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Contracts Keyed to Fuller
Ertel v. Radio Corp. of America
Citation:
307 N.E.2d 471 (1974)Facts
Economy Finance Corporation provided financing to Delta Engineering Corporation through a loan secured by Delta’s accounts receivable. John Ertel, as Secretary-Treasurer of Delta, personally guaranteed the loan. Delta assigned its accounts receivable from RCA to Economy as collateral. Economy sent notification of this assignment to RCA by certified mail, which was received and signed for by an RCA dock employee on May 14, 1969. Despite this notification, RCA continued to make payments directly to Delta rather than to Economy. Delta subsequently defaulted on its loan, and Economy sought payment from Ertel as guarantor. After satisfying the debt, Ertel filed a third-party complaint against RCA, claiming that as subrogee of Economy’s rights, RCA was liable to him for wrongfully paying Delta. RCA argued that it had set-off rights against Delta for incomplete performance on the last of three contracts, which should apply against Ertel as subrogee.
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