Brief Fact Summary. Plaintiff is an assignee of Ethel L. Potter (Potter). Defendant is Potter’s employer. Potter signed a contract with Plaintiff, assigning all of her income to Plaintiff in order to pay off a debt. Instead, Defendant gave $1.50 of Potter’s wages to her, because she had no other income.
Synopsis of Rule of Law. When a contract is assigned and the non-assigning party agrees to the assignment, the non-assigning party becomes liable to the party to which the contract was assigned.
If he pays his indebtedness to the assignor in ignorance of the assignment, he is relieved from all liability to the assignee.View Full Point of Law
Issue. Should Defendant pay the sum that Defendant paid to Potter over the months to Plaintiff due to the assignment?
Once a party to a contract has notice that the contract has been assigned and accepts the assignment, the party owes the obligation, not to the assignor, but to the assignee. In this case, Defendant owed Potter an obligation to compensate Potter for her work. After the assignment, Defendant owed this obligation to Plaintiff.
Discussion. By paying Potter’s wages to Plaintiff, Defendant accepted Potter’s assignment to Plaintiff, and became obligated to Plaintiff rather than to Potter.