History of Sales Law
Un. Sales Act 1-8
Un. Sales Act 9-16
Un. Sales Act 17-22
Un. Sales A. 23-32
Un. Sales A. 33-40
Un. Sales A. 41-46
Un. Sales A. 47-56
Un. Sales A. 57-62
Un. Sales A. 63-68
Un. Sales A. 69-75
Un. Sales A. 76-79
Comment, Sec. 1-2
Statute of Frauds I
Statute of Frauds II
Chose in Action
Chose in Action II
Chose in Action III
Chose in Action IV
Chose in Action
Bill Long 12/9/05
Barely a Once-Told Tale
Whenever I run into a term in a legal document or code that I don't recognize, I stop. I didn't always do this. When I was a student, I just plunged ahead, perhaps thinking that by the time I got to the end I would underestand what was meant or, more probably, that I would forget the momentary disquiet I felt upon skipping over something I didn't know. Well, the time has come to face one of those terms. It is a term that is barely used anymore, but at one time it bulked large in life. People even talked of it as if they knew what it meant. It is to an attempt to reconstruct the meaning of the seemingly formidable term chose in action that I devote this and the next few essays.
Getting Acquainted with Chose in Action
The term appears in Sec. 4 of the USA of 1906 but, interestingly, has dropped out of the corresonding section (2-201) of the UCC. The USA provides that "a contract to sell or a sale of any goods or choses in action of the value of $500 or upward..." must be memorialized in a writing. By the time you get to the UCC statute of frauds fifty or so years later, we have: "A contract for the sale of goods for the price of $5,000 or more..." (2-201(1); 2003 ed.). See, the chose in action has dropped out, even before we knew how to give it a proper burial. Yet there is one place where the phrase exists in the current Article 2. In 2-103(k), "Goods" [the subject matter of Article 2] are defined to include a lot of things, but the final section of the definition says: "The term does not include information, the money in which the price is to be paid, investment securities under Article 8, the subject matter of foreign exchange transactions, or choses in action." Phew. Thus, we don't have to worry about choses in action in construing Article 2. They, like the contract under seal (2-203), have been relegated to the dust bin of history. But just as I thought it was important to know a little about a contract under seal (in these essays) to give them their due, I think we ought to give choses in action some attention.*
[*Why is there positive reference to chose in action in the USA but not the UCC? A reasonable suggestion is that it was a drafting oversight in the USA to include it in its statute of frauds section, since the earlier definition articles (secs. 1-2) clearly state that only goods are the subject matter of the Act. The statute of frauds, drafted in a "non-sales" context, had the phrase "chose in action" in it since 1677.]
As one 120 year-old English case held: "All personal things are either in possession or in action. The law knows no tertium quid between the two" (Colonial Bank v. Whinney, 30 Ch. D. 261, 285 (1885)). Thus the personal thing we are looking at is "in action." The simplest definition of a chose in action I have seen is "the right to receive or recover a debt, demand, or damages on a cause of action ex contractu or for a tort or omission of a duty" (Black's Law Dictionary (5th ed., 1979) at 219). Even simpler is the more colloquial, " a right to payment" or "a right to bring a claim." That is, a chose in action partakes of an incorporeal something that enables one to bring a suit to vindicate a right that a person has. Let me give several more definitions, gleaned from a bevy of dictionaries and summarized nicely in an 1893 law review article, and then let's turn to the history of the concept. The goal is to try to get to a conceptual understanding of this thing, which we then can conveniently forget for our understanding of modern sales law.
A good place to start is Rastell's 1527 dictionary, enlarged and republished in 1721.
"Things in action is when a man hath cause or may bring an action for some duty due to him, as an action of debt upon an obligation, annuity, or rent, action of covenant or ward, trespasse of goods taken away, beating or such like: and because they are things whereof a man is not possessed, but for recovery of them is driven to his action, they are called things in action" Termes de la Ley, s.v. Chose in Action.
William Blackstone, who has something elegant to say about almost everything in the common law, says this:
"Property in chattals personal may be either in possession, where a man hath not only the right to enjoy but hath the actual enjoyment of the thing, or else it is in action: where a man hath a bare right without any occupation or enjoyment." Commentaries, Vol. 3, ch. 25.
Let's continue with Blackstone's definition, as it becomes even more specific and helpful.
"Property in action or such where a man hath not the occupation but merely a bare right to occupy the thing in question: the possession whereof may, however, be recovered by a suit or action at law from whence the thing so recoverable is called a thing or chose in action. Thus money due on a bond is a chose in action...but there is no possession till recovered by course of law. If a man promises or covenants with me to do any act, and fails in it, whereby I suffer damage, the recompense for this damage is a chose in action, for though a right to some recompense vests in me at the time of the damage done, yet what and how large such recompense shall be can only be ascertained by verdict...
I think the concept is starting to take on startling clarity now. Someone owes you something and won't pay. The right you have to bring a suit on what is owed is a chose in action. Someone promises you something and doesn't fulfill the promise; you have the same option, likewise a chose in action.*
[*Space doesn't permit the consideration of a hugely important issue in the history of the common law, the enforceability of gratuitous promises. The common law had several devices by which a person would be held to his promise; we have lost nearly all of them. By giving the example of the action of covenant, Blackstone shows he is of an earlier, but possibly more enlightened, age.]
Let's close this essay with one more definition, this time from 1891. Joshua Williams' Personal Property, p. 9, has this:
"The term choses in action appears to have been applied to things, to recover or realize which, if wrongfully withheld, an action must have been brought: things, in respect of which a man had no actual possession or enjoyment but a mere right enforceable by action. The more important things recoverable by action only were money due from another, the benefit of a contract, and compensation for a wrong or damages: and these have always been the most prominent choses in action, though not the only things included in the term."
Note how Williams adds to the earlier definitions the emphasis on a right of action in tort. And, he suggests that there might be other things included in the term. The next essay describes the nature of a chose in action from the perspective of history.
Copyright © 2004-2007 William R. Long