14.133

Assignment of Choses in Action

Property generally may be realty (real) or personalty (personal). Realty are characterized by geographical fixity(land) while personalty are generally mobile.

Personalty is also classified into tangible/corporeal and intangible/incorporeal. The former is capable of physical handling/possession/manipulation/enjoyment while the latter is incapable of any of these.

Incorporeal property is also called a chose in action which has been defined as a legal expression used to describe all personal rights of property which can only be claimed or enforced by action (in a court) and not by taking physical possession.

A chose generally is a thing capable of being owned. Choses in action may be legal or equitable. Legal choses in action are rights which were enforceable or recoverable only by an action at Common law. This category of choses includes debts, benefits under a contract, insurance policies, copyrights, patents etc.

Equitable choses on the other hand are rights over property which were only enforceable/recoverable/cognizable by the courts of Chancery. It could only be recovered by a suit in Equity and the rights under this category include interests of a beneficiary in a Trust, a legacy/reversionary interest under a will etc.

Choses in action may also be in respect of already existing things/property or things/property to be acquired at a future date but which are not yet in possession. The chose in action may be property in itself and it may also be a propriety right over property.

Assignment is the transfer of something from one person to another such that the assignee obtains rights of a nature that were hitherto exercisable only by the assignor. An assignment of a chose is thus the transfer of a chose in action from the assignor to the assignee such that the assignee obtains and becomes entitled to enjoy rights in respect of that chose, which were hitherto exclusively enjoyed by the assignor.

Assignment may be legal (statutory) or equitable.

Assignment and Novation

An assignment is quite distinct from a novation. Novation is essentially a legal device by which parties to a contract may legally vary/shift their obligations under the contract to third parties. Thus, A can agree with B, his creditor, that C, who owes him money, will pay that debt to B in full satisfaction of his own (A’s) debt.

Novation is however fundamentally different from assignment in three material aspects:

  • The consent of the parties is sine qua non since the original contract is rescinded by the novation. There must thus be consensus ad idem. There can be no novation otherwise. This is contrary to the case in assignment where there only need be communication to the assignee, his consent and that of the trustee of the liability are immaterial.
  • The original debt in novation must be totally extinguished under the new arrangement.

There is no such requirement for assignment to be valid.

  • For novation to be valid, there must be consideration in all cases as it is essentially a new contract. The requirement for consideration in assignment is much more relaxed.

Assignment and Equities

The general rule as regards assignment of choses in action is that an assignee takes, subject to the equities thar already apply to the chose in action (property) in question. Thus, anyone who has an interest (legal or equitable) in an assigned chose is entitled to a higher priority than that of the assignee.

The logic here is based on a recognition that the assignee cannot acquire a better title than that of the assignor. What he essentially gains by virtue of the assignment is a right to continue in the stead of the assignor in respect of that chose and nothing better.

In Re Knapman (1881) 18 Ch. D 300 the beneficiaries of a will brought an action against the executor seeking to revoke the probate. While the matter was in court, these beneficiaries assigned the right under the will to someone else.

Their action subsequently failed in court, the court ruled that the executor had a right to set off the costs of the suit against the estate. As such, since the right to this had already been assigned, the assignee has to settle this cost since he was assigned a property that had a pre-existing liability.

Claims of equities that arise after notice of the assignment has been given to the trustee would not affect the assignee however, except where the claim is very closely related to the original transaction upon which the chose came into existence.

The rule that the assignee takes subject to equities will not apply where the trustee is estopped, either by conduct or deed, from setting up equities against the assignee. It would not also apply where the agreement occasioning the original transaction includes a clause that the assignees of the assignor would take free from all equities.

Historically, assignment of choses in action was largely unrecognized at Common law. There was the fear that allowing such assignment would bring about Maintenance and even cases of Champerty as well as the risk of encouraging a litany of contentious matters on the same res.

Maintenance arises where a person who has no legal interest in a matter provides assistance by money or otherwise to a party to the suit while Champerty marries the foregoing with the prospect of reward out of the possible spoils of the suit.

Thus, no debt could be assigned at Common law unless the debtor specifically agreed to the assignment. The only exceptions allowed by Common law were in respect of choses in action assigned by or to the King and assignment of negotiable instruments in order to promote trade.

Equity has however always recognized the assignment of choses in action, both equitable and legal. It would not however allow the assignment of bare rights without accompanying interest in property. This was to avoid, as in the case of the Common law, situations that encourage Maintenance.

Assignability

Not all choses in action are assignable. The courts would not give effect to such assignments either on grounds of public policy or on account of the nature of the subject matter of the assignment.

Choses in action that are not assignable include:

  • Salaries of public officials. This is because it is perceived that if allowed to assign their salaries, they may deprive themselves of their means of sustenance and thereby impair the efficiency which is most desirable for the public service.
  • Alimony is not assignable on much the same grounds as salaries of public officials as the money is meant for the maintenance of the spouse.
  • Rights arising out of a contract of a personal nature i.e. contracts that require personal service like employment.
  • Expectancies (future choses) are not assignable at Common law based on the maxim: Nemo dat quod non habet. They are assignable in Equity although, such assignment must be for value.

Equitable Assignment

An equitable assignment is of a flexible nature. This flexibility makes it quite distinct from legal assignments as they do not require all of the formality required under the law. It may be in respect of a legal or equitable chose. Thus, there may be an equitable assignment of an equitable chose or an equitable assignment of a legal chose.

While there is no strict formality required for equitable assignments, certain criteria are instructive as to whether it would be considered valid or not.

For an equitable assignment to be considered as having been effected, there must be a clear intent to assign. While Equity does not require that the assignment be in writing or made in any particular format, there must be a clearly deducible intent to assign on the part of the assignor.

The intent to assign here will be construed from the words used and the particular circumstances of the case. If what is construed is a mere mandate/authority to hold onto certain property, no intent to assign may be ascribed by the court.

The position that Equity does not require writing for equitable assignments has however been affected by S. 9 of the Statute of Frauds and S. 78(1)(c) of the Property and Conveyancing Law which require that the assignment of any equitable interest or trust must be in writing.

The assignment is also required to be communicated to the assignee. Although, the assignee may still take in certain instances even without communication, subject to the right of the assignee to repudiate the transfer when he becomes aware of it.

The particular chose intended to be assigned must be identified. It is insufficient to give a vague representation of what is sought to be assigned. Such vagueness may impair the court’s construction of an intent to assign in such circumstance.

Consideration in equitable assignment depends on the circumstance. Where the assignment is complete in the sense that there is nothing left for the assignor to do to perfect the assignee’s title, there would be no need for consideration.

If it is incomplete though, consideration may be required. Consideration will also be required where the assignment concerns some future chose as the agreement in such instance can only be a contract to assign and all contracts must be backed by consideration.

No consideration is however required for assignment of existing choses.

There is no real requirement for notice of the equitable assignment to be given to the trustee of the liability. Notice is however useful to the extent that it puts the trustee on guard as to the change of rights affecting the chose and may prevent him from settling in favour of the assignor instead of the assignee.

It also makes the trustee liable to the assignee where he settles in favour of the assignor in spite of the notice given to him. Again, while the assignee generally takes subject to any prior equities affecting the chose, giving notice ensures that he would not be affected by any subsequent equities.

Most importantly, notice allows the assignee to establish the priority of his interest in consequence of the rule in DEARLE v HALL.

An equitable assignment of a chose in action has bearing on the manner in which the rights can be enforced in a court of law. The effect here is largely dependent on whether the chose in question is a legal or equitable chose and if the chose was absolutely assigned or not.

Where the assignment concerns a legal chose, the assignee cannot assert his title over the property in his own name. He must join the name of the assignor either as co-plaintiff, where he agrees, or as a defendant. Where the chose is equitable though, the assignee can sue in his own name.

An assignment is absolute when the assignor transfers his whole interest in the chose to the assignee. It is however non-absolute where it is made subject to some condition at the happening of which it would become inoperable or where only a charge is made on the chose, in favour of the assignee.

In this instance, only a part of the assignor’s interest is transferred. The effect of this is that in situations where the transfer was absolute, the assignee would be able to sue in his own name. Where it is not absolute however, he must join the assignor before he can enforce his rights over the chose.

Where the chose is legal though, it is immaterial whether it is absolute or not, the assignee must join the assignor.

Legal Assignment

The Common law rule against assignment of choses in action was only lifted in 1875 and this was via the provision of the Judicature Acts, particularly S. 25(6) . This provision is impari materia with S. 150(1) Property and Conveyancing Law .

The purport of those provisions is that there can be absolute assignments by writing of any debt or other legal thing in action when express notice in writing has been given to the trustee of the liability. Also, it shall be effectual to transfer the legal right to sue in respect of such thing, along with the legal and other remedies in respect of it and the power to give a good discharge for the chose without the assignor’s permission.

The provisions clearly contain ingredients that would make a legal assignment valid and these include the following:

  • The assignment must be in writing and signed by the assignor.
  • It must be in respect of some existing debt or other legal thing in action and this includes equitable choses in action.
  • It must be absolute.
  • There must be an express notice in writing given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive the debt or claim the thing in action.

The assignment takes effect from the date that notice is given. Failure to give notice at all or failure to give it in writing or failure to even execute the writing in the first place will not invalidate the assignment.

Rather, it becomes an equitable assignment instead of a legal one. Further, there is no requirement for consideration here.

The position at Common law before the Act amended it was that the assignee had no right independent of the assignor’s and was obligated to sue in the assignor’s name if he wanted to enforce his rights over the chose.

The Acts have however changed this and the assignee no longer needs to sue in the name of the assignor. He can sue all by himself.

2 thoughts on “ Assignment of Choses in Action ”

Your really hoshmeasures sir thankx

Great work. You are appreciated sir!

Leave a Reply Cancel reply

Notify me by email when the comment gets approved.

Join an online course that makes it easy for you to get A’s in your law exams, you can check it out here: Get Access to Ace LL.B Exams.

  • Practical Law

Chose in action

Practical law uk glossary 2-107-5828  (approx. 7 pages).

  • Miscellaneous: Legal Concepts
  • Enforcement and Remedies: Land and Buildings
  • Security and Quasi Security
  • Legal Concepts and Miscellaneous

Hall Ellis Solicitors

chose in action

Chose in action: meaning.

A chose in action is:

  • an intangible property right or property
  • which is legally not in a person's possession
  • but is only enforceable by legal process.

The legal process begins with a chose in action and ends with a judgment or court order.

Therefore, a chose in action is a right to sue : a legal right. It's a property right. It's more often referred to as a cause of action .

A person owns a chose in action in the same way as someone owns the device you are using right now.

Choses in action comprise all personal rights of property which cannot be taken by possession of a physical object (ie a chose in possession). 

Depending on the cause of action, a person would be:

  • owed a sum of money (ie a creditor owed a debt), and the debtor must pay the money
  • entitled to performance of a contract
  • the owner of intellectual property rights and entitled to sue for infringement
  • entitled to a licence to use intellectual property rights

In turn, the remedy leads to the entitlement to enforce (aka "enjoy") the legal rights which flow from the chose in action, which is usually one or more of:

  • an injunction
  • specific performance

And suppose the debtor, did not pay the sum ordered to be paid, the creditor would be entitled to initiate action to enforce the judgment or order. 

For a chose in action to exist, there must be a remedy at common law or equity which recognises the chose.

So, if a remedy does not exist for the alleged chose in action, the chose in action cannot exist.

It's pronounced "ch-oh-se" in action.

Types of Choses in Action: Examples

Legal choses in action are enforceable in a court exercising its common law jurisdiction.

Well known forms of legal choses in action include:

  • claims for debts
  • patent rights
  • trade marks
  • design rights
  • confidential information
  • common design 
  • interference with contractual rights

Equitable choses include:

  • a share in a trust fund
  • the share of proceeds of sale in the hands of a mortgagee.

Choses in action are also able to be established by reliance upon vicarious liability , apparent or ostensible authority and the law of agency, where the facts of the case permit.

Chose in Action Examples

  • Chattels: One person can hand another a pen, and thereby pass possession of the pen. The pen is a physical object. In legal terminology, the pen is a chattel and a chose in possession, not a chose in action. 
  • a chose in action
  • which is personal property
  • which is owned by you 
  • which entitles you to sue the person for conversion
  • for damages or delivery up of a chattel
  • Copyright law: Suppose you own copyright in some software. The software is protected by copyright law. A person uses the software without your consent. As the person has not obtained a licence from you, it is an infringement of copyright law. Infringement entitles you to damages for your pecuniary loss and an injunction to restrain infringement (ie unlawful use of the software) in the future. The right to sue for infringement is a chose in action.
  • Conspiracy: Continuing the copyright infringement example above, a series of people combine with an intention to infringe the copyright of your software. A separate, freestanding tort of conspiracy arises to render each of the participants in the conspiracy liable for the conspiracy.

Assignments

  • Legal choses in action may be assigned in equity, at common law or by statute. 
  • Equitable choses can be assigned in equity or by statute.

For an assignment of a legal chose in action to be effective by statute:

  • it must be in writing,
  • be absolute (the whole of the chose, unconditional and not a security interest),
  • with notice to the debtor.

If an assignment is ineffective by statute (for instance, an assignment of part of a debt), it still may be effective in equity.

A deed of assignment or ordinary contract may be used to assign the property rights in a chose.

  • Terms of Use
  • Privacy Statement
  • Cookie Policy

Legal Advice

  • Software Legal Advice
  • Business Contracts
  • Intellectual Property Advice

Contact Information

89 Fleet Street London EC4Y 1DH

[email protected]

+44 20 7036 9282

Sewell & Kettle Lawyers

Home » Dictionary » Chose in action

Chose in action

A chose in action is a personal property right to an intangible object. In the case of Torkington v Magee [1902] 2 KB 427 a chose in action was defined as “personal rights of property which can only be claimed or enforced by action, and not taking physical possession”. This means that the only way to obtain possession of the claimed intangible rights is through either legal or equitable action.

The main example of a chose in action is a debt. A debt owed to a creditor is incapable of being physically possessed and can only be enforced by suing. The economic value of debt is a right to sue for its recovery. A critical aspect of a chose in action is that any paper documentation supporting the right is not in and of itself the proprietary right.

A chose in action is capable of being assigned both at law and in equity. The transfer of property at law in NSW is governed by section 12 of the Conveyancing Act 1919 (NSW). In order for a chose in action to be validly assigned at law the transfer must:

  • Be absolute, meaning that the transfer must be unconditional;
  • Be in writing and signed by the assignor (section 23C);
  • The person liable to the chose needs to be put on notice in writing of its assignment; and
  • Not necessarily be supported by consideration.

If an assignment of a legal chose in action fails at law, there is protection in equity for the transfer to be valid. Parties will be bound in equity if “by reason of some fact or circumstance which a court of equity regards as binding the legal owner in conscience to hold the property upon trust for the assignee” (see Kitto J in Olsson v Dyson (1969) 120 CLR 365.

Equity will bind a legal owner in conscience if:

  • The assignee has provided consideration for the assignment of the chose in action;
  • The assignor has done everything required to effect the transfer, despite not complying with statutory requirements; or

In the absence of consideration, equity will regard an assignor’s conscience as bound if they induce the assignee to act to their own detriment in reliance on the inducement (equitable estoppel).

  • Help and information
  • Comparative
  • Constitutional & Administrative
  • Criminal Justice
  • Criminology
  • Environment
  • Equity & Trusts
  • Competition
  • Human Rights & Immigration
  • Intellectual Property
  • International Criminal
  • International Environmental
  • Private International
  • Public International
  • IT & Communications
  • Jurisprudence & Philosophy of Law
  • Legal Practice Course
  • English Legal System (ELS)
  • Legal Skills & Practice
  • Medical & Healthcare
  • Study & Revision
  • Business and Government
  • Share This Facebook LinkedIn Twitter

Sealy and Hooley's Commercial LawText, Cases, and Materials

Sealy and Hooley's Commercial Law: Text, Cases, and Materials (6th edn)

  • Note: The Effect of Brexit
  • Preface to the sixth Edition
  • New to this Edition
  • Acknowledgements
  • Table of cases
  • Table of legislation
  • 1. An introduction to commercial law
  • 2. Basic concepts of personal property
  • 3. Bailment
  • 4. Introduction
  • 5. Creation of agency, and the authority of the agent
  • 6. Relations with third parties
  • 7. Relations between principal and agent
  • 8. Introduction and definitions
  • 9. Passing of the property in the goods as between seller and buyer
  • 10. Transfer of title
  • 11. Seller’s obligations as to quality
  • 12. Performance of the contract
  • 13. Remedies of the seller
  • 14. Remedies of the buyer
  • 15. International sales
  • 16. Modern payment systems
  • 17. Payment cards and electronic money
  • 18. Negotiable instruments
  • 19. Bills of exchange
  • 20. Cheques and miscellaneous payment instruments
  • 21. The financing of international trade
  • 22. Assignment of choses in action
  • 23. Receivables financing
  • 24. Introduction
  • 25. Possessory security
  • 26. Non-possessory security
  • 27. Insurance
  • 28. Insolvency

p. 787 22. Assignment of choses in action

  • D Fox , D Fox Professor of Common Law, University of Edinburgh
  • RJC Munday , RJC Munday Reader Emeritus in Law, University of Cambridge
  • B Soyer , B Soyer Professor of Commercial and Maritime Law, Institute of International Shipping and Trade Law, Swansea University
  • AM Tettenborn AM Tettenborn Chair in Law, Swansea University
  •  and  PG Turner PG Turner Visiting Senior Fellow of the Melbourne Law School
  • https://doi.org/10.1093/he/9780198842149.003.0022
  • Published in print: 13 July 2020
  • Published online: September 2020

This chapter deals with the general law of assignment of choses in action. Beginning with the historically based difference between equitable and statutory assignment, it then explains what ‘chose in action’ and ‘assignment’ are before discussing the requirement that there be an existing and assignable chose in action or right as well as the requirement that a person who holds an existing assignable chose in action intends to assign it. It also examines whether and when a rule of legal formality requires writing to be made; whether and when notice of the assignment is required; and obstacles to the enforcement of an assigned chose in action.

  • chose in action
  • law of assignment
  • legal formality
  • enforcement

You do not currently have access to this chapter

Please sign in to access the full content.

Access to the full content requires a subscription

Printed from Oxford Law Trove. Under the terms of the licence agreement, an individual user may print out a single article for personal use (for details see Privacy Policy and Legal Notice).

date: 24 February 2024

  • Cookie Policy
  • Privacy Policy
  • Legal Notice
  • Accessibility
  • [66.249.64.20|185.66.14.133]
  • 185.66.14.133

Characters remaining 500 /500

Transfer in Ownership – Choses in Action • Is it a legal or equitable chose in action? o There are two main types of choses in action, they can either be legal or equitable – the first step is to distinguish between whether they are legal or equitable: ▪ Legal: if the chose in action is something that can be enforced at common law , then it is a legal chose in action ▪ Equitable: a beneficiary right under a trust (the trustee has legal title and the beneficiary has equitable title) o The beneficiary has the right to compel the trustee to hold the trust for the benefit of the beneficiary

[DETERMINING WHETHER THE CHOSE IN ACTION CAN BE DEALT WITH (ASSIGNABILITY)]

Legal choses in action

• Can the legal chose in action be assigned? – (capable of assignment at general law) o Prima facie, legal rights over intangible goods can be assigned o S12 of the Conveyancing Act illustrates the requirements of assignment ▪ Absolute assignment (you cannot assign half of the debt owed) ▪ In writing ▪ Signed by the assignor ▪ Notice of writing must be given to the debtor

• What happens when you have a non-assignable chose in action? o The following choses in action cannot be assigned at general law: ▪ Note: the “benefit/burden” principle ▪ Personal service contract ▪ Bare right to litigate ▪ Public policy (for noting) ▪ Capable under general law but not assignable due to: • Materiality of identity • Contractual prohibition o A bare right to litigate cannot be assigned (assigning the right to litigate for litigation’s sake) – Glegg v Bromley - however, there are exceptions to this rule:

1 ▪ The fruits of litigation can be assigned - Glegg v Bromley – “whatever money I get from litigation, I will give to you” ▪ Where a genuine commercial interest exists - Trendtex (Credit Suisse) • In this case, Trendtex had a right to money from the Nigerian Bank which they could have assigned • But the Nigerian bank won’t pay it back, so they assigned the right to litigate to Credit Suisee (had the money to help them litigate) • Oliver LJ: where a cause of action arises out of a bare right which itself is assignable, the cause of the action equally remains assignable” – it has become a right to property • Note the existence of illegality, if there is illegality on foot (e.g. failure to register a prospectus) then the restitution rights cannot be assigned - Equuscorp o Materiality of identity – if you have a contract in which the identity of the parties is so material, you cannot assign the benefit of the contract without the consent of the party ▪ “it is one thing to provide details of production facilities and other business information to PB, it was quite another thing to have to deal with a competitor like PB in that regard” ▪ Direct competitor – it is not beneficial to be in an assignment relationship with your competitor – Pacific Brands v Underworks ▪ Apart from prohibitions created by statute or public policy, the most common such reaons will be contractual prohibitions on assignment, the materiality of the identity obligee to the contractual relationship to the obligor’s performance” – Pacific Brands v Underworks o Certain contractual rights/contractual prohibitions cannot be assigned ▪ A chose in action arising from a contract cannot be assigned if the contract’s terms prohibit it – Linden Gardens Trust • HD Point: Shouldn’t be prohibited, assignor should just have to pay breach damages i.e. as if wording was ‘warrant it will not be assigned”; o Indeed this approach has been adopted with respect to collateral property in the Personal Property Securities Act 2009,

2 o However this is cf Owners of Strata Plan 5290 - reasoned strongly that Linden holds you cannot assign a contractual right when there is an express clause prohibiting it, even when legislation allows assignment (e.g. liquidator rights in Corporations Act 2001) • HD Point 2: May have an equity workaround: o Third Party Equity Workaround: Don King Productions v Warren - rather than transferring benefit of a contract, declare yourself trustee of a chose in action for a third party (in exchange for $$) o CL still sees contract between the contractors, equity notes benefit for 3rd party o Burden of a contract cannot be assigned – Pacific Brands ▪ You cannot assign the burden of the contract without approval, you can assign the benefit as long as s12 of the CA is met ▪ Novation exception – you can novate (change the name on the contract) with the consent of the promise (this consent may be implicit in the contract) ▪ Note: materiality of identity – it won’t be implicit where the identity of the parties is important o Personal services cannot be assigned – Nokes v Doncaster ▪ You should be able to choose who your employer is – Nokes ▪ Exception: you cannot assign positive obligations but you can assign negative obligations o I.e., Doctor has employment contract, which includes a term to keep patient info confidential. (Zahedi-Anarak). When business is on-sold to new employer, his employment contract cannot be assigned, but his NEGATIVE obligations can be. Thus, Breach of Confidence can be automatically transferred with no novation.

Equitable chose in action Distinct from a legal chose in action • These are rights over actions, which can only be enforced in courts of equity

3 • They can be personal or proprietary rights – for example, the right to force someone to transfer land to you

Trusts There are three attributes which are common to all trusts: • A trust must have a trustee who holds title to the trust properly • The trustee must hold the property for the benefit of a beneficiary or a purpose recognised by law • Trust property must vest in the trustee • Note: the chose in action lies with the beneficiary – they compel the trustee to hold the trust property

There are four main elements of a trust (the three certainties) which need to be fulfilled when creating a trust: • Intention – use of the word “trust” is determinative for intention - Byrnes v Kendle o can also infer from obligatory, not permissive, language (hope vs must/expect) • Subject matter – what is the trust property? This must be clear or the trust fails o Intangible test – clarity and certainty of language – in context o Tangible test – clarity of language and specificity of segregation • Objects – who are the beneficiaries? o Object must be a legal person – purpose trusts are automatically invalid • Constitution: The trust property must be vested in the trustee – it is not enough for the settler to declare a trust, you actually have to transfer the property to the trustee

Web Analytics

Law Explorer

Fastest law search engine.

If you have any question you can ask below or enter what you are looking for!

  • Law Explorer /
  • CONSTITUTIONAL LAW /

Constitution of an Express Trust

transfer of a chose in action

4 Constitution of an express trust

AIMS AND OBJECTIVES By the end of this chapter you should be able to: ■ identify the essential tests in Milroy v Lord for the constitution of an express trust ■ appreciate that the law in this chapter involves gifts and the creation of trusts ■ distinguish between a perfect and an imperfect trust and understand the consequences of constitution ■ grasp the principle in Fletcher v Fletcher ■ understand and apply the maxims, ‘Equity will not assist a volunteer’ and ‘Equity will not perfect an imperfect trust’ 4.1 Introduction A settlor who wishes to create an express trust is required to adopt either of the following methods: (a) a self-declaration of trust; or (b) a transfer of property to the trustees, subject to a direction to hold upon trust for the beneficiaries. This is known as the rule in Milroy v Lord [1862] 31 LJ Ch 798, HC. The effect of the perfect creation of a trust is that the beneficiary, who may be a volunteer, may enforce the trust. However, if the trust is incompletely constituted, the transaction involving an intended trust operates as an agreement to create a trust. Subject to the Contracts (Rights of Third Parties) Act 1999, this agreement may be enforced by a person who has provided consideration. Alternatively, a donor may make a perfect gift to the donee by transferring the legal and equitable interests directly to the desired donee. This involves a gift, as opposed to an intended trust. But a difficulty arises if the intended donor fails to transfer the legal title to the intended donee. The latter may be tempted to argue that the intended donor retains the legal title as an express trustee for the disappointed intended donee, and thus the imperfect transfer, by way of intended gift, constitutes the creation of an express trust. Such an argument, without any additional evidence, has been consistently rejected by the courts. There are two maxims that summarise the approach of the courts: ‘Equity will not assist a volunteer’ and ‘Equity will not perfect an imperfect gift’. 4.2 The rule in Milroy v Lord [1862] The principle laid down by Turner LJ in Milroy v Lord [1862] identifies the various modes of creating an express trust. Generally, there are two modes of constituting an express trust and the onus is on the settlor to execute one (or in exceptional circumstances both) of these modes for carrying out his intention. CASE EXAMPLE Milroy v Lord [1862] 31 LJ Ch 798, HC The settlor executed a deed purporting to transfer shares to Mr Lord on trust for Mr Milroy. The shares were only capable of being transferred by registration in the name of the transferee in the company’s books. The settlor failed to complete the transfer, although Mr Lord held a power of attorney as agent for the settlor. On the settlor’s death, Lord gave the share certificates to the settlor’s executors and the question arose whether the shares were held upon trust for the claimant. Held: There was no gift of the shares to the objects nor was there a transfer of the shares to the intended trustee. The settlor having failed to transfer the shares to the trustee, the court will not infer that he is a trustee for the claimant. JUDGMENT ‘[I]n order to render a voluntary settlement valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may, of course, do this … if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes … but, in order to render the settlement binding, one or other of these modes must … be resorted to, for there is no equity in this court to perfect an imperfect gift. The cases go further to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred, the court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust.’ Turner LJ On analysis, the court decided the following: ■ There was no gift of the shares to Mr Milroy. ■ The settlor did not have an intention to create a trust. ■ In order to create a trust or to transfer the property (legal title), the settlor or transferor is required to do everything expected of him in order to vest the property in the name of the intended transferee. ■ The requirements necessary to be complied with in order to transfer the property vary with the type of property involved. ■ The settlor may transfer the property to the trustee subject to a valid declaration of trust. ■ The settlor may declare himself a trustee. ■ If the trust is intended to be created by one of these modes the court will not automatically adopt another mode of creating the trust. These are the primary rules concerning the constitution of a trust. 4.2.1 Transfer and declaration mode A settlor may wish to create a trust by transferring the property to another person (or persons) as trustee(s), subject to a valid declaration of trust. In this context the settlor must comply with two requirements, namely a transfer of the relevant property or interest to the trustees complemented with a declaration of the terms of the trust (see the ‘three certainties’ test above). If the settlor intends to create a trust by this method and declares the terms of the trust, but fails to transfer the property to the intended trustees, it is clear that no express trust is created. The ineffective transaction will amount to a conditional declaration of trust but without the condition (the transfer) being satisfied. For instance, S, a settlor, nominates T1 and T2 to hold 50,000 BT plc shares upon trust for A for life with remainder to B absolutely (the declaration of trust). In addition, S is required to transfer the property in the shares to T1 and T2. The declaration of trust on its own without the transfer is of no effect. The formal requirements, if any, concerning the transfer of the legal title to property vary with the nature of the property involved. There are broadly two types of properties that exist — realty and personalty. In order to transfer the legal title to registered land the settlor is required to execute the prescribed transfer form and register the transfer in the names of the trustees at the appropriate Land Registry. The transfer of tangible moveable property requires the settlor to deliver the property to the trustees, accompanied by the appropriate intention to transfer; the transfer of the legal title to shares in a private company involves the execution of the appropriate transfer form and registration of the transfer in the company’s share register. The various requirements for the transfer of the most common forms of properties can be summarised as follows: ■ Legal estates and interests in land must be transferred by deed under s 52(1) of the Law of Property Act 1925. ■ Equitable interests in either land or personalty must be disposed of in writing: see s 53(1)(c) of the Law of Property Act 1925. ■ Choses in action (intangible personal property such as debts or intellectual property) may be assigned in law in writing in accordance with s 136 of the Law of Property Act 1925. As an alternative, an assignment may be executed in equity. ■ Tangible moveable property (chattels) may be transferred by delivery accompanied by clear and unequivocal intention that the transferor intends to transfer property to the recipient, or by deed of gift. In Re Cole [1964] Ch 175, a husband showed his wife the furniture in a house and said that it was all hers. The question in issue was whether a transfer of the legal title had taken place. Held: no transfer had taken place, as the words spoken were too loose to refect an intention to donate. ■ Shares in a private company will be transferred when the transfer procedure laid down in the Companies Act 2006 has been complied with. 4.2.2 Transfer of shares in a private company The owner of the legal title to shares in a private company is the person whose details are registered in the company’s books. Thus, a new transferee acquires the legal title when he is registered with the company. The Companies Act 2006 outlines the procedure that is required to be followed in order to transfer shares in a private company. The transferor is required to execute a stock transfer form, issued under the Stock Transfer Act 1963, and send this, along with the share certificates, to the registered office of the company for registration. The company usually has an absolute discretion to decide whether to register the new applicant without giving reasons for its decision. In addition, the company deals only with the registered legal owner of the shares. tutor tip ‘It is instructive to analyse the judgment of Turner LJ in Milroy v Lord [1862] 31 LJ Ch 798.’ In accordance with the Milroy v Lord [1862] principle, if the transferor has done everything required of him and the only things remaining to be done are to be performed by a third party, the transfer will be effective in equity. This is known as the ‘last act’ principle. The donor has completed the last act that may be achieved by him. This will be sufficient to transfer the equitable interest in the property to the donee. In these circumstances the donor who retains the legal title to the property holds it as a trustee for the donee. The type of trust is constructive and is thus created by operation of law. The effect is that dividends declared at any time after the transferor has completed his duties in respect of the transfer, and before the new owner is registered, will be held on trust for the new transferee. Likewise, votes attaching to the shares are required to be cast as trustee for the new owner. Whether the transferor has done everything required of him to transfer the shares is essentially a question of fact. CASE EXAMPLE Re Rose [1952] Ch 499, CA Mr Rose executed two transfers of shares on 30 March 1943. He died more than five years after executing the transfers, but less than five years (the claw-back period at this time) after the transfers were registered in the company’s books, on 30 June 1943. For estate duty purposes it was necessary to know when the donee had received the shares. Held: The shares were transferred on 30 March 1943. At this time the transferor had done everything in his power to transfer the shares, and all that remained was for the directors of the company to consent to the transfer and register the new owner. JUDGMENT ‘[I]f a document is apt and proper to transfer the property – is, in truth, the appropriate way in which the property must be transferred – then it does not seem to me to follow from the statement of Turner LJ [in Milroy v Lord [1862]] that, as a result, either during some limited period or otherwise, a trust may not arise, for the purpose of giving effect to the transfer. Whatever might be the position during the period between the execution of this document and the registration of the shares, the transfers were, on 30th June 1943, registered. After registration, the title of Mrs Rose was beyond doubt complete in every respect, and if Mr Rose had received a dividend between execution and registration and Mrs Rose had claimed to have that dividend handed to her, what would Mr Rose’s answer have been? It could no longer be that the purported gift was imperfect; it had been made perfect. I am not suggesting that the perfection was retroactive. Lord Evershed MR A similar conclusion was reached in Mascall v Mascall [1984] 49 P&CR 119, in respect of the execution of a transfer concerning registered land. Browne-Wilkinson LJ explained the justification of this principle. JUDGMENT ‘The basic principle underlying all the cases is that equity will not come to the aid of a volunteer. Therefore, if a donee needs to get an order from a court of equity in order to complete his title, he will not get it. If, on the other hand, the donee has under his control everything necessary to constitute his title completely without any further assistance from the donor, the donee needs no assistance from equity and the gift is complete. It is on that principle, which is laid down in Re Rose , that in equity it is held that a gift is complete as soon as the settlor or donor has done everything that the donor has to do, that is to say, as soon as the donee has within his control all those things necessary to enable him, the donee, to complete his title.’ In contrast to the Re Rose [1952] principle, if the transferor has not done everything required of him, the transfer will not be effective in equity. This may be illustrated by Re Fry [1946]. CASE EXAMPLE Re Fry [1946] Ch 312, HC The donor of shares was domiciled in the USA, and needed the consent of the Treasury (under the Emergency Regulations (Defence (Finance) Regulations 1939)) to transfer shares in a British company. He sent the necessary forms to the company for registration of the new owner, save for Treasury approval. This he had applied for, but had not been granted at the time of his death. The question in issue was whether a transfer in equity had been made at the time of the donor’s death. Held: The shares had not passed to the donee at the time of the donor’s death, for he had not done everything required of him: he had not obtained Treasury consent. JUDGMENT ‘Had they, however, arrived at the position which entitled them, as against that company, to be put on the register of members? Had everything been done which was necessary to put the transferees into the position of the transferor? If these questions could be answered affirmatively, the transferees would have had more than an inchoate title; they would have had it in their own hands to require registration of the transfers. Having regard, however, to the Defence (Finance) Regulations 1939, it is impossible, in my judgment, to answer the questions other than in the negative. The requisite consent of the Treasury to the transactions had not been obtained, and, in the absence of it, the company was prohibited from registering the transfers. In my opinion, accordingly, it is not possible to hold that, at the date of the testator’s death, the transferees had either acquired a legal title to the shares in question, or the right, as against all other persons (including Liverpool Borax Ltd) to be clothed with such legal title.’ Romer J The court decided that the donor had not done everything required of him to secure registration of the shares, despite his death after his application for Treasury approval was made. The logic of the Re Fry [1946] decision may be understood on the ground that the donor might have been required to furnish more information to the Treasury before consent was obtained. In any event, the company was not entitled legitimately to consider registering the new owner until Treasury consent was obtained. The court came to a similar decision on the facts of Milroy v Lord [1862] (see above). In the case of Pennington v Waine [2002] All ER (D) 24, CA the Court of Appeal decided that where the donor had manifested an immediate and irrevocable intention to donate shares to another and had instructed her agent to execute the transfer, the donor will not be permitted to deny the interest acquired by the donee. CASE EXAMPLE Pennington v Waine [2002] All ER (D) 24, CA The donor, Ada, was the owner of a number of shares in a company and was also one of its directors. Under instructions from Ada, one of the company’s auditors, Mr Pennington, prepared a transfer form for 400 shares which was duly executed by Ada and sent to Mr Pennington. The transfer was in favour of Ada’s nephew, Harold, to secure his appointment as a director as a 51 per cent holder of shares. The form was placed on the company’s file. Mr Pennington assured Harold that he was appointed a director and nothing more was required to be done by him. No further action was taken in relation to the transfer. Ada died and by her will left her estate to others. The question in issue was whether a transfer in equity was made by Ada before her death in favour of Harold, or whether the shares passed to her heirs under her will. Held: A transfer to Harold in equity was made during Ada’s lifetime. Ada intended an immediate and irrevocable transfer in favour of Harold. The court considered that the test here was whether Ada had done everything required of her to secure the transfer, as distinct from whether she had done everything short of registration. The main ground for the decision was the fact that it would have been unconscionable for Ada and her heirs to deny the interest acquired by Harold. As an alternative ground the court decided that Ada and Mr Pennington were agents for Harold to submit the form to the company. The court also decided that the interim trust that arises, pending registration, is a constructive trust. JUDGMENT ‘There was a clear finding that Ada intended to make an immediate gift. It follows that it would also have been unconscionable for Ada to recall the gift. It follows that it would also have been unconscionable for her personal representatives to refuse to hand over the share transfer to Harold after her death. If Ada had procured the registration of Harold as the owner of the shares in the books of the company, the legal title to the shares would have passed to him. In these circumstances I can see no reason for holding that there was no valid equitable assignment to him without delivery of the transfer or shares to him. In those circumstances, in my judgment, delivery of the share transfer before her death was unnecessary so far as perfection of the gift was concerned. I would also decide this appeal in favour of the respondent on this further basis … the words used by Mr Pennington should be construed as meaning that Ada and, through her, Mr Pennington became agents for Harold for the purpose of submitting the share transfer to the Company.’ Arden LJ It should be noted that the Pennington v Waine [2002] principle is distinct from the traditional Re Rose [1952] principle. In the former case, the court proceeded on the basis of ‘unconscionability’ on the part of the donor to deny that a transfer took place. This is a fairly broad concept and involves a question of law for the court to decide in its discretion, as opposed to the narrow Re Rose (1952) question of fact as to whether the donor had done everything required of him to effect the transfer. Unconscionability may involve a promise made by the donor, relied on by the donee to his detriment. In these circumstances the court will prevent the donor from denying the promise and reclaiming the property as his own. In Pennington v Waine , Arden LJ decided that in certain circumstances the delivery of the share transfer form to the company could be dispensed with. This would be the case where it would be unconscionable for the donor to renege on his promise. In any event Arden LJ decided that the auditors could have been treated as the agent of the donor for the purpose of submitting the form to the company. In addition the status of the third party who decides on the registration of the legal title to the shares is required to be taken into account. If the third party has a formal role to play in deciding on the registration of the legal interest, then the constructive trust will be terminated on the date of the complete transfer of the legal title. But if the third party plays a more active role and has the power to refuse to register the transfer of the legal title the question arises as to whether the constructive trust will continue or be terminated. In Pennington v Waine the court in an obiter pronouncement decided that the constructive trust will continue to operate despite the refusal to register the new owner. On this basis it could be argued that the court has created another exception to the rule that ‘Equity will not perfect an imperfect gift.’ In addition to the transfer of the relevant property to the trustees, the settlor is required to declare the terms of a trust. In other words, the requirement here is that in order to constitute the trust the settlor must transfer the property to the trustees and, either before or after the transfer, declare the terms of the trust. A transfer of the property to the trustees unaccompanied by a declaration of trust by definition will not create an express trust. Such a transfer may create a resulting trust for the settlor. For example S, an intended settlor, purports to create an express trust of 10,000 BT plc shares by transferring the legal title to the shares to T1 and T2 as trustees, but failed to declare the terms of the trust. The intended beneficiary of the shares was his son, B, absolutely, but S failed to indicate the terms of the trust. Since T1 and T2 acquire the shares as trustees without a declaration of the terms of the trust, the intended express trust fails and a resulting trust for S will arise. Likewise, a declaration of trust of 10,000 BT plc shares in favour of B absolutely with the intention that T1 and T2 will acquire and hold the shares as trustees for B will fail if T1 and T2 did not acquire the relevant shares. A declaration of trust involves a present, irrevocable intention to create a trust. This involves the ‘three certainties’ test: certainty of intention to create a trust, certainty of subject-matter and certainty of objects (see Chapter 3 ). 4.3 Self-declaration of trust An alternative mode of creating an express trust is by way of a self-declaration. A settlor declares that he presently holds specific property on trust, indicating the interest, for a beneficiary. The settlor is the creator of the trust and the trustee. He simply retains the property as trustee for the relevant beneficiaries. Clear evidence is needed to convert the status of the original owner of the property to that of a trustee. This form of creating an express trust is as effective as the transfer and declaration mode. In the absence of specific statutory provisions to the contrary, no special form is required as long as the intention of the settlor is sufficiently clear to constitute himself a trustee, for ‘Equity looks at the intent rather than the form.’ Thus, the declaration of trust may be in writing or may be evidenced by conduct or may take the form of a verbal statement or a combination of each of these types of evidence: see Paul v Constance [1977] 1 WLR 527 (above); contrast Jones v Lock [1865] LR 1 Ch App 25 (above). What is required from the settlor is a firm commitment on his part to undertake the duties of trusteeship in respect of the relevant property for the benefit of the specified beneficiaries (see the ‘three certainties’ test, above). In this respect there is no obligation to inform the beneficiaries that a trust has been created in their favour. The effect of this mode of creation is to alter the status of the settlor from a beneficial owner to that of a trustee. For instance, S, the absolute owner of 50,000 shares in BP plc, declares that henceforth he holds the entire portfolio of shares upon trust for B, his son, absolutely. In these circumstances an express trust is created. S retains the legal title to the shares, but B acquires the entire equitable interest in the shares. 4.4 No self-declaration following imperfect transfer The court will not automatically imply the self-declaration mode of creating a trust if there has been an imperfect gift or transfer of the property to the intended recipient. A gift is created when the donor transfers both legal and equitable interests to the donee. As distinct from a trust, the gift does not involve the separation of the legal and equitable interests. If, therefore, the donor intended to create a gift but fails to transfer the relevant property to the donee, the court will not assist the intended donee to order that the intended gift be perfected. Equally the intention to give is fundamentally different from an intention to create or declare a trust. Accordingly, an imperfect transfer will not be construed as a valid declaration of trust. This rule applies to imperfect gifts of property (see Jones v Lock [1865] above) as well as imperfect transfers to trustees, for ‘Equity will not perfect imperfect gifts.’ The reason for the rule is that, despite the transferor’s intention to benefit another by means of a transfer (whether on trust or not), the transferor ought not to be treated as a trustee if this does not accord with his intention: see Richards v Delbridge [1874] LR 18 Eq 11. CASE EXAMPLE Richards v Delbridge [1874] LR 18 Eq 11 A grandfather attempted to assign a lease of business premises to his grandson, R, by endorsing the lease and signing a memorandum: ‘This deed and all thereto I give to R from this time henceforth with all stock in trade.’ He gave the lease to R’s mother to hold on his behalf. On the death of the grandfather it was ascertained that his will made no reference to the business premises. The question in issue was whether the lease was acquired by the grandson, R, during the grandfather’s lifetime, or was transferred to the residuary beneficiaries under the grandfather’s will. Held: There was an imperfect gift inter vivos , as the assignment, not being under seal, was ineffectual to transfer the lease. Further, no trust had been created, as the grandfather did not declare himself a trustee of the lease for the grandson. The court will not construe an ineffectual transfer as a valid declaration of trust. JUDGMENT ‘[F]or a man to make himself a trustee there must be an expression of intention to become a trustee, whereas words of present gift show an intention to give over property to another, and not retain it in the donor’s own hands for any purpose, fiduciary or otherwise.’ Sir George Jessel MR The principle has been summarised in a passage from F W Maitland’s Equity: A Course of Lectures (1909): QUOTATION ‘I have a son called Thomas. I write a letter to him saying “I give you my Blackacre estate, my leasehold house in the High Street, the sum of £1,000 Consols standing in my name, the wine in my cellar.” This is ineffectual – I have given nothing – a letter will not convey freehold or leasehold land, it will not transfer Government stock, it will not pass the ownership in goods. Even if, instead of writing a letter, I had executed a deed of covenant – saying not I do convey Blackacre, I do assign the leasehold house and the wine, but I covenant to convey and assign – even this would not have been a perfect gift. It would be an imperfect gift, and being an imperfect gift the court will not regard it as a declaration of trust. I have made quite clear that I do not intend to make myself a trustee, I meant to give. The two intentions are very different – the giver means to get rid of his rights, the man who is intending to make himself a trustee intends to retain his rights but to come under an onerous obligation. The latter intention is far rarer than the former. Men often mean to give things to their kinfolk, they do not often mean to constitute themselves trustees. An imperfect gift is no declaration of trust. This is well illustrated by the case of Richards v Delbridge .’ 4.5 The settlor may expressly adopt both modes of creation The settlor may expressly manifest an intention to transfer the relevant property to third party trustees (transfer and declaration mode) and, prior to completing the transfer, to declare himself a trustee for the beneficiaries (self-declaration mode). In this event, the trust will be perfect, provided that the third party trustee acquires the property during the settlor’s lifetime. In other words, the self-declaration of trust is regarded as conditional on an effective transfer of the property to the third party trustee. This condition may only be satisfied during the lifetime of the settlor. The court has also decided that it is immaterial how the third party trustee acquires the property: see Re Ralli’s Will Trust [1964] Ch 288, HC. CASE EXAMPLE Re Ralli’s Will Trust [1964] Ch 288, HC In 1899, a testator died, leaving the residue of his estate upon trust for his wife for life with remainder to his two children, Helen and Irene, absolutely. In 1924, Helen covenanted in her marriage settlement and under clause 7 to settle all her ‘existing and after acquired property’ upon trusts which failed, and ultimately on trust for the children of Irene. The settlement declared that all the property comprised within the terms of the covenant will, under clause 8, ‘become subject in equity to the settlement hereby covenanted to be made’. Irene’s husband was appointed one of the trustees of this marriage settlement. In 1946, Irene’s husband was also appointed a trustee of the 1899 settlement. In 1956, Helen died and, in 1961, Helen and Irene’s mother died. The question in issue was whether Helen’s property from the 1899 settlement was held upon the trusts of Helen’s marriage settlement, or subject to Helen’s personal estate. Held: By virtue of the declaration in Helen’s settlement in 1924, Helen and, since her death, her personal representative (Irene’s husband), held her share of the 1899 settlement subject to the trusts of Helen’s settlement. This was the position even though the vesting of the property in Irene’s husband came to him in his other capacity as trustee of the 1899 settlement. The same conclusion could be reached by applying the rule in Strong v Bird [1874] LR 18 Eq 315 (see below). JUDGMENT ‘In my judgment the circumstance that the plaintiff holds the fund because he was appointed a trustee of the will is irrelevant. He is at law the owner of the fund and the means by which he became so have no effect on the quality of his legal ownership. The question is: for whom, if any one, does he hold the fund in equity? In other words, who can successfully assert an equity against him disentitling him to stand on his legal right? It seems to me to be indisputable that Helen, if she were alive, could not do so, for she has solemnly covenanted under sea to assign the fund to the plaintiff and the defendants can stand in no better position.’ Buckley J In this case it is worth noting the fortuitous event in 1946 when Irene’s husband was appointed a trustee of the 1899 settlement. This meant that the third party trustee acquired the trust property, and since it was during Helen’s lifetime, the trust became perfect. 4.6 Multiple trustees including the settlor In the case of Choithram International v Pagarani [2001] 1 WLR 1, PC, the Privy Council decided that where the settlor appoints multiple trustees, including himself, and declares a present, unconditional and irrevocable intention to create a trust for specific persons, a failure to transfer the property to the nominated trustees is not fatal, for his (settlor’s) retention of the property will be treated as a trustee. Trusteeship for these purposes is treated as a joint office so that the acquisition of the property by one trustee is equivalent to its acquisition by all the trustees. For example, S nominates himself and T1 and T2 as trustees of property and specifies the terms. If S manifests an irrevocable and unconditional intention to create a trust, his failure to transfer the property to T1 and T2 is not fatal because S retains the property as a trustee. His retention of the property as one of the trustees is equivalent to all the trustees acquiring a right to acquire the property. Thus the trust is perfect. CASE EXAMPLE T Choithram International SA v Pagarani [2001] 1 WLR 1, PC The settlor, Mr Choithram Pagarani (CP), intended to set up a foundation to serve as an umbrella organisation for four charitable bodies which he had already established. CP and the other trustees executed the foundation trust deed, despite CP’s rapidly failing health. The trust deed was made between CP, as settlor, and CP and seven other named individuals as trustees. CP transferred 1,000 to the trustees as the initial subject-matter of the trust, with further property to be placed under the control of the trustees. The deed also set out the terms of the trust. Immediately after signing the documents CP said words to the effect that ‘I have given all my wealth to the trust.’ He then told his accountant, who was present at the time of signing, to transfer all his balances with the companies and his shares to the foundation trust. At a subsequent meeting of the trustees, CP reported that the foundation had been established and all his wealth had been given to the trust. The relevant documents were prepared, but CP refused to sign. Evidence was adduced that CP had an aversion to signing such documents and had been advised that it was not necessary to do so. However, CP repeatedly declared that he had done his ‘bit’: he had given all his wealth to the foundation and there was nothing more for him to do. In the end, CP had failed to execute the forms which were necessary to carry out the formal transfer of the further assets before his death.   The claimants, CP’s first wife and her children, commenced proceedings in the British Virgin Islands for a part of CP’s estate. The claim was made on the ground that the intended gifts to the foundation were ineffective because CP had failed to transfer the relevant properties, namely CP’s shares and deposit balances in the companies, to the foundation. The trial judge found that CP intended to make immediate gifts of the relevant properties, but his intention was not irrevocable. In addition, the judge found that, despite CP’s intention to make immediate gifts to the foundation, he had failed to vest the properties in the hands of all the trustees of the foundation. This decision was affirmed by the Caribbean Court of Appeal. The defendants (executors of CP) appealed to the Privy Council. Held: Effective transfers inter vivos had been made to the trustees subject to the trusts, on the following grounds: 1. CP’s intention was to make a present, immediate, unconditional and irrevocable gift to the foundation. This was manifested by the execution of the foundation deed, verbally declaring his intention upon signing the document and instructing his accountant to transfer all his balances with the companies and his shares to the foundation trust. 2. Although the words used by CP were appropriate to an outright gift, ‘I give to X’, on construction, those words were intended to create a gift to the trustees of the foundation on trust for the foundation. This was partly attributed to the fact that the foundation had no legal existence apart from the trust declared by the foundation trust deed. Accordingly, the Milroy v Lord [1862] principle for the creation of an express trust had been satisfied. 3. Since the property was vested in one of the trustees, namely CP himself, the express trust was constituted. Accordingly, there was a duty to transfer the property to all of the trustees of the foundation trust. In principle there was no distinction between a case where a settlor declared himself to be a sole trustee for a beneficiary and the case where he declared himself to be one of the trustees for that beneficiary. In both cases the trust was perfect and the beneficiary acquired an equitable proprietary interest in the property. 4. The subject-matter of the trust comprised all of CP’s wealth in the British Virgin Islands, namely CP’s deposit balances and shares in the four companies. This was in accordance with CP’s statements and conduct. JUDGMENT ‘The foundation has no legal existence apart from the trust declared by the foundation trust deed. Therefore the words I give to the foundation can only mean I give to the trustees of the foundation trust deed to be held by them on the trusts of the foundation trust deed. Although the words are apparently words of outright gift they are essentially words of gift on trust …  What is the position here where the trust property is vested in one of the body of trustees, viz TCP? In their Lordships’ view there should be no question. TCP has, in the most solemn circumstances, declared that he is giving (and later that he has given) property to a trust which he himself has established and of which he has appointed himself to be a trustee. All of this occurs at one composite transaction taking place on 17 February. There can in principle be no distinction between the case where the donor declares himself to be sole trustee for a donee or a purpose and the case where he declares himself to be one of the trustees for that donee or purpose. In both cases his conscience is affected and it would be unconscionable and contrary to the principles of equity to allow such a donor to resile from his gift.’ Lord Browne-Wilkinson 4.7 No trust of future property It is not possible to create an express trust of property that does not exist or property that may or may not be acquired by the settlor simply because there is no property that is capable of being subject to an order of the court. Such property is referred to by a variety of names but the principle remains the same. Examples of terms used are ‘future’ or ‘after-acquired’ property or an ‘expectancy’ or a ‘ spes ’ (or hope of acquiring property). Thus, it is not possible to create a trust of lottery winnings in the future. CASE EXAMPLE Re Ellenborough [1903] 1 Ch 697, HC An intended beneficiary under a will voluntarily covenanted to transfer her inheritance to another upon trusts as declared. Before the testator had died the intended beneficiary (covenantor) changed her mind. The covenantee brought an action claiming that the covenantor was under a duty to transfer the relevant property. Held: No trust of the covenant had been created, because the property was not owned by the covenantor at the time of the covenant. In addition, the covenantee could not bring an action to enforce the agreement for he had not provided consideration. JUDGMENT ‘The question is whether a volunteer can enforce a contract made by deed to dispose of an expectancy. It cannot be and is not disputed that if the deed had been for value the trustees could have enforced it … Future property, possibilities, and expectancies are all assignable in equity for value: Tailby v Official Receiver [1888] 13 App Cas 523. But when the assurance is not for value, a court of equity will not assist a volunteer.’ Buckley J It should be noted that although a trust cannot be created in respect of future property, a contract is capable of being created in respect of such property. 4.8 Trusts of choses in action A chose in action is a right to intangible personal property such as a right to dividends attaching to shares, intellectual property and the creditor’s right to have a loan repaid by the debtor. A trust is capable of being created in respect of any type of existing property, including a chose in action. The chose may be assigned to the trustees in accordance with the intention of the settlor. CASE EXAMPLE Don King Productions Inc v Warren [1999] 2 All ER 218, CA K and W (two well-known boxing promoters) entered into partnership agreements in which W purported to assign the benefit of promotion and management agreements to the partnership. However, several of the contracts contained express prohibitions against assignment. The question in issue was whether a trust of the benefit of the agreements (choses in action) was created. Held: The benefit of promotion and management agreements was capable of being the subject-matter of a trust in accordance with the intention of the parties. JUDGMENT ‘[I]n principle, I can see no objection to a party to contracts involving skill and confidence or containing non-assignment provisions from becoming trustee of the benefit of being the contracting party as well as the benefit of the rights conferred. I can see no reason why the law should limit the parties’ freedom of contract to creating trusts of the fruits of such contracts received by the assignor or to creating an accounting relationship between the parties in respect of the fruits.’ Lightman Similarly, the court may construe the subject-matter of a covenant as creating a chose in action, namely the benefit of the covenant. This intangible property right may be transferred to the trustees on trust for the relevant beneficiaries. What is needed to assign such a right or chose is a clear intention on the part of the assignor to dispose of the chose to the transferee. Accordingly, A may execute a covenant with B to transfer 10,000 to B upon trust for C. If the subject-matter of the trust is treated as the cash, namely 10,000, it becomes a question of fact as to whether the sum has been transferred to B. If we assume that A did not transfer the sum to B it is still possible that the trust may be treated as perfect. The court may construe the trust property as the ‘benefit of the covenant’ or the ‘right to the cash’, i.e. a chose in action. This chose may be transferred by operation of law in accordance with the intention of the parties. Therefore, in a sense the trust is perfect in that B has the trust property even though A did not transfer 10,000 in cash to B. B having acquired the right to the cash is entitled to claim the cash from A. This difficult principle is known as the rule in Fletcher v Fletcher [1844] 4 Hare 67. CASE EXAMPLE Fletcher v Fletcher [1844] 4 Hare 67 The settlor, Ellis Fletcher, covenanted (for himself, his heirs, executors and administrators) with trustees (their heirs, executors, administrators and assigns) to the effect that if either or both of his natural issue (illegitimate children), Jacob and John, survived him and attained the age of 21, Ellis’s executors would pay to the covenantees (or heirs etc.) £60,000 within 12 months of his death, to be held on trust for the relevant natural issue. In the circumstances, Jacob alone survived the settlor and attained the age of 21. The surviving trustees (covenantees) declined to act in respect of the trust of the covenant, unless the court ordered otherwise. Jacob brought an action directly against the executors, claiming that he become solely entitled in equity to the property. Held: A trust of the covenant was created in favour of Jacob, the claimant, who was entitled to enforce it as a beneficiary. JUDGMENT ‘[W]here the relation of trustee and cestui que trust is constituted, as where property is transferred from the author of the trust into the name of a trustee, so that he has lost all power of disposition over it, and the transaction is complete as regards him, the trustee, having accepted the trust, cannot say he holds it, except for the purposes of the trust, if it is not already perfect. This covenant, however, is already perfect. The covenantor is liable at law, and the court is not called upon to do any act to perfect it.’ Wigram VC On analysis, in Fletcher v Fletcher [1844], the court decided that: (a) On construction of the terms of the covenant, the intended trust property was the ‘benefit of the covenant’ or a right to the cash sum, i.e. a chose in action, and not the cash sum of 60,000. (b) Since the sum had existed in Ellis Fletcher’s estate at the time of the covenant, this chose in action was transferred to the covenantees, trustees, on the date of the creation of the covenant. (c) The covenantees therefore became trustees, subject to the achievement of the stipulated conditions, surviving the settlor and attaining the age of 21. (d) Since Jacob satisfied these conditions he became a beneficiary unconditionally and was therefore entitled to protect his interest. It is questionable who had the ‘benefit of the covenant’. Was it Ellis Fletcher or the covenantees, trustees? Did Ellis Fletcher have the benefit of the covenant? He was the covenantor. He (or his estate) was under a duty to transfer the sum to the covenantees, trustees. He (or his estate) therefore had the burden of transferring the sum to the covenantees, trustees. It is true that Ellis Fletcher had the cash in his estate at the time of the covenant, but this did not derive from the covenant. This sum existed independently of the covenant. Alternatively, it could be argued that the covenantees, trustees had the ‘benefit of the covenant’ as covenantees. They were nominated as the recipients of the sum of 60,000, albeit in a representative capacity. In other words, between the two parties to a voluntary covenant – the covenantor and the covenantees – only the covenantees may be treated as acquiring the ‘benefit of the covenant’. If this is the true position, then only the covenantees may create a trust of this chose or benefit: i.e. only the covenantees may become the settlors of the chose in action. On the facts of Fletcher v Fletcher [1844], this was clearly not the intention of the covenantees, trustees. A separate analysis of the Fletcher v Fletcher [1844] rule which is consistent with the Milroy v Lord [1862] principle is to identify the trust property as the cash sum of 60,000, and not the ‘benefit of the covenant’ or the chose in action. The issue then is whether the covenantees, trustees, acquired, or were entitled to acquire, the cash sum and, if so, when. It could be argued that the terms of the covenant were unique and imposed a positive duty, not on Ellis Fletcher, but his personal representatives to transfer 60,000 to the covenantees as trustees for Jacob. Under the covenant Ellis Fletcher merely had a duty to retain the cash sum in his estate at the time of his death. If he had done this at the time of his death then Ellis Fletcher would have done everything in his power, barring his death, to perfect the trust under the Re Rose (1952) principle. He was merely required to die (an issue outside his control), leaving the cash sum in his estate. This he had done. At this point a positive duty would be imposed on Ellis Fletcher’s personal representatives to transfer the property to the covenantees, trustees. 4.8.1 Fletcher restricted to debts enforceable at law Owing to the difficulties posed by the Fletcher v Fletcher [1844] principle and the opportunities for intended beneficiaries under an imperfect trust, it is not surprising that the principle has been restricted by the courts to one type of chose in action, namely debts enforceable at law. A debt enforceable at law involves a legal obligation to pay a quantified amount of money. It does not concern an obligation to transfer shares or paintings. In addition the obligation involves existing, and not future, property. This restriction was imposed in an obiter pronouncement in Re Cook’s Settlement Trust [1965] Ch 902, HC. CASE EXAMPLE Re Cook’s Settlement Trust [1965] Ch 902, HC A number of valuable paintings were gifted by his father to Sir Francis Cook, who covenanted with trustees to the effect that if any of the paintings was sold during his lifetime, the net proceeds of sale were required to be settled on trust for stated beneficiaries. Sir Francis gave one of the paintings to his wife who wanted to sell it. The question in issue was whether the covenant may be enforced as an agreement to create a trust or as a trust. Held: (a) The parties to the agreement were volunteers who could not enforce the covenant. (b) The intended trust was imperfect for the subject-matter concerned future property, i.e. the proceeds of sale in the future. For this reason the Fletcher [1844] principle was not applicable. In any event the Fletcher principle was applicable to debts enforceable at law. JUDGMENT ‘The covenant with which I am concerned did not, in my opinion, create a debt enforceable at law, that is to say, a property right, which, although to bear fruit only in the future and on a contingency, was capable of being made the subject of an immediate trust, as was held to be the case in Fletcher v Fletcher … this covenant on its true construction is, in my opinion, an executory contract to settle a particular fund or particular funds of money which at the date of the covenant did not exist and which might never come into existence. It is analogous to a covenant to settle an expectation or to settle after acquired property.’ Buckley J KEY FACTS Constitution of express trusts Rule in Milroy v Lord [1862] (a) self-declaration of trusts (b) transfer to trustees and declaration Settlor is the trustee (‘three certainties’ test) Re Kayford [1975]; Paul v Constance [1977] Vesting of property in the hands of the trustees accompanied by a valid declaration of trust Transfer of the legal title – nature of the property Land – registration under the LRA 1925 Chattels – deed of gift or delivery Re Cole [1964] Shares in a private company – execution of a stock transfer form and registration in the company’s share register choses in action – assignment at law under s 136 LPA 1925 Transfer of the equitable interest Whether the transferor has done everything required of him to effect the transfer Writing under s 53(1)(c) of the LPA 1925 Re Rose [1952]; Mascall v Mascall [1984]; Pennington v Waine [2002] Where there are multiple trustees nominated by the settlor (including the settlor) and the latter has manifested an irrevocable intention to create a trust, the trust is valid even though the other named trustees have not acquired the property Choithram v Pagarani [2001] An imperfect transfer to the trustees will not automatically be treated as a valid declaration of trust Richards v Delbridge [1874]; Jones v Lock [1865] A settlor may expressly declare himself a trustee pending a transfer to the third party trustees. If the transfer takes place during the lifetime of the settlor the trust will be perfect Re Ralli [1964] The benefit of a covenant (chose in action of a debt) may be the subject-matter of a trust Fletcher v Fletcher [1844] 4.9 Consequences of a perfect trust sui juris A person who is under no disability, such as mental illness, affecting his power to own or transfer property.

transfer of a chose in action

  • ASSIGNMENT OF CHOSES IN ACTION

Share This Post

transfer of a chose in action

 Emmanuel Bassey

  • INTRODUCTION

As a general rule and based on the doctrine of privity a contract cannot confer rights or impose obligations on any person except the parties to the contract. Accordingly, a contract cannot be enforced by or against a person who is a stranger to it even if the contract is made for his benefit and purports to give him the right to sue or to make him liable upon it. The main reason for this is that it is the parties’ contract, and they are always free to vary or discharge it by agreement. The creation of a third party right would impede this freedom unless an agreement for such third party involvement has been made part of the agreement.

As with every general rule, there is always an exception. One of the exceptions to the doctrine of privity of contract arises in the assignment of choses in action where the owner of a contractual right can transfer same to a third party without the consent of the debtor (the counter-party to the contract), thereby enabling the third party to enforce the right against the debtor. The process of transfer of such a right is known as “assignment” and the types of property which are susceptible to this type of transfer are known as “choses in action.”

This article sets out to trace the evolution, incidence, and the conditions precedent for a valid assignment of choses in action under Nigerian law.

  • WHAT ARE CHOSES IN ACTION?

Choses in action is a legal expression used to describe all personal rights of property which can only be claimed or enforced by action and not by taking physical possession of them. They are also called “things in action” because they are things which a person is not possessed but has to bring an action in court in order to recover them. Choses in action may be legal or equitable. Legal choses in action are those which could historically only be enforced by an action at common law whilst equitable choses in action are choses in action which could only be enforced in the courts of equity- they arose out of property rights over which the Chancery Court formerly had exclusive jurisdiction. Examples of choses in action include debts, shares, negotiable instruments, policies of insurance, bills of lading, patents, copyrights, rights under trusts and legacies, benefit of a contract for sale of reversionary interest, rights to claim indefinite sums of money, as for compensation under Statute; damages for loss in which the assignee was the assignor’s insurer, a debt or benefit arising out of an existing contract, but payable at a future time and a claim for damages in tort. All these are intangible rights which cannot be physically possessed but only claimed or enforced by an action in court. They are in law permitted to be assigned by the holders (though they can neither be seen nor possessed) to third parties who would be able to enforce the rights against the debtors even though they were not parties to the original contract.

The term “assignment” refers to the act of transferring to another all or part of one’s property, interest, or rights.   The term denotes not only the act of transfer, but also the instrument by which it is effected. In Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd   the Court of Appeal held that “assignment means to give something to some body for their use or benefit. It also may mean to transfer right, property or title from the persons legally entitled to them to some body else for their benefit.”

The assignment of choses in action may be legal or equitable. Due to the vagaries of the historical evolution of law and equity, different considerations apply to the assignment of choses in action at law and in equity.

  • ASSIGNMENT AT COMMON LAW

Historically, under common law contractual rights were hitherto not assignable without the consent of both contracting parties since they were things in action as opposed to things in possession. This common law rule stemmed from the difficulty of conceiving of transfer of an intangible, and the desire to avoid maintenance and champerty. The only methods of assigning contractual rights at common law were by novation and by procuring the debtor’s acknowledgment that he held for the assignee, both of which required the consent of the debtor, unless the assignment was done by the king or it involved the assignment of a mercantile chose in action like a negotiable instrument which are transferrable by mere delivery. Accordingly, legal choses in action could only be assigned at law with the consent of the debtor. The assignor was however, required to be joined as a party to any action to enforce the assignment (either as a plaintiff if he consented or as a defendant in the absence of consent) since there was no privity of contract between the debtor and the assignee.

Given the rigors of assignment of legal choses in action under the common law, the courts of equity developed more flexible requirements for the assignment of equitable choses in action. However, the most significant intervention was introduced by the enactment of the English Judicature Act of 1873 which introduced the concept of statutory assignment.

  • STATUTORY ASSIGNMENT

The enactment of the Judicature Act, 1873 (a statute of general application in Nigeria) created an exception to the doctrine of privity of contract by introducing the concept of trust of a chose in action in section 25(6) of the Act, which provides as follows:

Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice;- (a) The legal right to such debt or thing in action (b) All legal and other remedies for the same and (c) The power to give a good discharge for the same without the concurrence of the assignor; Provided that if the debtor, trustee or other person liable in respect of such debt or thing in action has notice:- i. That the assignment is disputed by the Assignor or any person under him or; ii. Of any other opposing or conflicting claim to such debt or thing in action, he may if he thinks fit either call upon the person making claim hereto to inter plead concerning the same, or pay the debt or other in action in Court.

By section 25(6) of the Judicature Act, a contractual party could assign his rights under the contract subject to the conditions stated in the Act without any need for a novation or acknowledgment by the debtor.

  • CONDITIONS FOR A VALID ASSIGNMENT OF CHOSES IN ACTION

In order for Section 25(6) of the Judicature Act 1873 to apply, three conditions must be fulfilled:

6.1 The assignment must be absolute and not purport to be by way of charge only

An absolute transfer is a transfer of the whole not a part of the chose in action. The test to be applied in determining whether an assignment is absolute is whether the assignor has unconditionally transferred to the assignee for the time being, the sole right to the debt in question as against the debtor in which case the assignment is absolute. The fact that the assignee is to hold proceeds of the debts or the surplus proceeds beyond the stated amount, on trust for the assignor does not prevent the assignment from being absolute.

An assignment that purports to be by way of charge only is not an absolute assignment. The relevant test is to decide whether the assignment merely gives a right to the assignee to payment out of a particular fund by way of security rather than an unconditional transfer of the fund to the assignee. The judicial reasoning behind the requirement for an absolute assignment is that the debtor should not be put in doubt or jeopardy by the arrangements between the assignor and the assignee as to whom he is to discharge his obligations.

No particular form or mode is prescribed or required by law for a legal assignment as long as the assignor absolutely and unequivocally indicates the transfer of the benefit, interest or title to the assignee.

6.2 It must be in writing under the hand of the assignor

No particular mode or form is necessary as the writing can be informal, as for instance, a direction in writing by a creditor to his debtor to pay the assignee, handed to the assignee, may amount to an assignment but such a direction handed to the debtor may not by itself constitute an assignment unless there is evidence that the assignee has requested or consented to it. It is also the law that even if the debtor has the direction, it may not constitute more than authority to pay, and gives the assignee no rights unless the instructions can be said to amount to an irrevocable mandate to the debtor.

6.3 Express notice in writing thereof must be given to the debtor or trustee

This notice is not required to be in a separate document purposely prepared as a notice and described as such. What is needed is that information relative to the assignment shall be conveyed to the debtor, and that it shall be conveyed in writing. A written demand for payment sent by the assignee to the debtor has been held to be sufficient once the notice is unconditional and given to the debtor personally before the assignee commences his action. It has also been held that since a creditor can assign by directing his debtor to pay the assignee, a single written document would suffice to constitute both the Assignment as well as the notice envisaged by the Act. Furthermore, it is not necessary for the notice to the debtor to be given by the assignor or the assignee; it may be given by a third party.

  • LEGAL EFFECT OF A STATUTORY ASSIGNMENT

Once the above conditions have been fulfilled, certain legal consequences immediately follow:

  • The assignee can sue the debtor in his own name instead of having to sue in the name of the assignor and perhaps to go to the Court of equity to compel his joinder in the action.
  • Consideration is not required for the assignment.
  • The consent of the assignee is not required for the assignment. However, where it is the liabilities or the burdens under a contract that are to be assigned to a debtor, the consent of the assignee is required.
  • EQUITABLE ASSIGNMENT OF CHOSES IN ACTION

An equitable assignment of a chose in action arises in the event of an assignment of an equitable chose in action and where there has been a failure to comply with the statutory conditions for a valid assignment of a legal chose in action. Such an assignment which fails to comply with the requirements of the statute will not become invalid but will operate as an equitable assignment.

An equitable assignment may be in writing or oral. It may operate by way of a charge only or be part of the debt or chose. If there is an equitable assignment of an equitable chose in action the assignment being absolute, then the assignee is entitled to sue in his own name.

Any words will suffice provided they are unambiguous to the effect that an identifiable debt has been made over by the creditor to some third person. No privity of contract or consideration is required for equitable assignment provided that the assignor has, at the material time, done all that he can to perfect the gift.

An equitable assignment is binding even without notice to the debtor. However, as a matter of practice, notice to the debtor is very important for three reasons:

  • In the absence of notice the debtor is entitled to discharge his obligations to the assignor and not to the assignee, whereas if he has notice he does so at his own peril and he may well be required to discharge the obligation a second time to the assignee with no entitlement to recovery from the assignor.
  • The giving of notice to the debtor has an effect on prior equities. The general rule as regards assignment of choses in action is that an assignee takes subject to the equities that already apply to the property in question. Thus, anyone who has a prior interest (legal or equitable) in an assigned chose is entitled to a higher priority than that of the assignee. The reason for this is that the assignee cannot acquire a better title than that of the assignor. What he essentially gains by virtue of the assignment is a right to continue in the stead of the assignor in respect of that chose and nothing better.Claims of equities that arise after notice of the assignment has been given to the debtor would not affect the assignee, except where the claim is very closely related to the original transaction upon which the chose came into existence. The rule that the assignee takes subject to equities will not apply where the trustee is estopped, either by conduct or deed, from setting up equities against the assignee. It would not also apply where the agreement occasioning the original transaction includes a clause that the assignees of the assignor would take free from all equities.
  • The date of notice establishes the order of priority as between successive assignees. Thus, where there are two or more assignees of the same chose in action, the first to give notice has priority over the other assignees even if they were first in time.

Assignment of choses in action provides a veritable avenue for the exchange of contractual rights, especially when the assignor does not have the wherewithal to enforce the right in court. This creates a win-win situation for the assignor and the assignee, as the assignor is immediately able to receive value for his rights and the assignee is able to enforce the right to receive whatever benefit he has contracted for whilst the debtor’s position is not adversely affected. The parties, however, need to understand the applicable principles so that they would know the extent of any rights that they acquire in any given transaction.

______________________________

For further information on this article and area of law, please contact Emmanuel Bassey  at: S. P. A. Ajibade & Co., Lagos by Telephone (+234 1 472 9890), Fax (+234 1 4605092) Mobile (+234.703.805.9736, +234.815.088.2839) Email: [email protected] www.spaajibade.com

  • Emmanuel Abasiubong Bassey, Senior Associate in the Dispute Resolution Department of S.P.A. Ajibade & Co., Lagos, Nigeria.
  • Makwe v. Nwukor & Anor (2001) LPELR-1830(SC) (pp 25 – 25 paras D – E). See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors. (2013) LPELR-20870(CA) (pp 62 – 98 paras A – E). It was however, held that the benefit of a contract is only assignable in cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it. See, Tolhurst v. Associated Portland Cement Manufacturers Ltd (1902) 2 K.B. 660 at 668, (1903) A.C. 414 cited in Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 24 – 25 paras E – C).
  • I. E. Sagay, Nigerian Law of Contract (first published 1985, 2nd Edn, Spectrum Books Limited, Ibadan, 2000) 516.
  • See, https://mcmahonsolicitors.ie/choses-in-action/ [accessed on 14th December 2023.] Supra.
  • See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors (supra).
  • See, FCMB v. Essien (2022) LPELR-58699(CA) (pp 6 – 6 paras E – F).
  • See, FCMB v. Essien (supra).
  • Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 24 – 25 paras E – C).
  • The following choses are however not assignable: (1) Salaries of public officials. This is because it is perceived that if allowed to assign their salaries, they may deprive themselves of their means of sustenance and thereby impair the efficiency which is most desirable for the public service; (2) Alimony- because the money is meant for the maintenance of the spouse and (3) Rights arising out of a contract for personal service.
  • Maintenance occurs when a third-party provides support for litigation without a just cause, by providing, for example, financial assistance. Champerty is an aggravated form of maintenance, where a third-party pays some or all of the litigation costs in return for a share of the proceeds.
  • (36 & 37 Vict.) CHAPTER 66.
  • In Nigeria, a statute of general application refers to refers to statutes which were in force in England on the 1st of January, 1900. They were to be applied by the courts in Nigeria as far as local circumstances permit. However, the Western Region is now exempted by virtue of Law of England (Application) Law of 1959. The West African Court of Appeal stated in Young v. Abina that it was not necessary for the statute to be in force in all of the United Kingdom, but it only had to be in force in England. See, https://www.learnnigerianlaw.com/learn/legal-system/englishlaw accessed on 12th December 2023.
  • Section 25 (6) of the Judicature Act i873 which has now been repealed and replaced substantially by Section 136 of the English Law of Property Act, 1925, in England.
  • See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors. (supra). It has been held that the benefit of a contract is only assignable in cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it. See, Tolhurst v. Associated Portland Cement Manufacturers Ltd (1902) 2 K.B. 660 at 668, (1903) A.C. 414 cited in Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 24 – 25 paras E – C).
  • See, https://www.designingbuildings.co.uk/wiki/Legal_and_equitable_assignment [accessed on 14th December 2023].
  • See, Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (2009) LPELR-4381(CA) (pp 25 – 26 paras D – D).
  • See, Bateman v. Hunt, 20 T. L. R. 628.
  • See, Julius Berger (Nig) Plc & Anor v. Toki Rainbow Community Bank Ltd (supra).
  • See, William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454.
  • If it is incomplete, consideration may be required. Consideration will also be required where the assignment concerns some future chose as the agreement in such instance can only be a contract to assign and all contracts must be backed by consideration. See, Ben Electronic Co. (Nig) Ltd v. ATS & Sons & Ors (2013) LPELR-20870(CA) (pp 62 – 98 paras A – E).
  • The notice may be written or oral and the wording of the notice may be informal. A newspaper article may be a sufficient notice to the debtor. See, Lloyd v Banks (1868) LR 3. Ch App 488.
  • Re Knapman (1881) 18 Ch. D 300.
  • https://djetlawyer.com/assignment-of-choses-in-action/#:~:text=An%20assignment%20of%20a%20chose,legal%20(statutory)%20or%20equitable [accessed on 5 December 2023].
  • See, the rule in Dearle v Hall 3 Russell 1, 38 ER 475.

Subscribe To Our Newsletter

Get updates and learn from the best, more to explore, spa ajibade & co. 2013 annual business luncheon.

In 2008, SPA Ajibade & Co. inaugurated its annual lecture via a Business Luncheon. A reputable Speaker is selected each year to deliver a lecture

transfer of a chose in action

Powering Change – Women in Innovation and creativity – Okojie-Owoyemi

Powering Change: Women in Innovation and creativity – Okojie-Owoyemi

Privacy Overview

Remember me Lost your password?

Your Cart (0)

Your cart is empty Continue Shopping

McMahon Legal (Solicitors)

Choses in Action

Paul McMahon Intangibles

Intangible Property

Most intangible property rights are so-called “choses in action”. A chose in action is a right asserted by legal action. The classic type of chose in action is a debt or an incontrovertible contractual obligation. It also includes a wide range of assets such as stocks, shares, insurance policies. The rights of a beneficiary under its trust is an equitable chose in action. The essential right of a partner is to an account of the partnership assets generally, on winding up.

Intellectual property rights cover a range of rights, which are protected by statute or common law. Copyright consists of a bundle of rights in respect of original works. They protect against copying. A patent protects an inventor of an invention for a period of 20 years. A trademark protects the goodwill associated, with particular goods. Other rights, such as industrial designs and semiconductor chip designs, enjoy similar statutory protection.

A range of other rights, such as confidential information and goodwill are protected by common law. Various rights and remedies are available from the courts to counter interference with such rights.

Nature of Chose in Action

A chose in action is a quasi-property right which may be ultimately asserted by legal action.  The expression embraces a wide variety of assets and quasi-assets. The classes of chose in action vary in respect of their assignability and the nature of the rights and property concerned.

In broad terms, choses in action are divided into legal choses in action and equitable choses in action.  However, there are choses in action outside of these categories and choses in action which are not enforceable in court but depend for their existence on other circumstances and factors.

A legal chose in action is one which was historically enforced by action at law (as opposed to in equity). Rights enforceable by action at law include rights under contracts, claims for unliquidated damages for breach of contract or a right of action based on tort. The right of the trustee to recover trust assets is a legal chose in action.

Equitable choses were those originally enforced by the courts of equity.  They arise out of property rights over which the Chancery Court formerly had exclusive jurisdiction, including, in particular, equitable interests in property, shares in partnership and shares in funds.

Equitable rights to the property include beneficial interest under trusts, many interests in funds, reversionary interest in estates and shares in partnerships. Equitable choses in action include claims in equity for misfeasance, breach of trustee and relief against forfeiture.

Examples of Choses in Action

The following are examples of choses in action;

  • debts whether by contract or by instrument under seal;
  • mortgage debts;
  • debentures;
  • rights to rents;
  • tithes and annuities;
  • many interests in funds,
  • negotiable instruments,
  • promissory notes;
  • bills of exchange.
  • insurance policies;
  • charterparties.

A chose in action need not be evidenced by an instrument; such as for example;

  • patent rights;
  • dividends due;
  • contractual rights from a verbal contract.

Debts, Accounts and Policies

Certain types of assets are effectively legal claims, which can only be enforced by Court Action.  A debt, insurance policy or bank account can be mortgaged by being assigned to the mortgagee as security. In order to complete the security, notice should be given to the debtor or the party who has the obligation to pay, who should in turn confirm and acknowledge such assignment.

An assignment and notice in writing is essential to give the assignee the right to sue and enforce the obligation in its own name.  Failure to give notice does not render the assignment void.  Instead, it means that it can only be enforced indirectly.   The priority of assignments is determined by the date of notice to the debtor/covenanting party. Therefore, failure to give notice may cause priority to be lost, if a later assignment is notified first.

Security Assiignments

A security assignment may be taken over rents receivable, in the same manner as over any debt or third party liability. A formal security assignment is the best way to procure effective security. The tenant should be notified to pay the rent to a nominated account. This can be a very effective security, in the case of an investment property.

It is possible to create a fixed charge over monies due, such as accounts receivable (e.g. unpaid invoices).  It is necessary that the borrower does not control the account and only makes withdrawals with the lender’s specific consent. It is often desirable for a lender to create a fixed charge over a borrower’s debtors as these may constitute a significant asset.

Many attempts to create a fixed charge over a receivable, leave the borrower with too much control, so that the such charges take effect if at all, as floating charges, with the consequent weaknesses and vulnerability. Certain Irish Revenue debts have priority over fixed charges over book debts.

There are very little limitations on what might be contained in a contract. Usually there are rights and obligations on the respective parties. One person’s rights are equivalent to the other person’s obligation. The obligations or rights “receivable” are often capable of assignment. This might comprise a right to payment or the right to require performance

The developer’s rights under a building contract and various associated contracts may be assigned by way of security to a bank. More commonly, the lender acquires direct rights that allow the lender or its nominee the option of assuming the rights and obligations of the borrower under the contracts.

Many contracts are not capable of assignment. There is a presumption that a contract may be assigned, unless it is expressed or implied otherwise. An assignment involves an outright transfer of the benefit of the contract. It is not possible to transfer the burdens or obligations under a contract.

It is possible to subcontract their performance to a third party. However it is a fundamental principle that a person who has undertaken obligations cannot get rid of his obligations by transferring or assigning them.

Bank Accounts

A bank account is a debt owed by the bank to the customer. The customer does not “own” the deposit as such and it is not property. Rather it is a claim against the bank. A debt, asset or receivable is mortgaged by assignment in writing followed by notice to the debtor.

Certain difficulties arise with a charge over a deposit with the lender itself. Generally, it is not possible to take a security charge over the mortgagee’s own debt (which is what the deposit is). There is a mechanism to avoid this difficulty and EU regulations have assisted and simplified this type of security.

Insurance Policies

The Policy of Insurance Act provides that an assignment of an insurance policy must be in writing, either by endorsing the policy or by a separate instrument. Written notice of the assignment must be given to the insurance company at their principal place of business.  The company should acknowledge receipt of a notice.

A mortgage of an insurance policy takes the form of an assignment with a provision for re-assignment.  The assignments take effect in order of notice.

A “legal” mortgage may be taken over shares by making a transfer of them to the mortgagee, subject to an agreement to re-transfer.  The mortgagee will be registered as shareholder.  It is not possible to note a mortgage on the register of shares of a company.

An “equitable” mortgage of shares can be taken by way of a transfer executed by the mortgagor, leaving the name of the transferee blank. The share certificate should also be delivered.  It is possible to give a company a stop notice that entitles the mortgagee to notice of an application to transfer and gives the mortgagee the opportunity to obtain a restraining order.

Intellectual Property

A mortgage over intellectual property, which comprises patents or trade marks must be signed, transferred and registered on the Register.  A mortgage is registered in the Patents  Office. Mortgages have priority in order of registration.

The grant of security over the  following assets must be registered in the Patents Office;

  • trade marks;
  • registered designs.

There is no register of copyright. A mortgage of copyright is taken by way of a transfer subject to an obligation to re-transfer upon redemption.

Assignability of Rights

It is possible to assign some, but not all, intangible rights. They are usually assigned by written assignment, followed by notice to the obligor (other party). Equitable interests may be created over intangible rights.

A right to sue for an indefinite amount, such as a right to compensation, is usually non-transferable on public policy grounds. Where, however, the transferee has a genuine interest in the litigation, an assignment may be permitted.

References and Sources

Irish Texts

Modern law of personal property in England and Ireland 1989  Bell

Consumer Law Rights & Regulation 014       Donnelly & White

Commercial Law White           2012 2 nd  ed

Commercial & Economic Law in Ireland        2011 White

Commercial Law 2015 Forde 3 rd  ed

Irish Commercial Precedents (Looseleaf)

Commercial & Consumer Law: Annotated Statutes 2000  O’Reilly

Irish Tort Legislation    Fahey  Irish Tort Legislation    2015

Personal Property Law: Text and Materials  2000  Sarah Worthington

Personal Property Law (Clarendon Law Series) 2015 Michael Bridge

The Law of Personal Property 2017   Professor Michael Bridge and Prof. Louise Gullifer

The Principles of Personal Property Law 2017  Duncan Sheehan

Crossley Vaines on Personal Property 1967 by J C Vaines

The Law of Bills of Sale 2017 James Weir

Palmer on Bailment 2009  Norman Palmer

The Reform of UK Personal Property Security Law: Comparative Perspectives  2012 John de Lacy

The Law of Personal Property Security 2007  Hugh Beale and Michael Bridge

Legal Guide has a Better Version of this Article

Legal blog covers tax and regulation.

Important Notice-  See the Disclaimer Below , McMahon Legal, Legal Guide Limited and Paul McMahon have no liability arising from reliance on anything contained in this article nor on this website

Contact McMahon Legal 

Related Posts

Intangibles

Intangible Security

  • 25 years+ in legal practice
  • Author of unique guides to Irish Law
  • Visit McMahon Legal Site  
  • Exploratory Consultation Free

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

  • We're Hiring!
  • Help Center

paper cover thumbnail

A Chose in Action

Profile image of Ishara Sovis

A Chose in Action is a property right in something intangible, or which may be tangible but are not in one's possession, but enforceable through legal or court action. Generally representing a mere right to sue for a debt or for damages, such as a contractual right, the term gradually developed as lawyers and judges, and especially creditors were attracted to incorporeal personal property, increasingly prevalent in a growing commercial world. The document discussed about regarding “the nature of a chose in action, critically assess whether choses in action may be transferred, realized, mortgaged or charged, and, if so, what are the legal requirements, under English law, to ensure that such dealings are effective.

Related Papers

reference-global.com

Stephanie Laulhe Shaelou

transfer of a chose in action

goodluck kimaro

Calin Rizoiu

Ringkasan Kelompok 8

Sapta Harinanda

RINGKASAN KELOMPOK 8 MPA

Mirali Purohit

Machine Learning methodologies are making a remarkable contribution, and yielding state-of-the-art results in different speech domains. With this exceptionally significant achievement, a large amount of labeled data is the largest bottleneck in the deployment of these speech systems. To generate massive data, hand-labeling training data is an intensively laborious task. This is problematic for clinical applications where obtaining such data labeled by speech pathologists is expensive and time-consuming. To overcome these problems, we introduce a new paradigm called Weak Speech Supervision (WSS), a first-of-its-kind system that helps users to train state-of-the-art classification models without hand-labeling training data. Users can write labeling functions (i.e., weak rules) to generate weak data from the unlabeled training set. In this paper, we provide the efficiency of this methodology via showing the case study of the severity-based binary classification of dysarthric speech. In...

Hermann Kaindl

Transinformação

Rosana P. T. de Moraes

O artigo propõe um caso fictício para ilustrar o uso das tecnologias de Dados Abertos Interligados como mecanismos para tornar interoperáveis informações em acervos de bibliotecas, arquivos e museus, utilizando como exemplo as informações sobre o escritor Machado de Assis e sua obra. Utilizou-se como método o estudo de um caso restrito e ilustrativo, não exaustivo. Aplicaram-se diferentes vocabulários para interligação dos dados e para sua representação, utilizando os princípios do Linked Data; sugere-se que os profissionais da informação usufruam dessa potencialidade e busquem novas aplicações para ampliar a interoperabilidade dos dados disponíveis na Web.

E3S Web of Conferences

In deep water, pipelines are usually laid directly on the seabed. During the laying process, the pipe typically penetrates into the seabed by a fraction of a diameter. The vertical embedment of pipeline and formation of berm during penetration have a significant effect on the pipeline stability. This study aims to investigate the vertical pipeline penetration at uniform and normal consolidated clay, by carrying out a series of numerical analyses, in which the coupled Eulerian-Lagrangian method (CEL) is incorporated to enable large deformation simulation. These analyses have been compared with collapse loads calculated using the theory solution. The results show that the CEL method is very suitable for simulating large-deformation pipesoil interaction.

Grenze International Journal of Engineering and Technology GIJET

Journal of Neurosurgery: Spine

Mir Sajad Hussain

OBJECT Abnormal sacral slope (SS) has shown to increase progression of spondylolisthesis, yet there exists a paucity in biomechanical studies investigating its role in the correction of adult spinal deformity, its influence on lumbosacral shear, and its impact on the instrumentation selection process. This in vitro study investigates the effect of SS on 3 anterior lumbar interbody fusion constructs in a biomechanics laboratory. METHODS Nine healthy, fresh-frozen, intact human lumbosacral vertebral segments were tested by applying a 550-N axial load to specimens with an initial SS of 20° on an MTS Bionix test system. Testing was repeated as SS was increased to 50°, in 10° increments, through an angulated testing fixture. Specimens were instrumented using a standalone integrated spacer with self-contained screws (SA), an interbody spacer with posterior pedicle screws (PPS), and an interbody spacer with anterior tension band plate (ATB) in a randomized order. Stiffness was calculated f...

RELATED PAPERS

Health Services Research

Nguyen Minh Thuc B2204751

Welber Smith

Lentera Pendidikan : Jurnal Ilmu Tarbiyah dan Keguruan

azizul hakim

Integrity Journal of Education and Training

Adam Anyebe

abrar ridwan

Dinamika Kerajinan dan Batik: Majalah Ilmiah

gunawan prasetyo

Transplantation

David Cranston

European journal of internal medicine

Agustín Julián Jiménez

Biodiversitas

Puti Sri Komala

International Journal of Gynecology & Obstetrics

Jurnal teknologi

Ahmed Rajab

Monex : Journal Research Accounting Politeknik Tegal

Rizky Ameilia Wulandari

Goncalo Modesto

Intelligent Automation & Soft Computing

Dr. Ansar Siddique

RELATED TOPICS

  •   We're Hiring!
  •   Help Center
  • Find new research papers in:
  • Health Sciences
  • Earth Sciences
  • Cognitive Science
  • Mathematics
  • Computer Science
  • Academia ©2024

To find out more about the Government’s amendments to the Bankruptcy Act please visit Bankruptcy amendment .

Choses in action

On this page.

Official Trustee Practice Statement 6 explains the choses in action in bankruptcy.

Introduction

What is a chose.

  • a chose in possession is a thing of which the owner has actual enjoyment
  • a chose in action is a thing of which a person has not the present enjoyment, but merely a right to sue to recover it (if withheld) by commencing an action, and protected by the law.
  • Examples of choses in action include money due on a bond, the right to recover money by legal action, the right of a beneficiary under a will to “due administration” with respect to the executor, the right to enforce a contract or recover damages for its breach and rights arising by reason of the commission of a tort (civil wrong) or other wrong.
  • A common situation in bankrupt estates is where a person sells goods to another and then becomes bankrupt.  If, at the date of bankruptcy, the purchaser has not paid for the goods, the right to collect payment is an asset that vests in the trustee of the bankrupt estate.
  • A chose in action may be assigned by written instrument signed by the assignor that is absolute in terms and by notice in writing being given to the debtor (see section 100-5 of the Insolvency Practice Schedule).  The Courts have confirmed the right of a trustee to sell a chose in action, including to a discharged bankrupt.  This is not possible in the case of an undischarged bankrupt as the “asset” would immediately revest in the trustee under paragraph 58(1)(b) of the Bankruptcy Act 1966 – see also the decision in Meriton Apartments Pty Limited v Industrial Court of New South Wales [2008] FCAFC 172 (13 October 2008) .

Actions where the official trustee commences proceedings

  • Where a cause of action exists and the bankrupt has not commenced recovery as at the date of bankruptcy, if the cause of action has vested it is open to the Official Trustee to commence proceedings to enforce its rights – for example, to sue for a debt that was previously owed to the bankrupt.
  • the probability of succeeding in the action
  • the costs of pursuing the matter
  • the attitude of the bankrupt’s creditors and whether they want to contribute towards any cost of recovery
  • the ability of the other party to pay the amount awarded if the trustee is successful, and
  • the possibility that the trustee could become liable for the defendant’s costs in the event the action is unsuccessful.
  • Paragraph 19(1)(k) of the Bankruptcy Act affords a trustee protection in circumstances where such actions may be considered not cost-effective to recover.

Assignment of a cause of action

  • A bankrupt who no longer has the ability to pursue a claim against another party may request that the trustee either pursue the action or sell that right back to the bankrupt (after discharge) or to an associated (third) party.  The trustee has a duty to the bankrupt as well as to the creditors in the estate and may consider either possibility.
  • The potential defendants in the action may challenge any proposed assignment of the cause of action to the bankrupt or their associates.  The potential defendants may make a competing offer to purchase the cause of action from the trustee in order to ensure it does not proceed.  In any event, either party may challenge the trustee’s decision.

Section 60 of the Bankruptcy Act

  • Where an action is on foot when bankruptcy occurs, the trustee is required to make an election under subsection 60(2) of the Bankruptcy Act to either abandon the proceedings or continue the action.  Subsection 60(3) provides the trustee with 28 days following service of notice of the action to make the election, otherwise it is deemed abandoned.
  • However, under section 60, there are some types of action in which a trustee is not required to make an election.  Pursuant to subsection 60(4), any action involving a “personal injury or wrong” done to a bankrupt, to their spouse or de facto partner or to a member of their family is an action that can be continued by a bankrupt in their own name.  Likewise, an action in respect of the death of the bankrupt’s spouse or de facto partner or a member of their family may be continued by the bankrupt.  The fruits of any such action are not property a trustee would be entitled to recover as divisible property due to the exemption in paragraph 116(2)(g) of the Bankruptcy Act.
  • The basic test to determine whether an action relates to a “personal injury or wrong” was set out in Cox v Journaux (No.2) [1935] HCA 48 and has been referred to in many subsequent cases, including Faulkner v Bluett [1981] FCA 3.  The test is that an action will be one for personal injury or wrong where the relief sought is to be assessed by immediate reference to the pain felt by the bankrupt in respect of their mind, body or character and without any reference to their rights to property.
  • In some situations, it may not be immediately clear whether an action commenced by the bankrupt relates to a personal injury or wrong or is referrable to their property rights, and it is possible that an action may contain both elements.

Considerations

  • A decision as to whether to pursue an action depends on several factors, including the potential amount to be realised in the estate and evidence of liability.
  • advances and indemnities from creditors
  • funding under section 305 of the Bankruptcy Act, and/or
  • applying money in the estate.
  • Where there is money in the estate that would in the normal course be available to creditors as a dividend, creditors’ views will be sought to ascertain whether they agree that the money being used to pursue the proceeding.  Creditors are presented with information to assist in making the decision.

Assignment of actions

  • The Official Trustee may elect to assign a chose in action where a recovery is not a viable proposition within the administration of an estate.  There may be instances where the Official Trustee forms the view that prosecution of the action would not benefit the estate notwithstanding a bankrupt’s opposing opinion.
  • The Official Trustee has several options for determining the value of the consideration that will depend on the action, the potential cost and benefit to the estate.  Creditors will be consulted during the process.
  • The assignment of the action may be finalised by the Official Trustee and the assignee entering into a deed.  Usually, the assignee bears legal costs incurred in preparing the deed, with the trustee’s solicitor vetting the deed.

In sensitive situations, click or tap this bar to quickly exit this page.

We welcome your feedback to help us improve our website.

We are unable to respond to respond to comments or suggestions. Alternatively, if you would like a response, you can  send us feedback  or  contact us .

  • Find a Lawyer
  • Ask a Lawyer
  • Research the Law
  • Law Schools
  • Laws & Regs
  • Newsletters
  • Justia Connect
  • Pro Membership
  • Basic Membership
  • Justia Lawyer Directory
  • Platinum Placements
  • Gold Placements
  • Justia Elevate
  • Justia Amplify
  • PPC Management
  • Google Business Profile
  • Social Media
  • Justia Onward Blog

2013 Mississippi Code Title 11 - CIVIL PRACTICE AND PROCEDURE Chapter 7 - PRACTICE AND PROCEDURE IN CIRCUIT COURTS IN GENERAL § 11-7-3 - Assignee of chose in action may sue

The assignee of any chose in action may sue for and recover on the same in his own name, if the assignment be in writing. In case of a transfer or an assignment of any interest in such chose in action before or after suit brought, the action may be begun, prosecuted and continued in the name of the original party, or the court may allow the person to whom the transfer or assignment of such interest has been made, upon his application therefor, to be substituted as a party plaintiff in said action. If in any case a transfer or assignment of interest in any demand or chose in action be made in writing before or after suit is filed, to an attorney or firm of attorneys, appearing in the case, it shall be sufficient notice to all parties of such assignment or transfer, if such assignment or transfer be filed with the papers in said cause, and such attorney or attorneys shall not be required to be made parties to said suit. An "assignee" for purposes of this section includes both absolute assignees, with or without recourse, and conditional or limited assignees including assignees for collection purposes.

Disclaimer: These codes may not be the most recent version. Mississippi may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.

Get free summaries of new opinions delivered to your inbox!

  • Bankruptcy Lawyers
  • Business Lawyers
  • Criminal Lawyers
  • Employment Lawyers
  • Estate Planning Lawyers
  • Family Lawyers
  • Personal Injury Lawyers
  • Estate Planning
  • Personal Injury
  • Business Formation
  • Business Operations
  • Intellectual Property
  • International Trade
  • Real Estate
  • Financial Aid
  • Course Outlines
  • Law Journals
  • US Constitution
  • Regulations
  • Supreme Court
  • Circuit Courts
  • District Courts
  • Dockets & Filings
  • State Constitutions
  • State Codes
  • State Case Law
  • Legal Dictionary
  • Legal Blogs
  • Business Forms
  • Product Recalls
  • Justia Connect Membership
  • Justia Premium Placements
  • Justia Elevate (SEO, Websites)
  • Justia Amplify (PPC, GBP)
  • Testimonials

Chinese Lawyer in Shanghai, Shenzhen, Guangzhou and Beijing:

  • Our Lawyers
  • China Divorce Law
  • China Real Estate
  • China Dispute Resolution
  • Foreign Investment in China
  • Testimonials

Chose in possession and Chose in Action under Common Laws

Chose in possession and Chose in Action under Common Laws

  • China Estate Planning

This post is rather an effort of myself in learning property laws in common law countries.

As a lawyer, one of my main law practices is to help China’s high net worth individuals to work out their estate plan under which very often clients wishes to allocate their assets or properties in both China and offshore countries. It is critical for me to understand the basic concepts and rules of local property laws that are very often unique and distinct.

The term “chose in action” has really puzzled me a lot when reading legal materials in English.

According to some of the internet resources:

A chose in action refers to all personal rights to property which can only be claimed or enforced by an action and not by taking physical possession of the property. It is a right to recover something not in one’s possession. It is a right of which a person does not have present enjoyment, but may recover it (if withheld) by action. This may be assigned by writing, if signed by the assignor, absolute in terms and notice in writing being given to the debtor. A “chose in possession” is a right of which the owner has the actual enjoyment.

and the one from Oxford Reference:

A right of proceeding in a court of law to obtain a sum of money or to recover damages. Examples include rights under an insurance policy, a debt, and rights under a contract. A chose in action is a form of property and can be assigned, sold, held in trust, etc. See also chose in possession.

As opposite to chose in possession where there is a corporeal tangible thing that can be physically possessed, chose in action seems to refer to those incorporeal intangible interests that can only be obtained by way of legal action.

Chose in Possession as opposed to chose in action means vesting of actual possession of a thing or a right in person. All proprietary rights in personam if chose in possession refers to anything or right which is in claimant’s possession. For example, the money which a person has in purse is a chose in possession whereas the money which a debtor owes to him is a chose in action.

Further, it is said that:

(a) Chose in action (i) These are intangible rights which can only be enforced by court action. (ii) They are not capable of physical possession for example debts, patents, among others. (b) Chose in possession These are tangible things or subject matter, capable of physical possession for example land and motor vehicles.

So from the above, a chose in action under common law can refer to all personalties that don’t fall within the category of “chose in possession”, encompassing a great variety of proprietary interests.

The property systems in common law are so different from those in civil law jurisdictions and they are almost incomparable. There are also some elements of differences among the common law countries themselves.

Great material Thank you so much

LEAVE A COMMENT Cancel reply

Related posts.

transfer of a chose in action

Steps and Procedures of Selling Residential Properties in China

transfer of a chose in action

Inheritance of Corporate Shares in a China Company (II)

transfer of a chose in action

Inheritance of Personal Properties in China: Bank Deposits (III)

Foreigners can own china property by way of gifting or inheritance.

transfer of a chose in action

Right of Residence and Cross-border Estate Planning for Properties in China

Cookies on GOV.UK

We use some essential cookies to make this website work.

We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

We also use cookies set by other sites to help us deliver content from their services.

You have accepted additional cookies. You can change your cookie settings at any time.

You have rejected additional cookies. You can change your cookie settings at any time.

transfer of a chose in action

Capital Gains and other taxes manual

Practice note 3: "chose in action".

The Valuation Office Agency's (VOA) technical manual used to assess Capital Gains and other taxes.

1. Introduction

Requests from Inspectors will be made directly to the local DVS Registration Centre rather than via CEO, as in the past. The Inspector’s request may not use the term “Chose in Action” but will usually ask for the valuation of an “unascertainable deferred consideration”.

This practice note gives background information, procedural guidance and offers some example valuations. Where additional guidance or assistance is required the caseworker should contact CEO Technical Centre.

2. Definitions

A “chose” is a right, and may be one of two kinds, “choses in action”, and “choses in possession”. A “chose in action” is a right of which a person does not have present enjoyment, but may recover it (if withheld) by action. This may be assigned by writing, if signed by the assignor, absolute in terms and notice in writing being given to the debtor. A “chose in possession” is a right of which the owner has the actual enjoyment. A “chose” is property and is defined in s.136(1) Law of Property Act 1925.

For the purposes of taxation it may therefore be treated as an asset, although it may not comprise an interest in land.

3. Taxation of a “Chose”

For the purposes of this practice note it is only necessary to consider a “chose in action” and in essence the matter concerns the taxation of a vendor where an asset has been disposed of for consideration, some or all of which is due after the date of disposal.

Basically this divides into two types of case:-

Transactions where the consideration due after the time of the disposal is ascertained or ascertainable (albeit possibly only contingently payable) at the time of disposal;

Transactions where the consideration due after the time of the disposal is unascertainable at the time of disposal.

In practical terms DVs will be involved only in valuations for the second type of case. A further complexity may arise where the asset disposed of is land and in particular where the sale proceeds are linked to its future redevelopment and the possibility then exists that the transaction comes within the scope of s.776 ICTA 1988 which concerns “Transactions in Land” and may give rise to the Inspector seeking to tax any gain as income “which constitutes profits or gains chargeable to tax under Case V1 of Schedule D”.

4. Ascertainable and Unascertainable Consideration

Whether the consideration due after the time of disposal is ascertained or unascertainable depends on the precise terms of the particular sale agreement. Experience shows that these are generally comprehensive and cumbersome documents.

An example of an ascertainable amount might be if an agreement for the sale of land provided that the consideration would be £300,000 of which £100,000 is payable on completion of the sale and £200,000 will be payable two years after completion depending on whether a specified event (eg the grant of planning permission or the provision of a sewer etc) has or has not occurred by that date.

In these circumstances under the provisions of s.48 TCGA 1992 £300,000 is the consideration to be included in the initial computation of the chargeable gain arising on the disposal of the asset.

In this situation the taxpayer may be liable to pay a significant amount of tax prior to receiving the full consideration. In certain circumstances s.280 provides that the tax may be paid by instalments over a period not exceeding 8 years and ending not later than the date upon which the last of the consideration instalments is payable.

Consideration which is not ascertainable at the date of disposal is the area in which DVs are most likely to be asked to provide valuation advice.

In general terms the agreement for sale of the subject land (and/or buildings) will enable the vendor to receive an ascertainable sum of money at the date of sale, plus a conditional and unascertainable amount at an unascertained future date. The amount of the future sum may be totally open-ended and impossible to ascertain (even in a contingent amount) as at the date of disposal of the original asset. Therefore, it will not be possible to bring the further payment(s) within the provisions of s.48 TCGA 1992. (A practical example is contained under Valuation below).

5. Synopsis of Case Law

In both the Ingles case and the Marriage case the point in dispute was whether any chargeable gain arose when the further amounts due under the agreements were received. The computation of the chargeable gain arising on the disposal of the original asset was not directly in issue in either case. However, the judgements in the two cases provide useful guidance as to the chargeable gains consequences of this type of transaction.

5.1 Marren v Ingles 54 TC 76 (the “Ingles” case)

In the above case, under the terms of an agreement dated 15 September 1970, for the sale of some shares in a company, Mr Ingles was entitled to receive an initial quantifiable sum which would be payable in the event that shares in the company were subsequently quoted on the stock exchange.

The amount of the further sum would depend upon the price at which shares in the company were quoted in the Stock Exchange Official Daily List on the first day of dealings.

Mr Ingles accepted that the consideration to be included in the chargeable gains computation on the disposal of the shares on 15 September 1970, should be the initial quantifiable sum plus the value, as at 15 September 1970, of his right to receive the deferred unquantifiable payment.

The further sum was in fact received in 1972-1973 and the House of Lords held that the right to receive the further sum was itself a separate chargeable asset and that it was not simply a deferred part of the price of the shares. Under what is now s.22(1) TCGA 1992 there was in 1972-1973 a disposal of that asset, a further sum being a capital sum derived from the asset. The House of Lords rejected Mr Ingles contention that the receipt of the further sum was in satisfaction of a debt and therefore exempt under what is now s.251(1) TCGA 1992.

5.2 Marson v Marriage 54 TC 59 (the “Marriage” case)

In the above case Mr Marriage sold some 47 acres of land to a company on 31 March 1965 (that is before CGT came into force on 6 April 1965) for some £47,000.

Under a supplemental agreement also on 31 March 1965 the company agreed to pay Mr Marriage £7,500 for each acre of land it was permitted to develop at 8 units per acre within 21 years of the agreement (proportionately lower if a lesser density was permitted).

If the land was nationalised or compulsorily acquired, the company was to pay to Mr Marriage one-half of the payment it received.

In 1976, the company paid Mr Marriage some £348,000 in full settlement of his rights under the supplemental agreement. The High Court rejected Mr Marriage’s contention that the supplemental agreement quantified further consideration to be received by him (that is £47,000 plus £7,500 per acre for the 47 acres) and that what is now s.48(2) TCGA 1992 would have required that the quantified consideration be brought into the computation of gain at 31 March 1965, if the statute had then been in force.

The Court took the view that the consideration could not so be quantified because of the alternative payment which would be due if the land was nationalised or compulsorily acquired.

At 31 March 1965 that amount would have been wholly uncertain and could not at that date have been quantified. The principle in Marren v Ingles was therefore applied and the 348,000 was held to be a capital sum derived from a chargeable asset, namely the right to receive future payments.

The situation facing the DV in “Chose in Action” cases may be summarised as follows.

Under the terms of a sale agreement the vendor becomes entitled to a fixed sum payable on completion plus the right to a further amount unascertainable at the time of disposal; that right is a “chose in action” and it is this which has to be valued by the DV. The date of sale is the point at which the vendor disposes of the “interest in land”, therefore one asset is disposed of and another, albeit not an interest in land, is created.

For CGT purposes the valuation date is the date of disposal (generally the date of contract rather than date of completion. S.28(1) TCGA 1992).

The consideration received is the fixed amount, plus the value ascribable to the asset created. This value is then the base value for the new asset. In practical terms if the “chose” comes to fruition the amount assessable to CGT remains the same whether a high value is ascribed to the “chose in action” at the date of the original disposal or a low one is ascribed. However, the circumstances of particular taxpayers will dictate whether it is in their interests to pursue high or low valuations.

The actual assessment of tax on the “chose in action” and any sums derived from it are matters solely for the Inspector and DVs must not be drawn into discussions with taxpayers or their agents who may be seeking to decide whether to pursue a “high” or “low” valuation approach.

With regard to the s.280 TCGA 1992 mentioned above, it is considered by the Revenue that these do not apply in cases where the consideration is unascertainable.

7. Procedure

The Inspector’s instructions require that prior to requesting valuation advice they should first obtain the taxpayer’s agents agreement as to what is required to be valued and any valuation which the agent wishes to put forward. The Inspector’s request for a valuation should then be sent to the DV, giving details of the original asset disposed of, what is to be valued, at what date the valuation is to be made, a plan, and the name and address of the taxpayer. Generally, a full copy of the sale agreement will be provided so these cases are invariably bulky.

The cases can be ‘not negotiated’ or ‘agreed’ requests and the usual time limits and procedures apply as for other CGT valuations. The case type should be either 142 or 143 and the complexity code ‘2’ or higher. If the taxpayer or taxpayer’s agent disputes what is required to be valued the matter must be referred back to the Inspector to be resolved.

8. Valuation

8.1 part share interests.

In instances where the taxpayer is entitled to only a part of any future payments rather than the entirety, it is not considered appropriate to make any discount from the proportionate share in respect of this type of interest.

8.2 Valuation examples

The following is an example of a “typical”, (insofar as any of these cases can be said to be typical) “chose in action” valuation. DVs are obviously free to adopt whatever approach they see fit in the circumstances of each individual case.

8.2.1 Facts

A is a farmer with a 50 acre small holding situated in the designated “green belt” on the edge of an expanding town. Planning permission for residential development is thought to be available in 5 years at soonest, if the long term policy of the planning authority is carried out. Limitations imposed by the drainage system of the area would currently limit development to a maximum of 100 units, but if the projected infrastructure improvements take place it would allow development up to a maximum of 300 units. A enters into an agreement with a developer, under which he is to receive agricultural value for the entire farm immediately (£2,000 per acre); A will grant vacant possession and take early retirement. If during a period to commence 5 years hence and to run for a maximum of 15 years therefrom (20 years from now) planning consent becomes available A will receive £10,000 per planning unit granted. (This relates to a percentage of full development value at today’s date). The documents include safeguards to ensure “maximum” planning consents are applied for. It is considered that planning consent for 100 units is very probable but for the maximum coverage of 300 units only fairly probable.

8.2.2 Valuation Approach

Pragmatic approach plus knowledge of any local difficulties say planning consent available in 10 years.

Possible valuation approach

The base value of the “new” asset is therefore £215,000 and will be used to calculate gains against the actual future proceeds as and when they arise.

An alternative method of valuation may be to assume that “maximum” planning consents will be achieved and then to reflect the additional risk of this assumption in the PV £ adjustment. In this example:-

It should be noted that the risk factor to be adopted should reflect the facts in each particular case.

All figures in the above example are illustrative only and the exact method of valuation to be adopted in any case is at the discretion of the DV concerned.

Is this page useful?

  • Yes this page is useful
  • No this page is not useful

Help us improve GOV.UK

Don’t include personal or financial information like your National Insurance number or credit card details.

To help us improve GOV.UK, we’d like to know more about your visit today. We’ll send you a link to a feedback form. It will take only 2 minutes to fill in. Don’t worry we won’t send you spam or share your email address with anyone.

LIVE Transfer Talk: Chelsea keen on Leverkusen's Boniface

Copy Link

The summer transfer window is still some time from reopening in Europe, but there are plenty of moves in the works and gossip swirling around. Transfer Talk brings you all the latest buzz on rumours, comings, goings and, of course, done deals !

Transfer in search of more playing time? Wisconsin's Markus Ilver instead chose to work harder.

transfer of a chose in action

MADISON – Would anyone have criticized Markus Ilver for choosing last spring, after his second season at Wisconsin, to dive headfirst into the transfer portal?

Ilver played a total of 147 minutes in his first two seasons, spread out across 26 games. That included a total of 76 minutes in 11 Big Ten games.

At least one person would have criticized such a move.

“I feel like transferring is an easy way out – unless the situation isn’t perfect for you,” the junior forward said. “But this program, the culture here, it’s what I was looking for. I didn’t want to take the easy way out.”

Ilver’s reward this season for his persistence, at least on the surface, appears minimal.

The Badgers (18-9, 10-6 Big Ten) enter the weekend tied for third place in the league with Northwestern (19-8, 10-6) as they prepares for a road game Tuesday against Indiana, but Ilver is 11th on the team in minutes played at five per game.

Markus Ilver's work in practice has led to more chances to contribute in games

However, in two of the last five games head coach Greg Gard has turned to Ilver to give starter Tyler Wahl an early break. Carter Gilmore had filled that role for much of the season but Gilmore has struggled in recent games and Ilver’s work in practice has impressed.

“He is really smart,” Gard said of Ilver. “He picks things up quick. He is getting more physical.”

Ilver is averaging 1.0 point and 1.3 rebounds per game. His best game this season came in a loss at Penn State. He contributed three points, five rebounds, one block and one assist in 4:57.

Ilver took Gilmore’s spot in the rotation Tuesday against Maryland . He missed both his shots – both three-pointers – and lost the ball when he got careless on a baseline drive but grabbed two offensive rebounds in 6:24.

“I thought he gave us the minutes I was looking for to spell Tyler a little bit,” Gard said. “For the most part I thought he did a pretty good job.”

Ilver averaged 1.6 points and 0.9 rebounds per game as a sophomore on a team that failed to reach the NCAA Tournament. His post-season sit-down with Gard was frank and productive.

Greg Gard told Markus Ilver last spring that he was improving and to keep grinding

“He loved the place but he wanted to play,” Gard explained. “I said: ‘Hey, you’re trending in the right direction. Keep working. It’s up to you.’

“He wanted to stay. He said: ‘I love everything about this place. I’ve just got to get myself to where I can play more.’

“He is trending in the right direction. Everybody matures and develops at a different rate. There is not a cookie-cutter approach to it.

“So, I give him a huge amount of credit for staying with it. He is a great teammate. I like Markus a lot. I really appreciate his commitment to our program and he is going to help us, the rest of this year and going forward.”

More: After splitting two games, Wisconsin Badgers drop out of both top 25 basketball polls

Ilver acknowledged spending most of his first two seasons on the scout team during practice and spending more time on the bench than on the court in games wasn’t easy to accept.

“You’ve just got to keep working,” he said. “Patience. Coach Gard mentioned it: ‘Don’t let it get to you.’

“It is tough mentally but you’ve just got to keep working. I’ve been busting my ass and it is showing up…

“I have just got to be patient. I’ve got to be ready when my name is called. Give them good looks in practice that prepares them – and me – for the games. I’ve got to keep doing that.”

The Federal Register

The daily journal of the united states government, request access.

Due to aggressive automated scraping of FederalRegister.gov and eCFR.gov, programmatic access to these sites is limited to access to our extensive developer APIs.

If you are human user receiving this message, we can add your IP address to a set of IPs that can access FederalRegister.gov & eCFR.gov; complete the CAPTCHA (bot test) below and click "Request Access". This process will be necessary for each IP address you wish to access the site from, requests are valid for approximately one quarter (three months) after which the process may need to be repeated.

An official website of the United States government.

If you want to request a wider IP range, first request access for your current IP, and then use the "Site Feedback" button found in the lower left-hand side to make the request.

IMAGES

  1. Chose in action examples. How do you transfer a chose in action?. 2022

    transfer of a chose in action

  2. 🏆 Chose in action examples. Chose in possession and Chose in Action

    transfer of a chose in action

  3. Definition of Chose in Action

    transfer of a chose in action

  4. Chose vs. Choose: How to Use Choose vs. Chose in Sentences • 7ESL

    transfer of a chose in action

  5. 🏆 Chose in action examples. Chose in possession and Chose in Action

    transfer of a chose in action

  6. Personal property—Chose in action—Assignment of judgment debt— Priority

    transfer of a chose in action

COMMENTS

  1. Oxford Legal Research Library: Part II The Transfer of Intangible

    In order to effect the assignment or a chose in action: the assignor must have manifested an intention to transfer the chose; the thing being assigned must be a chose in action, in present existence, certain or capable of being ascertained; the identity of the assignee must be clear; and the appropriate forms and formalities must have been satis...

  2. Assignment of Choses in Action

    An assignment of a chose is thus the transfer of a chose in action from the assignor to the assignee such that the assignee obtains and becomes entitled to enjoy rights in respect of that chose, which were hitherto exclusively enjoyed by the assignor. Assignment may be legal (statutory) or equitable. Assignment and Novation

  3. Choses in Action

    De Witt, 53 N.C. App. 252, 262 (N.C. Ct. App. 1981), the court held that "an assignment of a chose in action operates as a valid transfer of the title to the chose in action and the assignee becomes the real party in interest who may maintain the action in his or her own name." [i] http://en.wikipedia.org/wiki/Chose

  4. Chose in action

    Chose in action The bundle of personal rights over property which can only be claimed or enforced by action, and not by taking physical possession, for example, a cash balance at a bank or money due on a bond. End of Document Resource ID 2-107-5828 © 2024 Thomson Reuters. All rights reserved. Related Content Topics Miscellaneous: Legal Concepts

  5. Choses in Action & Rights to Sue: legal rights to sue

    A chose in action is: an intangible property right or property which is legally not in a person's possession but is only enforceable by legal process. The legal process begins with a chose in action and ends with a judgment or court order. Therefore, a chose in action is a right to sue: a legal right. It's a property right.

  6. A CALL FOR HARMONIZATION ACROSS COMMON

    modern chose in action. Of course, the current rules governing choses in action differ slightly between and even within jurisdictions,15 hence this Article's call for unified regulation of the creation, transfer, and cohesive application of these rules across all common law jurisdictions. B. History and Modern Developments

  7. Chose in action

    In order for a chose in action to be validly assigned at law the transfer must: Be absolute, meaning that the transfer must be unconditional; Be in writing and signed by the assignor (section 23C); The person liable to the chose needs to be put on notice in writing of its assignment; and Not necessarily be supported by consideration.

  8. 22. Assignment of choses in action

    Beginning with the historically based difference between equitable and statutory assignment, it then explains what 'chose in action' and 'assignment' are before discussing the requirement that there be an existing and assignable chose in action or right as well as the requirement that a person who holds an existing assignable chose in action int...

  9. Chose in Action--Gratuitous Assignment

    The most common method employed for a gratuitous transfer of a chose in action is by the delivery of a written instrument of such a nature as is capable of transferring the title to the donee without con-sideration. Taylor v. Purdy supra; City of Louisville v. Lenehan, 149 Ky. 537, 149 S. W. 932 (1912).

  10. Choses in Action • Is It a Legal Or Equitable Chose in Action?

    Transfer in Ownership - Choses in Action • Is it a legal or equitable chose in action? o There are two main types of choses in action, they can either be legal or equitable - the first step is to distinguish between whether they are legal or equitable: Legal: if the chose in action is something that can be enforced at common law, then it is a ...

  11. Mississippi Code § 11-7-7 (2020)

    Transfer of chose in action after filing. Universal Citation: MS Code § 11-7-7 (2020) Any chose in action or any interest therein, after suit has been filed thereon, may be sold or assigned the same as other property, whether such claim or any interest therein was heretofore assignable under the laws of this state or not. Such sale shall be ...

  12. The Alienability of Choses in Action

    trust res - a legal or equitable chose in action - whatever else he ac-quires, acquires no title." 2 2 Thaddeus D. Kenneson, 23 YALE L. J. 194. Mr. Kenneson uses the supposed principle that a chose in action is "incapable of transfer," by which he seems to mean incapable because of its nature, as a premise to a series of arguments which seek to

  13. Constitution of an Express Trust

    A settlor may expressly declare himself a trustee pending a transfer to the third party trustees. If the transfer takes place during the lifetime of the settlor the trust will be perfect: Re Ralli [1964] The benefit of a covenant (chose in action of a debt) may be the subject-matter of a trust: Fletcher v Fletcher [1844]

  14. ASSIGNMENT OF CHOSES IN ACTION

    The process of transfer of such a right is known as "assignment" and the types of property which are susceptible to this type of transfer are known as "choses in action.". This article sets out to trace the evolution, incidence, and the conditions precedent for a valid assignment of choses in action under Nigerian law.

  15. Assigning the right to sue

    A right to sue is known as a chose in action. The common law had long held a distrust of assignment of choses in action. However equity permitted it to happen, and over time it became accepted. However, the ability to assign a chose in action has always been the exception, rather than the rule.

  16. Choses in Action

    A chose in action is a quasi-property right which may be ultimately asserted by legal action. The expression embraces a wide variety of assets and quasi-assets. The classes of chose in action vary in respect of their assignability and the nature of the rights and property concerned.

  17. Tanassee v. Snow :: 1996 :: Utah Court of Appeals

    at 1211-12. However, this court held that the transfer restrictions contained in the stock repurchase agreement, the articles of incorporation, and state law simply did not address involuntary transfers during life. Id. at 1213-14. ... (emphasis added). A chose in action has been defined as "'the right to recover pecuniary damages for a wrong ...

  18. (PDF) A Chose in Action

    A Chose in Action. A Chose in Action is a property right in something intangible, or which may be tangible but are not in one's possession, but enforceable through legal or court action. Generally representing a mere right to sue for a debt or for damages, such as a contractual right, the term gradually developed as lawyers and judges, and ...

  19. Choses in action

    What is a chose? chose in possession chose in action Bankruptcy Act 1966 Meriton Apartments Pty Limited v Industrial Court of New South Wales [2008] FCAFC 172 (13 October 2008) Actions where the official trustee commences proceedings Assignment of a cause of action Section 60 of the Bankruptcy Act Cox v Journaux (No.2) Faulkner v Bluett

  20. Chose in action legal definition of chose in action

    A chose in action is a comprehensive term used to describe a property right or the right to possession of something that can only be obtained or enforced through legal action. It is used in contradistinction to chose in possession, which refers to cases where title to money or property is in one person but possession is held by another.

  21. § 11-7-3

    The assignee of any chose in action may sue for and recover on the same in his own name, if the assignment be in writing. In case of a transfer or an assignment of any interest in such chose in action before or after suit brought, the action may be begun, prosecuted and continued in the name of the original party, or the court may allow the person to whom the transfer or assignment of such ...

  22. PDF Is the Right of an Assignee of a Chose in Action Legal or ...

    RIGHT OF AN ASSIGNEE OF A CHOSE I07. rather in the nature of a cross-action. Certainly it seems impossible to say, that it is a legal limitation of the claim, and if it is only an equity, it would be cut off by the assignment if the assignee be-. came the legal owner of the claim.

  23. Chose in possession and Chose in Action under Common Laws

    Chose in Possession as opposed to chose in action means vesting of actual possession of a thing or a right in person. All proprietary rights in personam if chose in possession refers to anything or right which is in claimant's possession. For example, the money which a person has in purse is a chose in possession whereas the money which a ...

  24. Capital Gains and other taxes manual

    A "chose" is a right, and may be one of two kinds, "choses in action", and "choses in possession". A "chose in action" is a right of which a person does not have present enjoyment ...

  25. PDF Indiana Appellate Transfer Action

    Indiana Appellate Transfer Action The Justices of the Supreme Court have examined, discussed, and addressed these cases on petition to transfer or review Week ending 2/16/2024 ... Action Details Date Author Panel 1 Panel 2 FP / NFP Opinion Date Rehearing 23A-CR-601 Harve Hensley v. State of Indiana Appellant Denied All Justices concur. 2/15/24 ...

  26. LIVE Transfer Talk: Chelsea keen on Leverkusen's Boniface

    The summer transfer window is still some time from reopening in Europe, but there are plenty of moves in the works and gossip swirling around.

  27. Wisconsin's Markus Ilver chose to keep grinding rather than transfer

    Ilver's reward this season for his persistence, at least on the surface, appears minimal. The Badgers (18-9, 10-6 Big Ten) enter the weekend tied for third place in the league with Northwestern ...

  28. Child Nutrition Programs: Income Eligibility Guidelines

    Start Preamble AGENCY: Food and Nutrition Service, USDA. ACTION: Notice. SUMMARY: This notice announces the Department's annual adjustments to the Income Eligibility Guidelines to be used in determining eligibility for free and reduced price meals, free milk, and Summer Electronic Benefit Transfer benefits for the period from July 1, 2024 through June 30, 2025.

  29. Real Madrid Receives Huge Recovered Player Boost For Sevilla Clash

    Real Madrid has received a huge boost ahead of Sunday's La Liga match against Sevilla, with one previously injured star again ready for action.