Citigroup v Brigade Capital Management: Difference between revisions

Citigroup v Brigade Capital Management (view source)

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 {{quote|{{Restatement of Restitution Section 14}}}}
-One might take the court to task for being a little too literal there. Nor does the court seem to have considered what “in discharge of the debt” means, but assumes it means that, mathematically, “has the effect of discharging the debt”. One could apply a ''reductio ad absurdam'' here: ''any'' payment made by a debtor to a creditor, apropos anything, would have the effect of retiring debt.  If I have a mortgage which, for good consideration, I have borrowed money for thirty years, the bank could treat my employer’s payment of my monthly wage to retirement of the debt, notwithstanding our carefully worked out thirty year long amortisation schedule. This surely cannot be right. My employer’s factual paymentr surely ''cannot'' unilaterally [[amend]] that [[contract]].
+One might take the court to task for being a little too literal there. Nor does the court seem to have considered what “in discharge of the debt” means, but assumes it means that, mathematically, “has the effect of discharging the debt”. One could apply a ''reductio ad absurdum'' here: ''any'' payment made by a debtor to a creditor, apropos anything, would have the effect of retiring debt.  If I have a mortgage which, for good consideration, I have borrowed money for thirty years, the bank could treat my employer’s payment of my monthly wage to retirement of the debt, notwithstanding our carefully worked out thirty year long amortisation schedule. This surely cannot be right. My employer’s factual paymentr surely ''cannot'' unilaterally [[amend]] that [[contract]].
 The finding that it can, in the JC’s (literally) unqualified view, rather mounts the pavements — ''sidewalks'', sorry — and runs down peaceable pedestrians perambulating the [[common law]] of [[contract]]. This is something which the law of [[restitution]], being really no more than a life-hack to cover the parts of commercial life that [[tort]] and [[contract]] somehow contrive to miss — really ought not to be able to do.
-Surely a contract, being an explicit, detailed, construction of rights and obligations between consenting parties must displace general [[common law]] principles like those of [[tort]] and [[restitution]] that the law has developed to mediate relationships between strangers. The contract ''must'' prevail. It ''cannot'' be right that an action that was neither requested, supported by consideration nor accompanied by any representation, let alone one on which the beneficiary has not relied to its detriment, can unilaterally amend a contract. Nor, to our reading, does the ''Restatement'' require it to. The ''Restatement'' is silent on the matter.
+Surely a contract, being an explicit, detailed, construction of rights and obligations between consenting parties must displace general [[common law]] principles like those of [[tort]] and [[restitution]] that the law has developed to mediate relationships between strangers. The contract ''must'' prevail. It ''cannot'' be right that an action that was neither requested, supported by consideration nor accompanied by any representation, let alone one on which the beneficiary has relied to its detriment, can unilaterally amend a contract. Nor, to our reading, does the ''Restatement'' require it to. The ''Restatement'' is silent on the matter, and leading case ''[[Banque Worms]]'' concerned a payment that ''was'' due on the day.
 There is a question as to whether this was a prepayment of [[principal]] per the terms of the contract. The contract allowed this, upon the Borrower delivering prior written notice to Citi, about which Citi must “promptly” notify lenders on receipt. Not only did the lenders not receive such a notification — since it wasn’t given, ''but nor did Citi''. That notice seems to be a condition precedent to prepayment under the contract, and was not delivered. Without it, Revlon would not be ''entitled'' to pay down the loan, even if it wanted to. To be sure, it is a low hurdle to cross, but Citi’s appeal team may feel it is a significant one all the same.