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Rights of Transferor and Transferee

Abatement means the interruption of a legal proceeding preventing the plaintiff from going forward with the suit at that time or in that form.  At one time, there existed a difference in the abatement of proceedings occurring in equity and in law.  Abatement of proceedings in equity merely suspended the action, subject to revival when the defect was cured, whereas abatement of proceedings in law terminated it, though the plaintiff could start the action anew.

Today, in some jurisdictions, statutes and rules of practice have abrogated the common law rule that termination or transfer of the plaintiff’s interest in the subject matter of an action while it is pending abates the action.

The Federal Rules of Civil Procedure also provides that in case of any transfer of interest, the action may be continued by or against the original party.[i]

However, pleas in abatement are not regarded with favor, and such pleas must be full and certain and must exclude all such matter as would, if alleged by the opposite party, defeat the plea.[ii]

As between transferor and transferee, a rule or statute authorizing, alternatively, continuance in the name of the original party or substitution in the name of the transferee, is solely for the benefit of the transferee.

The statutes or rules that provide for continuance in the name of the original party or substitution in the name of the transferee contemplate that the action will be carried on by the transferee, and the transferor is merely a nominal party who has no further power to control the action.[iii]

However, there may be cases where, after the transfer, the original party retains some interest in the suit, or may become liable to the assignee if he or she fails in the action.  In such cases the original party remains an interested party entitled to insist on continuation of the action.  The original party can then insist on continuance of action either in his or her own name or jointly with the assignee.

[i] Fed. R. Civ. P. 25(c)

[ii] National Live Stock Insurance Co. v. Wolfe (1915), 59 Ind. App. 418, 422, 106 N.E. 390

[iii] Wells v. Anglade, 23 So. 2d 469 (La. Ct. App. 1st Cir. 1945)


Inside Rights of Transferor and Transferee