GENERAL MOTORS ACCEPTANCE CORPORATION, APPELLANT, v. CLIFTON-FINE CENTRAL
SCHOOL DISTRICT, RESPONDENT.
85 N.Y.2d 232, 647 N.E.2d 1329, 623 N.Y.S.2d 821 (1995).
February 23, 1995
3 No. 8 (1995 NY Int. 046)
Decided February 23, 1995
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Paul K. Stecker, for Appellant.
Belinda A. Wagner, for Respondent.
SMITH, J.:
Defendant Clifton-Fine Central School District paid a dealer for two
buses even though it had received notice of an assignment of any
payment to plaintiff General Motors Acceptance Corp. (GMAC). The
principal issue here is whether Uniform Commercial Code (UCC)
9-318(3) renders defendant liable to plaintiff assignee for payment of
the two school buses even though it paid the assignor. Since issues of
fact exist which preclude summary judgment, we modify the order of the
Appellate Division.
In July 1988, defendant Clifton-Fine Central School District
contracted to purchase two GMC school buses for $81,242 from
Maier-Schule GMC, Inc., a truck and bus dealership located in Buffalo.
On December 12, 1988, Maier-Schule assigned to plaintiff General
Motors Acceptance Corp. (GMAC) (assignee) "all accounts and sums due
and to become due to Dealer from Clifton- Fine Central School
(Purchaser) on account of the sale by Dealer to Purchaser from time to
time of new GMC motor vehicles." On January 9, 1989, defendant's
business manager acknowledged in writing receipt of the assignment and
agreed to make payments for vehicles purchased from Maier-Schule in
accordance with the terms of the assignment. Despite the assignment,
on January 23, 1989 defendant paid the invoice for the buses by
remitting an $81,242 check to Maier-Schule. The record does not
indicate whether the dealer forwarded the proceeds to GMAC. Plaintiff,
however, never registered an objection to defendant regarding this
method of payment.
On September 7, 1989, defendant again contracted to purchase two GMC
school buses from Maier-Schule for $80,318. As before, on January 12,
SNIPPETS:
Defendant Clifton-Fine Central School District paid a dealer for two buses even though it had
The principal issue here is whether Uniform Commercial Code (UCC) § 9-318renders defendant
Since issues of fact exist which preclude summary judgment, we modify the order of the
In July 1988, defendant Clifton-Fine Central School District contracted to purchase two GMC
Supreme Court denied plaintiff's motion, granted defendant's motion and dismissed the
Citing UCC § 9-318, it determined that although the debtor had knowledge of the assignment,
The Appellate Division affirmed, finding "a previous course of dealing" between the parties
The court found defendant justified in making payments to Maier-Schule because GMAC never
It is clear that absent notice of an assignment and notice that the debtor should pay the
The account debtor is authorized to pay the assignor until the account debtor receives
Despite defendant's acknowledgment of the assignment, however, on this record summary
So long as the assignee permits the assignor to collect claims * * * the account debtor may
Under an indirect collection method the assignee permits the assignor to collect claims under
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