68 A.D.2d 969 | N.Y. App. Div. | 1979
Lead Opinion
Appeal from a judgment of the Supreme Court at Special Term, entered February 16, 1978 in Ulster County, upon an order which granted plaintiffs motion for partial summary judgment against the defendant, Gerald A. Christie, in the sum of $33,686.09. On February 15, 1973 defendants Christie and Di Peri executed in favor of plaintiff an "Unlimited Guaranty” which provided that "In consideration of financial accommodations given or to be given” to Di Peri & Christie Complete Car Care, Inc., defendants, "irrevocably and unconditionally” guaranteed payment to plaintiff of any and all liabilities of the corporation of which defendants were stockholders and officers. The defendants waived notice of acceptance of the guarantee, and the guarantee expressly stated that it was a continuing one, existing "until written notice of revocation [is] actually received by the [plaintiff], notwithstanding a revocation by, or the death of, or complete or partial release” of the defendants or the corporation. The record does not establish, nor does the plaintiff contend, that any credit was or had been extended to the corporation on February 15, 1973. Two weeks after the execution of the guarantee, Christie severed all of his ties with the corporation in a "Termination Agreement” dated March 1, 1973. He transferred all of his stock to the corporation, and Di Peri assumed all outstanding liabilities of the corporation, agreeing to indemnify Christie against all claims which might be personally made against Christie in connection with any obligation of the corporation. Christie resigned as officer and director of the corporation, and moved from Kingston, New York, to Long Island. Almost a year later, on January 7, 1974, plaintiff loaned the corporation $23,000 at 9ti% interest. Di Peri signed a promissory note for the amount of the loan as president of the corporation and, in addition, Di Peri and his wife signed as indorsers of the note. Significantly, Christie neither signed nor indorsed the note. Almost two years later, after execution of the guarantee, the plaintiff made a second loan of $4,300 to the corporation which Di Peri signed on behalf of the corporation. Again, Christie’s name did not appear on the note. The corporation defaulted in payment of the promissory note and the time note, and plaintiff thereafter commenced this action against Di Peri and Christie to recover over $25,000 on their unlimited guarantee of the corporate notes. Di Peri defaulted, but Christie appeared and served an answer. Plaintiff then moved for summary judgment which Special Term, after rejecting Christie’s contentions, granted. It is a well-established rule that an uncompensated surety’s obligation is construed strictissimi juris in the surety’s favor and that he is not liable beyond the express terms of the contract (see, e.g., Delaware Funds v Zuckerman-Honickman, Inc., 43 AD2d 889; People v Henry, 33 AD2d 1031, 1032). This rule of strict construction seeks to guard the rights of the surety and protect him from the imposition of liability which is not strictly within the contract terms (see 57 NY Jur, Suretyship and Guaranty, § 104, p 353), and in our view, it should be especially applicable on a motion for summary judgment which seeks to impose liability on a surety for moneys he never saw, never used, and from which he received no benefit. Christie contends that even if he was personally liable on the guarantee, he had effectively revoked it prior to plaintiff’s extensions of the loans. The guarantee was executory and unlimited as to duration and amount and, until credit was given, i.e., until the guarantee was accepted by plaintiff by acting upon it, it was simply a continuing offer by Christie which he could revoke at any time. Christie maintains that plaintiff was aware of his severance with the corporation, and he relies on
Dissenting Opinion
dissent and vote to affirm in the following memorandum by Staley, Jr., J. Staley, Jr., J. (dissenting). We respectfully dissent and would affirm the judgment. Christie contends that he intended to sign the "Unlimited Guaranty” only in his capacity as a corporate officer; that plaintiff had notice of the fact that Christie revoked the guarantee before the loans were made; and that plaintiff waived the requirement of written notice of revocation of the guarantee. The guarantee is clear and unambiguous in its terms of individual liability. It specifically sets forth that the individual guarantee extends to all debts due or to become due from the corporation to plaintiff. Christie’s contention concerning his intention in executing the "Unlimited Guaranty” contradicts its clear and unambiguous terms, and any oral evidence as to intent would be inadmissible under parol evidence rule (Community Nat. Bank & Trust Co. of N. Y. v Intercoastal Trading Corp., 55 AD2d 525; Pollack v Green Constr. Corp., 40 AD2d 996, affd 32 NY2d 720; County Nat. Bank v Grunwald, 30 AD2d 663). The reliance of the majority on Delaware Funds v Zuckerman-Honickman, Inc. (43 AD2d 889) is misplaced. In that case, Delaware, by unilateral instrument, undertook to guarantee the debts of Moyer Company, a customer of Zuckerman. On August 11, 1970, Delaware mailed a letter to Zuckerman revoking its guarantee, but the letter apparently never came to the attention of the proper Zuckerman personnel. Between December 11, 1970 and January 8, 1971, Zuckerman sold merchandise to Moyer valued at $7,313. Moyer defaulted on the debt and Zuckerman sued Delaware as guarantor. Zuckerman obtained a judgment against Delaware based on a finding that the revocation was ineffective since the consent of Zuckerman was required