CHAPTER X. THE ASSIGNMENT OF CONTRACTS. 125. Assignment.-A contract ordinarily affects only the parties to it. But these parties may, either by their own acts or by operation of law, be replaced by others, who then assume their rights and obligations. The operation by which such a change takes place is called the assignment of the contract.16 126. Liabilities may not be assigned.—A person may not assign his liabilities or debts. This rule is based on sense and convenience. When A owes B fifty dollars for a horse, A may not assign his debt to C without B's consent. If B consents, there is, in reality, a new contract. The converse of the rule that a promisor may not assign his liabilities under a contract, is that a promisee cannot be compelled by the promisor or by a third party to accept performance of the contract from any but the promisor.47 A party contracts with reference to the character, credit and substance of a particular person, and 'could this person place someone else in his place to make good his liability, there would be no safety in contract. In Robson v. Drummond,48 A let a carriage to B at a yearly rent for five years. He agreed to paint it every year and keep it in repair. C was a partner 46 Heaton v. Angier, 7 N. H. 397, LEADING ILLUSTRATIVE CASES. 47 Cannon v. Kreipe, 14 Kans. 324. 48 2 B. & A. 303 (Eng.). of A, but B contracted with A alone. After three years A retired from business. B was informed that C was thenceforth answerable for the repair of the carriage and would receive the payments. B refused to deal with C, and returned the carriage. It was held that he was entitled to do so. The rule is modified where the contract engages a party to do work which requires no special skill. If it does not appear that A has been selected with reference to any personal qualification, X cannot complain if A gets the work done by an equally competent person, B. But A is liable for B's poor work. In the United States A may assign to B the right to payment.49 49 Where an interest in land is transferred, liabilities attaching to its enjoyment pass with it.50 127. Assignment of rights.-Passing from the question of assignment of liabilities to those of rights, the rule at common law was that rights arising out of a contract may not be assigned, so as to enable the assignee to sue in his own name. An exception existed in the case of negotiable instruments by the rule of law merchant. The general rule is sometimes expressed by the phrase "a chose in action is not assignable." But an assignment of rights in a contract creates rights in a court of equity, and the law has taken cognizance of these equitable rights. Wherefore, the assignee is at least permitted to sue in the name of the assignor.51 49 Devlin v. New York, 63 N. Y. 8. 50 See subject, REAL PROPERTY. 51 Anson, Contracts (Huffeut's 2d ed.), § 295. The assignee has acquired further rights by statutes. These give him the power to sue in his own name. When this statutory right does not exist, he is said to possess a power of attorney, by virtue of the assignment from the assignor, to sue in the assignee's name.52 128. Novation.-Strictly speaking, the only method by which rights under a contract may be transferred, is not by an assignment but by a substituted agreement, termed a novation. Thus, if A owes B $100, and B owes C $100, an agreement between the three whereby A pays C $100, constitutes a new contract. The consideration for A's promise is the discharge of B; the consideration for B's discharge of A is the extinguishment of his debt to C; the consideration of C's promise is the substitution of A's liability for that of B.53 Furthermore, there must be ascertained sums due from A to B and B to C, and the agreement must be definite.54 129. Assignments in equity.-As indicated, courts of equity permit the assignment of contractual rights, whether those rights were legal or equitable rights. If they were equitable, the assignee might sue in his own name; if legal, equity would enable the assignee to sue, if there was any difficulty at law. But an assignment cannot be enforced in equity if the assignee can proceed at law, unless the remedy would be incomplete or inadequate.55 To enforce an assignment it is said that there must be a consideration 52 Glenn v. Marbury, 145 U. S. 499. 53 Heaton v. Angier, 7 N. H. 397. 54 Anson, Contracts (Huffcut's 2d ed.), § 297. 55 Carter v. United Ins. Co., 1 Johns. Ch. 463 (N. Y.); see subject, EQUITY. given by the assignee.56 Furthermore, the person who is liable must receive notice of the assignment before it is effectual. Thus, if A assigns to B his right against C, and C pays A before notice of the assignment is given to him, C is discharged from his debt. But if he pays A after B has served him with notice, C is still liable to B. But as between the assignor, A, and the assignee, B, the assignment is always enforcible.57 The rule is thus expounded by Turner, L. J., in Stocks v. Dobson:58 "The debtor is liable at law to the assignor of the debt, and at law must pay the assignor if the assignor sues in respect of it. If so, it follows that he may pay without suit. The payment of the debtor to the assignor discharges the debt at law. The assignee has no legal right, and can only sue in the assignor's name. How can he sue if the debt has been paid? If a court of equity laid down the rule that the debtor is a trustee for the assignee, without having any notice of the assignment, it would be impossible for a debtor safely to pay a debt to his creditor. The law of the court has, therefore, required notice to be given to the debtor of the assignment in order to perfect the title of the assignee." 130. Defenses. In addition to the rules discussed the assignee takes subject to all defenses and equities that the debtor may have set up against the assignor. Thus, where A assigns to B his right against C, if A 56 Anson, Contracts (Huffcut's 2d ed.), § 302. But usually the debtor cannot defend against the assignment on this ground. 57 Heermans v. Ellsworth, 64 N. Y. 159; Littlefield v. Storey, 3 Johns. 425 (N. Y.). 58 4 De G. M. & G. 11 (Eng.). has no right of action against C, the latter may in a suit by B so defend. The general rule, both at law and in equity, is that no person may acquire title to a chose in action or any other property, from one who has himself no title to it. The assignee must take care to ascertain the exact nature and extent of the rights he is acquiring, for he cannot take more than his assignor can give.59 131. What is assignable.-Generally, anything which directly or indirectly involves a right of property is assignable. There is no doubt about the right to assign mere money demands. Where A owes B, B may assign his claim to C, who may then sue A, after notice, and according to the procedure enforced. But if the case is one wherein A agrees to sell something to B, who agrees to pay on a certain day, a problem arises whether or not A, who assigns his right of payment to C, may also transfer his liability to perform. Generally, he may not. The assignor remains liable to perform under the general rule as to assignment of liabilities, discussed in a previous section. But the argument is made that since the assignor remains liable on the contract, the assignment should be good, since the seller may still look to him.6° 60 132. Same subject-Personal service contracts.— Personal service contracts are not assignable. A person who has made a contract to render personal services, may not assign his right to render such services, but he may assign his right to receive pay for them after they have been rendered by him. The reason 59 Anson, Contracts (Huffcut's 2d ed.), § 304. 60 Arkansas Co. v. Belden Co., 127 U. S. 379. |