Form and Requisites of Partial Assignments

A debt or chose in action, not in writing, may be verbally assigned.  Such an assignment will vest the equitable title of the fund assigned in the assignee and confer upon him/her a right of action in equity against the debtor.[i]  Moreover, an assignment may be made orally.[ii] In order to confer a complete and present right on the party meant to be provided for, there must be a related constructive appropriation of the subject matter.[iii]  When payment of the debt in question is received, a mere agreement or promise to pay another a specified sum out of the proceeds of the debt does not constitute a partial assignment.[iv]

A partial debt assignment, without notice to the debtor, is valid in equity .[v]  Generally, notice is necessary to protect the partial assignee against payment by the debtor to the assignor.[vi]  An assignee, prior in time rather than the one who first gives notice to the debtor, enjoys the priority to notify the debtor.[vii]  A debtor may be held liable in equity by the assignee, if he/she pays an assignor after notice of a partial assignment of the debt.[viii]  After notice, the debtor is  bound in equity to respect the partial assignment.[ix]

[i] Campbell v. J. E. Grant Co., 36 Tex. Civ. App. 641 (Tex. Civ. App. 1904)

[ii] National Bank of Republic v. United Sec. Life Ins. & Trust Co., 17 App. D.C. 112 (D.C. Cir. 1900)

[iii] Colleps v. George W. Smith Lumber Co., 185 S.W. 1043 (Tex. Civ. App. 1916)

[iv] Title Guaranty & Surety Co. of Scranton, Pa. v. State ex rel. Leavenworth State Bank, 61 Ind. App. 268, 109 N.E. 237 (Div. 2 1915),

[v] Hinkle Iron Co. v. Kohn, 229 N.Y. 179 (N.Y. 1920)

[vi] Le Porin v. State Exch. Bank of Hutchinson, 113 Kan. 76, 213 P. 650 (1923),

[vii] Columbia Finance & Trust Co. v. First Nat. Bank, 116 Ky. 364, 25 Ky. L. Rptr. 561, 76 S.W. 156 (1903).

[viii] Graham v. Southern R. Co., 173 Ga. 573 (Ga. 1931)

[ix] Humble Oil & Refining Co. v. Johnston, 5 S.W.2d 836 (Tex. Civ. App. 1928)

Inside Form and Requisites of Partial Assignments