Also known as: chose in action · choses in action
Written by attorneys — see sources below.
A form of intangible personal property consisting of a right to recover money or other property through litigation. The right must be enforceable by legal action rather than by physical possession.
Imran Iyer contracted to sell his patent license to Icarus Aviation. The agreement described the license as a right to collect royalties from third-party manufacturers. Because the license was a right enforceable only by lawsuit if royalties went unpaid, the transaction fell outside the UCC goods rules and was governed instead by general contract principles.
Isabella Ingram granted Integrity Partners a security interest in her pending breach-of-contract claim against a supplier. The claim qualified as a general intangible because it was a right to payment obtainable only through litigation. Integrity Partners perfected its interest by filing a financing statement covering general intangibles.
Ilana Isaacs held a promissory note issued by a foreign national. When war was declared, the note became enemy property reachable only by court action. The government treated the note as a thing in action subject to seizure procedures rather than immediate physical confiscation.
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View caseIsabelle Inman inherited a right to receive payments under a will that had not yet been probated. The right existed only as a claim that could be enforced through probate court proceedings. The legislature could not retroactively alter the claim without violating constitutional limits on vested rights.
The grandson Normand Morrison executed his will on August 21, 1779. On March 21, 1793, the Court of Probate for Hartford County disapproved the will and refused to record it. More than eighteen months elapsed from this decree, during which the right of appeal was lost under Connecticut law. There was no law in Connecticut allowing a new hearing before the court of probate except through special legislative action. On the second Thursday of May 1795, the Legislature of Connecticut passed a resolution setting aside the March 1793 decree of the Court of Probate. The resolution granted a new hearing before the same court of probate with liberty of appeal in six months. This resolution was passed after the time for appeal from the original decree had expired. A new hearing occurred on July 27, 1795, resulting in the court of probate approving the will and ordering it recorded. An appeal followed in August 1795 to the Superior Court at Hartford, which affirmed the decree in February 1796. The Supreme Court of Errors of Connecticut then reviewed the case and in June 1796 confirmed the judgment of the Superior Court. Calder and his wife asserted a claim to the premises as the heiress of Normand Morrison the physician. Bull and his wife asserted their claim under the will of Normand Morrison the grandson. The matter came before the United States Supreme Court for review of the state court proceedings.
View caseIrene Ingalls owned beachfront lots whose development rights were eliminated by a new coastal-protection statute. The loss of the right to build converted the property into a claim for compensation that could be pursued only through litigation. The claim was treated as a chose in action rather than tangible real estate.
In 1986, petitioner David H. Lucas purchased two residential lots on the Isle of Palms in Charleston County, South Carolina, for $975,000. He intended to construct single-family homes on the parcels, which at the time were zoned for such use and required no building permit for development. No portion of the lots qualified as a critical area under then-existing coastal zone legislation. Subsequently, in 1988, the South Carolina Legislature enacted the Beachfront Management Act. The legislation established a baseline and prohibited construction of occupable improvements seaward of a line drawn 20 feet landward of that baseline, directly affecting Lucas's parcels by barring any permanent habitable structures. Lucas filed an action in the Court of Common Pleas alleging that the Act's restrictions effected a taking of his property without just compensation. Following a bench trial, the court determined that the prohibition rendered the lots valueless and ordered the state to pay just compensation in the amount of $1,232,387.50. The Supreme Court of South Carolina reversed the trial court's judgment. It accepted the legislature's findings that new construction threatened public resources and concluded that a regulation designed to prevent serious public harm could not constitute a taking. The United States Supreme Court granted certiorari to review the South Carolina Supreme Court's decision.
View caseImani Idowu obtained a defamation judgment against protesters. The judgment represented a right to collect damages that existed only through enforcement proceedings. The right qualified as a thing in action that could be assigned or garnished like other litigation-based property.
Marine Lance Corporal Matthew Snyder was killed in action in Iraq. His father, Albert Snyder, arranged for the funeral to be held in Westminster, Maryland. Members of the Westboro Baptist Church, an unincorporated association founded by Fred Phelps, learned of the funeral through local newspapers and decided to picket it to communicate their belief that God punishes the United States for its tolerance of homosexuality. On the day of the funeral, Westboro members displayed placards on public land approximately 1,000 feet from the church where the service was held. The signs included messages such as "God Hates the USA," "Thank God for Dead Soldiers," "Pope in Hell," "Priests Rape Boys," "You’re Going to Hell," and "God Hates Fags." The picketing took place for about 30 minutes before the funeral began. The funeral procession passed within 200 to 300 feet of the picketers. Church members also posted an online "epic" that discussed Matthew Snyder’s funeral and criticized his parents. Albert Snyder filed a diversity action in the United States District Court for the District of Maryland against Fred Phelps, his daughters, and the Westboro Baptist Church. The suit alleged claims for intentional infliction of emotional distress, intrusion upon seclusion, and civil conspiracy. A jury found for Snyder and awarded $2.9 million in compensatory damages and $8 million in punitive damages. The district court reduced the punitive damages award to $2.1 million but left the verdict otherwise intact. The Fourth Circuit reversed the judgment, holding that Westboro’s statements were protected by the First Amendment. The Supreme Court granted certiorari to review whether the First Amendment shields the church members from tort liability for their picketing speech.
View caseThe UCC expressly excludes things in action from the definition of goods under Article 2. A right to payment or performance that can be obtained only through litigation therefore falls outside sales-of-goods rules and is governed by general contract or Article 9 principles instead.
Supporting sources
Yes. A thing in action is included within the definition of general intangible under Article 9. A creditor may therefore perfect a security interest in litigation rights or claims by filing a financing statement that covers general intangibles.
Supporting sources
A thing in action is a right enforceable only by bringing a lawsuit, whereas tangible personal property can be possessed and transferred by physical delivery. The distinction determines whether Article 2 sales rules or general intangible rules apply to a transaction.
…past forty years" in the region of the Isle of Palms that includes Lucas's lots. S. C. Code Ann. § 48-39-280(A)(2) (Supp. 1988). In action not challenged here, the Council fixed this baseline landward of Lucas's parcels. That was significant, for under the Act construction of occupable improvements was flatly prohibited…