An assignment is a manifestation to another person by the owner of a right expressing his/her intention to transfer his/her right to such other person or to a third person. Generally, subject of the assignment with all rights and remedies possessed by the assignor is taken by the assignee. In other words, an assignee stands in the shoes of the assignor and acquires all the rights and liabilities of the assignor.[i]
It was observed in Thweatt v. Jackson, 838 S.W.2d 725 (Tex. App. Austin 1992), that an assignee of a promissory note stands in the shoes of the assignor and obtains the rights, title, and interest that the assignor possessed at the time of the assignment. The assigned rights include the identified rights in the contract and applicable statutory rights.[ii]
However, an assignee of a non negotiable chose in action acquires no rights superior to those held by his/her assignor and is generally subject to any setoff available to the obligor against the assignor.[iii] The assignee of a chose in action takes it subject to all the equities existing against it in the hands of his/her assignor. The assignee cannot acquire any greater right or interest than which belonged to his/her transferor.[iv]
Successive assignees of a chose in action take the same subject to the equities between the original assignor and his/her assignee, as well as to equities existing between the original assignor and the debtor. This occurs particularly if the transfer is only of all right, title, and interest of the assignee to the chose.[v]
It was observed in Central Union Bank v. New York Underwriters’ Ins. Co., 52 F.2d 823 (4th Cir. S.C. 1931), that fire insurance contracts are not assignable because of confidence reposed by insurer in the owner of property. Thus, the owner must not sell the property and transfer the policy to the purchaser along with the title.
Therefore, an assignee acquires all the rights and liabilities of an assignor. An assignee possesses all the rights, title and interest that were possessed by the assignor. However, an assignee is not entitled to acquire any additional rights or interests more than which belonged to the assignor.
[i] Twenty First Century Recovery v. Mase, 279 Ill. App. 3d 660 (Ill. App. Ct. 5th Dist. 1996)
[ii] Global Fin. Servs. v. Duttenhefner, 1998 ND 53 (N.D. 1998)
[iii] United States Nat’l Bank v. Madison Nat’l Bank, 355 F. Supp. 165, 169 (D.D.C. 1973)
[iv] Jones County Trust & Sav. Bank v. Kurt, 192 Iowa 965 (Iowa 1922)
[v] Noland v. Law, 170 S.C. 345 (S.C. 1933)