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Graf v. Hope Building Corp.

Court of Appeals of New York

171 N.E. 884 (1930)

Facts

Hope Building Corporation (Hope) (defendant) owned a property subject to a mortgage held by Joseph Graf. The mortgage contained an acceleration clause stating the entire debt would come due after 20 days of default. Hope’s secretary incorrectly calculated the interest due on one of Hope’s payments. Hope’s president signed a check for an incorrect amount and then left the country on an extended vacation. Hope’s payment was short as a result of the mathematical error. When Hope failed to pay the balance within 20 days, the executors of Graf’s estate (plaintiffs) commenced foreclosure proceedings. There was no one available to sign a check for Hope while the president was out of the country. The trial court dismissed the complaint, and the appellate court affirmed. The executors of Graf’s estate appealed.

Rule of Law

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Issue

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Holding and Reasoning (O’Brien, J.)

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Dissent (Cardozo, C.J.)

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