CHAP. XII. and it was an axiom of the English common law that ' choses in action are not assignable.' The practical inconveniences resulting from this rule led to its gradual relaxation. It is no doubt possible by consent of all concerned to substitute a new debtor or new creditor in place of the person of inherence or of incidence as the case may be. This is however a cumbrous process, and is obviously not an assignment, but an extinction of the original right, followed by a contract creating a new right in substitution for the old one. It is an example of what the Romans called 'novatio1.' The first step towards the assignment of an obligation was taken by allowing a stranger to it to bring an action upon it in the name of the party entitled under it, and to retain the proceeds for himself. This was the process known in Roman law as 'cessio actionum.' The assignor was held to be a trustee for the assignee, or to have constituted the assignee his agent for the purpose of bringing actions. The English Court of Chancery, following the later Roman law 2, went so far as to allow the assignee to sue in his own name, provided that he had given consideration for the assignment, and that the debtor had had notice of it, subject however to all defences which would be good against the assignor3. Under the 'Supreme Court of Judicature Act, 1873,' 'Any absolute assignment, by writing under the hand of the assignor, not purporting to be by way of charge only, of any debt or other legal chose in action, of which express notice in writing shall have been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive such claim or debt or chose in action, shall be, and be deemed to have been, effectual in law, subject to all equities which would have been entitled to priority over the right of the assignee if this act

1 'Novatio est prioris debiti in aliam obligationem, vel civilem vel naturalem, transfusio atque translatio, hoc est ut cum ex praecedente causa ita nova constituitur, ut prior perimatur.' Dig. xlvi. 2. 1; cf. Inst. iii. 29. 3.

2 Code iv. 39. 7.

* See Lord Carteret v. Paschal, 3 P. Wms. 199.

instru

had not passed, to pass and transfer the legal right to such CHAP, XIL debt or chose in action from the date of such notice 1.' Similar provisions are contained in several continental codes2, and contractual rights of certain special kinds have been made assignable by statute, such as, for instance, rights arising on policies of marine and life insurance, bail bonds, and bills of lading3. The assignee, be it observed, in all the cases hitherto mentioned takes subject to all defences which were available against the original creditor, and sometimes subject to other drawbacks. Only one class of obligations Negotiable can be said to be fully assignable. It is first heard of in the ments. fourteenth century, and is the product of the wide extension of modern commercial transactions. What are called ' negotiable instruments,' or 'paper to bearer,' such as bills of exchange, or promissory notes, do really pass from hand to hand, either by delivery or indorsement, giving to each successive recipient a right against the debtor, to which no notice to the debtor is essential, and which, if the paper is held bona fide and for value, is unaffected by flaws in the title of intermediate assignors. It has been acutely remarked that the assignability of a negotiable instrument is due to its being in point of fact a material object, and so capable of actual delivery. The written document is thus, as it were, the embodiment of what would otherwise be an intangible, and therefore untransferable, claim1.

Liabilities do not, as a rule, pass by voluntary assignment. Under a contract, it is, for instance, said to be only reasonable that the creditor should continue to have a right to the benefit

136 and 37 Vict. c. 66. s. 25, 6.

2 E. g. in the Prussian Landrecht, i. 11. 38. 376-444; Austrian Code ss. 1394-1396.

Savigny, Oblig. ii. p. 112, truly observes that ordinary shares in companies are not obligations but parts of ownership, producing therefore not interest but dividends. So it has been held by the Court of Appeal, diss. Fry, L. J., that shares before registration were choses in action, but afterwards property, Colonial Bank v. Whinney, L. R. 30 Ch. D. 261, reversed in H. L., 11 App. Ca. 426.

4 Savigny, Oblig. ii. p. 99. Cf. Colonial Bank v. Whinney, u. s.

S

CHAP. XII. he contemplated from the character, credit, or substance of the person with whom he contracted. It was however a rule of English common law that certain covenants between landlord and tenant, which are said to touch the land, should' run with the land,' so that an assignee of the term,' i. e. a person to whom a tenant transfers his lease, can not only sue, but also be sued, upon them, as if he were the original lessee. Like rights and liabilities, in respect of these covenants, have been by statute made to attach to the person who succeeds to the rights of the original landlord, or, as he is called, the assignee of the reversion 1.'

Extinction

by per

formance,

by events preventing perform

ance.

We have already had occasion to mention incidentally some of the modes in which the obligations resulting from particular contracts are dissolved. It will however be necessary to consider, from a more general point of view, the circumstances which terminate rights in personam2.' They may perhaps be classified under the following heads: i. Performance; ii. Events preventing performance; iii. Substitutes for performance; iv. Release of performance; v. Non-performance.

i. Performance of the acts to which the person of incidence is obliged is the natural and proper mode by which he becomes loosed from the obligation of performing them3.

Performance by a third person is sometimes permissible, so a debt was in Roman law extinguished on payment of the amount by a stranger, even without the debtor's knowledge. ii. Some events which make performance impossible put an end to any right to insist upon it.

1. When the act due is intimately dependent on the individuality of either party, the right, or liability, to its performance must necessarily be extinguished by his death. It

1 32 Hen. VIII. c. 34.

Solutionis verbum pertinet ad omnem liberationem, quoquo modo factam.' Dig. xlvi. 3. 54.

3

By performance, and by some other facts, etiam accessiones (i.e. sureties) liberantur.' Ib. 1. 43.

would be obviously absurd to make the executors of the CHAP. XII. Admirable Crichton responsible for his non-performance of a contract to marry, or those of Raphael for his inability to return to life and finish the 'Transfiguration.' Serious illness may have a similar effect.

2. Under the old Roman law all claims against a 'filius familias' were cancelled by even a 'minima capitis diminutio,' such as he sustained in passing by adoption from one family to another.

6

3. Confusio,' or merger,' i. e. the union in one person of the characters of debtor and creditor, is sometimes held to extinguish, sometimes only to suspend, the operation of the right1.

4. When the performance has reference to a specific thing, its destruction, without fault of the parties, puts an end to the right. So when the proprietors of a place of public entertainment had agreed to let it on a certain day, before which it was burnt down, they were held to be free from their engagement 2.

5. Bankruptcy has already been mentioned more than once as one of the events which give rise to a universal succession. It has the further effect of freeing the bankrupt, either wholly or partially, according to the special provisions of the law under which he lives, from the claims to which he was previously liable.

6. The judicial rescission of a contract, or a decree of restitutio in integrum.'

7. A change in the law, or the outbreak of war between the countries of the contracting parties, may operate to make performance a 'legal impossibility.'

iii. Among substitutes for performance, the following are Substi the more important.

1 Code Civil, art. 1300; Dig. xvi. 3. 107.

2 Taylor v. Caldwell, 3 B. and S. 826.

3 Supra, pp. 136, 179.

tutes.

CHAP. XII.

Tender.

Compromise.

Datio in solutum.

Set-off.

1. Tender,' oblatio,' of the precise amount due, followed by payment into court,' or in Roman and French law by 'depositio,' or 'consignation,' into the hands of a public officer, even before any action has been brought 1, either extinguishes or suspends the debt.

2. Compromise,' 'transactio,' which may be analysed into a part payment, coupled with a promise not to claim the residue, can only operate as a discharge of the whole debt when the subsidiary promise is made in such a form, or under such circumstances, that it might equally well have been a good discharge without any part payment. So in an old English case it was resolved 'that payment of a lesser sum on the day, in satisfaction of a greater, cannot be a satisfaction to the plaintiff for a greater sum. When the whole sum is due, by no intendment the acceptance of parcel can be a satisfaction to the plaintiff'.'

3. It was long debated but finally admitted by the Roman lawyers that a datio in solutum,' or giving and acceptance of something other than the thing due, and in place of it, discharges the obligation 3. So in English law it is laid down that if a debtor pays to his creditor a horse, or a cup of silver, or any such other thing, in full satisfaction of the money, and the other receiveth it, this is good enough, and as strong as if he had received the sum of money, though the horse or the other thing were not of the twentieth part of the value of the sum of money, because that the other hath accepted it in full satisfaction 4.'

4. 'Set-off,' 'compensatio,' defined by Modestinus as 'debiti et crediti inter se contributio 5,' has been sometimes regarded as rateably extinguishing a claim ipso iure,' sometimes only

1 Cod. iv. 32. 19, viii. 43. 9; Code Civil, art. 1257.

2 Pinnel's Case, 5 Rep. 117. Cf. Foakes v. Beer, 9 App. Ca. 605. On the theory of 'accord and satisfaction,' the Author may perhaps refer to his Essay on Composition Deeds, Chapters ii. and iii.

3 Gai. iii. 168; Cod. viii. 43. 16.

4 Co. Litt. 212. a.

Dig. xvi. 2. I.