Opinion ID: 900476
Heading Depth: 1
Heading Rank: 4

Heading: Transfer of Chose in Action

Text: [¶ 8.] The right to proceed on Virginia Fritzel's chose in action for Johnson's defective work belonged to the estate after her death. Johnson contends that because there was no documented proof of transfer from the estate to the trust or to Charles Fritzel, the right of action was extinguished when the estate was closed. He concludes, therefore, that neither Charles nor the trust had standing to proceed with the suit and the trial court erred when it denied Johnson's motion for summary judgment. [¶ 9.] Choses in action, like debts owed a decedent, are estate assets. Johnson v. Zimmerman, 199 Misc. 903, 102 N.Y.S.2d 868, 869-70 (N.Y.1951); see also In re Wreede's Estate, 106 Ohio App. 324, 154 N.E.2d 756, 758 (1958)(unpaid debt owed to a decedent survives as an asset of the estate). A chose in action is intangible personal property. Teed v. Powell, 236 Va. 36, 372 S.E.2d 131, 133-34 (1988). As property of an estate, it must be passed to heirs or beneficiaries using `a deed, the execution of an adequate release or transfer in writing, or the performance of some other act. ...' Reardon v. Whalen, 306 Mass. 579, 29 N.E.2d 23, 24 (1940)(emphasis added)(quoting Millett v. Temple, 280 Mass. 543, 182 N.E. 921, 922 (1932)); see also Murphy v. Killmurray, 324 Mass. 707, 88 N.E.2d 544 (1949)(gift of chose in action, as intangible property, cannot be valid without a release, written transfer or the performance of some act putting it beyond the legal reach of creditors). [¶ 10.] Transfer of a chose of action is valid when it is delivered to the assignee without being affixed to any other instrument showing a title or a right to the thing assigned, and any language, however informal, will suffice if it shows the intention of the owner of that property to transfer it. Briley v. Madrid Improvement Co., 255 Iowa 388, 122 N.W.2d 824, 826-27 (1963). If a decedent's chose in action is not assigned to another person or entity, any right of recovery can only be maintained by the duly authorized representative of that estate, i.e., the executor or administrator. Johnson, 102 N.Y.S.2d at 870. [¶ 11.] Unquestionably, the cause of action against Johnson survived Virginia Fritzel's death and became an intangible asset of the estate. For the trust or Charles Fritzel to be a real party in interest, then, the estate had to transfer ownership of the action to one or both of them. The Bank acted as both administrator and trustee. Was the Bank required to execute some document showing that it transferred the cause of action from the estate to the trust? We think not. A transfer may be made without writing in every case in which a writing is not expressly required by statute. SDCL 43-4-5. No statute or case in South Dakota requires a documented transfer in these circumstances. Accord Champion Home Builders Co. v. Sipes, 219 Cal.App.3d 1415, 269 Cal.Rptr. 75, 80 (1990)(deciding under identical statute that assignment of choses in action need not be in writing). As evidenced by the trust officer's affidavit, the necessary act and the intent to transfer existed. Because the transfer legally passed the right of action from the Bank as administrator to the Bank as trustee, the trial court was correct in denying Johnson's summary judgment motion.