Protection of Assignee Against Acts of Assignor

The interests of a bona fide assignee of a chose in action are protected against any unauthorized act on the part of the assignor tending to interfere with the rights of the assignee, after notice to the debtor of an assignment.[i]  Moreover, this protection nullifies collusive agreements of the assignor and the debtor in order to defeat the rights of the assignee.[ii]  As a result, the assignor will not be allowed to destroy collateral to the detrimentof the assignee, when the collateral is assigned as a security for a debt owed to the assignee.[iii]

[i] Kithcart v. Kithcart, 145 Iowa 549 (Iowa 1910)

[ii] Nineteenth Realty Co. v. Diggs, 134 Cal. App. 278 (Cal. App. 1933)

[iii] Darling Shop of Birmingham, Inc. v. Nelson Realty Co., 262 Ala. 495 (Ala. 1954)

Inside Protection of Assignee Against Acts of Assignor