Article Review Equity

ASSIGNMENT OF LIFE POLICIES

[2007] 3 MLJ i
Malayan Law Journal Articles
2007

Lecturer: DR. Shuhadawati

Name: Muhammad Izzat Irfan Bin Taib 1513895
Introduction

First and the foremost, this article is discussed about the equitable assignment in law of equity in
Malaysia and common law rule. In facilitating commercial transactions, there may be
circumstances when a party must assigns his personal rights to another party. The essence of
assignment is the transfer of ownership of rights from the assignor to the assignee. The
requirement of a legal assignment must provide by statute. The requirement for a legal
assignment in Malaysia is prescribed under section 4(3) of the Civil Law Act 1956. Choses in
action is a known legal expression used to describe all personal rights of property which only can
obtain by action and not by taking possession.

Summary

To sum up, this article talks about whether life insurances policies are accountable as equity
assignment or statutory assignment. If the life insurances policies are under statutory assignment
thus it must comply with section 4(3) of specific relief act.

Analysis

According to common law, in general rule a chose in action cannot be assigned so as to entitle
the assignee to sue in his name. However the position in equity in the case of Fitzroy v Cave is
different. They admitted the title of assignee of a debt, regarding it as a piece of property which it
capable to be dealt with. On the other hand, under section 25 of Judicature Act 1873, it is
permissible to the assignee sue in his name. This was contradicted with the general rule of
common law in early. However this provision was deleted and re-enacted by section 136(1) Law
of The Property Act 1925. Fortunately, it was equivalent with section 4(3) of Specific Relief Act.

Whether the English law is still applicable in Malaysia is one of the questions that emerge in this
article. Since our local Act governing on assignment issue is unclear by virtue of section 5 Civil
Law Act. In addition the Civil Law Act also deals generally with absolute assignment of any
debt and other legal chose action. As long as the assignment has satisfied the section 4(3) the
assignment is absolute otherwise it is not absolute assignment. If the assignment is not comply
with one of the requirements or last two of requirements the assignment is not invalid, it just
mere void and can be proceed. This is because if the assignment not following the requirements
it will be considered as equitable assignment. In simple word, equitable assignment is the
assignment which is not complies with the four requirements of a legal assignment. The
conditions for equitable assignment are:-

1. there must be intention to assign

2. there must be some form of assignment
3. the property assigned must be identifiable
Based on this situation we can see that the law not prohibit if the assignment is fall under
equitable assignment. In addition, love and affection also must be noted that because it also
important as a part of the party to assign the assignment. But in Malaysia, we not insist to use
this great element for conditional assignment. Usually the conditional that recommended by
insurers is normally upon the assignee predeceasing the assignor.

Next, the differences between absolute and non-absolute assignment is the non-absolute
assignment does not entitle himself to sue in his under this Act, and absolute assignment is
otherwise. However, they are permitted to join assignor as a co-plaintiff and if he refuses can
join as a co-defendant with the insurers.

Last but not least, the conditional assignment in Malaysia was done by a good deed of
assignment.