Tuesday, April 9, 2013

Continental Purchasing Co. v. Van Raalte Co. case brief

Continental Purchasing Co. v. Van Raalte Co. case brief summary
251 App. Div. 151, 295 N.Y.S. 867 (App Div, 4th Dept 1937) 

Plaintiff assignee challenged the decision of the County Court of Chautauqua County (New York), which affirmed a judgment in favor of defendant employer. The assignee contended that the employer had notice of an employee's assignment of wages to the assignee.

-The employee assigned her wages to the assignee as security for payment of an account with the assignee.
-The assignee sent the employer notice of the assignment and initially the employer acknowledged the validity of the assignment and made six payments to the assignee.
-The employer the stopped paying the assignee and paid the employee her wages directly.
-The employer contended that payment to the employee exonerated her from any liability to the assignee.
-The lower court found for the employer because the assignee did not file a copy of the assignment with the action.

-The court reversed the judgment for the employer and entered a judgment for the assignee.
-The court held that the employer was liable to the assignee for the amount of the assignment.

The court found that the employer had notice of the assignment, acknowledged its validity, and relied on it. Thus, the employer paid the employee her wages knowing that the money belonged to the assignee.

When a contract is assigned and the non-assigning party agrees to that assignment, the non-assigning party becomes liable to the party to which the contract was assigned.

OUTCOME: The court reversed the decision dismissing the assignee's complaint and ordered a judgment for the assignee for the amount due under the assignment.

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