Continental Purchasing Co. v. Van Raalte Co.

Ethel Potter was employed by Van Raalte Co. (Van Raalte) (defendant). Ethel owed money on an account at the Steckler Sporting Goods Store. Potter’s account had been purchased by Continental Purchasing Co. (Continental) (plaintiff). As payment of her debt on the account, Potter assigned to Continental all “wages, or claims for wages, salary, or commission earned, or to be earned.” This included her wages both earned and to be earned from Van Raalte. Continental notified Van Raalte in writing of Potter’s assignment of her wages to Continental. Van Raalte acknowledged the assignment and proposed a modified payment scheme whereby Van Raalte would pay Continental a few dollars out of each of Potter’s paychecks until the full debt was satisfied. Continental agreed to this modified arrangement, and Van Raalte made six payments of $1.50 to Continental from Potter’s wages. After some time, Potter’s situation was referred to a charity, and Van Raalte discontinued making payments to Continental. Instead, Van Raalte disregarded the assignment and paid all the money due directly to Potter. Continental brought suit in New York state court against Van Raalte seeking the remaining $19.20 due to it based on Potter’s account. Van Raalte defended on the ground that it already paid the money to Potter. The trial court entered judgment for Van Raalte, and Continental appealed.