Court Opinion

ID: 5929221
Source: CourtListenerOpinion
Date Created: 2022-01-13 05:00:09.481218+00
Date Added: 2024-06-11T08:46:42.866689
License: Public Domain

Murphy, P. J., and Rubin, J.,
dissent in a memorandum by Murphy, P. J., as follows: We dissent and would affirm.
The contract which plaintiff seeks to enforce required payment into an escrow account of $125,000 earnest money to be paid as follows: $25,000 upon signing of the agreement and $100,000 "to be deposited after the waiver or determination of the right of first refusal by Carnegie Successors, Inc. and/or Rowab Enterprises, Inc., or its assignee.”
On November 8, 1988, plaintiff was notified that Carnegie Successors had waived its right of first refusal, and demand was made for the additional $100,000. Again, on November 11, 1988 and on November 14, 1988, defendants demanded payment of the remaining $100,000 of the earnest money. On the *227third demand defendant advised that if the payment was not received by 10:00 p.m., another offer would be accepted. On November 14, 1988, plaintiff-appellant Brenton, Ltd., the purchaser under a contract dated October 21, 1988, tendered a check to defendants which was dishonored by Chemical Bank for insufficient funds.
On November 23, 1988 counsel for defendants advised Brenton that the check was returned, that the failure to pay the $100,000 constituted a willful default, and that the $25,000 partial down payment was forfeited.
The property then was sold to Carnegie Successors which reconsidered its waiver of its first refusal right, on terms similar to the contract with Brenton.
We agree with the motion court that the failure to pay the $100,000 constituted a material breach of the contract, giving defendants the right to rescind. (Grace v Nappa, 46 NY2d 560.)
While it is true that payment by check constitutes only a conditional payment (UCC 2-511), and equity might require redeposit of a returned check under some circumstances, on this record defendants were entitled to rescind the contract. Defendants made payment by 10:00 p.m. of the essence of the contract. Brenton failed to perform. On these facts, no equitable duty existed to redeposit the check.
Accordingly, the judgment of the Supreme Court, New York County (Carmen Beauchamp Ciparick, J.), entered on October 19, 1989, which dismissed the complaint, should be affirmed.