Head 12: Transfer of incorporeals Flashcards
(19 cards)
Usually, transfer of incorporeals is by…
Assignation followed by intimation (or some other act)
Intimation = personal rights
Some other act (e.g. registration) = real rights
The person transferring the incorporeals is known as the…
The person receiving the assignaiton is known as the…
cedent (assignor)
assignee
Is writing required for assignation of immoveable property?
NO - RW(S)A 1995 s 11(3)(a), but the practice is to use attested writing in all cases.
If writing is used for assignation of immoveable property, where is the recommended style found?
Transmission of Moveable Property (S) Act 1862
Intimation is a formal process. How can it be achieved?
- Certified copy of assignation sent by post (1862 Act s 2)
- Certified copy formally delivered by notary public (1862 Act s 2)
- Acknowledged letter
- Performance or part performance by debtor for the benefit of assignee
Libertas-Kommerz
In this case the debtor (W) was sent a letter (as opposed to a copy of the assignation) explaining that an assignation had taken place. W then wrote back and it was clear from the terms of his reply that he understood that assignation had occurred.
It was held that this was sufficient to constitute intimation, even though it did not conform to the normal rule, since W had acknowledged the informal letter.
(Acknowledged letter form of intimation)
How can real rights be transferred?
Can’t be by intimation so title is normally transferred in the same way as the original grant of the right.
Usually this means either
(1) registration or assignation in the Sasines / Land Register
or
(2) taking possession of the thing in respect of which the right is held (short leases and pledges of corporeal moveables)
What happens if you go through assignation but it is not followd by intimation?
Then there is no transfer of the right
What types of incorporeal property are not transferred by assignation?
- Shares
- Negotiable instruments
- Bank notes (promissory notes payable to the bearer on demand and transferred by delivery)
Does the nemo plus rule apply to transfer of corporeal moveables?
Almost always. So if Alan purports to assign to Betty a right held by Tom, the assignation is ineffective and the right continues to be held by Tom.
Nonetheless,
1) if Alan acquires the right after the purported assignation, Betty’s title is perfected by accretion.
2) also positive prescription applies to real rights in land so even if the nemo plus rule prevents Betty from becoming owner, she may acquire ownership by prescription
Do the rules concerning voidable titles and the protection of good faith aquirers apply to incorporeal property?
Yes - these rules are universal across property law.
So ⁃ If Alan’s title to a right is voidable (eg at the instance of Tom) he can still transfer the right to Betty. And if Betty is (i) a purchaser (ii) in good faith, then she receives an unchallengeable title.
If these conditions are not met, Betty’s title is voidable too and can be reduced by Tom.
Is incorporeal property subject to the first in time, first in right rule and the offside goals rule?
Yes, both.
What is the “assignatus utitur jure auctoris” rule?
The rule is that assignation is not to worsen the position of the debtor - so any claims which were good against the cedent prior to intimation of the assignation are good against the assignee.
What does the “assignatus utitur jure auctoris” rule apply to?
Only to personal rights.
Scottish Widow’s Fund v Buist (1876)
This concerned a policy of life insurance. The person filled in the forms relating to their health but they were dishonest. He then sold the insurance policy - to fund his drinking sprees - to Mr Buist. He then died. Mr Buist contacted the insurer asking for them to pay out on the insurance policy.
It is a principle of insurance law that if you tell lies in negotiations then the contract is voidable.
So the insurers refused to pay because the insured person had lied, thus they could reduce the contract. Mr Buist argued that this shouldn’t affect him. The court held that Mr Buist had taken the insurance policy on the same basis as the cement held it - thus he could have no better right than the cedent had.
Since the insurers could have used this defence against the cement, they could also use it with the assignee - so Buist did not receive the money.
What is the position in relation to compensation / set-off
The assignatus utitur jure auctoris rule also includes compensation (set-off). So if
W owes A £10k under a contract of loan. Supposing there is then a loan the other way of A to W for £3k. A then enforces the contract against W for £10k. To this claim, W has a defence: that A owes W £3k. The law allows W to deduct the £3k - this is known as ‘setting off’ the £3k. So W only has to pay A £3k.
However, supposing A assigns the right of payment of £10k to B. B then tries to enforce against W. The principle is that W’s position is not to be made worse by the assignation - thus because W could have set off £3k with A, W can set off the same £3k in a question with B.
Alex Lawrie Factors Ltd v Mitchell Engineering Ltd 200
The right to payment under a contract was being assigned from A to B. When B came to claim the money from the customer, W, W refused to pay because the service provided (painting) by A was so bad. This was a defence under the contract. It was held that this defence was also available against B - so B could not claim payment.
However, W also claimed damages because the painting was so bad. W tried to claim damages off B (the assignee). This raised the question whether liabilities could be assigned. It was held that liabilities could not be assigned - the worst that could happen was the value could become worthless because of set off, but they cannot end up with a negative asset (i.e. a liability)
What is the warrandice for assignation?
“Warrandice debitum subesse”
What two guarantees does the warrandice debitum subesse give?
1) The right being assigned still exists (but not that the debtor is solvent or able to perform)
2) The cedent’s own title to the right.
