chose in action

Definition of chose in action

Further reading

A chose in action is essentially a right to sue. It is an intangible personal property right recognised and protected by the law, which has no existence apart from the recognition given by the law, or which confers no present possession of a tangible object.

A chose in action, sometimes called a chose in suspense, in its more limited meaning denotes the right to enforce by legal proceedings the payment of a debt, to obtain money by way of damages for contract, or to be recompensed for a wrong. Less accurately, the money itself which could be recovered is frequently termed a chose in action, as is also sometimes the document evidencing a title to a chose in action, such as a bond or a policy of insurance, though strictly it is only the right to recover the money which can be so termed. Choses in action were, before the Judicature Acts, either legal or equitable. Where the chose could be recovered only by an action at law, as a debt (whether arising from contract or tort), it was termed a legal chose in action; where the chose was recoverable only by a suit in equity, as a legacy or money held upon a trust, it was termed an equitable chose in action. Before the Judicature Acts, a legal chose in action was not assignable, i.e., the assignee could not sue at law in his own name. To this rule there were two exceptions: (1) the crown had always been able to assign choses in action that are certain, such as an ascertained debt, but not those that are uncertain; and (2) assignments valid by operation of law, e.g., on marriage, death, or bankruptcy. On the other hand, however, by the law merchant, which is part of the law of England, and which disregards the rules of common law, bills of exchange were freely assignable. The consequence was that, with these and certain statutory exceptions (e.g., actions on policies of insurance), an action on an assigned chose in action must have been brought at law in the name of the assignor, though the sum recovered belonged in equity to the assignee. All choses in action being in equity assignable, except those which are altogether incapable of being assigned, in equity the assignee might have sued in his own name, making the assignor a party as co-plaintiff or as defendant. The Judicature Acts made the distinction between legal and equitable choses in action of no importance. The Judicature Act of 1873, s. 25 (6), enacted that the legal right to a debt or other legal chose in action could be passed by absolute assignment in writing under the hand of the assignor. This was later updated by the Law of Property Act 1925 s136.