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Chose (pronounced: /ʃoʊz/, French for "thing") is a term used in common law tradition to refer to rights in property, specifically a combined bundle of rights.[1] A chose is the enforcement right which a party possesses in an object. The use of chose extends from the English use of French within the courts.[2] In English and commonwealth law, all personal things fall into one of two categories, either choses in action or choses in possession.[3] English law uses chose to refer to a bundle of rights, traditionally relating to property which may be utilised in certain circumstances. Thus, a chose in action refers to a bundle of personal rights which can only be enforced or claimed by a chose-holder bringing an action through the court to enforce the action. In English law, this category is enormously wide.[4] This is contrasted with a chose in possession which is a bundle of rights which can be enforced or acquired by taking physical possession of the object. This may be, for example, a legal mortgage.[5] Both choses in possession and choses in action represent separate proprietary interests. What differs between each is the method in which each chose may be enforced. This is dependent on the possessory nature of the reference object.[6]

Historical uses include a chose local, a thing annexed to a place, such as a mill; and a chose transitory, something movable that can be carried from place to place.[citation needed]

Chose in action

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A chose in action or thing in action, also known as a chose in suspense,[7][8] is a right to sue. It has been made trite law, since Torkington v Magee, that chose in action is a legal expression used to describe all personal rights of property that can be claimed or enforced only by legal action. It is a categorisation of interests in assets, therefore, the enforcement of which cannot be secured without the use of a court.[4] It is an intangible property right recognised and protected by the law, which has no existence apart from the recognition given by the law, and that confers no present possession of a tangible object.[9] Since incorporeal assets such as claims for repayment of debts, or assigned rights in contracts cannot be subject to possession, they cannot be categorised as choses in possession.[10] In certain circumstances, the chose in action creates a separate proprietary right, independent from the property in which it may reference.[11] This new property can be subject to charges or can be assigned. For example, a right to enforce and receive payment for a debt, obtain money by way of damages for breach of contract, or receive recompense for a wrong is a chose in action. Two consequences result from this. Firstly, they are claims which cannot be executed by the chose-holder without the enforcement of legal proceedings. Second, these examples may be themselves assigned, novated, or otherwise used by the chose-holder[12] if the economic value of the asset is the right to sue. Historically, documents which represented a title to a chose in action of a particular kind, such as bonds or other documentary intangibles, were themselves choses in possession because, similar to promissory notes, they were negotiable and thus could be physically seised. That is to say, they were transferred solely by delivery of the document itself. Today, most bonds and other financial instruments have been dematerialised and are issued as a single global note. The consequence of this is that most financial instruments are now choses in action held by the beneficial party against the broker holding assets in a securities depository such as CREST, where investors own interlocking interests in trusts, rather than the actual issued note.[13] The development of dematerialised securities brings some objects which are termed as chose in action today full circle, such as bonds or bill of lading which the court first developed as choses in action, and which, without the use of a negotiable instrument no longer operate as choses in possession. Currently, claims which are treated as being "locked up" inside the paper include pledges, negotiable instruments, and custodial bailment.

Choses in action are particularly crucial to the assignment of interests in law, and thus play a crucial role in the operation and coordination of the financial markets. Certain rights, such as a claim to rescission of a mortgage, are rights of action, but not choses in action or part of one that can be assigned.[14] Because the category is often broadly construed, there have been numerous attempts to expand the category to allow new intangible assets to fall within the chose in action.

In the United States, the Supreme Court has held in Mullane v. Central Hanover Bank & Trust Co.[15] that a property right can vest in a cause of action over property, and later, in Logan v. Zimmerman Brush Co., in a discrimination claim.[16]

Effect of fusing of chancery and common law

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The chose can either be legal or equitable. Before the Judicature Acts, which fused the courts of equity and common law into one jurisdiction, 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:[17]

  1. the Crown (i.e. central government) 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.

Before this point, the courts of equity could not enforce a legal chose in action and vice versa. 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 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 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.[17] This was later updated by the Law of Property Act 1925 s. 136 which outlined that for an assignment to be valid:[18]

  • it must be in writing;
  • it must be absolute, and not by charge only; and
  • written notice must be given to the obligor.

These requirements are significant because without notice, it prevents the assignee from suing on the debt. Until the debtor has given notice, set-offs continue to arise between the assignor and the debtor, the debtor does not know to pay anyone other than the assignor; and the assignee may lose priority to subsequent assignees who do provide notice.[19] The difference between present and future choses in action has been likened to the difference between a tree and its fruit.

Chose in possession

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A chose in possession refers to a bundle of rights and remedies (which in England are inextricably linked)[20] of an object of tangible personal property that can be physically possessed by the owner and can be transferred by delivery. Relation, or rather, capacity of control and apparent dominion is required as the foundation of the alleged chose in possession. This is impossible with incorporeal rights. Possession and possession-based techniques are of little relevance to modern financial markets, but still play a substantial role in commercial and retail lending.[21] Therefore a chose in possession denotes not only the right to enjoy or possess a thing, but also the actual or constructive enjoyment of it. The possession may be absolute or qualified. It is absolute when the person is fully and completely the proprietor or owner of the thing; it is qualified when he "has not an exclusive right, or not a permanent right, but a right that may sometimes subsist and at other times not subsist", as in the case of animals ferae naturae ("of a feral nature", or wild). A chose in possession is freely transferable by delivery. Previous to the Married Women's Property Act of 1882, a wife's choses in possession became vested in her husband immediately upon her marriage, while her choses in action did not belong to her husband until he had converted them to possession. However, this difference is now practically obsolete.[17]

In practice, there is little difference between the utility of a chose in possession and a chose in action, outside of insolvency. However, a Chose in possession is particularly important in view of insolvency as the possessory right of the asset allows for enforcement of security irrespective of the solvency of the company. Where an asset is (1) unique and cannot be replicated, such as shares in a company amounting to board control; (2) a proprietary interest wherein account of profits of the original owed item; or (3) procedural remedies; exist, a chose in possession will be crucial in enforcement.

Notes

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References

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Revisions and contributorsEdit on WikipediaRead on Wikipedia

Chose

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from Grokipedia
A chose is a legal term in English referring to an item of or a right enforceable in relation to such property. It encompasses two primary categories: a chose in possession, which is a tangible chattel that can be physically possessed, such as or , and a chose in action, which is an intangible personal right that can only be claimed or enforced through legal proceedings, including debts, contracts, copyrights, and shares in a . This distinction remains relevant in jurisdictions influenced by English , including the and , where it underpins statutes on and obligations.

Overview and Classification

Etymology and General Definition

The term "chose" in English legal terminology derives from the word chose, meaning "thing," which traces back to the Latin causa denoting a matter, affair, or legal case. This linguistic origin reflects its adoption into the following the of 1066, when Anglo-Norman French—known as —became the language of the royal courts, influencing legal vocabulary from the 12th through 14th centuries and beyond. The word entered English legal usage as part of this broader infusion of Norman terms, persisting in specialized contexts despite the eventual shift to English in judicial proceedings by the . In systems, a "chose" refers broadly to , also termed chattels or personalty, encompassing all forms of property excluding such as and interests therein. This includes movable tangible items and certain intangible rights, distinguishing it from realty in the historical division of assets for purposes of inheritance, transfer, and enforcement under . The concept emerged in medieval to categorize assets that could be owned and dealt with independently of holdings, reflecting the system's emphasis on practical distinctions between physical possession and legal remedies. Though archaic in everyday language, "chose" remains an enduring term in for denoting personal assets that are subject to , transfer, or judicial , often classified into choses in possession (tangible items under physical control) and choses in action (rights recoverable by ). This usage underscores its foundational role in property principles, where it facilitates the analysis of non-real assets across jurisdictions influenced by .

Distinction Between Types

In , personal other than is divided into a : choses in possession and choses in action. This categorization encompasses all forms of personalty, with choses in possession comprising tangible items capable of physical possession and immediate enjoyment, such as or chattels. Choses in action, by contrast, consist of intangible rights or claims that cannot be physically seized and must be enforced through legal proceedings, including debts, copyrights, or contractual entitlements. The philosophical distinction at the core of this classification is rooted in traditions, where possession signifies direct, corporeal control and present utility, while action denotes a prospective or contingent right dependent on judicial . This divide reflects a fundamental separation between immediate, self-executing interests and those requiring external validation or recovery. The rationale for this division in historical was to delineate rights directly enforceable in courts of —through physical delivery or seizure—from those necessitating intervention by courts of equity, as choses in action were originally deemed non-assignable at to prevent abuses like and champerty. Over time, equity recognized their assignability, bridging the gap but preserving the conceptual framework. This classification profoundly influences ownership by clarifying the nature of proprietary interests, transfer by dictating mechanisms such as manual delivery for choses in possession versus written assignment for choses in action, and remedies by contrasting physical with suits for or .

Chose in Possession

Characteristics and Examples

A chose in possession refers to tangible personal property that can be physically possessed or controlled, such as movable chattels. It includes items that exist as physical objects, distinct from intangible rights. These are visible and touchable assets, like , merchandise, , or furniture, where is evidenced by actual possession rather than legal claims. Unlike choses in action, their value stems from the physical item itself, allowing direct use or transfer without court intervention. Common examples include household items, vehicles, jewelry, and tools—any chattel that can be handed over or seized physically. This category forms the basis for much of everyday , emphasizing immediate control over the object. This form of property fundamentally differs from choses in action, as its value derives from physical control rather than enforceable rights.

Transfer and Assignability

The primary method of transferring ownership of a chose in possession, which encompasses tangible such as chattels, is through actual delivery of the item to the transferee, thereby vesting immediate without the need for additional formalities under . This delivery serves as the strongest evidence of the transferor's intent to relinquish possession and rights, ensuring the donee or buyer acquires full legal upon receipt. For bulky or cumbersome items where actual delivery proves impractical, symbolic delivery suffices, such as handing over a key to a containing the , which equally effects the transfer of possession and . At , choses in possession are fully assignable as , requiring no equitable intervention or written instrument beyond the act of delivery, in contrast to the more restricted treatment of intangibles. The assignee thereby obtains complete possessory rights, including the ability to use, enjoy, and dispose of the chattel as their own. Disputes arising from such transfers, such as wrongful withholding after delivery, were historically resolved through actions like , which sought recovery of the specific chattel or its value for unjust detention, or , which allowed immediate restitution of goods wrongfully taken or distrained. These remedies evolved from early medieval writs, with formalized under statutes like those of Marlborough (52 Hen. III, c. 21) to facilitate swift possession recovery, underscoring the emphasis on physical control in chose in possession transfers.

Chose in Action

Characteristics and Examples

A chose in action represents intangible , consisting of rights that are enforceable exclusively through legal proceedings rather than physical possession. It encompasses various claims, obligations, and benefits that exist as abstract entitlements rather than tangible objects. The ownership of a chose in action constitutes a bundle of personal rights, such as the ability to initiate a for recovery or to under a contractual . Unlike physical assets, these rights are neither visible nor touchable, necessitating reliance on supporting documentation like contracts, deeds, or records to establish and enforce them. Common examples of choses in action include debts owed by one party to another, shares in a entitling the holder to dividends or voting , copyrights protecting original works, patents granting exclusive invention , and claims for arising from torts such as . In the seminal case of Torkington v Magee 2 KB 427, the court defined a chose in action as encompassing "all personal of which can only be claimed or enforced by action, and not by taking physical possession," illustrating its application to contractual breaches where recovery requires judicial intervention. This form of property fundamentally differs from choses in possession, as its value derives entirely from the underlying enforceable right rather than any immediate or physical control over an object. Legal choses in action are those that can be enforced directly through actions at , without the intervention of equitable principles. These rights historically fell under the jurisdiction of courts and include negotiable instruments such as bills of exchange and promissory notes, which are governed by statutory frameworks that facilitate their recognition and transfer. For instance, under the , these instruments are assignable in their own name, allowing the holder to sue directly upon them. Legal choses also encompass certain debts and shares in companies that meet specific formalities for assignment, enabling the assignee to pursue remedies at . In contrast, equitable choses in action arise from rights enforceable solely through the courts of equity, such as the , which developed to address gaps in rigidity. These include beneficial interests under trusts, simple contract debts not recognized at law, and legacies under wills, where enforcement relies on equitable remedies like or injunctions rather than direct legal action. Equitable choses often stem from informal agreements or relationships, and their assignability is more flexible, not requiring strict statutory but potentially subject to the rule in Dearle v Hall for priority among assignees. The primary differences between legal and equitable choses lie in their historical jurisdictional roots and mechanisms of enforcement. Legal choses receive direct statutory or recognition, allowing assignment under section 136 of the , which mandates an absolute written assignment signed by the assignor and express to the for the assignee to sue in their own name. Equitable choses, however, depend on the of the parties and equitable intervention for fairness, often lacking such statutory formality and enforceable through the original obligee joining the assignee in proceedings. In modern practice, while many choses—such as policies and business goodwill—operate primarily as equitable interests requiring equitable remedies, statutory developments have blurred lines by enabling legal assignment for a broader range where formalities are met.

Historical Development

Origins in Medieval English Law

The term "chose," derived from the Norman French word for "thing," entered English legal terminology following the of 1066, reflecting the integration of French influences into the emerging system. By the thirteenth century, the term appeared in the Year Books, early reports of court proceedings, to distinguish or "choses" from such as land. This usage highlighted a foundational binary in medieval law, where choses encompassed both tangible movables and intangible rights, contrasting with the feudal emphasis on immovables tied to . In early , choses in possession—encompassing chattels personal (like and livestock) and chattels real (such as leasehold interests)—were treated as recoverable through possessory writs that prioritized physical control. For instance, chattels personal could be reclaimed via writs of or , which enforced delivery or value against wrongdoers, while chattels real, like terms of years, were viewed as quasi-chattels subject to similar possessory remedies, as noted in Year Book reports from the reign of Edward I (1272–1307). In contrast, choses in action, including s, bonds, and rights to performance, were deemed personal to the obligee and initially non-assignable, enforceable only by the original holder through actions like or account, without mechanisms for transfer to prevent disputes over personal obligations. The distinction between these categories arose within the feudal framework, where land-based lord-tenant relationships dominated, rendering intangibles like debts inherently personal and non-transferable to safeguard feudal hierarchies and avoid interference in personal dealings. This approach protected the integrity of obligations tied to individuals rather than estates, aligning with the common law's early focus on and possession over abstract rights. Key developments in the fourteenth century further delineated these concepts, particularly through cases establishing specialized actions for debts secured by written obligations. For example, the action of debt sur obligacion allowed recovery on sealed bonds without the defendant's wager of law defense, streamlining enforcement while upholding the non-assignability of the underlying chose to curb practices like , where third parties might stir up litigation for gain. Year Book cases from Edward III's reign (1327–1377) illustrate this, emphasizing that such rights remained inalienable to preserve the obligee's personal claim.

Evolution Through Equity and Fusion

From the fifteenth century onward, the intervened to facilitate the assignment of choses in action, which were deemed non-assignable at due to their personal character and concerns over and champerty. Equity courts enforced such assignments by allowing assignees to recover debts in their own names, often through mechanisms like declarations of trust, where the assignor held the legal interest as for the equitable assignee, thereby circumventing rigidity that required suits in the assignor's name and risked champertous interference. This equitable innovation, evident in early Chancery petitions dating to 1413, treated choses in action as proprietary interests transferable upon the assignor's intent, subject to to the obligor to bind third parties. However, limits persisted; the case of Ryall v Rolle (1749) illustrated equity's boundaries by affirming that to the equated to delivery of possession for intangible , yet underscoring 's resistance to full alienability without statutory support, as a vested legal title rather than merely a . At , assignments of choses in action were largely prohibited as champertous until partial statutory relief emerged, notably through the 1677, which mandated written dispositions for equitable interests or trusts to prevent fraud and oral ambiguities. This requirement, under section 9, enabled some assignments if documented and signed, though it did not fully override 's personal obligation doctrine, leaving equity to fill gaps via informal trusts. The 's stance, rooted in fears of multiplied suits and injustice as articulated in cases like Lampet's Case (1612), persisted, confining assignability to exceptions such as royal grants or negotiable instruments under merchant custom. The of 1873 and 1875 marked a pivotal reform by fusing the separate courts of and equity into a unified of Judicature, abolishing procedural divides that had forced litigants to navigate multiple forums. While this procedural merger streamlined administration—allowing equitable defenses in legal actions and vice versa—it preserved substantive distinctions between legal and equitable rights, ensuring equity's principles, like those governing trusts, remained distinct. These acts facilitated the legal of equitable interests in choses in action, particularly through the rule in Dearle v Hall (), which prioritized successive equitable assignees based on the order of notice to the trustee or obligor, protecting bona fide subsequent interests while binding the obligor. Post-fusion, these changes simplified the assignment of debts and other choses in action by permitting voluntary equitable transfers without rigid formalities in England, diverging from stricter Australian requirements and enhancing commercial efficiency. This procedural unity reduced jurisdictional conflicts, enabling assignees to enforce rights directly in unified courts and influencing modern commercial law by standardizing transfers of intangible assets like receivables, though substantive equitable priorities via notice endured.

References

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  8. https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem6016
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  11. https://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/136
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  13. https://www.oxfordreference.com/display/10.1093/oi/authority.20110803095610183
  14. https://thelawdictionary.org/chose-in-possession/
  15. https://avalon.law.yale.edu/18th_century/blackstone_bk2ch30.asp
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  22. https://www.legislation.gov.uk/ukpga/Vict/45-46/61
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  27. https://lawreview.lse.ac.uk/articles/742/files/6734b68ba678d.pdf
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  29. https://core.ac.uk/download/235284513.pdf
  30. https://www.parliament.uk/about/living-heritage/transformingsociety/laworder/court/overview/judicatureacts/
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  33. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4561540
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