Continental Purchasing Co. v. Van Raalte Co.
Supreme Court of New York, Appellate Division
295 N.Y.S. 867 (1937)
Employee Ethel Potter assigned her Van Raalte (defendant) wages to Continental Purchasing (plaintiff) to satisfy a store debt; Van Raalte acknowledged the assignment in writing, agreed to a modified installment payment plan to Continental, and made six such payments, but later disregarded the assignment entirely once Potter's situation was referred to a charity, paying all remaining wages directly to Potter instead. Continental sued for the remaining $19.20 owed, and the trial court ruled for Van Raalte because it had already paid Potter directly.
Whether, if a debtor receives notice that his debt has been assigned to a third party but continues to pay the original creditor directly instead of the third party assignee, the debtor is liable for the resulting damage to the assignee.