Equitable Assignment
Practical law canada glossary 7-621-0060 (approx. 2 pages).
- Canada (Common Law)
Equitable Assignment: Everything You Need to Know
An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness. 3 min read
An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness.
Equitable Assignment
An equitable assignment may not appear to be self-evident by the law's standard, but it presents the assignee with a title that is protected and recognized in equity. It's based on the essence of a declaration of trust; specifically, essential fairness and natural justice. As long as there is valuable consideration involved, it does not matter if a formal agreement is signed. There needs to be some sort of intent displayed from one party to assign and the other party to receive.
The evaluation of a righteous equitable assignment is completed by determining if a debtor would rationally pay the debt to another party alleging to be the assignee. Equitable assignments can be created by:
- The assignor informing the assignee that they transferred a right to them
- The assignor instructing the other party to release their obligation from the assignee and place it instead on the assignor
The only part of an agreement that can be assigned is the benefit. Generally speaking, there is no prerequisite for the written notice to be received or given. The significant characteristic that separates an equitable assignment from a legal assignment is that most of the time, an equitable assignee may not take action against a third party. Instead, it must rely on the guidelines governing equitable assignments. In other words, the equitable assignee must team up with the assignor to take action.
The Doctrine of Equitable Assignment in Wisconsin
In Dow Family LLC v. PHH Mortgage Corp ., the Wisconsin Supreme Court issued in favor of the doctrine of equitable assignment. The case was similar to many other foreclosure cases, except this one came with a twist. Essentially, Dow Family LLC purchased a property and the property owner insisted the mortgage on the property had been paid off. However, in actuality, it wasn't.
Prior to the sale, the mortgage on the property was with PHH Mortgage Corp. When PHH went to foreclose on the mortgage, Dow Family LLC contested it. There was one specific rebuttal that caught the attention of the Wisconsin Supreme Court. The official mortgage on record was with MERS, an appointee for the original lender, U.S. Bank.
Dow argued that PHH couldn't foreclose on the property because the true owner was MERS. Essentially, Dow was stating that the mortgage was never assigned to PHH. Based on this argument, PHH utilized the doctrine of equitable assignment.
Based on a case from 1859, Croft v. Bunster, the court determined that the security for a note is equitably assigned when the note is assigned without a need for an independent, written assignment. Additionally, Dow contended that the statute of frauds prohibits the utilization of the doctrine, mainly because it claimed every assignment on a property must be formally recorded.
During the case, Dow argued that the MERS system, which stored the data regarding the mortgage, was fundamentally flawed. According to the court, the statute of frauds was satisfied because the equitable assignment was in accordance with the operation of law. Most importantly, the court avoided all consideration regarding the MERS system, concluding it was not significant in their decision.
The outcome was a major win for lenders, as they were relying on the doctrine specifically for these types of circumstances.
Most experts agree that this outcome makes sense in the current mortgage-lending environment. This is due to the fact that it is still quite common for mortgages to be bundled up into mortgage-backed securities and sold on the secondary market.
Many economists claim that by not requiring mortgages to be recorded each time a transfer is completed, the loans are more easily marketed to investors. Additionally, debtors know who their current mortgage company is because the new lender must always notify the current borrower in order to receive payment. It was determined that recording and documenting the mortgage merely provides a signal to the rest of the world that the property owner secures a debt.
If you need help with an equitable assignment, you can post your job on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
Hire the top business lawyers and save up to 60% on legal fees
Content Approved by UpCounsel
- Assignment Legal Definition
- Assignment Law
- What Is the Definition of Assigns
- Legal Assignment
- Assignment and Novation Agreement: What You Need to Know
- Assignment of Rights Example
- Assignment of Rights and Obligations Under a Contract
- Partial Assignment of Contract
- Assignment Contract Law
- What is an Assignment and Assumption Agreement
Related Content
- practice notes (87)
- precedents (2)
- q&as (40)
Equitable assignment definition
What does equitable assignment mean.
Assignments can occur in equity when any of the requirements of legal assignment are not satisfied.
The assignor can inform the assignee that he transfers a right or rights to him or instruct the other party or parties to the agreement to discharge their obligations to the assignee. Only the benefit of an agreement may be assigned. There is no requirement for written notice to be given or received. The position of a party who wishes to be able to make an equitable transfer of obligations under the contract is the same as described under legal assignments.
View the related practice notes about Equitable assignment
Contracts required to be in writing.
This Practice Note considers the specific situations where a contract is required by law to be in writing: assignments, contracts...
Transferring a loan by assignment
This Practice Note explains one of the key ways a lender can transfer a loan under English law to another...
Discover our 87 Practice Notes on Equitable assignment
View the related precedents about Equitable assignment
Ireland—deed of assignment.
Ireland—Deed of assignment This Deed is made on [date] Parties The parties clause should clearly and unambiguously identify the parties...
Ireland—Confidentiality agreement—mutual
Ireland—Confidentiality agreement—mutual This Agreement is made on [insert date] Parties Check that the parties named in the contract are correct....
Dive into our 2 Precedents related to Equitable assignment
View the related q&as about Equitable assignment
Person 1 is the freehold owner of plot a and also had a lease of the neighbouring plot, plot b. person 1 grants a lease to person 2 of plots a and b. person 1's leasehold tenure of plot b comes to an end—person 2 now ends up with a split reversion landlord situation, having person 1 as landlord with control over plot a and the original freehold owner of plot b as its other landlord. are the landlords jointly and severally liable for landlord covenants under the lease (which is holding over).
Person 1 is the freehold owner of Plot A and also had a lease of the neighbouring plot, Plot B....
If a tenant fails to complete the formalities for assigning a commercial lease to an assignee, and the assignee takes possession of the premises with the landlord’s knowledge and consent, would there be an equitable assignment of the lease?
If a tenant fails to complete the formalities for assigning a commercial lease to an assignee, and the assignee takes...
See the 40 Q&As about Equitable assignment
View the related News about Equitable assignment
Banking & finance—november 2023 case round-up.
Banking & Finance analysis: This News Analysis provides a summary of the cases we have alerted in Banking & Finance...
Property Disputes weekly highlights—30 November 2023
This week's edition of Property Disputes weekly highlights includes: the introduction of the Leasehold and Freehold Reform Bill to Parliament,...
Read the latest 50 News articles on Equitable assignment
Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.
Access this content for free with a 7 day trial of LexisNexis and benefit from:
- Instant clarification on points of law
- Smart search
- Workflow tools
- 36 practice areas
** Trials are provided to all LexisNexis content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisNexis services please email customer service via our online form. Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
"We constantly have to look at our own supply chain and choose the best value and quality-focused solutions for our offices. That was really the genesis of our switch to LexisNexis."
Harper Mcleod
Access all documents on Equitable assignment
0330 161 1234
- International Sales(Includes Middle East)
- Latin America and the Caribbean
- Netherlands
- New Zealand
- Philippines
- South Africa
- Switzerland
- United States
- Research & Reports
- LexTalk Forum
Popular Links
- Supplier Payment Terms
- Partner Alliance Programme
HELP & SUPPORT
- Legal Help and Support
- Tolley Tax Help and Support
- Privacy Policy
- Cookie Settings
- Terms & Conditions
- Data Protection Inquiry
- Protecting Human Rights: Our Modern Slavery Agreement
Equitable assignment | Practical Law
Equitable assignment
Practical law uk glossary 2-107-6540 (approx. 3 pages), equitable assignment..
- The assignor can inform the assignee that he transfers a right or rights to him.
- The assignor can instruct the other party or parties to the agreement to discharge their obligation to the assignee instead of the assignor.
IMAGES
VIDEO
COMMENTS
There were many reasons women wanted the right to vote, but primarily they wanted equality in all aspects of society and felt their votes would contribute to a more fair and equitable representation of society. The idea of women’s suffrage ...
According to Purdue University’s website, the abbreviation for the word “assignment” is ASSG. This is listed as a standard abbreviation within the field of information technology.
The formula for computing pro rata coverage is a tool insurance companies use to determine equitable coverage rates. It can also be used to work out equitable payments when more than one insurer provides coverage.
'assigned': 'a Grant of future Possibility is not good in law, yet a Possibility of a Trust in Equity might be assigned'. 18. It was soon recognised that common
An assignment of an equitable chose in action, for example, a legacy or an interest in a trust fund may be assigned in equity and the assignee may sue in
It's based on the essence of a declaration of trust; specifically, essential fairness and natural justice. As long as there is valuable consideration
Assignments can occur in equity when any of the requirements of legal assignment are not satisfied. The assignor can
ment of such a transfer is a valuable consideration.2 6 An equitable assignment is an agreement in the nature of a trust which a court of equity will enforce
But on the trust conception of equitable assignment the assignor ... equitable assignments that take effect as trusts and other equitable
Equity recognises as property certain assets which are not recognised at common law, such as a beneficiary's interest in a trust. Property interests can also be
The 'partial' trust model which posits that only equitable assignments of legal choses in action entail a trustee‒beneficiary relationship between assignor and
Equitable principles will govern the validity of an assignment where either the law has no application, or the law has not been fully complied with. Where.
Only the benefit of
An equitable assignment is a transfer of future interest that doesn't fully meet legal standards, but will still be honored by courts.