§ 8.01-13.Assignee or beneficial owner may sue in own name; certain discounts allowed.

Section 8.01-13 lets an assignee or beneficial owner of a non-negotiable bond, note, writing, or other chose in action step directly into the shoes of the original obligee, payee, or contracting party and maintain, in the assignee’s own name, any action that original party might have brought.

That right comes with a condition, except as provided in § 8.9A-403. The assignee must allow all just discounts — defenses, credits, and setoffs — not only those available against the assignee personally, but those the defendant had against the original obligee, payee, or contracting party before the defendant had notice of that party’s assignment or transfer. Where the chose in action passed through more than one hand, the assignee must also allow discounts good against any intermediate assignor or transferor, so long as the right to those discounts was acquired in good faith before the defendant had notice of that intermediate assignor’s transfer to the next person in the chain.

The practical effect is that assigning a non-negotiable instrument does not wipe out defenses a debtor already had. The debtor’s position is protected up to the point notice of a given transfer reaches it, but an assignee who takes without notice of an earlier transfer along the chain is not automatically saddled with discounts that arose later, after that particular notice.