Court Opinion

ID: 9442513
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:50:28.91765+00
Date Added: 2024-06-11T17:29:07.286892
License: Public Domain

*137On Petition for Rehearing
PER CURIAM.
By its petition for rehearing the appellee company- makes the contention, among others, that in holding that Hurley had the right to disaffirm the dividend orders executed by him, we overlooked the rule stated in Section 170(2)c of the Restatement of the Law of Contracts as follows:
“(2) Except as stated in Subsection (4) an obligor is discharged from any duty to the obligee or to any assignee, if he obtains for value, by performance or otherwise, a discharge of the duty
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(c) from any holder of an assignment voidable by the assignor because of infancy, insanity, fraud, duress, mistake or illegality, if the discharge is obtained in good faith prior to avoidance of the assignment by the assignor, and the obligor neither knows nor has reason to know facts showing that the assignment is voidable.”
These dividend orders, the Company says, were in effect assignments of the debt, and hence, it is argued, the Company should be protected by its payments to Mrs. Price, and no subsequent effort to disaffirm the orders should result in charging the company.
We are not impressed with the argument that the orders were assignments, but we think it unnecessary to determine that question, because of the facts found in the trial court’s finding No. XII, as follows: “The dividends and stock rights listed above in Paragraph XI in the total sum of $20,458.50 were paid and delivered by defendant to Elizabeth J. Price under dividend order No. 13157 during the period from February 19, 1929 until the death of Elizabeth J. Price on December 27, 1943.”
Dividend order No. 13157 was the order signed by Mrs. Price and . Burton alone, after they had received the allegedly forged assignment of the 575 shares. (In the opinion this was described as an order which “Burton had executed” to Mrs. Price “after the purported assignment”.)
It thus appears that the dividends paid on the 575 shares were not paid jpürsüant to any order signed by Hurley. Indeed, they could not well have been, for as disclosed in footnote 1 of the opinion, Hurley’s order referred to dividends on stock “standing in the names of Mrs. Elizabeth J. Price and George E. Burton and Lester Hurley on the books of your company.” After the 575 shares had been transferred on the books to Burton and Price alone, this order would no longer describe these shares. The finding above quoted shows that after the receipt of the purported assignment, the dividend order previously received bearing Hurley’s signature became functus officio.
Because the company did not, when it paid the dividends, do so in reliance on Hurley’s order, it cannot now rely upon it as a defense.
As we think the points urged in the petition are without merit, a rehearing is denied.