Stream v. CBK Agronomics, Inc.
| Decision Date | 28 October 1974 |
| Citation | 79 Misc.2d 607,361 N.Y.S.2d 110 |
| Parties | , 16 UCC Rep.Serv. 177 Arnold C. STREAM, Plaintiff, v. CBK AGRONOMICS, INC., Defendant. |
| Court | New York Supreme Court |
Monasch, Chazen & Stream, New York City, for plaintiff; Arnold C. Stream, New York City, of counsel.
Chadbourne, Parke, Whiteside & Wolff, New York City, for defendant; Paul G. Pennoyer, Jr., Ruffen H. Cotton, Jr., New York City, of counsel.
This case presents an appeal to Equity, in order to avoid the strict rigors of the law. Such an invitation is always attractive. But, as has oft been seen, there is little room for the chancellor's foot to rotate in the law of bills and notes.
Plaintiff brings this action on a promissory note in the face amount of $250,000., which provided for payment in nineteen consecutive monthly installments. The note contained the following provision: 'If the first eighteen scheduled payments are timely paid, or prepaid, the entire principal amount payable hereunder shall be deemed to have been paid in full.' The lopsided payment schedule imbued this provision with extraordinary importance, since the first eighteen payments aggregate only one half of the principal sum and the final installment is in a like sum of $125,000.
Each installment was payable on the first day of the month at a Madison Avenue branch of the Chemical Bank. No grace period whatever was provided.
It is not for the court to speculate as to the reasons for this unusual payment schedule. Nor is it helpful to characterize the arrangement either as a lavish premium for punctilious performance, or a severe penalty in the event of breach. The note was fashioned by skilled counsel at arm's length--those counsel appear within the four corners of the note as corporate signatory and payee--and no suggestion is made of overreaching in the execution and utterance of the note.
The maker of the note, now known as General Energy Corp. is a corporation with its principal office at Kansas City, Missouri. The first twelve installments commencing March 1, 1972, through February 1, 1973, were paid by mailing a cashier's check by certified mail, return receipt requested, which invariably (except for a single one-day delay as to which plaintiff made no demur) arrived in the bank on the payment date.
The 13th installment, however, set the stage for this lawsuit. On February 28, 1973, defendant's treasurer, James C. Laird, committed the installment payment in the sum of $5,191. to the U.S. Mail in Kansas City by an ordinary corporate check. Somewhat predictably, the check did not arrive at the Chemical Bank until March 5, three days after plaintiff exercised its option to accelerate the entire balance by reason of non-receipt.
Faced now with the specter of heavy cost for this cavalier form of tender, defendant has marked a lissome trail of argumentation in an attempt to demonstrate that mailing an ordinary draft in Kansas City on the last day of the month constituted payment in New York City the next day.
It is possible to march some distance with defendant. One could accept the notion that plaintiff's acquiescence in the use of the mails for the first twelve installments denoted authorization of that mode of delivery to the bank (United Securities Corp. v. Franklin, 180 A.2d 505, Mun.Ct.App.D.C.). Furthermore, the Uniform Commercial Code has preserved the concept of 'constructive delivery' as expressed in the earlier Negotiable Instruments Law (Billingsley v. Kelly, 261 Md. 116, 274 A.2d 113; Snyder v. Town Hill Motors, Inc., 193 Pa.Super. 578, 165 A.2d 293). But the underbrush closes in upon defendant's contention that the ordinary corporate check constituted valid tender of payment.
It is true, of course, that a check is conditional payment, and where an instrument is 'taken for...
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...133 F.Supp. 633, 635 (D.Minn.1955); Steele v. Vanderslice, 90 Ariz. 277, 367 P.2d 636, 639 (1961); Stream v. CBK Agronomics, Inc., 79 Misc.2d 607, 361 N.Y.S.2d 110 (N.Y.Co.1974), Modified on other grounds, 48 A.D.2d 637, 368 N.Y.S.2d 20 (1st Dept. 1975). Here, the mailing of the check by th......
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...does not result in a "forfeiture." See Janssen Bros., 299 N.E.2d at 434.4 In one case cited by the Bank, Stream v. CBK Agronomics, Inc., 79 Misc.2d 607, 361 N.Y.S.2d 110 (Sup.Ct.1974), aff'd 48 A.D.2d 637, 638 N.Y.S.2d 20 (1975), the court did hold a borrower strictly to the precise date of......