Partial Assignments

When the assignor collects any money and holds it as a trustee of the assignee, a partial assignment exists between the parties to the assignment.[i]  Under the common law, an entire claim or debt arising out of a single transaction cannot be split by an assignment.  Moreover, it cannot be the subject of several suits without the consent of the debtor or the equitable joinder of all the parties holding  interest in the debt.  The debtor should not be subjected to multiple suits or claims not contemplated in the original assigned contract.[ii] The holder of an accrued cause of action may not assign the right to recover part of the damages while retaining the right to recover the balance of damages.[iii]  Notice of a partial assignment does not affect the original debtor’s right to defend against a partial assignee.[iv]

A partial assignment is effective as to the part assigned to the same extent and in the same manner as if the part was a separate right. An assignment can be enforced over the debtor’s objection only if all persons entitled to the promised performance are joined in the proceeding, unless joinder is not feasible and it is equitable to proceed without joinder given the obligor did not contract to perform the assigned part separately.

[i] Hubbard v. Bibb Brokerage Co., 44 Ga. App. 1 (Ga. Ct. App. 1931)

[ii] Space Coast Credit Union v. Walt Disney World Co., 483 So. 2d 35 (Fla. Dist. Ct. App. 5th Dist. 1986);

[iii] Korte Const. Co. v. Deaconess Manor Ass’n, 927 S.W.2d 395 (Mo. Ct. App. E.D. 1996),

[iv] First Nat’l Bank v. Gross Real Estate Co., 162 Neb. 343 (Neb. 1956)


Inside Partial Assignments