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ASSIGNMENT of CONTRACT RIGHTS 221 Fail in Case of Non-Fulfilment of This Condition

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UniversityUniversity ofof PennsylvaniaPennsylvania LawLaw ReviewReview AndAnd AmericanAmerican LawLaw RegisterRegister FOUNDEDFOUNDED 18521852 PublishedPublished Moasthly.Moathly. NovemberNOYClDber toto June,JIlIIe, byby thethe UnivenmtyUninnit)' ofof PennsylvaniaPel1lll11nni. LawLaw School,School. atat 34th34th andaDd ChestnutCbettnut Streets,Streeb, Philadelphia,Philadelphia, Pa.P•• VOL.VOL. 74.74. JANUARY,JANUARY, 1926.1926. " No.NO·3· 3- ASSIGNMENTASSIGNMENT OFOF CONTRACTCONTRACT RIGHTSRIGHTS ThisThis subject hashas beenbeen muchmuch discusseddiscussed underunder thethe headingheading "alienability of choses inin action."action." InIn continuingcontinuing thethe discussiondiscussion ourour first stepstep should bebe toto abandonabandon altogetheraltogether thethe termtenn "chose in action." ItsIts linguisticlinguistic construction isis faulty, inin thatthat itsits individualindividual wordswords lead one toto thinkthink of somethingsomething very different fromfrom thatthat which the expression as a whole now denotes. There is no "chose" or thing or res.rcs. There isis a right (or claim): against some person. In this article we shall speak in terms of rightsrights (or claims) and not about "choses." It isis even more important that we should cease to use such a phrase as "assignment of contract." Whatever definition we choose for thethe word "contract," itit is not possible to construct accurate rulesrules by the use of such aa phrase. If a contract isis de­de- fined as consisting of thethe facts operating toto create a binding obli­obli- gation-offer, acceptance,acceptance, consideration, etc.-these facts are merely a part 0off recordedrecorded history and surely cannot bebe assigned.assignedL It isis meaninglessmeaningless toto speakspeak of assigning a pastpast event. IfIf aa con­con- tracttract isis defineddefined asas aa promisepromise enforceableenforceable atat law,law, wewe are merelymerely placingplacing emphasisemphasis uponupon oneone ofof thethe operativeoperative factsfacts andand indicatingindicating thatthat itit isis inin factfact operative.operative. AA promisepromise isis merelymerely aa pastpast eventevent andand cannotcannot properlyproperly bebe saidsaid toto bebe assignableassignable byby thethe promisee;promisee; muchmuch ·lessless cancan aa promisepromise bebe assignedassigned byby thethe promisorpromisor whowho mademade it,it, andand itit wouldwould bebe equallyequally erroneouserroneous toto saysay thatthat eithereither partyparty toto aa bilateralbilateral contractcontract cancan assignassign botkboth promises.promises. IfIf contractcontract isis defineddefined asas de-de- (207)(207) HeinOnline -- 74 U. Pa. L. Rev. 207 1925-1926 2082o8 UNIVERSITYUNIVERSITY OFOFPENNSYLVANIA PENNSYLVANIA LAWLAW REVIEWREVIEW notingnoting thethe legallegal relationsrelations ofof thethe partiesparties createdcreated byby agreementagreement oror promise,promise, itit isis againagain erroneouserroneous toto saysay thatthat thethe "contract""contract" cancan oror cannotcannot bebe assigned.assigned. SomeSome ofof thethe legallegal relationsrelations cancan bebe assignedassigned andand somesome cannot.cannot. TheThe legallegal relationsrelations createdcreated byby anyany particularparticular contractcontract mustmust bebe analyzedanalyzed andand thethe assignabilityassignability ofof eacheach oneone mustmust bebe consideredconsidered separately.separately. TheThe legallegal relationsrelations createdcreated byby aa contractcontract areare inin variousvarious com­com- binations;binations; theythey cancan alwaysalways bebe analyze4,analyzed, however,however, intointo rights,rights, powers,powers, privileges,privileges, andand immunities,immunities, eacheach havingshavings itsits necessarynecessary cor­cor- relative.relative. TheThe presentpresent articlearticle willwill notnot considerconsider thethe assignabilityassignability ofof powers,powers, privilegesprivileges oror immunities.immunities. TheyThey maymay inin somesome casescases bebe assignable. InIn thethe lawlaw ofof agencyagency isis toto bebe foundfound thethe oldold maximmaxim "delegatus"delegatwu delegaredelegarenon non potest,"potest," indicatingindicating thatthat thethe powerpower ofof anan agent isis not assignable.assignable. We know,know, however, thatthat thisthis maxim does notnot tell thethe wholewhole story.1story.' TheThe most importantimportant of the legallegal relationsrelations createdcreated by contract is thethe relation of right and duty.duty. The problem of assignment inin connection with thisthis relationrelation is th~the subject of the present article; and it isis restricted toto rights and du­du- ties that are created by contract. DEFINITION To say that one person has a "right" against another means that he has thethe aid of organized society inin controlling the conductcond,!ct of that other person inin some respect. Exactly thethe same ideaidea. isis expressed when we say that that that other person is under a legal duty toto thethe first.first. The one who has thethe right isis in the superior oror moremore advantageous position; thethe dutyduty bearer isis inin thethe inferior or lessless advantageousadvantageous position. AA contract maymay createcreate inin thethe one personperson rightsrights toto moremore thanthan one performance;performance; also,also, itit may createcreate rightsrights inin each of thethe contractingcontracting partiesparties againstagainst thethe other.other. LetLet usus determinedetermine firstfirst whatwhat' isis meantmeant byby thethe assignmentassignment ofof aa right.right. AA simplesimple illustrationillustration willwill bebe ofof service.service. LetLet usus supposesuppose thatthat AA hashas aa rightright thatthat BB shallshall paypay himhim $ioo.$IOO. ItIt isis establishedestablished lawlaw thatthat AA hashas powerpower toto assignassign thisthis rightright toto C.C. 'In Barber Agency Co. v. Co-op. Barrel Co., 133 Minn. 207, i58 N. W. 38 1 In Barber Agency Co. v. Co-op. Barrel Co., 133 Minn. 207, Is8 N. W. 38 (igs6),(1916), itit isis said:said: "It"It isis thethe universaluniversal rulerule thatthat anan agentagent cannotcannot transfertransfer toto anotheranother powerspowers callingcalling forfor thethe exerciseexercise 6fof discretion,discretion, skill,skill, oror judgment."judgment." HeinOnline -- 74 U. Pa. L. Rev. 208 1925-1926 ASSIGNMENTASSIGNMENT OFOF CONTRACTCONTRACT RIGHTSRIGHTS ItIt isis alsoalso establishedestablished lawlaw thatthat thethe assignmentassignment isis operativeoperative withoutwithout thethe consentconsent ofof B.B. AfterAfter thethe assignmentassignment B isis underunder thethe samesame dutyduty asas before;before; thatthat is,is, hehe mustmust stillstill paypay $ioo$100 at thethe timetime andand place specified.specified. TheThe correlativecorrelative right,right, however, isis nono longerlonger inin A;A; itit isis in C.C. The social assistance formerly at A's command isis now available toto CC andand isis notnot available toto A. ' If the foregoingforegoing isis correct,correct, anan assignment ofof anan existing right is an act of the possessor of thatthat rightright which operates to ex-ex­ tinguishtinguish the rightright of thethe'assignor assignor and toto create an exactlye."<:actl:· similar rightright inin thethe assignee. ThisThis definitiondefinition is inin termsterms of legal opera-opera­ tion-oftion--of thethe effect of the assignor's act upon.the action of organ-organ­ izedized society. It is not a descriptive definition enabling us to recognizerecognize an act of assignment when we see one. Such a definition as the foregoing renders some service, but it isis not sufficient standing alone. In order to predict legal opera­opera- tiontion we must be able toto recognize the facts that will bring it about. This is true even though the courts do not start in the beginning with completed descriptive definitions of facts and definite rules of law determining the legal operation of those facts. Perfect definition and fixed rule are the final goal toward which the courts are striving; they are a goal which, as Judge Cardozo tells us, is never actually reached.22 In every decision of a case the court may assume a definition.definition and assert a rule; but thethe facts and decision of that very case add ,toto the inductive basis used by the next court in remaking thethe definition and correcting the rule. The law does not start with definitions and general rules already crystallized and put into definite words. Instead,Instead, some eventsevents occur;occur; A acts and B complainscomplains thereofthereof to aa court. The court must determine what society will do about it;it; this is a deter- •'TheThe NatllreNature ofof thethe JlldicialJudicial Process (1921),(92), passim;passim; especiallyespecially atat p.p. 166:x66: "I"I wa.swas muchmuch troubledtroubled inin spirit, inin my firstfirst years uponupon thethe bench, toto findfind how tracklesstrackless waswas thethe oceanocean on whichwhich I hadhad embarked. II sought forfor certainty.certainty. TI WdSwas oppressedoppressed andand disheartened when II foundfound thatthat thethe questquest forfor itit waswas futilefutile ..•. .. AsAs thethe yearsyears havehave gonegone by,by, andand asas II have reflectedreflected moremore andand moremore uponupon thethe naturenature ofof thethe judicialjudicial process, II havehave becomebecome reconciledreconciled toto thethe uncertainty,uncertainty, becausebecause II havehave growngrown toto seesee itit asas inevitable.inevitable. II have growngrown toto seesee thatthat thethe
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