Petterson v. Pattberg Case Brief

Petterson v. Pattberg

161 N.E. 428 | 248 N.Y. 86 | 1928 N.Y. LEXIS 1227

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Takeaway

Background

Petterson owed Pattberg $5,450 on a bond secured by a third mortgage on Petterson’s Brooklyn property. The debt was not yet fully due. On April 4, 1924, Pattberg wrote that he would accept cash payment of the mortgage at a $780 discount if Petterson paid by May 31 and made the regularly scheduled April 25 installment. Petterson made that installment on time.

Near the end of May, Petterson went to Pattberg’s home with cash and announced that he had come to pay off the mortgage under their agreement. Before Petterson made a formal tender, however, Pattberg said that he had sold the mortgage and refused the money. Petterson had contracted to sell the property free of the mortgage and ultimately had to pay the mortgage’s new holder in full. Petterson’s executrix sought the $780 discount as damages.

The trial court awarded the plaintiff $780 plus interest, and the Appellate Division affirmed. The Court of Appeals reversed and dismissed the complaint.

Issues

Issue #1

Whether Pattberg’s letter created an immediately binding contract or a revocable offer for a unilateral contract.

Holding

It created a revocable offer for a unilateral contract, not an immediately binding promise.

Reasoning

Pattberg offered to reduce the mortgage debt by $780 in exchange for a specified act: payment in full of the reduced amount before May 31. He did not seek a return promise by Petterson. The proposed exchange was therefore a promise for performance—an offer to form a unilateral contract.

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