Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 6

Siler agreed to complete a project for Mountain Bell. To finance the project, Siler borrowed money from First National. As security for the loan, Siler assigned to First National his right to collect from Mountain Bell upon completion of the project. First National never notified Mountain Bell of the assignment. Consequently, Mountain Bell did not pay First National when the money was due but instead paid Siler. First National then sued Mountain Bell for that same payment. Is Mountain Bell obligated to pay First National after it has already paid Siler? (First National Bank of Rio Arriba v. Mountain States Telephone Telegraph Co., 571 P.2d 118)