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ASSIGNMENT
Sale of credits & other incorporeal things
Technical term but basically a sale
WHAT MAKES ASSIGNMENT DIFFERENT FROM SPECIES SALE:
ASSIGNMENT
Subject matter: Intangibles
Form: Consensual
Binding effect to 3rd persons: Recorded in registry of property or in public instrument
SALE
Subject matter: Tangibles
Form: Consensual
Binding effect to 3rd persons:No recording needed to such effect
EFFECT OF ASSIGNMENT
1. lack of knowledge or consent of debtor not essential for validity but has legal effects
2. assignment of rights made w/o knowledge of debtor debtor may set up against assignee the compensation w/c would pertain to him against assignor of all credits prior to assignment and of later ones until he had knowledge of the assignment
3. debtor has consented to assignment cannot set up compensation unless assignor was notified by debtor that he reserved his right to the compensation
4. debtor has knowledge but no consent - may still set up compensation of debts previous to assignment but not the subsequent ones.
TRANSFER OF OWNERSHIP
by tradition & not by perfection
execution of public instrument because intangibles cannot be physically transferred
ACCESSORIES & ACCESSIONS
includes all accessory rights such as guaranty, mortgage, pledge or preference
WARRANTIES
1. against hidden defect - N/A because intangibles has no physical existence
2. existence & legality of credit - there is warranty except when expressly sold as a doubtful account
3. solvency of debtor - no warranty, unless
a. there is stipulation
b. insolvency was prior to assignment & of common knowledge
warranty shall last for 1 year only
4. one who assigns inheritance right w/o enumerating rights shall be answerable for his character as an heir
5. one who sells whole of certain rights for a lump sum, shall be answerable for legitimacy of the whole in general but not for each of the various parts
BREACH OF WARRANTY
1. if in good faith - expenses of the contract & other legitimate payments made by reason of the assessment
2. if in bad faith - expenses of contract & other legitimate payments plus useful & necessary expenses
ASSIGNMENT OF CREDIT OR INCORPOREAL RIGHT IN LITIGATION
presumption: buyers purpose is speculation
law would rather benefit the debtor of such credits rather than the one who merely speculates for profit
when credit or incorporeal right in litigation is assigned or sold, debtor has a right to extinguish it by reimbursing the assignee for the price the buyer paid plus interest
right to redeem to be exercised within 30 days from demand by assignee for payment
RIGHT TO REDEEM BY DEBTOR NOT AVAILABLE IN THE FOLLOWING INSTANCES
(NOT CONSIDERED SPECULATIVE)
1. assignment of credit / incorporeal right to co-heir or co-worker
2. assignment to creditor in payment for his credit
3. assignment to possessor of tenement or piece of land which is subject to the right in litigation assigned
Sale of credits & other incorporeal things
Technical term but basically a sale
WHAT MAKES ASSIGNMENT DIFFERENT FROM SPECIES SALE:
ASSIGNMENT
Subject matter: Intangibles
Form: Consensual
Binding effect to 3rd persons: Recorded in registry of property or in public instrument
SALE
Subject matter: Tangibles
Form: Consensual
Binding effect to 3rd persons:No recording needed to such effect
EFFECT OF ASSIGNMENT
1. lack of knowledge or consent of debtor not essential for validity but has legal effects
2. assignment of rights made w/o knowledge of debtor debtor may set up against assignee the compensation w/c would pertain to him against assignor of all credits prior to assignment and of later ones until he had knowledge of the assignment
3. debtor has consented to assignment cannot set up compensation unless assignor was notified by debtor that he reserved his right to the compensation
4. debtor has knowledge but no consent - may still set up compensation of debts previous to assignment but not the subsequent ones.
TRANSFER OF OWNERSHIP
by tradition & not by perfection
execution of public instrument because intangibles cannot be physically transferred
ACCESSORIES & ACCESSIONS
includes all accessory rights such as guaranty, mortgage, pledge or preference
WARRANTIES
1. against hidden defect - N/A because intangibles has no physical existence
2. existence & legality of credit - there is warranty except when expressly sold as a doubtful account
3. solvency of debtor - no warranty, unless
a. there is stipulation
b. insolvency was prior to assignment & of common knowledge
warranty shall last for 1 year only
4. one who assigns inheritance right w/o enumerating rights shall be answerable for his character as an heir
5. one who sells whole of certain rights for a lump sum, shall be answerable for legitimacy of the whole in general but not for each of the various parts
BREACH OF WARRANTY
1. if in good faith - expenses of the contract & other legitimate payments made by reason of the assessment
2. if in bad faith - expenses of contract & other legitimate payments plus useful & necessary expenses
ASSIGNMENT OF CREDIT OR INCORPOREAL RIGHT IN LITIGATION
presumption: buyers purpose is speculation
law would rather benefit the debtor of such credits rather than the one who merely speculates for profit
when credit or incorporeal right in litigation is assigned or sold, debtor has a right to extinguish it by reimbursing the assignee for the price the buyer paid plus interest
right to redeem to be exercised within 30 days from demand by assignee for payment
RIGHT TO REDEEM BY DEBTOR NOT AVAILABLE IN THE FOLLOWING INSTANCES
(NOT CONSIDERED SPECULATIVE)
1. assignment of credit / incorporeal right to co-heir or co-worker
2. assignment to creditor in payment for his credit
3. assignment to possessor of tenement or piece of land which is subject to the right in litigation assigned
