Generally; Between Successive Assignees

The order of priority between assignees will be determined by the order of the execution of assignments between successive assignees of the same right.  However, mere priority of notice to the obligor of the assignment of the chose in action will not give priority of right to a later assignee over an earlier assignee of the same chose in action.

If an assignee fails to give notice to the person holding the fund assigned to him/her, a subsequent assignee, without notice of a former assignment, will acquire priority on giving notice of his/her assignment.[i] Whereas, if two or more assignees receive written assignments of the same account for value without notice, then the assignee whose notice of the assignment is first filed is entitled to priority over all other assignees of the same account.[ii]

If a prior assignee has recorded a notice once, then it is not necessary for him/her to give notice to the debtor.  However, if an assignee of a chose of action fails to provide a notice to the debtor, then a subsequent assignee with good faith who gives such notice acquires a superior right.[iii] Therefore, if the prior assignment is effective and irrevocable, or if the subsequent assignee acts in good faith, then the right of that assignee is superior to that of a subsequent assignee of the same right.

[i] Phillips’s Estate, 205 Pa. 515 (Pa. 1903)

[ii] River Junction v. Maryland Casualty Co., 110 F.2d 278 (5th Cir. Fla. 1940)

[iii] H. S. Mann Corp. v. Moody, 144 Cal. App. 2d 310 (Cal. App. 2d Dist. 1956)


Inside Generally; Between Successive Assignees