Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller

Exercise 15

BACKGROUND AND FACTS?Edward Hosch entered into four loan agreements with Citicapital Commercial Corporation to finance the purchase of heavy construction equipment. A few months later, Citicapital merged into Citicorp Leasing, Inc., which was then renamed GE Capital Commercial, Inc. One year later, GE Capital assigned the loans to Colonial Pacific Leasing Corporation. When Hosch defaulted on the loans, Colonial provided a notice of default and demanded payment. Hosch failed to repay the loans, so Colonial sued to collect the amount due. The trial court granted summary judgment to Colonial and entered final judgment against Hosch. On appeal, Hosch argued that there was insufficient evidence that the loans had been assigned to Colonial.
IN THE LANGUAGE OF THE COURT
McFADDEN, Judge.
* * * * Hosch contends that the trial court erred in granting Colonial's motion for summary judgment because there is no evidence that the contracts were assigned to Colonial. However, the contention is refuted by the record, which includes affidavits of a GE litigation specialist, a written assignment and other documents establishing that Hosch's four loans were assigned to Colonial. Hosch has presented no contradictory evidence showing that the loans were not assigned to Colonial, and instead submitted his own affidavit stating that he had not been notified of any such assignment. However, the loan agreements expressly provide that the lender may transfer or assign any or all of its rights under the agreements without notice to or the consent of Hosch.
"A party may assign to another a contractual right to collect payment, including the right to sue to enforce the right. But an assignment must be in writing in order for the contractual right to be enforceable by the assignee." Because the record, as noted above, contains a written assignment of the loans to Colonial, as well as other evidence of the assignment, the trial court did not err in granting summary judgment to Colonial. [Emphasis added.]
DECISION AND REMEDY The Georgia appellate court found sufficient evidence that GE Capital had assigned the loans to Colonial. It therefore affirmed the trial court's judgment for Colonial.
The Legal Environment Dimension Do borrowers benefit from the fact that lenders may freely assign their rights under loan agreements? If so, how?
WHAT IF THE FACTS WERE DIFFERENT? Suppose that Hosch had sold the equipment financed by the loans from Citicapital to a third party. Would Hosch still have been liable to Colonial Pacific? Why or why not?