Case ID: misc_87/html/0315-01.html
Source: Caselaw Access Project
Author: {"author": "Cohalan, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Frederick W. Heinzer, Appellant, v. Bernard J. Klyberg and Joseph Freeny, Co-partners, Trading as Klyberg & Freeny, Respondents.
    (Supreme Court, Appellate Term, First Department,
    November, 1914.)
    Composition agreement — by whom entered into — evidence — when tender not kept good — Code Civ. Pro., § 732.
    A composition agreement entered into by a debtor and a-number of his creditors, each acting on the faith of the engagement of the other, is binding upon all.
    Where the testimony clearly shows that one of the creditors orally agreed with the debtors and other creditors to accept a certain percentage of his claim, he is bound by the composition agreement though he did not sign it.
    Where a check for the amount of the percentage of the claim of the creditor who did not sign the composition agreement, as called for thereby, was not certified and was returned, and the tender was not kept good by depositing the required amount or the check in court pursuant to section 732 of the Code of Civil Procedure, judgment should have been entered for plaintiff for such amount, with interest and costs.
    Appeal by the plaintiff from a judgment of the Municipal Court of the city of New York, borough of Manhattan, first district, rendered in favor of the defendants, after a trial by the court without a jury.
    
      Sidney Nordlinger, for appellant.
    H. & J. J. Lesser (Harry Yarm, of counsel), for respondents.
   Cohalan, J.

The action was brought to recover the sum of $240 for goods sold and delivered. The sale, delivery and nonpayment are admitted by the defendants in their answer, but as an affirmative defense they set up that on or about the 9th day of February, 1914, the claim was compromised by an agreement, wherein the plaintiff agreed to accept twenty-five per cent of the face value of his claim in full settlement thereof. The evidence- showed that an involuntary petition in bankruptcy had been filed against the defendants, and that sometime later the plaintiff called at the place of business of the firm and asked one of the defendants what he had decided to do for his creditors. He was informed that the firm was to pay twenty-five cents on the dollar to all their creditors. There was testimony to the effect that the plaintiff agreed to accept this offer. One of the committee of creditors having charge of the defendants’ affairs testified that the plaintiff '■ agreed with him to accept with all other creditors the twenty-five per cent. While, the plaintiff did not sign the composition agreement, there is abundant testimony to show that the plaintiff agreed with the defendants and the other creditors to accept twenty-five per cent of his claim.

A composition agreement, if entered into by a debtor with a number of his creditors, each acting on the faith of the engagement of the other, is binding upon them. There were forty-two creditors and forty-one signed the composition agreement, and the plaintiff had accepted orally, but at the last moment refused to sign the agreement. The acceptance of each creditor, whether written or oral, is sufficient, according to the case of White v. Kunts, 107 N. Y. 522; also the case of Bowers v. Stewart, 28 Misc. Rep. 475.

Of course the plaintiff denied that he had entered into the composition agreement, although he admits that he had a discussion-with regard thereto. There was, therefore, conflicting evidence in the case, and the court decided in favor of the defendants.

On the merits I do not think we should disturb the judgment, only in this respect: there was no legal tender of the twenty-five per cent made to the plaintiff. A check for sixty dollars was offered in evidence, subject to the order of the plaintiff. This check was not certified and was returned. The ténder was not kept good by depositing the fund or the check in court, pursuant to section 732 of the Code of Civil Procedure. Under these circumstances I think judgment should have been entered for at least the sum of sixty dollars, with interest and costs.

Judgment appealed from reversed, with costs, and judgment directed for the plaintiff for the sum of sixty dollars and interest, with appropriate costs in the court below.

Seabury and Bijur, JJ., concur.

Judgment reversed, with costs, and judgment directed for plaintiff, with costs.