When the obligation of a third person or an order upon the third person is accepted in satisfaction, the creditor may rescind the acceptance if:

1. (1) the debtor prevents the third person from complying with the order or from fulfilling the obligation;
2. (2) at the time the obligation or order is received, the third person is insolvent and the fact is unknown to the creditor; or
3. (3) before the creditor can, with reasonable diligence, present the order to the third person upon whom it is given, the third person becomes insolvent.

History: En. Sec. 2073, Civ. C. 1895; re-en. Sec. 4961, Rev. C. 1907; re-en. Sec. 7463, R.C.M. 1921; Cal. Civ. C. Sec. 1533; Based on Field Civ. C. Sec. 740; re-en. Sec. 7463, R.C.M. 1935; R.C.M. 1947, 58-508; amd. Sec. 766, Ch. 56, L. 2009.