The owner of an insurance company and an insurance agent entered into an agreement to use the agent's number for the purpose of selling insurance policies and handling customers while dividing the profits between them. After the owner assigned his rights under to the agreement the insurance agent stopped sharing in the profits arising from the policies sold.
The Court held that the assignment of rights was done contrary to the provisions of the agreement and the law and is void. The general rule is that an assignment of rights does not require the consent of the debtor, and this is based on the assumption that it does not matter to the debtor to whom he must perform his obligation. However, in cases where the identity of the owner of the right must be taken into account and when the assignment may fundamentally change the content of the right or cause a change in the debtor's situation for the detriment or cause him undue burden, the right of assignment can be limited or curtailed due to the nature of the right itself. Here, the original engagement was a personal engagement based on familiarity and a relationship of trust between the parties, where the insurance agent, based on the aforementioned acquaintance, still bore personal responsibility towards the clients also for the actions of the other party. The agent never knew the entity receiving the rights and its employees, and never agreed to work with them or be responsible for their actions, which may cause him substantial liability. Thus, in light of the nature of the agreement that attaches importance to the debtor's identity and the burden and worsening of the agent's situation that may occur due to the assignment, which was made without his express consent as required by the agreement, the assignment is null and void and as such constitutes a material violation of the agreement.