Wednesday, December 18, 2013

New York Bronze Powder Company, Inc. v. Benjamin Acquisition Corp. case brief

New York Bronze Powder Company, Inc. v. Benjamin Acquisition Corp. case brief summary
716 A.2d 230 (1998)


CASE SYNOPSIS
The Court of Special Appeals (Maryland) reversed the trial court's judgment entered in favor of petitioner obligee, holding that respondent obligor was not liable for non-payment of a note or breach of the parties' modified asset purchase agreement. The matter was before the court on the obligee's petition for a writ of certiorari.

CASE FACTS
The obligee and the obligor entered into an agreement under which the obligor agreed to purchase from the obligee the assets of a business, together with the assumption of certain of the business's liabilities. The note was due in two installments. The obligor never made any cash payment on the note. The obligee obtained a judgment in its favor for the amount due under the note. The intermediate appellate court reversed that judgment and held that, under the terms of the note, the obligee was required to surrender the note for cancellation in order to receive payment and that because the obligee had not surrendered the original note, the obligor had no duty to pay.

DISCUSSION

  • On further appeal, the court recognized that the dominant element in the case was that the note was non-negotiable. 
  • The court further held that the language in the note was not a condition precedent to payment and that neither in the context of the contract as a whole, nor within the terms themselves, was the creation of a condition so clear that it overcame the preference for interpretation of the language as a covenant.
CONCLUSION
The court reversed the intermediate appellate court's judgment.


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