In re Estate of Galewitz, 14 N.Y.2d 124 (1964)

When a party makes an offer of payment (tender) and the recipient does not object to the form of the offer at the time it is made, the recipient waives the right to later claim the tender was insufficient due to its form.

Summary

In a dispute over the sale of stock back to two closely held corporations after the owner’s death, the New York Court of Appeals held that the corporations’ offer to pay for the stock with checks was a sufficient tender of performance. The administratrix of the estate initially delayed acceptance and later rejected the offer due to insufficient amount, but never objected to the form of payment (checks). The court reasoned that, because no objection was made to the form of payment at the time of the offer, the administratrix waived any right to later claim the tender was insufficient on those grounds. The order was reversed and remitted.

Facts

The petitioner’s intestate (deceased) had a contract with two closely held corporations, owned entirely by his family, stating that upon his death, the corporations could purchase his stock at a fixed price. Following the intestate’s death, the president of the corporations (the intestate’s father) offered to pay the administratrix the stipulated amount on two separate occasions. The first time, the administratrix’s attorney requested a delay to prepare paperwork. The second time, her new attorney rejected the offer, claiming the contract price was insufficient. On both occasions, the president had checks ready for payment and was prepared to make the payment in that form. The corporations had the ability to pay the stipulated amount.

Procedural History

The Surrogate’s Court ruled in favor of the petitioner, holding that the offer of payment by check was not a good tender of performance. The corporate appellants appealed to the New York Court of Appeals.

Issue(s)

Whether an offer to purchase stock with a check constitutes a sufficient tender of performance when the recipient does not object to the form of payment at the time of the offer.

Holding

Yes, because no objection was made to the form of the offer of payment at the time it was made, the tender was sufficient in these circumstances.

Court’s Reasoning

The Court of Appeals reversed the Surrogate’s Court’s decision, holding that the offer of payment by check was a sufficient tender of performance. The court relied on the principle that when a tender is made, the recipient must object to the form of the tender at the time it is made; failure to do so constitutes a waiver of any objection to the form. The Court cited Duffy v. O’Donovan, 46 N. Y. 223 and Mitchell v. Vermont Copper Min. Co., 67 N. Y. 280, for this proposition. The Court emphasized that the administratrix’s attorney never objected to payment by check; instead, the objections focused on delaying the transaction and later on the inadequacy of the contract price. Since the corporations were capable of paying the agreed-upon amounts and the form of payment was not contested at the time of the offer, the court found the tender sufficient. This decision underscores the importance of raising timely objections to the form of a tender to preserve legal rights. As the Court stated, “No objection having been made to the form of the offer of payment, it was in these circumstances sufficient.” The court remitted the case to the Surrogate’s Court for proceedings consistent with its memorandum.