COMMON LAW 233
- Three persons are involved in an assignment :
(i) The original owner,
(ii) The person bound to the original owner,
(iii) The person to whom the original owner has transferred the right.
The right, i.e., the chose in action may be legal or equitable such as a legacy or an interest in a trust fund.
Assignment of a chose in action was differently treated by Equity and by the Common Law.
Common Law and Chose in Action
There could be no assignment in Common Law of a Chose in action. Not only there could be no assignment of an equitable chose, there could be no assignment even of a legal chose.
The reason was the fear of multiplicity of suits.
Statute law and Special law made certain kinds of Choses of action assignable :
(i) Negotiable Instruments became assignable by the law merchant
(ii) Policies of Life Insurance and Marine Insurance were made assignable by Statute.
(iii) Section 25(6) of the Judicature Act : all legal Choses in Action have been made assignable.
Equity and Chose in Action
In Equity, a chose in action was always assignable. Not only an equitable Chose was assignable in Equity but a legal Chose was also assignable in Equity.
If the Chose was equitable, the assignee could bring his proceedings to recover it in a Court of Chancery in his own name.
If it was a legal Chose, the proceedings had to be taken in the name of the assignor and the way the Court of Chancery interfered, was to restrain the assignor from objecting to this use of his name on the assignee giving him a proper indemnity against costs.