text:
    Oliver R. Grace, Appellant, v Michael C. Nappa, Respondent, et al., Defendants.
    Argued February 14, 1979;
    decided March 29, 1979

      POINTS OF COUNSEL

      Irving Bizar and Aaron Lewittes for appellant.
    I. Defendant vendor breached material conditions of the contract: although time was of the essence, he was not able to deliver at the closing, the marketable, insurable title bargained for. (Lese v Lamprecht, 196 NY 32; Cohen v Kranz, 12 NY2d 242; Delegated Props, v Lewis, 36 AD2d 766; Kaplan v Scheiner, 1 AD2d 329; Roberts v New York Life Ins. Co., 195 App Div 97, 233 NY 639; Friedman v Fishbein, 215 App Div 174; Reizen v Larkin Lbr. Co., 133 Misc 755; Shelton v Kipper, 14 AD2d 406; Bigler v Morgan, 77 NY 312; Smyth v Sturges, 108 NY 495.) II. The new findings made by the majority were against the weight and preponderance of the evidence. Trial Term’s findings should be reinstated. (Exchange Bakery & Rest, v Rifkin, 245 NY 260; York Mtge. Corp. v Clotar Constr. Corp., 254 NY 128; Aerated Prods. Co. of Buffalo v Godfrey, 290 NY 92; Matter of City of New York [Schurz Ave. — Title Guar. & Trust Co.], 2 NY2d 859; Boyd v Boyd, 252 NY 422; Forster v Manufacturers Trust Co., 267 NY 371; Smith v Smith, 273 NY 380.)

      John M. Armentano and Samuel S. Tripp for respondent.
    I. In exercising its power to review the determination below, this court should choose the findings of fact made by the court below. (Braiman v Braiman, 44 NY2d 584; Tibbetts Contr. Corp. v O & E Contr. Co., 15 NY2d 324; Bernardine v City of New York, 294 NY 361; People ex rel. MacCracken v Miller, 291 NY 55; Aerated Prods. Co. of Buffalo v Godfrey, 290 NY 92.) II. The performance which was tendered by Nappa at the closing was a reasonable alternative to the reduction certificate and should have been accepted by plaintiff. (Aron v Gillman, 309 NY 157.) III. Because Grace in bad faith rejected the substitutes (the new mortgage and the escrow), the findings of the court below should be affirmed and this court should direct specific performance in favor of Nappa. (Simonds

      v Simonds, 45 NY2d 233; Simon v Etgen, 213 NY 589; Marino v Nolan, 24 AD2d 1005, 18 NY2d 627; Harris v Shorall, 230 NY 343; Oppenheimer v Humphreys, 125 NY 733; Campbell v Prague, 6 App Div 554; Greenfield v Mills, 123 App Div 43; Morrow v Constantino, 4 AD2d 769; Baltimore Realty Corp. v Alman, 282 App Div 714; Kjellgren Realty Corp. v Galop, Inc., 13 AD2d 789.) IV. Nappa was entitled to a reasonable opportunity to supply the physical certificate of reduction, even though time was of the essence. (Matter of Baylies, 248 App Div 217; Cheney v Libby, 134 US 68; Patchogue Field Club v Davis, 237 App Div 890.) V. Nappa did not breach the contract. (Hencken v Edelman, 19 AD2d 821; Voccia v Pleasure Boat Co., 239 App Div 165, 264 NY 656; Soundwall Constr. Corp. v Moncarol Constr. Corp., 56 Misc 2d 892.) VI. The mortgage is not "ambiguous”. VII. Nappa presented such proof of the outstanding balance of the mortgage that a reasonable person could confidently perform his side of the agreement secure in the knowledge that he was buying a house on the terms to which he had agreed. VIII. The addition of a fifth Justice who did not hear oral argument by the court below without notice to the parties was proper.
   OPINION OF THE COURT

Chief Judge Cooke.

In this action, plaintiff seeks to recover a $52,500 down payment on certain real property, together with the reasonable costs of a title search. Defendant counterclaims for specific performance of the real property contract. Initially, Special Term had granted summary judgment to plaintiff, but the Appellate Division found that a question of fact precluded such relief and reversed (48 AD2d 922). After trial, Supreme Court ruled in favor of plaintiff and dismissed the counterclaim. On a second appeal, the Appellate Division again reversed, dismissed plaintiffs action and remitted for trial of the counterclaim. Subsequently, the Appellate Division granted leave to appeal to our court and certified the following question for review: "Was the order of this court dated May 29, 1978 properly made?”

The issue which we are called upon to review is whether defendant sufficiently complied with a contractual provision requiring him to furnish a recordable mortgage "estoppel certificate” to establish the outstanding balance of a mortgage encumbering the subject real property.

There should be a reversal. Where a search of the title reveals an undischarged mortgage, a buyer is entitled to compliance with a contract provision requiring the seller to produce a certificate, in recordable form, demonstrating the outstanding balance of the mortgage accompanied by other pertinent information. Absent such certificate or tender of an acceptable substitute, the vendee cannot be forced to close title to the property. Only in such fashion may the vendee be assured of receiving the title detailed in the contract, freed of the spectre of future litigation.

Oliver Grace, the. plaintiff, entered into a contract with defendant Nappa to purchase certain real property. Upon execution, plaintiff paid defendant $52,500 with $333,981.50 payable on closing. Additionally, plaintiff was to take the premises subject to a mortgage in the amount of $138,518.49. The contract obligated defendant to produce a certificate "executed and acknowledged by the holder of such mortgage and in form for recording, certifying as to the amount of the unpaid principal and interest thereon, date of maturity thereof and rate of interest thereon”. The parties chose specifically to make time "of the essence as against both the Seller and Purchaser”.

Having failed to obtain the estoppel certificate by law day, defendant attempted to prove the outstanding balance of the mortgage by producing canceled checks and an amortization schedule. To explain his failure to procure the certificate, defendant also produced a letter from the mortgagee which indicated, among other things, that the latter did not personally consider the mortgage to be "in good standing”. Not satisfied with the substitute, plaintiff steadfastly refused to accept anything other than the estoppel statement and refused defendant’s requests for an adjournment of closing. At the meeting set for closing, according to defendant’s attorney, his client offered to satisfy the existing mortgage on the parcel and take back a purchase-money mortgage on the same terms. Defendant did not actually pay off the outstanding mortgage and deliver or record a satisfaction piece, nor did he tender a purchase-money mortgage and demand that plaintiff accept a conveyance. As another alternative, defendant suggested placing a sum of money in escrow, but no tender of performance was made. Other alternatives were discussed, none of which met with plaintiff’s approval and finally the closing was aborted.

Later that same day, defendant’s attorney contacted plaintiffs attorney suggesting yet another proposal which again did not satisfy plaintiff. Plaintiff informed defendant that he considered the matter ended, and indicated his desire to renegotiate the contract. When defendant refused to return the down payment, this action emerged.

Following trial, Supreme Court found for plaintiff, reasoning that defendant had not complied with the estoppel certificate requirement, and had proposed no substitute performance which could have been completed on law day. On reversal, the Appellate Division held that a “reasonable purchaser” would have accepted the canceled checks and amortization schedule as adequate evidence of the mortgage balance. It further held that there was no proof that defendant’s proposals could not be implemented on the date of closing, and concluded that plaintiff was bound “to accept adequate proof of the balance of the mortgage, since he was buying real property, not an estoppel certificate”.

Generally, parties to the sale of real property, like signatories of any agreement, are free to tailor their contract to meet their particular needs and to include or exclude those provisions which they choose. Absent some indicia of fraud or other circumstances warranting equitable intervention, it is the duty of a court to enforce rather than reform the bargain struck (see, e.g., Laba v Carey, 29 NY2d 302, 308; Abrams v Thompson, 251 NY 79, 86). It is this fundamental principle which controls our disposition of the present case.

When a provision that time is to be of the essence is inserted in a real property contract, the date established as the law day takes on especial significance. Ordinarily, the law will allow the vendor and vendee a reasonable time to perform their respective obligations, regardless of whether they specify a particular date for the closing of title (see, e.g., Cohen v Kranz, 12 NY2d 242; Taylor v Goelet, 208 NY 253). When there is a declaration that time is of the essence, however, each party must tender performance on law day unless the time for performance is extended by mutual agreement (see, e.g., Rhodes v Astro-Pac, Inc., 41 NY2d 919, affg 51 AD2d 656; Kotcher v Edelblute, 250 NY 178, 184; Kaplan v Schemer, 1 AD2d 329, 330). In the instant case, therefore, plaintiff was well within his rights when he refused to consent to an adjournment of the closing and instead insisted upon immediate performance of defendant’s obligations. Once the closing was aborted, moreover, it was not necessary for plaintiff to entertain further proposals from defendant, for if defendant had failed to satisfy a material element of the contract, he was already in default (see Isse Realty Corp. v Trona Realty Corp., 17 NY2d 763, affg 24 AD2d 1000).

Without doubt, defendant did not comply with the contract insofar as it required a particularized mortgage estoppel instrument. In our opinion, this constituted a material breach of the contract, giving rise to a right of rescission on the part of the purchaser (see, generally, Wates v Crandall, 2 AD2d 715; McAndrew v Lanphear, 280 App Div 6). The importance of the estoppel certificate, and the materiality of defendant’s breach, is aptly illustrated by the decision in Oppenheimer v Humphreys (125 NY 733, affg 9 NYS 840). There, the search revealed a mortgage on the property in the principal sum of $22,000, with interest at 7%. By contrast, the contract identified the debt as $16,000, at 5% interest. At the time set for the passing of title, the vendee declined to close without an estoppel letter, citing the discrepancy between the contract and recorded mortgage. In an attempt to resolve the impasse, the vendors proposed various alternatives, including an offer to satisfy the outstanding mortgage and take back a purchase-money mortgage, all of which the purchaser rejected.

Although not expressly required by the contract of sale, the lower court held that the vendee was entitled to a recordable estoppel certificate: "He was entitled to demand, if the mortgage had been reduced to the extent claimed, such evidence of the fact as would enable him to spread the same upon the record, so that * * * the records would show precisely the extent to which the mortgage was a lien, and it does not seem that anything less than this would satisfy the requirements of the law” (9 NYS, at p 841, supra). Without such a certificate, the court stated, the purchaser would not possess clear record title and would run the risk of future litigation as to the amount of the mortgage. On appeal, this court affirmed on the opinion below (125 NY 733, 734, supra).

In light of Oppenheimer, it can hardly be said that a specific provision entitling the vendee to an estoppel certificate is not a material term of the contract. Indeed, the soundness of this conclusion is underscored by the circumstances of the instant case. At the closing, defendant produced a letter in which the mortgagee, his hostility to the vendor thinly veiled, stated that he did not consider the mortgage in good standing. From this plaintiff could have anticipated, quite reasonably, that litigation with respect to the mortgage would ensue. To compel a buyer to accept a conveyance in such a situation would be tantamount to forcing him to purchase a lawsuit. Our law wisely holds that a "vendee has the right to a title that will enable him to hold his land in peace, and to be reasonably sure that no flaw or doubt will arise to affect its marketable quality and value” (Acme Realty Co. v Schinasi, 215 NY 495, 506). So long as a reasonable likelihood of litigation exists, the buyer is not required to consummate the transaction (see, e.g., Regan v Lanze, 40 NY2d 475; Laba v Carey, 29 NY2d 302, supra; Brokaw v Duffy, 165 NY 391). Obviously, the requirement of an estoppel certificate took on an essential character in this case.

Defendant’s failure to provide the certificate was thus a material breach of the contract, excusing plaintiff’s performance (see, e.g., 3A Corbin, Contracts, §§ 663, 665) and giving him the right to recover his down payment and the reasonable cost of a title search (see, e.g., McAndrew v Lanphear, 280 App Div 6, supra). Since defendant did not tender performance of the substitute proposals and demand that plaintiff proceed to close title, his mere statement or offer of substitute performance was insufficient to put plaintiff in default (Oppenheimer v Humphreys, 9 NYS 840, 841-842, affd 125 NY 733, supra; cf. Cohen v Kranz, 12 NY2d 242, 246, supra). We need not grapple with the academic question of whether actual performance of one or more of defendant’s proposals would have been adequate to fulfill his contractual obligation.

In sum, since defendant materially breached the contract of sale, he may not be awarded specific performance, and plaintiff is entitled to prevail in his action for return of the down payment. This result flows from the provisions which the parties included in their compact.

The order of the Appellate Division should be reversed, with costs, and the judgment of the Supreme Court, Nassau County reinstated. The certified question is answered in the negative.

Judges Jasen, Gabrielli, Jones, Wachtler and Fuchsberg concur with Chief Judge Cooke.

Order reversed, etc.


source: Caselaw Access Project

author: Jones, J.

license: Public Domain

text:
    Mineola Union Free School District, Appellant, v Mineola Teachers Association, Respondent.
    Argued February 13, 1979;
    decided March 29, 1979

      POINTS OF COUNSEL

      Henry A. Weinstein for appellant.
    I. The relief sought in arbitration is prohibited by statute, decisional law and public policy. II. The arbitration claims herein are not authorized by the terms of the Taylor Law. (Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509.

      Thomas Sheehan for respondent.
    I. The mere possibility that an award might later be subject to being set aside on public policy grounds does not justify a stay. II. No public policy, however derived, inhibits this arbitration demand. (Matter of Susquehanna Val. Cent. School Dist. at Conklin [Susquehanna Val. Teachers’ Assn., 37 NY2d 614; Matter of Port Washington Union Free School Dist. v Port Washington Teachers Assn., 45 NY2d 746.)
   OPINION OF THE COURT

Jones, J.

The submission of the present dispute between the parties — as to the extent of the obligation of the school district to make payroll deductions to cover membership dues owed to the association — is both authorized by the Taylor Law and embraced within the scope of their arbitration agreement.

The collective bargaining agreement between the association and the district contained two provisions which are pertinent for present purposes. Article IV, entitled "Professional Association Membership Dues Deductions” provides: "4.01 Teachers may in the first week of any month during a payroll period sign and deliver to the Board an assignment authorizing deduction of membership dues, in accordance with the form annexed to this Agreement as Appendix K.” The scope-of-arbitration provision is found in paragraph a of section 31.05 of which provides: "For purposes of arbitration a grievance between the parties signatory to this Agreement is defined as any controversy or dispute as to the meaning, interpretation or application of any provision of this Agreement.”

Differences arose between the association and the district with respect to the obligation of the latter under section 4.01 to deduct and transmit association dues allegedly owed by teachers whose employment had been terminated. The parties proceeded through the prescribed grievance procedures. No resolution having thus been reached, the association served a demand for arbitration, whereupon the district promptly applied for a stay of arbitration under CPLR 7503 (subd [b]). Special Term granted the stay, the Appellate Division reversed, and the district has appealed as of right to our court (CPLR 5601, subd [a], par [ii]).

Our consideration proceeds at two levels (Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509, 513). First, we must determine whether the Taylor Law (Civil Service Law, art 14) authorizes arbitration of the subject matter of the association’s claim — payroll deduction of membership dues owed the association by the teachers. It is at this branch of our consideration that the district aims its heavy fire, contending that in this instance the association’s claim falls outside the permissible scope of arbitration.

The district’s position is grounded in its assertion that to require it to make payroll deductions under the applicable section of this particular collective bargaining agreement would run afoul of the provisions of, or at least the policy expressed in, section 93-b of the General Municipal Law. Subdivision 1 of that section provides: "The fiscal or disbursing officer of every municipal corporation or other civil division or political subdivision of the state is hereby authorized to deduct from the wage or salary of any employee of such municipal corporation or civil division or political subdivision of the state such amount that such employee may specify in writing filed with such fiscal or disbursing officer for the payment of dues in a duly organized association or organization of civil service employees and to transmit the sum so deducted to the said association or organization. Any such written authorization may be withdrawn by such employee or member at any time by filing written notice of such withdrawal with the fiscal or disbursing officer.”

The district points out that the payroll deduction authorization form, Appendix K, incorporated by reference in section 4.01 of the collective bargaining agreement between these parties provides that every such authorization "shall remain in full force and effect for all purposes and shall be continuous * * * until withdrawn by written notice between September 1 and September 15 of any given year”. It is argued that this stringent limitation on the right of withdrawal collides with the last sentence of subdivision 1 of section 93-b. The conclusion is then drawn that to seek enforcement of a payroll deduction section containing this offending restriction would be to violate the statute and the public policy it is said to manifest.

We reject this contention. Initially we observe that arbitration is foreclosed only when it "contravenes a strong public policy, almost invariably involving an important constitutional or statutory duty or responsibility”; "[i]ncantations of 'public policy’ may not be advanced to overturn every arbitration award that impairs the flexibility of management of a school district” (Matter of Port Jefferson Sta. Teachers Assn. v Brookhaven-Comsewogue Union Free School Dist., 45 NY2d 898, 899). Arbitration of the present claim will in no way offend statute or policy. The statute expressly authorizes payroll deduction for association dues. To the suggestion that the statute may also be said to reflect a policy that teachers should have an unfettered right to withdraw payroll deductions at any time, whereas the present bargaining agreement restricts such withdrawal to the first 15 days of September in each year, there are two responses. The provision and any policy of the statute with respect to freedom of withdrawal are evidently for the benefit of the teachers and not the school district. In any event there could be no flouting of such policy in this instance inasmuch as no issue is raised as to the right of withdrawal or any restriction thereon. No teacher seeks or has been denied such right, nor does either the school district or the association seek to submit any question with respect thereto to arbitration. It would be immaterial to the present arbitration if it were to be assumed that the present restriction as to authorization withdrawal were to be deemed invalid.

Accordingly we conclude that submission to arbitration of the subject matter of the association’s claim is authorized under the Taylor Law.

We proceed then to the second level of consideration— whether such authority was exercised and whether the particular agreement to arbitrate extends to this dispute. The scope-of-arbitration provision in paragraph a of section 31.05 is very broad, embracing "any controversy or dispute as to the meaning, interpretation or application of any provision of this Agreement”. The association’s claim is predicated on the provisions of section 4.01 of that agreement. Thus, we conclude that "the parties did agree by the terms of their particular arbitration clause to refer their differences in this specific area to arbitration”. (Matter of Acting Supt. of Schools of Liverpool Cent. School Dist. [United Liverpool Faculty Assn.], 42 NY2d 509, 513, supra).

Inasmuch as we conclude that the arbitration sought by the association should proceed, we refrain from addressing or even describing the substantive aspects of the particular dispute between the association and the district (CPLR 7501).

For the reasons stated, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Cooke and Judges Jasen, Gabrielli, Wachtler and Fuschberg concur with Judge Jones.

Order affirmed.


author: Chief Judge Cooke.

text:
    Fifty States Management Corporation, Appellant, et al., Plaintiff, v Pioneer Auto Parks, Inc., et al., Respondents, et al., Defendant.
    Argued February 13, 1979;
    decided March 29, 1979

      POINTS OF COUNSEL

      Frank J. Bona and Francis X. Murphy for appellant.
    I. Honest mistake or excusable neglect is no defense to acceleration of rent. (Graf v Hope Bldg. Corp., 254 NY 1; First Nat. Stores v Yellowstone Shopping Center, 21 NY2d 630; Noyes v Anderson, 124 NY 175; Weirfield Holding Corp. v Pless & Seeman, 257 NY 536; W. F. M. Rest, v Austern, 35 NY2d 610.) II. The refusal to pay the September rent was a willful default which also warrants acceleration of rent, as alleged in the amended and supplemental complaint. (20 East 74th St. v Minskoff, 308 NY 407; Chemical Bank v Wasserman, 37 NY2d 249; Bright Radio Labs. v Coastal Commercial Corp., 4 AD2d 491; DFI Communications v Greenberg, 51 AD2d 403; Weirfield Holding Corp. v Pless & Seeman, 257 NY 536.) III. The

      cases of Graf v Hope Bldg. Corp. (254 NY 1) and Belnord Realty Co. v Levison (204 App Div 415) are the authority for and are not distinguishable from the case at bar. (Belnord Realty Co. v Levison, 204 App Div 415; Rentways v O’Neill Milk & Cream Co., 308 NY 342; Conditioner Leasing Corp. v Sternmor Realty Corp., 17 NY2d 1.)

      James T. Duggan for respondents.
    I. Inequity, a slight and unimportant default is sufficient to prevent enforcement of a clause for acceleration of rent. (Graf v Hope Bldg. Corp., 254 NY 1; W. F. M. Rest. v Austern, 35 NY2d 612; J. N. A. Realty Corp. v Cross Bay Chelsea, 42 NY2d 392.) II. The acceleration clause constitutes a forfeiture. (Douglas v Knickerbocker Life Ins. Co., 83 NY 492; Merchants Bank of New Haven v Bliss, 35 NY 412; Colon v Lisk, 153 NY 188.) III. The Graf, Belnord and Yellowstone cases are distinguishable and inapposite to the issues herein. (Graf v Hope Bldg. Corp., 254 NY 1; Belnord Realty Co. v Levison, 204 App Div 415; First Nat. Stores v Yellowstone Shopping Center, 21 NY2d 630.)
   OPINION OF THE COURT

Chief Judge Cooke.

The question posed on this appeal is whether equity will intervene to prevent enforcement of a provision in a 20-year lease between commercial parties providing for the acceleration of the rent due for the entire lease term upon the tenant’s default in the payment of a monthly rental installment. Reasoning that enforcement of the acceleration clause would exact an unconscionable forfeiture, the Appellate Division affirmed the dismissal of the landlord’s complaint by Supreme Court, Erie County.

There should be a reversal. By failing to tender payment of two monthly rental payments or even offering to cure the default, defendant tenant was in willful breach of a material term of the lease. As the tenant is entitled to possession of the demised premises upon payment of the rent reserved for the balance of the lease term (as well as continued performance of other covenants of the lease) and there is no claim of fraud or exploitive overreaching on the part of the plaintiff in compelling performance of its bargained-for right, the agreement of the parties must be enforced in accordance with its terms.

Fifty States Management Corp. (referred to variously as "Fifty States” and "landlord”) and Pioneer Auto Parks, Inc. (referred to variously as "Pioneer” and the "tenant”), entered into a 20-year lease of commercial property located in Buffalo in 1972. In return for possession, Pioneer covenanted to make rental payments the first of each month throughout the term of the lease. To secure these payments, Fifty States insisted that Pioneer supply a financially responsible guarantor. It also bargained for and received a clause in the lease giving it the option of accelerating future rent due for the balance of the lease term following default in the payment of a monthly installment from which the frequent provisions requiring the landlord to give formal notice of default and granting the tenant a grace period within which to cure its default were conspicuously absent. Defendant Lyon executed and delivered to Fifty States an instrument in which he unconditionally guaranteed the payment of rent fixed and the performance by Pioneer of all terms and conditions of the lease.

No claim has been made that the acceleration clause is boilerplate, unknowingly assented to by the tenant as a result of its being compelled to enter into a contract of adhesion. Indeed, there is nothing in the record which detracts from the conclusion that the clause was anything but the result of intensive negotiations between commercial parties of equal bargaining strength.

The first three rental payments were timely made. However, the check covering the August, 1973 rent was never received by the landlord. The envelope containing the check was incorrectly addressed and was returned to the tenant while its president was on vacation. During that period, however, Pioneer was on notice that the check had not been delivered. Fifty States informed Pioneer’s president that there had been no receipt of the August rental payment and the guarantor inquired of him the reason tenant failed to make payment as required by its lease. On August 20, 1973, the parties met in Buffalo to discuss the problem. When there was no tender of payment by Pioneer, its president was served with a summons and complaint seeking acceleration of the rent payments in accordance with the terms of the lease. The complaint was subsequently amended to reflect the fact that tenant also failed to pay the following month’s rent.

Pioneer resists enforcement of the acceleration clause on the ground that it constitutes a penal forfeiture, long disfavored by equity. It is true that equity will often intervene to prevent a substantial forfeiture occasioned by a trivial or technical breach (see J. N. A. Realty Corp. v Cross Bay Chelsea, 42 NY2d 392, 397-398; Noyes v Clark, 7 Paige 179). To permit literal enforcement of an instrument in such circumstances, it is reasoned, is to elevate the nonperformance of some collateral act into the cornerstone for the exaction of a penalty (5 Pomeroy, Equity Jurisprudence [5th ed], § 455a). Similarly, equity may relieve against the effect of a good faith mistake, promptly cured by the party in default with no prejudice to the creditor to prevent unconscionable overreaching (Graf v Hope Bldg. Corp., 254 NY 1, 13 [Cardozo, Ch. J., dissenting]; 5 Pomeroy, Equity Jurisprudence [5th ed], § 440a; cf. W.F.M. Rest. v Austern, 35 NY2d 610, 614). And, of course, equity abhors forfeitures and courts will examine the sum reserved under an instrument as liquidated damages to insure that it is not disproportionate to the damages actually arising from the breach or designed to coerce the performance of a party (Wirth & Hamid Fair Booking v Wirth, 265 NY 214, 223; Ward v Hudson Riv. Bldg. Co., 125 NY 230, 235; cf. Uniform Commercial Code, § 2-718, subd [1]).

Thus, in rare cases, agreements providing for the acceleration of the entire debt upon the default of the obligor may be circumscribed or denied enforcement by utilization of equitable principles. In the vast majority of instances, however, these clauses have been enforced at law in accordance with their terms (e.g., First Nat. Stores v Yellowstone Shopping Center, 21 NY2d 630, 638, mot for rearg den 22 NY2d 827; Conditioner Leasing Corp. v Sternmor Realty Corp., 17 NY2d 1, 4; 5 Pomeroy, Equity Jurisprudence [5th Ed], § 439; Rasch, New York Landlord and Tenant [2d ed], § 376). Absent some element of fraud, exploitive overreaching or unconscionable conduct on the part of the landlord to exploit a technical breach, there is no warrant, either in law or equity, for a court to refuse enforcement of the agreement of the parties. Here, Pioneer points to no circumstances which would justify relieving it of the consequences of its bargain and subsequent default.

Generally, where a lease provides for acceleration as a result of a breach of any of its terms, however trivial or inconsequential, such a provision is likely to be considered an unconscionable penalty and will not be enforced by a court of equity. For example, a clause authorizing acceleration for failure to comply with a covenant collateral to the primary obligation of the tenant is generally held to constitute a forfeiture, for the damages reserved in the lease are disproportinate to any loss which could possibly accrue to the landlord (see Seidlitz v Auerbach, 230 NY 167, 173; 884 West End Ave. Corp. v Pearlman, 201 App Div 12, affd 234 NY 589). A covenant to pay rent at a specified time, however, is an essential part of the bargain as it represents the consideration to be received for permitting the tenant to remain in possession of the property of the landlord. Often the landlord relies on timely payment of rent to meet its own outstanding obligations, such as a mortgage on the demised premises. Thus, an acceleration clause, so common in other commercial transactions, is merely a device in the landlord-tenant relationship intended to secure the tenant’s obligation to perform a material element of the bargain and its enforcement works no forfeiture. This, of course, presumes that the sum reserved for liquidated damages is no greater than the amount the tenant would have paid had it fully performed and that the tenant would be entitled to possession upon payment (see, generally, McManus, The Enforcement of Acceleration Clauses in New York, 8 NYLF 466; Ann., 104 ALR 223, Provisions by Which Upon Breach of Contract the Entire Amount Remaining Unpaid Thereon Shall Become Immediately Due as One for Penalty or for Liquidated Damages).

There can be no claim that the sum reserved under the acceleration clause here bears no relationship to the damages sustained by landlord as a result of the breach. The clause is nothing more than a bargained-for device which seeks to insure the performance of a material element of the obligation of the tenant and fixes the damages for its breach. Upon failure to tender a rental payment, the landlord was merely afforded its contractual option to receive the rental payments reserved for the remainder of the lease term as a condition of defendant’s continued occupancy. While it is true, as Pioneer maintains, that it will lose interest on the money advanced, this factor alone is no more effective in creating a penalty than the parties contracting to receive the entire rent at the beginning of the lease term (Belnord Realty Co. v Levison, 204 App Div 415, 417).

It may very well be that since the initial failure to tender timely payment of the August rent was due to clerical error, equitable relief would have been available to Pioneer had its default been immediately cured upon discovery of the error in the absence of prejudice to plaintiff (see Graf v Hope Bldg. Corp., 254 NY 1, 12-14 [Cardozo, Ch. J., dissenting], supra; 100 Eighth Ave. Corp. v Morgenstern, 4 AD2d 754). In such a case, the failure of the landlord to accept a cure for a trifling mistake without prejudice to himself and then seek enforcement of the acceleration clause would be at least exploitive and, perhaps, unconscionable (see Giles v Austin, 62 NY 486, 493-494; cf. Jones v Gianferante, 305 NY 135, 138). But Pioneer made no attempt to cure its default after being notified by both its guarantor and the landlord that the August rent had not been received. Rather, it blithely sat by and exacerbated the effects of its willful breach by purposely failing to tender the rent due the following month. It would be a perversion of equitable principles to relieve a party of the impact of its intentional default.

In sum, the facts of this case do not justify equitable intervention. The parties freely bargained for the inclusion of a clause in their lease whereby the rent for the remainder of the lease term would be accelerated upon breach of tenant’s covenant to pay rent. The landlord was not required to give formal notice of default to trigger the acceleration clause, nor was the tenant given a grace period within which to cure it. Notwithstanding the lack of ameliorative provisions in the lease, Fifty States did send Pioneer notice of its default and went so far as to arrange a meeting between the parties at which the default could have been readily cured. That honoring at least this aspect of its "bargain may cause Pioneer fiscal hardship does not, standing alone, serve as a basis for construing the acceleration clause as a penalty under the guise of applying equitable principles to a routine commercial transaction.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the case remitted to Supreme Court, Erie County for a determination of the amount due appellant under the lease in accordance with this opinion.

Judges Gabrielli, Jones, Wachtler and Fuchsberg concur with Chief Judge Cooke; Judge Jasen taking no part.

Order reversed, with costs, and the case remitted to Supreme Court, Erie County for further proceedings in accordance with the opinion herein.


author:
      Per Curiam.
     Jones, J.

text:
    Frank D. Gilroy, Respondent, v American Broadcasting Company, Inc., et al., Appellants.
    Argued February 7, 1979;
    decided April 3, 1979

      POINTS OF COUNSEL

      Philip R. Forlenza, Clarence Fried and Rafael pastor for American Broadcasting Company, Inc., and others, appellants.
    I. Having failed to prove any damages by competent, nonspeculative evidence, plaintiff may only recover nominal damages. (Freund v Washington Sq. Press, 34 NY2d 379; Hewlett v Caplin, 275 App Div 797; Broadway Photoplay Co. v World Film Corp., 225 NY 104; Bernstein v Meech, 130 NY 354; Carnera v Schmeling, 236 App Div 460; Cutting v Miner, 30 App Div 457; Moss v Tompkins, 144 NY 659; Lippincott Co. v Lasher, 430 F Supp 993; Baker v Hart, 123 NY 470; Slingerland v International Contr. Co., 169 NY 60; American Electronics v Neptune Meter Co., 33 AD2d 157.) II. In a field preempted by Federal copyright law, plaintiff had no right to invoke State law by claiming unfair competition and misappropriation. (Holmes v Hurst, 174 US 82; Dellar v Samuel Goldwyn, Inc., 150 F2d 612, 327 US 790; Detective Comics v Bruns Pub., Ill F2d 432; Warner Bros. Pictures v Columbia Broadcasting System, 216 F2d 945, 348 US 971; Tralins v Kaiser Aluminum & Chem. Corp., 160 F Supp 511; Gantz v Hercules Pub. Corp., 15 Misc 2d 1061; Matter of Hemingway v Random House, 53 Misc 2d 462, 23 NY2d 341; De Silva Constr. Corp. v Herrald, 213 F Supp 184; Sinatra v Goodyear Tire & Rubber Co., 435 F2d 711; Hebrew Pub. Co. v Scharfstein, 288 NY 374.)

      Stephen F. Huff and Sandra L. Grayson for Four Star International, Inc., and another, appellants.
    I. Since there is no evidence to support the award of the court below, plaintiff should only recover nominal damages. (Hewlett v Caplin, 275 App Div 797, 301 NY 591; Freund v Washington Sq. Press, 34 NY2d 379; Broadway Photoplay Co. v World Film Corp., 225 NY 104; Wakeman v Wheeler & Wilson Mfg. Co., 101 NY 205;
      Story Parchment Co. v Paterson Parchment Paper Co., 282 US 555; Sheldon v Metro-Goldwyn Pictures Corp., 106 F2d 45, 309 US 390; G.R.F., Inc. v Board of Assessors of County of Nassau, 41 NY2d 512; Dunkel v McDonald, 272 App Div 267, 298 NY 586; Alexander’s Dept. Stores v Ohrbach’s, Inc., 269 App Div 321; Eastman Kodak Co. of N. Y. v Southern Photo Materials Co., 273 US 359.) II. The court below erred in awarding preverdict interest. (Brandt Corp. v Warren Automatic Controls Corp., 37 AD2d 563.) III. Any remand for a new trial should include the issues of liability and defendants’ cross claims. (Del Cerro v City of New York, 46 AD2d 898; Aetna Cas. & Sur. Co. v Garrett, 37 AD2d 750; Wessel v Krop, 30 AD2d 764.)

      Robert Ehrenbard, Charles E. McTiernan, Jr., and Arthur R. Lehman for respondent.
    I. The evidence was ample to support the jury verdict. (Story Parchment Co. v Paterson Parchment Paper Co., 282 US 555; Wakeman v Wheeler & Wilson Mfg. Co., 101 NY 205; Randall-Smith, Inc. v 43rd St. Estates Corp., 17 NY2d 99; Jones Co. v Burke, 306 NY 172; MacGregor v Watts, 254 App Div 904; Myers v Sea Beach Ry. Co., 43 App Div 573, 167 NY 581; Matter of Rothko, 43 NY2d 305; Bagley v Smith, 10 NY 489; Kaval Constr. Corp. v State Div. of Human Rights, 39 AD2d 347; Tobin v Union News Co., 18 AD2d 243, 13 NY2d 1155.) II. Plaintiff’s exclusive right in his literary property is protected from infringement under common law. (Sears, Roebuck & Co. v Stiffel Co., 376 US 225; Compco Corp. v Day-Brite Light, 376 US 234; Warner Bros. Pictures v Columbia Broadcasting System, 216 F2d 945; Goodis v United Artists Tel., 425 F2d 397; Matter of Hemingway v Random House, 23 NY2d 341; Chamberlain v Feldman, 300 NY 135; Palmer v De Witt, 47 NY 532; Columbia Broadcasting System v Documentaries Unlimited, 42 Misc 2d 723; Georgie Porgie Co. v Link, 332 F Supp 638; King v Mister Maestro, 224 F Supp 101.) III. The court below correctly awarded Gilroy preverdict interest from June 25, 1967. (Brandt Corp. v Warren Automatic Controls Corp., 37 AD2d 563; Phelps v A. R. Gundry, Inc., 23 AD2d 960; De Long Corp. v Morrison-Knudsen Co., 14 NY2d 346.) IV. This court has the power to and should restore the verdict or remit the case to the court below for further consideration because of pervasive and crucial errors of law. (Miller v Lucey, 223 App Div 567; Lane — Real Estate Dept. Store v Lawlet Corp., 28 NY2d 36; Haefeli v Wordrich Eng. Co., 255 NY 442; Matter of City of New York

      [Fifth Ave. Coach Lines], 18 NY2d 212; O’Neill v New York, Ontario & Western Ry. Co., 115 NY 579; Wood v Webster Paper & Supply Co., 284 App Div 169; Varkonyi v S. A. Empresa De Viacao Airea Rio Grandense [Varig], 22 NY2d 333; Trippe v Trippe, 19 NY2d 944; Matter of Port Auth. Trans-Hudson Corp. [Hudson Rapid Tubes Corp.], 20 NY2d 457.)
   OPINION OF THE COURT

Per Curiam.

Consistent with past practice and explicit statutory prescription, we hold that a final judgment or order which is appealable by virtue of CPLR 5601 (subd [d]) brings up for review only the prior nonfinal order of the Appellate Division which is the predicate for the appeal (CPLR 5501, subd [b]; Matter of Farber v U. S. Trucking Corp., 26 NY2d 44, 55; Buffalo Elec. Co. v State of New York, 14 NY2d 453). The final judgment entered in a court of original instance or an order of the Appellate Division which finally determines an appeal from such a judgment is not itself reviewable on such an appeal, unless that order or judgment, viewed separately, is appeal-able as of right under CPLR 5601 or by leave under CPLR 5602 (CPLR 5501, subd [b]).

The present litigation has followed a long and circuitous path. In 1965, plaintiff commenced this action, claiming that defendants appropriated his literary character, "Amos Burke”, and seeking punitive and compensatory damages. A trial was held in 1972, at which the Trial Judge dismissed the punitive damage claim and ruled that plaintiff was entitled to recover the profits derived from defendants’ use of the Burke character. However, the court refused to admit into evidence plaintiff’s expert testimony as to the market value of the literary property. The parties stipulated to the amount of profits, and both plaintiff and defendant took their first appeals.

Finding that the trial court had applied an improper measure of damages, the Appellate Division modified on the law and facts, and remitted for a new trial on the damage issue (hereinafter "the first Appellate Division order” [see 47 AD2d 728]). In addition, the court held that expert testimony could be introduced to establish the value of the misappropriated property.

At the second trial which followed in 1976, the court again dismissed the punitive damage claim, but submitted the issue of compensatory damages to a jury. A verdict was returned against defendants in the amount of $745,000. An amended judgment was entered thereon, and cross appeals ensued.

On this second appeal, the Appellate Division modified by ordering a new trial, unless plaintiff stipulated to a reduction of the verdict (hereinafter "the second Appellate Division order” [see 58 AD2d 533]). Plaintiff so stipulated in June, 1977 and a judgment for the reduced amount, $100,000, was entered in Supreme Court. Defendants duly filed notices of appeal to this court. As indicated by their briefs, they now seek a review of both the first and second Appellate Division orders.

Whatever the merits of defendants’ arguments, they are for the most part beyond our review. For although the final judgment of Supreme Court entered in June, 1977 is appeal-able to this court, only the first order of the Appellate Division is reviewable. Since defendants’ major contentions are addressed to matters disposed of by the second Appellate Division order, they may not be passed upon by this court.

Critical to our determination is the distinction between appealability and reviewability (see, generally, Cohen and Karger, Powers of the New York Court of Appeals, § 107, p 447). Without doubt, an appeal as of right lies from the final judgment of Supreme Court. But that judgment is not appeal-able in its own right. Rather, it becomes appealable by virtue of CPLR 5601 (subd [d]), under which an aggrieved party may appeal to the Court of Appeals "from a final judgment entered in a court of original instance * * * where the appellate division has made an order on a prior appeal in the action which necessarily affects the judgment * * * and which satisfies the requirements of subdivision (a) [of section 5601] * * * except that of finality” (CPLR 5601, subd [d]). Since the first order of the Appellate Division effected a substantial modification by which defendants were aggrieved, it satisfies the requirements of CPLR 5601 (subd [a]). As a result, the final judgment entered following the second appeal to the Appellate Division is appealable to this court (CPLR 5601, subd [d]).

This is not to say, however, that we may review every question of law which has arisen in the course of the action. To the contrary, our review power on a CPLR 5601 (subd [d]) appeal is narrowly circumscribed and reaches only the prior "non-final determination of the appellate division” upon which the appeal is predicated (CPLR 5501, subd [b]; Matter of Farber v U. S. Trucking Corp., 26 NY2d 44, 55, supra; Matter of Town of Hempstead v Little, 22 NY2d 432, 436; see, also, Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 5601:6, p 499). In the present case, it is the first order of the Appellate Division which serves as the underlying basis for the CPLR 5601 (subd [d]) appeal, and hence that order alone which is reviewable. That defendants now request review of the second order does not give us license to ignore the established limits of our power. Neither does it divest us of power to dispose of that which is properly before us (Buffalo Elec. Co. v State of New York, 14 NY2d 453, 457, supra).

On the merits, defendants make a number of allegations of error with respect to the first Appellate Division order. We have reviewed those contentions and conclude that the order should be affirmed, for the reasons stated in the memorandum at the Appellate Division (47 AD2d 728).

Accordingly, the judgment appealed from should be affirmed, with costs.

Jones, J.

(dissenting). I cannot agree with the disposition made by the majority and am obliged to dissent. In my analysis, while defendants may not appeal to our court as of right from the second order of the Appellate Division (that entered on June 16, 1977), an appeal would lie by permission of our court. I would grant such permission and proceed to a disposition of that appeal on the merits.

A skeletal recitation of the procedural history of this litigation is necessary to an understanding of the posture in which the case now reaches us. Plaintiff asserts that he created the literary character of "Amos Burke”, a millionaire detective in a chauffeured Rolls Royce, the central character in his original screenplay entitled, "Who Killed Julie Greer?”, and that defendants have misappropriated his literary property. At the first trial in January, 1972, at the close of defendants’ case, the trial court dismissed the claim for punitive damages and held that the claim for compensatory damages, although clearly established, would be limited to defendants’ actual profits from the misappropriation. The parties then stipulated that such profits would be $15,000, and on January 28, 1972 a judgment for plaintiff was entered accordingly in Supreme Court, New York County.

On cross appeals, the Appellate Division by order entered March 5, 1975 (the "first Appellate Division order”) modified on the law and on the facts and remanded the case for a new trial only on the issue of damages, both punitive and compensatory (47 AD2d 728). The remand was based on what the Appellate Division concluded was the erroneous limitation of plaintiff’s recovery to defendants’ profits and the related erroneous exclusion of opinion testimony as to the reasonable value to plaintiff of the literary character Amos Burke.

On the second trial in March and April, 1976, the trial court again dismissed the claim for punitive damages and the jury returned a verdict against all defendants for compensatory damages in the amount of $745,000. Judgment was entered in Supreme Court on April 26, 1976 with interest from June 25, 1967. On a postjudgment motion this judgment was amended on October 20, 1976 to direct that interest be computed from January 25, 1975.

Again there were cross appeals. By order entered June 16, 1977 (the "second Appellate Division order”) the Appellate Division modified on the law and the facts and ordered a second new trial as to compensatory damages only unless plaintiff consented to a reduction of the verdict in his favor to $100,000 together with interest from June 25, 1967 and to entry of an amended judgment in accordance therewith, in which event the judgment, as so amended and reduced, was affirmed (58 AD2d 533). On June 30, 1977 plaintiff consented to this reduction and to the entry of the amended judgment. On the same date a third judgment for plaintiff was entered in Supreme Court in the reduced amount.

Defendants thereafter took timely appeals as of right to our court, explicitly reciting in their notices of appeal that they were appealing both from the second order of the Appellate Division and from the subsequently entered third judgment of Supreme Court. The case is presently before us on these appeals.

Examination of the notices of appeal and review of the briefs and oral argument disclose that the unmistakable intention of defendants is to seek our review, and hopefully our reversal, of the second order of the Appellate Division which, while reducing the amount of plaintiffs compensatory damages from the $745,000 figure fixed by the jury, nonetheless sustained a recovery in his favor of over $100,000. It is their argument that the award of damages must be set aside as wholly speculative, although they also deny any liability on an assertion of Federal pre-emption. The threshold question is whether the procedural means employed by them can serve to accomplish their objective; do they have an appeal as of right by means of which they can obtain our review of the second order of the Appellate Division?

In my analysis (quite aside from questions as to its "finality”, a subject shortly to be addressed) defendants have no appeal as of right from the second order of the Appellate Division (CPLR 5601). No such appeal lies under CPLR 5601 (subds [a] or [d]) because, while the order directed a modification in a respect which was both substantial and within the power of our court to review, defendants were not aggrieved thereby. Nor are subdivisions (b) or (c) applicable. Accordingly, were the present appeals by defendants taken to review only the second order of the Appellate Division such appeals would have to be dismissed on the ground that no such appeal lies as of right. There is, however, as the majority observes, an added aspect to the present appeals — it may be taken (because of the contention that common-law liability is precluded by pre-emption of Federal copyright law) that defendants seek review of the first order of the Appellate Division as well. On that basis, as the majority correctly concludes, the appeal, to the extent it seeks review of the first order of the Appellate Division, cannot be dismissed; an appeal does lie as of right. And with respect to such appeal, I, too, would affirm.

My difference with the majority is that in my analysis defendants’ appeals must be considered as seeking our review of both the first and the second orders of the Appellate Division. The attempted appeal from the second order of the Appellate Division should be recognized as discrete and separable, and inasmuch as there is no appeal as of right that appeal should be dismissed.

To treat the appeal as a single appeal, as does the majority, would necessarily bring up for review all issues raised and preserved by appellants, including their contentions as to error with respect to the second order of the Appellate Division which accordingly should be confronted and determined. Any question as to our authority to reach the merits of the second order surely turns on considerations of appealability, not reviewability. To interpret that portion of CPLR 5501 (subd [b]) which provides: "On an appeal pursuant to subdivision (d) of section fifty-six hundred one * * * only the non-final determination of the appellate division shall be reviewed” as limiting the scope of review to the ñrst nonfinal determination of the Appellate Division in unusual instances in which, as here, there are two nonfinal determinations of the Appellate Division is a distortion. The limitation of review, as I understand it, was intended only to exclude review of the final judgment entered in the court of original instance, here the Supreme Court judgment entered on June 30, 1977 (the formal predicate for the CPLR 5601, subd [d], appeal).

As indicated my preference would be to treat defendants’ notices of appeal as in effect having triggered two appeals— one from the first order of the Appellate Division, another from the second order of the Appellate Division. As to the former there should be an affirmance; as to the latter a dismissal.

I turn then to the question whether, following such a dismissal, an appeal would lie by permission from the second order of the Appellate Division, as to which the provisions of CPLR 5602 (subd [a], par 1) are determinative. At this point analytically the question of finality could be said to become relevant, not really to the ultimate outcome, but to the procedural path by which that outcome is to be reached. If the second order of the Appellate Division is deemed to be "final” in consequence of plaintiff's consent to accept the reduced verdict (compare, for instance, cases in which a new trial is directed on the issue of damages only and the parties thereafter fix the amount of such damages by stipulation, e.g., Nardelli v Stamberg, 44 NY2d 500; cf. Jewish Reconstructionist Synagogue of North Shore v Incorporated Vil. of Roslyn Harbor, 40 NY2d 158), then permission may be granted to appeal from that order itself under CPLR 5602 (subd [a], par 1, cl [i]). If on the other hand the second order of the Appellate Division is classified as "nonfinal” (whatever the rationale for such classification), then permission may be granted to defendants under clause (ii) of paragraph 1. In that event the appeal would be from the final judgment of Supreme Court, i.e., the third judgment of Supreme Court entered June 30, 1977, thereby to bring up for review the "nonfinal” second order of the Appellate Division — an order made on a prior appeal (the second appeal) which necessarily affects the final Supreme Court judgment. On either categorization of the second order of the Appellate Division, an appeal would lie by permission.

If it be taken, as I think is the case, that permission to appeal could be granted defendants so as to bring up the second order of the Appellate Division for review, I would note that on argument of the present appeal an oral motion was expressly made for such leave. Accordingly, confronted with the necessity to dismiss that portion of the appeals mistakenly taken as of right, I would forthwith grant leave to appeal and proceed on the present record, briefs and oral argument to a review of the second order of the Appellate Division on the merits. The dismissal of any portion of the present appeals without more would reopen the time for defendants to apply in the alternative for leave to appeal (CPLR 5514, subd [a]). If such an application were to be made and deemed timely, it does not appear that it would not be granted. That in turn would produce a second appeal to be fully briefed and argued, in all material respects similar to the present appeal, to be calendared some months from now. Such an eventuality would be needlessly clumsy, inefficient and costly.

In sum, I cannot accept the position adopted by the majority that there is no procedural means by which our court may recognize (and give effect if it be so disposed) to defendants’ desire for a review of • the second order of the Appellate Division. Such a conclusion runs counter to the grant of appellate jurisdiction vested in our court by Constitution and statute in cases such as this.

Inasmuch, however, as there is to be no review of the second order of the Appellate Division, it would serve no purpose here to address the substantive issues which would be confronted on such an appeal.

Chief Judge Cooke and Judges Gabrielli, Wachtler and Fuchsberg concur in Per Curiam opinion; Judge Jones dissents and votes to dismiss in part the appeal taken as of right, grant defendants’ oral motions for leave to appeal and review on the merits the June 16, 1977 order of the Appellate Division in a separate opinion in which Judge Jasen concurs.

Judgment affirmed, with costs.

      . Defendants argue that this court has jurisdiction as to the first and second orders of the Appellate Division pursuant to CPLR 5601 (subd [a], par [iii]). However, both orders are nonfinal and therefore not appealable under CPLR 5601 (subd [a]). Moreover, appellants were not aggrieved by the modification effected in the second order, and could not appeal that order even if it were viewed as final.

      . We note that defendants’ motions for leave to appeal, made at oral argument, are untimely (CPLR 5513, subd [b]), and therefore dismiss them. Contrary to the suggestion in the dissenting opinion, the motions are not rendered timely by CPLR 5514 (subd [a]). That provision would apply only if we were to dismiss the appeal. Since the appeal is properly here, we see no reason to dismiss it.

      . While the order of the Appellate Division is denominated a "reversal”, in effect it is a modification; rejection of the claim for punitive damages was affirmed and a new trial was granted conditionally on the issue of compensatory damages only.

      . Plaintiff also sought leave to cross appeal, but his motion was dismissed on December 19, 1977 (43 NY2d 825) and his motion for reargument was denied on February 10, 1978 (43 NY2d 950). We all agree that plaintiff as a nonappellant has no standing to seek reinstatement of the $745,000 verdict of the jury on the second trial.

      . If in consequence of plaintiff’s consent to the reduction in compensatory damages the Appellate Division order were to be deemed an affirmance there would likewise be no appeal as of right under either subdivision (a) or (d) of CPLR 5601.

      . Inasmuch as permission may be granted to defendants to appeal by one course or the other to obtain our review of the second order of the Appellate Division — which is the target for which they really seek review in our court — having in mind the somewhat esoteric character of the procedural maze through which this opinion seeks to show a way, no sufficiently useful additional purpose would be served here by making a subcategorial, precise determination whether permission to appeal is properly to be considered on the basis that the second Appellate Division order is final or on the basis that it is nonfinal. Those are the only two alternatives, and under either one or the other permission to appeal could be granted by our court.


author: Fuchsberg, J. Jasen, J.

text:
    The People of the State of New York, Respondent, v Steven Joseph Garofolo, Appellant.
    Argued February 5, 1979;
    decided April 3, 1979

      POINTS OF COUNSEL

      William M. Simon for appellant.
    I. The court committed reversible error in permitting a written confession into evidence which was completed and signed 20 to 45 minutes after appellant’s attorney had been thwarted in his efforts to speak with appellant. (People v Hetherington, 27 NY2d 242; People v Taylor, 27 NY2d 327; People v Villeroel, 56 AD2d 807; People v Arthur, 22 NY2d 325; People v Sanchez, 15 NY2d 387; People v Gunner, 15 NY2d 226; People v Failla, 14 NY2d 178; People v Hobson, 39 NY2d 479.) II. The court erred on the facts and the law in permitting an oral confession and the evidence derived therefrom into evidence. (People v Hobson, 39 NY2d 479; People v Donovan, 13 NY2d 148; People v Gunner, 15 NY2d 226; People v Failla, 14 NY2d 178; People v Villeroel, 56 AD2d 807; People v Valerius, 31 NY2d 51; People v Paulin, 25 NY2d 445.) III. The court committed error in permitting a correction officer to testify as to admissions made to him after appellant’s arraignment. (People v Robles, 27 NY2d 155; People v Arthur, 22 NY2d 325; People v Vella, 21 NY2d 249; People v Gunner, 15 NY2d 226; People v Failla, 14 NY2d 178; People v Donovan, 13 NY2d 148.) IV. The court, in permitting testimony as to the contents of a letter opened by a correction officer in evidence, was in error. V. The summation of the prosecutor contained impermissible statements constituting reversible error. VI. The court committed reversible error in its charge to the jury on the law as it relates to the voluntariness of a confession. (People v Brainard, 56 AD2d 633.) VII. The court’s charge created prejudice against defendant.

      Patrick Henry, District Attorney (Harry Organek of counsel), for respondent.
    I. Appellant’s right to counsel was not violated because the attorney did not enter the proceeding prior to the signing of the written confession. Assuming, arguendo, that error was committed in admitting the confession, such error was harmless beyond a reasonable doubt. (People v Arthur, 22 NY2d 325; People v Gunner, 15 NY2d 226; People v Hobson, 39 NY2d 479; People v Ramos, 40 NY2d 610; People v Donovan, 13 NY2d 148; People v Pinzon, 44 NY2d 458; People v Sanchez, 15 NY2d 387; People v Clark, 41 NY2d 612; People v Coleman, 42 NY2d 500.) II. Appellant’s oral confession was properly admitted since an attorney had not entered the proceeding prior to the time that the oral confession was made. (People v Yukl, 25 NY2d 585; People v Boone, 22 NY2d 476; People v Huntley, 15 NY2d 72; People v Edney, 47 AD2d 906; People v Blim, 58 AD2d 672; People v Failla, 14 NY2d 178; People v Fitzpatrick, 32 NY2d 499; People v Gleeson, 36 NY2d 462.) III. Appellant’s postarraignment statement to Correction Officer De Maio was properly admitted into evidence. (People v Kaye, 25 NY2d 139; People v Cerrato, 24 NY2d 1; People v McKie, 25 NY2d 19.) IV. The trial court properly permitted Officer De Maio to testify about the contents of the letter written by appellant. (People v Robinson, 36 NY2d 224; Atkins v Elwell, 45 NY 753; People v Tyler, 40 NY2d 1065; People v Giro, 197 NY 152; Mahaney v Carr, 175 NY 454; Wright v Fireman’s Ins. Co. of Newark, 249 App Div 87; Edwards v Noyes, 65 NY 125; People v Gibson, 218 NY 70.) V. The challenged comments of the prosecutor in his summation were not prejudicial and moreover, were not preserved for review on this appeal; alternatively, under the circumstances of this case, they constituted harmless error. (People v Marks, 6 NY2d 67, 362 US 912; People v Mullin, 51 AD2d 558; People v Castillo, 16 AD2d 235, 12 NY2d 732; United States v Armedo-Sarmiento, 545 F2d 785, 430 US 917; United States v Greene, 497 F2d 1068, 420 US 909; People v Fiore, 34 NY2d 81; People v McCain, 42 AD2d 866; People v Vails, 43 NY2d 364; People v Molineux, 168 NY 264; People v Cuty, 26 AD2d 596.) VI. The court’s instructions concerning the voluntariness of appellant’s confession constituted a correct restatement of the applicable law. (People v Hulett, 28 AD2d 624, 22 NY2d 696, 393 US 788.) VII. The court’s charge was eminently fair and did not prejudice defendant. (People v Wiechers, 179 NY 459; People v Kuss, 32 NY2d 436, 415 US 913; People v De Gina, 46 AD2d 925; People v Brown, 43 AD2d 743, 35 NY2d 916; People v Lucchetti, 33 AD2d 566; United States v Nasta, 398 F2d 283; People v Ruberto, 10 NY2d 428; People v Sim, 53 AD2d 992; People v Wilson, 58 AD2d 1044.)
   OPINION OF THE COURT

Fuchsberg, J.

This appeal calls upon us to explore two recurring issues involving the safeguards assuring that the constitutional right to counsel is not thwarted. The first is whether the defendant’s constitutional right to counsel was impermissibly impeded by the inadequacy of police procedures that delayed communication between the defendant and a lawyer retained on his behalf. The second is whether so-called casual police inquiries that, without seeming to intend to do so, nevertheless elicited unwarned and uncounseled incriminatory answers were violative of the defendant’s rights.

The case may be said to have begun on October 26, 1975, when the partially clad body of a 19-year-old woman was found in a wooded area abutting a Suffolk County tavern. Before the day was out, the defendant, Steven Joseph Garofolo, had twice confessed to her murder, for which he has since been convicted after trial by jury. Pretrial motions seeking a broad spectrum of relief, including the suppression of both the initial and later confessions as well as certain physical evidence the location of which was thereby disclosed, were all denied. The Appellate Division, unanimously and without opinion, upheld the judgment. For reasons that in the main focus on the various confessions, we are forced to conclude that a new trial is required.

We start with the chronology of events leading to defendant’s arrest. In doing so, we accept the suppression court’s findings, which, being supported by the record and affirmed by the Appellate Division, are now beyond our review (People v Gruttola, 43 NY2d 116, 122-123).

The defendant first came to the attention of the police when he telephoned the decedent’s parents to report that on the night of the crime he had seen the murdered woman exiting a tavern in the company of three young men. He left his name and number and when Suffolk County police, who followed up on this information, located him at a pizzeria at which he was employed, the defendant readily agreed to accompany them to Suffolk County’s fourth homicide squad to assist in identifying the individuals he claimed to have seen with the victim. The defendant reached the squad’s offices at about 8:20 p.m.

Very soon after his arrival, Detective Rodriguez, who was in command of the investigation, noted inconsistencies in the story Garofolo had begun to tell. His suspicions aroused, the interrogating officer, on the hypothesis that Garofolo might well turn out to be the perpetrator of the crime, gave him the warnings prescribed by Miranda v Arizona (384 US 436, 475). At this juncture, Garofolo, after protesting that he had nothing to hide and would speak to the police without a lawyer, broke into tears and began to pour out a story of how he had choked and bludgeoned the deceased with a nightstick to still her when "she screamed I was trying to rape her”. All this had happened so precipitously that it was then only about 8:30 p.m. Further querying followed this revelation so that the oral questioning was completed at approximately 8:55 p.m. The police then undertook to reduce Garofolo’s confession to writing, a task they had accomplished by 9:40 p.m., at which time the defendant and the police officers initialed and signed a three-page statement.

In the course of making both the oral statement and the written one that ensued, Garofolo disclosed that he had disposed of the nightstick, a pizza shirt he had worn during the commission of the crime and an earring belonging to the decedent in certain garbage receptacles. He also told the police that he had discarded his undershirt along a highway. Armed with this information, several policemen, promptly dispatched to search for these articles even while the interrogation was yet in progress, apparently had no difficulty in locating them.

Meanwhile, during much of the time that the fourth squad was holding Garofolo, Eric Naiburg, a lawyer previously retained to represent Garofolo on an unrelated pending charge, was busy trying to find his client. He had undertaken that quest at the instance of Garofolo’s father, who could tell the lawyer only that his son had been taken away by two police officers but not why he was taken or where he was being held. The time when the father spoke to the lawyer was never fixed with any precision. Naiburg would later estimate that the senior Garofolo’s call may have arrived as late as 8:30 p.m. Whenever it was, it is undisputed that Naiburg did not check with Suffolk County’s central police headquarters until 9:10 P.M.

Not that Naiburg did not act with speed. His first efforts to locate his client were in other directions. He initially tried the Suffolk sixth precinct, where Garofolo had once been taken in connection with the earlier charge. Upon learning his client was not there, on the chance that the arrest might have occurred in adjoining Nassau County, he next contacted the Suffolk fugitive squad but met with equal lack of success. Only then did he call the Suffolk headquarters, where, asking for someone in authority, he was connected with Detective Violet Joyce.

Joyce was co-operative, but no central pool of information of persons in the custody of the police department was available to her nor, so far as this record shows, was there one in existence at all. She agreed to make a round of inquiries of all seven Suffolk "general service” squads. Carrying out that commitment, she made her initial inquiry of the fourth squad, which covered the area of defendant’s residence and was located across the courtyard from the headquarters itself, and then followed up with the other six. Each advised her that it had no prisoner named Garofolo. By the time she got back to Naiburg to report the results, it was at least 9:30 p.m. In the course of her report to him, she observed that she had had some trouble reaching the fourth squad because its personnel was engaged in a homicide investigation, but when she did get through she was told no one was under arrest. Of course, as was later to be learned, the defendant, who was then not only in custody but already under arrest for a confessed murder, was in fact being held incommunicado merely a stone’s throw from where Joyce was conversing with his lawyer. Be that as it may, it was not until 11:00 p.m. that Naiburg was finally informed of Garofolo’s whereabouts.

In relating these facts to the applicable law, we emphasize that the fundamental rule in this State is that, once the police have been apprised that a lawyer has undertaken to represent a defendant in custody in connection with criminal charges under investigation, the person so held may not validly waive the assistance of counsel except in the presence of the lawyer (People v Hobson, 39 NY2d 479, 481; People v Arthur, 22 NY2d 325, 329). This proposition is purposed to do more than merely help to assure that the right to counsel is the "effective” one guaranteed by our Constitutions (US Const, 6th Arndt; NY Const, art I, § 6). Sensitive that other constitutional rights, such as the privilege against self incrimination and the one guaranteeing due process, are far from self-executing, it looks to their viability as well (People v Donovan, 13 NY2d 148, 151). It therefore applies whenever a defendant, whether denominated by the police as an "accused”, a "suspect”, or a "witness”, is deemed to be in custody (People v Sanchez, 15 NY2d 387, 389).

These protections in mind, we turn to consider when, if at all, the entry of counsel was sufficient to invoke them in the present case. In that connection, our recent decision in People v Pinzon (44 NY2d 458) forecloses any argument but that Naiburg’s 9:10 p.m. call to Detective Joyce at police headquarters must be so construed and that any uncounseled statement taken thereafter must be deemed inadmissible. In this conversation, Naiburg advised Joyce that he represented Garofolo on the previous charge and that, though he was not aware of the nature of his present brush with the law, he assumed it was unrelated. This sufficiently identified his professional interest in the new charge. Nor was it necessary for him to state explicitly that his client was no longer to be questioned in his absence (People v Arthur, 22 NY2d 325, 329, supra), for it is almost universally recognized that, at this stage at least, "any lawyer worth his salt will tell the suspect in no uncertain terms to make no statement to police under any circumstances” (Watts v Indiana, 338 US 49, 59 [Jackson, J.]). Finally, since a defendant’s rights are not to be impaired by "lack of communication within the law enforcement agencies”, the notice Naiburg thus imparted was nonetheless chargeable to the police despite the fact that Joyce was neither a participant in the ongoing interrogation nor possessed of any personal knowledge that it was taking place (People v Pinzon, 44 NY2d 458, 463-465, supra).

In Pinzón, counsel, whose services there too had been enlisted by the defendant’s family, had thrice called police headquarters of this very same county and on each occasion a civilian employee, without making any further attempt to verify the fact, unintentionally misinformed him that his client was not in custody. Extrapolating from rulings in cases in which the police, acting in bad faith, had sequestered a defendant and thereby frustrated a lawyer’s efforts to intervene (see People v Donovan, 13 NY2d 148, supra; People v Failla, 14 NY2d 178), we held that "the police should have been on notice that an attorney had appeared on behalf of the defendant then in custody”. In so saying, we noted that it was for the police "to establish and maintain procedures which will insure that an attorney representing [a person in custody] may communicate with him and with the officials responsible for the investigation, without unreasonable delay” (People v Pinzon, supra, p 464).

True, in the case before us, once Detective Joyce received Naiburg’s call at headquarters, she did make a diligent effort to ascertain whether and where Garofolo was being held. But we now make explicit what was implied in Pinzón: that good faith efforts are made to locate a defendant who is taken into custody does not absolve the police of their responsibility if their internal procedures are inadequate to keep track of those against whom the restraining hand and the accusing finger of the State have come to rest. In a Nation that prizes individual liberty, it is not asking too much to expect that, in those cases where interference with a person’s liberty becomes necessary, no undue delay prevent anyone so circumstanced from securing the protections — here the right to counsel — to which he or she is entitled.

These principles were ignored in this instance. Not only did Detective Rodriguez and his fellow officers do nothing to facilitate access by counsel, but their inaction foreclosed the possibility of any such communication. More than that, though Garofolo had become the target of the investigation the better part of an hour before Detective Joyce officially called the fourth squad from her headquarters post, she was incorrectly informed that no one by that name was in custody. Also, while neither Rodriguez nor any of his aides would spare the few seconds it might have taken to give headquarters timely advice of Garofolo’s detention, the record shows that Rodriguez twice found it convenient to leave the interrogation room in order to dispatch officers to retrieve evidence the location of which had emerged from the oral confession. Most troublesome of all is the fact that this conduct does not appear to contravene any regulation or system designed to enforce respect for the right to counsel. Rather, there is no evidence of any provisions to that end.

On this score, we need not speculate as to how an adequate monitoring system should be constituted other than to say that it must be one reasonably calculated to achieve its purpose with swiftness and certitude. What measures need be adopted to secure this level of efficiency obviously will depend, among other things, on the complexity and size of a particular police department and its domain. Regardless of the method, it goes without saying that a system that promptly advises an attorney or others entitled to inquire of the client’s status will also inform the relevant police unit that a defendant in its custody is represented by an attorney.

For these reasons, and because by 9:10 p.m. no significant portion, if any at all, of Garofolo’s confession had yet been reduced to writing (see People v Donovan, 13 NY2d 148, 150-151, supra; People v Failla, 14 NY2d 178, 182, supra; cf. People v Bevilacqua, 45 NY2d 508, 512-513), we hold as a matter of law that it should have been suppressed.

The fact that the written statement was vitiated by an abuse of the right to counsel, however, did not mean that the oral statement that preceded it was similarly tainted. Naiburg, who might better have adopted the caution of requesting that a police blotter or other record entry be made of each of his communications to the police, was less than precise in fixing the times of those that preceded the one at 9:10 p.m. (cf. People v Failla, supra, p 178). From our review of the record, we cannot say that the suppression court could not find, as it did, that Naiburg did not enter the proceeding before the oral statement was completed. Nor was the right to counsel triggered at that time merely by the fact that Garofolo had previously retained Naiburg on the unrelated charge (People v Coleman, 43 NY2d 222, 226).

But the People contend that, because the untainted oral confession was identical in all material respects with the written one, it was not error to have failed to suppress the latter. We do not agree. It is well-nigh impossible to avoid the conclusion that the written version was accorded greater weight by the jury than was the oral one (see People v Donovan, supra, p 153). As witness the rules relating to parol evidence and the Statute of Frauds, written documents, especially those signed by the parties to be charged, are commonly understood, even if sometimes undeservedly, to evince a degree of deliberation and authenticity not generally associated with oral proof of the same events (see, generally, 9 Wigmore, Evidence, § 2454). This is not a preference confined to the legal mind alone. Serious written materials, in book form or otherwise, ordinarily are looked at as more reliable than their more evanescent oral counterparts, which are so much more often subject to the vagaries of memory and narration. So, when coupled with a confirmatory writing, even an oral statement takes on added credibility. Thus, by reiterating and, hence, corroborating the substance of the oral confession, the written statement may well have erased whatever doubts the jury entertained concerning the credibility of the witnesses upon whom the People had to rely to prove the contents of the unwritten one.

And, precisely because defendant nowhere alleges that the written confession was in any relevant respect different from the oral version, we find meritless his claim that the evidentiary fruits of the earlier statement must be suppressed. On the affirmed findings of fact before us, we cannot conclude otherwise than that the location of all the items connected with the crime were disclosed in the validly taken oral confession with sufficient specificity for the police to have found them. In fact, as already indicated, the retrieval of the evidence was initiated well before Garofolo’s statement had been reduced to writing.

We now turn to the statements elicited from the defendant while he was confined to the Suffolk County Jail awaiting trial. Though without a doubt Garofolo’s right to counsel then had attached and he was not to be questioned in the absence of his lawyer, the lower court, categorizing the answers Garofolo gave on that occasion as "gratuitous responses to the correction officer’s vocalized musings”, held them admissible as spontaneous and voluntary utterances under the narrow doctrine enunciated in People v Kaye (25 NY2d 139). They should have been excluded.

The opening question, casually asked of the defendant by a correction officer on the day of arraignment, was "how [Garofolo] had made out in court”. The query should never have been made. In the context in which it was put it could not be on the order of a neutral greeting or comment. For a person trained in police work, it had to possess at least a potential for triggering disclosures broader than those required by the question itself. It played upon the natural penchant to volunteer that even cautioned witnesses will so often exhibit. In fact, in this instance, the officer having seen certain incriminating passages in a letter Garofolo had written to his parents the day before, it does not take much to surmise that the question was not a disinterested one. Not surprisingly, the response from Garofolo was that he had told his attorney that he had killed Ms. Wilkinson and that a plea was being negotiated. The officer did not desist at this point. A little later, he returned with the provocative remark, "I thought you didn’t kill the girl”, bringing forth more incriminatory replies. This stimulus, calling for an express admission or denial of guilt by the defendant, clearly violated the stringent safeguards that surround the right to counsel and, significantly, was apparently promptly reported by the correction officer to his superiors.

While some exchanges between a defendant and his jailers must of necessity occur, there is no excuse for inquiries such as those put here. Queries aimed at the issue of a defendant’s guilt or innocence must be proscribed irrespective of their underlying motivation. These hardly masked a form of custodial interrogation no less invidious than that condemned by Miranda (People v Maerling, 46 NY2d 289, 301-303; Brewer v Williams, 430 US 387, 392-393; Rhode Is. v Innis, RI Sup Ct, Aug. 8, 1978, cert granted 47 USLW 3566). People v Kaye (25 NY2d 139, supra) certainly does not give it sanction. Indeed, an English court’s admonition that in like circumstances an officer should "keep his mouth shut and his ears open” is not only blunt but good advice (Reg. v Male, 17 Cox Crim Law Cases, 689, 690).

As to the reliance by the People and the dissenter on the harmlessness of these errors, suffice it to say that, on the whole record we cannot say that "there is no reasonable possibility that the error might have contributed to defendant’s conviction” and that, being constitutional errors, they were not "harmless beyond a reasonable doubt” (People v Crimmins, 36 NY2d 230, 237).

Finally, because there must be a new trial, we comment briefly on the defendant’s assertion that the letter he wrote to his parents from the Suffolk County Jail was illegally searched and seized by the correction officer. The argument fails in view of affirmed factual findings that Garofolo was made aware of the jail’s routine procedure to inspect all prisoners’ correspondence before he delivered the unsealed letter to the correction officer (see Stroud v United States, 251 US 15, 21-22).

The order of the Appellate Division should be reversed and the case remitted for a new trial.

Jasen, J.

(dissenting). By its decision today, the majority adopts what I believe will be viewed as a per se rule holding that the erroneous denial of a motion to suppress a written confession can never be considered harmless error, notwithstanding the introduction at trial of a prior untainted oral confession identical to the former in all material respects. As I cannot agree with this result, I respectfully dissent.

Admittedly, the existence of a writing can only but confirm a prior oral statement. Were this the only factor to be considered in this case, I would agree with the majority’s rejection of the proffered harmless error analysis. However, totally ignored by the majority is the effect of the police officers’ testimony as to their discovery of the evidentiary fruits of this brutal crime in the precise locations described by defendant in his voluntary oral confession. As the majority concluded, "the retrieval of the evidence was initiated well before Garofolo’s statement had been reduced to writing.” Under these circumstances, confirmation of defendant’s untainted oral confession in the minds of the jury was certainly accomplished through the police officers’ highly incriminating testimony and the introduction of the lawfully discovered evidence of the crime: to wit, the nightstick used to commit the murder, the victim’s earring, and the defendant’s bloody clothing. What further effect could the written confession, identical to the oral, have had upon the outcome of this trial? Given the unique facts of this case, I cannot conclude that there exists a reasonable possibility that the erroneous introduction of either defendant’s written confession or his statements made while in jail contributed to his conviction. (See People v Almestica, 42 NY2d 222, 224; People v Crimmins, 36 NY2d 230, 237.)

The order of the Appellate Division should be affirmed.

Chief Judge Cooke and Judges Gabrielli, Jones and Wachtler concur with Judge Fuchsberg; Judge Jasen dissents and votes to affirm in a separate opinion.

Order reversed, etc.

      . The convictions were on counts of felony murder and murder in the second degree, for each of which the defendant received prison sentences of 25 years to life, to be served concurrently.

      . Although the fourth squad is a part of headquarters, it is physically located in the same building as the fourth precinct.


author: Fuchsberg, J.

text:
    Bulova Watch Company, Inc., Appellant, v Celotex Corporation, et al., Respondents, et al., Defendant.
    Submitted January 4, 1979;
    decided April 3, 1979

      POINTS OF COUNSEL

      Marvin A. Bass and Renee L. Gabor for appellant.
    I. The Uniform Commercial Code does not govern an action for breach of warranty on 20-year bonded roofing materials and flashings installed in 1953. (Great Atlantic & Pacific Tea Co. v Rust Eng. Co., 75 Misc 2d 920.) II. A 20-year guarantee, bond of roofing materials in which the principal promised to make all repairs necessitated by wear and tear from the elements in order to maintain the roofing materials in watertight condition is a separate contract. (Perlmutter v Beth David Hosp., 308 NY 100; Ben Constr. Corp. v Ventre, 23 AD2d 44; Schenectady Steel Co. v Trimpoli Gen. Constr. Co., 43 AD2d 234;
      Wise & Co. v Rand McNally & Co., 195 F Supp 621; American Trading Co. v Fish, 42 NY2d 20.) III. The independent contractual obligation to repair the roofing materials and the flashings in order to maintain them in watertight condition for 20 years was acknowledged in a signed writing in 1973. (General Obligations Law, § 17-101.) IV. The original sale of "20 year bonded” materials referred to in the specifications denotes that the transaction was accompanied by express and implied warranties of future performance of the goods. (Citizens Utilities Co. v American Locomotive Co., 11 NY2d 409; Mittasch v Seal Lock Burial Vault, 42 AD2d 573.)

      Michael S. Torre for respondents.
    The Statute of Limitations for breach of warranty is six years from the date of delivery. (Great Atlantic & Pacific Tea Co. v Rust Eng. Co., 75 Misc 2d 920; Mendel v Pittsburgh Plate Glass Co., 25 NY2d 340; Owens v Patent Scaffolding Co. Div. of Harsco, 77 Misc 2d 992; Perlmutter v Beth David Hosp., 308 NY 100; Schenectady Steel Co. v Trimpoli Gen. Constr. Co., 43 AD2d 234; American Trading Co. v Fish, 42 NY2d 20; Citizens Utilities Co. v American Locomotive Co., 11 NY2d 409.)
   OPINION OF THE COURT

Fuchsberg, J.

At issue on this appeal is the timeliness of a suit brought to recover damages for a roofing materials supplier’s failure to live up to its express promise to repair its so-called "bonded” roof for a period of 20 years from the date of sale. We hold that a cause of action accrues upon each breach of that undertaking which occurs within the 20-year period and that the Statute of Limitations runs after six years from the date when the particular breach for which any such suit is brought has taken place.

In 1952, plaintiff Bulova Watch Company contracted for the installation of a roof on its factory in Jackson Heights, Queens. As per its obligations under a construction agreement, the contractor purchased roofing materials from defendant Barrett Division, Allied Chemical & Dye Corporation, which issued two "20-Year Guaranty Bond[s]” to Bulova, one for its "Barrett Specification Pitch and Felt”, limited to the recovery of sums up to $8,000 and the other for its "Barrett flashing materials”, with a ceiling of $700. The bonds, which recited that they were effective as of February 20, 1953 and that the materials had "been applied in the matter specified by Barrett”, expressly guaranteed that Barrett would "at its own expense make any repairs (excepting repair of injury to said Roof caused by the roof base over which it is applied, or from any cause other than ordinary wear and tear by the elements) that may become necessary to maintain said Roof * * * in a water-tight condition”. In the event this obligation was not performed after due notice by Bulova, the instruments imposed liability on both Barrett and its surety, defendant Continental Casualty Company, which not only countersigned the bonds but permitted these imposingly inscribed documents to be captioned with its name. Defendant Celotex has since assumed Barrett’s obligation under the bonds.

In effect, Bulova has alleged that the guaranteed roof turned out to be no more waterproof than a sieve. The first evidence of leakage purportedly came to light at least as early as September 6, 1955, and, despite repeated demands that the bonds’ terms be fulfilled, Barrett’s intermittent and allegedly inadequate attempts at repair did not prevent the defects from persisting throughout the balance of the 20 years. Even as the guarantee period was about to expire, Celotex, on February 14, 1973, found it necessary to respond to the recurring complaints by sending Bulova a letter acknowledging its responsibility to repair leaks present in the roof during the fall and winter of 1972-1973.

Not much later, on July 10, 1973, Bulova brought this action to recover $65,000 in damages, the amount it would cost to replace the roof, on two theories, one for breach of an implied warranty of fitness for use and the other for breach of the express terms and conditions of the guarantee bonds. Perhaps because the two theories, though discernible, were intermingled in the pleadings, Special Term, on defendants’ motion for summary judgment, treated the suit as though it were premised on implied warranty alone. It then proceeded to dismiss on the ground that it was barred by the Statute of Limitations. The Appellate Division affirmed, without opinion (59 AD2d 831), and we granted leave to the plaintiff to appeal from so much of the order as dismissed the afore-mentioned causes of action. For the reasons that follow, we believe there should be a reversal.

Preliminarily, however, we acquiesce in the conclusion that Bulova’s implied warranty theory does not hold water. Even assuming that a warranty of fitness would arise under the original combined sale and services contract (but see Milau Assoc. v North Ave. Dev. Corp., 42 NY2d 482), the claim would be barred by the Statute of Limitations. For to determine whether such a claim is contractual rather than tortious in nature, we must look to the form of the remedy sought. And, since here Bulova asked only for recovery of the cost of the defective roof and not for any consequential damages, and therefore its warranty count is to be deemed one in contract alone, the cause of action arose at the time of the sale (see Sears, Roebuck & Co. v Enco Assoc., 43 NY2d 389, 394-395; Victorson v Bock Laundry Mach. Co., 37 NY2d 395, 403; Citizens Utilities Co. v American Locomotive Co., 11 NY2d 409, 416). Moreover, the discovery rule of subdivision (2) of section 2-725 of the Uniform Commercial Code does not apply to transactions entered into prior to the code’s enactment in 1964 (Uniform Commercial Code, § 2-275, subd [4]; § 10-102, subd [2]; Mendel v Pittsburgh Plate Glass Co., 25 NY2d 340, 342, n 1 [overruled in Victorson, supra]; Great Atlantic & Pacific Tea Co. v Rust Eng. Co., 75 Misc 2d 920).

Thus, insofar as suit was posited on a warranted theory, whether the transaction here is looked at as a sale of goods or a services contract or a combination of both, in 1953 it was governed by the six-year contract Statute of Limitations.* So measured, it was correctly held to be time-barred.

Nevertheless, plaintiffs rights under the bonds enable its suit to weather the storm of defendants’ attacks. The bonds embody an agreement distinct from the contract to supply roofing materials. The former expressly promise to furnish whatever labor and materials are required for future repairs; the latter deals only with those provided at the time of the installation. The period during which performance may be required under the bonds is expressly stipulated to be 20 years; the only time specified for the performance of the sales contract was that of the original installation. The form of the bonds was one highlighting the obligation of Continental as surety, with Barrett as one of two signatories; under the sales contract Barrett was the sole obligor and Continental was not involved at all. Nor can it be doubted that the defendants expected Bulova to view the bonds as a special, separate and additional incentive to purchase a Barrett specification roof. Therefore, all the more so than in a case where a surety’s obligation is actually appended to a contract for the purchase of goods, a different Statute of Limitations may apply (see American Trading Co. v Fish, 42 NY2d 20).

On the limitations question, it is clear that the separate bond obligations, as agreements contemplating services, were subject to a six-year statute (CPLR 213, subd 2; 1 Weinstein-Korn-Miller, NY Civ Prac, par 213.13) running separately for the damages occasioned each time a breach of the obligation to repair the bonded roof occurred (see Putnam’s Sons v Owens, 51 AD2d 527; Colpan Realty Corp. v Great Amer. Ins. Co., 83 Misc 2d 730, 731-732). For this reason, the bond claims arising within six years of the commencement of this suit are timely, provided they also arose during the 20-year period to which the guarantee relates.

Finally, some comments are in order on the attempt by each of the parties to bring the rights flowing from the guarantee bonds under the umbrella of the "prospective warranty” doctrine. True, when a warranty expressly guarantees the future performance (as opposed to present condition) of goods, some courts have held that a cause of action for breach of warranty accrues when the breach is or should have been discovered (e.g., Mittasch v Seal Lock Burial Vault, 42 AD2d 573; see Schmitt & Hanko, For Whom the Bell Tolls — An Interpretation of the UCC’s Exception as to Accrual of a Cause of Action for Future Performance Warranties, 28 Ark L Rev 311; Case Note, 31 Fordham L Rev 609). So, for example, in Woodworth v Rice Bros. Co. (110 Misc 158, affd without opn 193 App Div 971, affd without opn 233 NY 557), a purchaser of fruit trees, though more than six years had elapsed from the date of sale, was allowed to sue his vendor when the saplings did not bear fruit "true to name” as promised. Other cases, however, have been more restrictive in their interpretation of such warranties (e.g., Citizens Utilities Co. v American Locomotive Co., 11 NY2d 409, supra).

But, there is no need at this juncture for us to endeavor to lift the fog that envelops the perhaps questionable distinctions made in these prospective warranty cases. Their analysis would, not be dispositive here because, as we have held, the defendants did not merely guarantee the condition or performance of the goods, but agreed to perform a service — to repair the roof. Since breaches of this fully bargained-for promise are actionable for six years from their occurrence, Bulova may recover for all of the defendants’ derelictions of duty that it can prove took place between July 10, 1967 (six years prior to the institution of suit) and the date on which the bonds expired.

Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and plaintiffs second and fourth causes of action reinstated.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones and Wachtler concur with Judge Fuchsberg.

Order, insofar as appealed from, reversed, etc.

      . The causes of action based on the warranty and bond theories were designated the second and fourth causes of action. Special Term also dismissed and severed two other causes of action sounding in negligence, to the extent that they pleaded damages which antedated the three-year tort Statute of Limitations period preceding the commencement of suit. We denied leave to appeal from so much of the Appellate Division’s order as related to the negligence causes because of nonfinality and therefore do not treat with them on this appeal (43 NY2d 844).

      . As a result of the adoption of the Uniform Commercial Code in 1964, the statute is now four years in sales of goods cases (Uniform Commercial Code, § 2-275, subd [1]).

      . Although it might be argued that the bonds’ prospective promises give rise to an implied future performance warranty, we note, without reaching the question, that no case appears to have applied the doctrine to implied warranties (Schmitt & Hanko, 28 Ark L Rev 311, 328; but see Mittasch v Seal Lock Burial Vault, 42 AD2d 573, 574). Moreover, in the circumstances of the present case, it is just as likely that a promise to repair could be said to give rise to an inference that the roof was not of such quality as to last the 20 years covered by the bonds without supplemental work (cf. Owens v Patent Scaffolding Co. Div. of Harsco, 77 Misc 2d 992).