Motive

The motive that prompted an assignor to make the transfer will be considered immaterial and will constitute no defense to an action by the assignee, if an assignment is considered valid in all other ways.[i] The motives that induce a party to make a contract, whether justifiable or not will have no influence on its validity.[ii]  However, an illegal motive cannot justly be ascribed to the proper exercise of a legal right.[iii]  The primary purpose or motive with which a voluntary transfer  of property is made by a party indebted at the time is immaterial.[iv]

In Castleman v. Redford, 61 Nev. 259 (Nev. 1942), a debtor purchased goods from a company located in another state and failed to pay for them.  The company assigned its claim to the assignee for collection.  The debtor claimed that the assignee was not the real party in interest.  The court held that the assignee can bring an action in his/her own name.  The court further found that the assignment was valid and the motive behind the assignment was immaterial.  The court rejected the debtor’s claim that the assignor had no capacity to make the assignment and added that the legal status of the assignor was immaterial.

If a statute does not invalidate an assignment, it is considered valid  under  state courts.  A resident assignee can maintain an action in the state although his/her foreign assignor himself/herself is barred.  Similarly, the motive prompting the assignment is not material.  Even if it the motive intended a convenient enforcement or to avoid the incapacity of the assignor to bring an action, the assignment is still valid and the action is enforceable.[v] Similarly, the motive prompting the assignment of an action for an injuries causing tort that are strictly personal is immaterial.[vi] Likewise, motive to confer or defeat jurisdiction in the federal court is immaterial.[vii]

[i] Marshall v. Staley, 528 P.2d 964 (Colo. Ct. App. 1974).

[ii] Leahy v. Ortiz, 38 Tex. Civ. App. 314 (Tex. Civ. App. 1905).

[iii] Bates v. Simmons, 62 Wis. 69 (Wis. 1885).

[iv] Westminster Sav. Bank v. Sauble, 183 Md. 628 (Md. 1944).

[v] Wagner v. Braunsberg, 5 A.D.2d 564 (N.Y. App. Div. 1st Dep’t 1958).

[vi] Lisenby v. Patz, 130 F. Supp. 670 (D.S.C. 1955).

[vii] Id.


Inside Motive