The brief
| Citation | 248 N.Y. 86, 161 N.E. 428 (1928) |
|---|---|
| Court and year | New York Court of Appeals, 1928 |
| Procedural posture | John Petterson's executrix sued for breach and recovered the $780 allowance in the lower courts. The Court of Appeals reversed. Judge Lehman dissented. |
| Facts | Pattberg held a bond and third mortgage on Petterson's Brooklyn property. His April 4, 1924 letter offered a $780 reduction if the borrower paid the reduced principal by May 31 and made the scheduled April installment on time. Petterson paid that installment. Later in May, Petterson arrived at the lender's house and announced that he had come to pay off the mortgage. Pattberg said he had sold it before Petterson exhibited the money. Cash was shown only afterward. Pattberg refused to take it. Petterson had agreed to sell the land free of the mortgage. He ultimately paid the new holder without the promised discount. |
| Issue | Was the offer withdrawn before Petterson performed the requested act of acceptance? |
| Rule | Under the rule applied by this majority, an offer requesting an act rather than a return promise remained revocable before the requested performance. Notice that the mortgage had been sold withdrew the discount offer before Petterson tendered payment. |
| Holding | The majority held that no discount contract formed because the offer was withdrawn before tender. It reversed the judgments below and dismissed the complaint. |
What counted as performance before withdrawal
The majority identified the requested act as early payment of the reduced principal, so an intention to pay or a promise to do so later did not complete the exchange it understood Pattberg to have offered. Traveling to the house was insufficient. Announcing the purpose of the visit was insufficient too. The lender withdrew before tender.
The court stopped at that sequence. Kellogg went further in his own discussion, suggesting that even a completed tender would not suffice without payment, but expressly identified the tender-first situation as a question not before the court for decision. That personal view was not the holding. Changing the order of withdrawal and tender therefore changes an issue the majority had left open.
Lehman dissented, with Andrews joining him. He understood the undertaking to accept payment as inviting a present offer backed by the ability and intention to pay, which made the borrower's conduct more than a mere promise of future performance. The lender's refusal then mattered to the consideration analysis. In Lehman's view, Pattberg could not rely on a failure to pay that his own refusal had produced.
Performance, preparation and reliance
Compare Restatement (Second) of Contracts § 45: beginning or tendering the invited performance can create an option that prevents revocation. Preparation is not necessarily performance.
Ragosta v. Wilder applies that distinction to obtaining financing, while leaving a separate promissory-estoppel question for remand. It does not establish that Petterson would win in every jurisdiction today.
Financing and a tender-first sequence
Before the lender withdraws, the borrower obtains financing but has neither tendered payment nor begun the requested payment. Does obtaining the loan alone create a § 45 option?
Show the analysis
No, if obtaining financing is only preparation rather than part of the performance the offer invites. Ragosta makes that distinction. A separate reliance claim requires its own analysis; the lack of a § 45 option does not resolve it.
The borrower makes a complete tender before learning that the mortgage has been sold. Does the Petterson majority squarely decide the result?
Show the analysis
No. The majority said that sequence was not before it. Kellogg expressed a personal view about completed payment, but the court did not decide the tender-first question. Analyze the governing acceptance rule instead of treating that additional discussion as a holding.
Locating the holding and the reserved question
Identify precisely what the offer requests and place the events in order: announcement, withdrawal, then displayed cash. Separate the majority's narrow timing holding from the writer's additional view and the dissent's interpretation of the requested act.
Quick answers
Did Petterson decide what happens after tender?
No. Withdrawal preceded tender on the facts decided. Kellogg discussed a tender-first scenario but expressly said it was not before the court.
The invited act in Lehman's dissent
Which statement accurately identifies Lehman's dissent in Petterson?
Answer and explanations
Correct answer: C.
Authority: Petterson report: majority, personal observation and Lehman dissent
- A. The court said the tender-first sequence was not before it. Kellogg expressed a personal view about requiring completed payment, but that additional discussion was not the majority's holding or Lehman's rationale.
- B. Lehman described a present offer backed by ability and intention to pay. Replacing that with an unsupported promise of future payment loses the feature on which his analysis relied.
- C. The dissent understood the promise to accept payment as inviting this present offer. Lehman objected to treating the lender's refusal as the reason the borrower lacked the consideration necessary to enforce the discount promise.
- D. This assigns the majority's conclusion to the dissent. Lehman challenged the use of the lender's refusal as the reason the borrower had failed to complete the payment exchange.