New York Law Review

Tag: 1859

  • Tipton v. Feitner, 20 N.Y. 423 (1859): Enforceability of Divisible Contracts After Partial Breach

    Tipton v. Feitner, 20 N.Y. 423 (1859)

    When a contract is divisible into distinct, separately enforceable parts, a party’s breach of one part does not necessarily preclude recovery for the other parts, especially when those parts have been fully performed.

    Summary

    This case addresses the divisibility of contracts and the impact of partial breach on recovery. Tipton sued Feitner for the price of delivered dressed hogs. Feitner argued that Tipton had breached the contract by failing to deliver live hogs as agreed. The court held that the contract was divisible, with payment for the dressed hogs contingent only on their delivery, not on the delivery of the live hogs. Therefore, Tipton was entitled to recover the price of the delivered dressed hogs, subject to a deduction for Feitner’s damages resulting from the non-delivery of the live hogs. The court emphasized that the key is whether the parties intended the performance of one part of the contract to be a condition precedent to the other.

    Facts

    Tipton agreed to sell Feitner both dressed and live hogs. The dressed hogs were to be delivered immediately, while the live hogs, coming from Ohio, were to be delivered later. Feitner refused to pay for the dressed hogs, claiming Tipton failed to deliver the live hogs.

    Procedural History

    Tipton sued Feitner to recover payment for the dressed hogs. The case was referred to a referee who found in favor of Tipton, deducting damages suffered by Feitner for the non-delivery of the live hogs. Feitner appealed, arguing that Tipton’s breach barred any recovery. The New York Court of Appeals reviewed the referee’s decision.

    Issue(s)

    Whether Tipton’s failure to deliver the live hogs constituted a breach that precluded him from recovering payment for the dressed hogs already delivered under the same contract.

    Holding

    No, because the contract was divisible, and payment for the dressed hogs was contingent only on their delivery, not the delivery of the live hogs.

    Court’s Reasoning

    The court reasoned that the contract was divisible because the agreement regarding the dressed hogs was distinct from the agreement regarding the live hogs, with separate prices and delivery times. The court stated that “the bargain respecting the several kinds of property, in regard to the payment for each, is to be taken distributively.” The court emphasized that there was no explicit condition making the delivery of the live hogs a prerequisite for payment for the dressed hogs. “The only condition upon which the payment for the former depended, was their delivery.” The court distinguished this case from those involving entire contracts, such as employment contracts for a fixed period, where full performance is typically a condition precedent to any payment. The court also noted that Feitner had a remedy for Tipton’s breach regarding the live hogs, which was properly addressed through a deduction in damages. The court thus allowed Tipton to recover for the delivered goods while ensuring Feitner was compensated for the breach. The court contrasted its holding with cases involving entire contracts, noting, “These cases proceed upon the ground that the contracts were entire in the sense that full performance of the services contracted for was, by the agreement of the parties, to be made before anything became payable by the employer.”

  • Mitchell v. Cook, 29 Barb. 243 (N.Y. Sup. Ct. 1859): Limits on Comptroller’s Authority to Re-assign Mortgages

    Mitchell v. Cook, 29 Barb. 243 (N.Y. Sup. Ct. 1859)

    The Comptroller of New York’s authority to re-assign mortgages, originally pledged as security for circulating notes under the General Banking Law, is strictly limited to re-assignment to the original transferor (the bank or individual banker), except in cases of failure to redeem the notes.

    Summary

    Mitchell sought to foreclose on a mortgage he claimed to own through a series of transactions involving the White Plains Bank and the state comptroller. The mortgage had originally been assigned to the comptroller as security for the bank’s circulating notes, then re-assigned to the bank’s president Crawford, who then handed it to Mitchell. The court held that Mitchell did not have valid title to the mortgage because the comptroller only had the authority to re-assign the mortgage to the bank itself, not to a third party like Mitchell. The attempted indirect purchase was deemed invalid, and the foreclosure action failed. The court emphasized strict adherence to the banking law to protect banks and mortgagors.

    Facts

    Elisha Crawford, president of White Plains Bank, assigned a bond and mortgage to the state comptroller to secure the bank’s circulating notes.
    The comptroller issued circulating notes to the bank based on the security of the bond and mortgage.
    Crawford later delivered circulating notes (owned by Mitchell) to the comptroller, equal to the mortgage amount, and received a re-assignment of the bond and mortgage.
    Crawford obtained the re-assignment for Mitchell’s benefit and then handed the bond and mortgage to Mitchell.

    Procedural History

    Mitchell, claiming ownership of the bond and mortgage, sued to foreclose on it.
    The Supreme Court initially ruled in favor of Mitchell.
    This appeal followed, challenging Mitchell’s claim of ownership and right to foreclosure.

    Issue(s)

    Whether the comptroller had the legal authority to re-assign the bond and mortgage to Crawford (acting as Mitchell’s agent) instead of directly to the White Plains Bank, thereby vesting valid title in Mitchell.

    Holding

    No, because the comptroller’s authority to re-assign mortgages under the General Banking Law is limited to re-assignment to the original transferor (the bank) or sale upon failure to redeem the circulating notes; therefore, Mitchell did not obtain valid title.

    Court’s Reasoning

    The court strictly interpreted the General Banking Law of 1838, emphasizing that the comptroller’s power to re-assign mortgages is limited. The statute only allows re-assignment to the original transferor (the bank) upon redemption of the circulating notes, or sale in case of default. The court stated, “The act nowhere authorizes him to transfer or assign bonds and mortgages pledged with him as such security, otherwise than to the person or association by whom they were transferred, excepting in the case of failure to redeem the notes, by the persons or associations who issued them.”
    The court reasoned that allowing the comptroller to assign directly to a third party like Mitchell would be “an act on the part of the comptroller, utterly destitute of authority, and a plain violation, not only of the letter, but of the spirit, of the law.” It also noted that such a practice could harm both banks and mortgagors. The court dismissed the idea that handing the documents to Mitchell by Crawford constituted a valid sale by the bank, as it was merely an attempt to indirectly circumvent the comptroller’s limited authority. Because Mitchell’s claim rested solely on the invalid re-assignment, his foreclosure action failed. The subsequent assignment to Mitchell by Crawford and the bank was the basis of a later successful suit.