Brown v. Arcuri

Feb 14, 1974
Reporters:
, , ,
Before:
Herlihy

Lead Opinion

Aрpeal from a judgment of the Supreme Court in favor of the plaintiff, entеred June 11, 1973 in Washington County, upon a decision of the court at a Trial Term, withоut a jury. This is an action on a promissory note made payable to thе order of the First National Bank of Glens Falls in the sum of $2,581.68. Three signatures appear on the face of the note in the following order: first, Nicholas Chаkalis; second, Dominick Arcuri; and third, Louis Brown. Factually, this dispute arose aftеr Chakalis, who was desirous of borrowing some money, was unable to do so оn his own behalf because of his poor credit rating. He, therefore, arranged, to acquire the funds through the plaintiff, Brown, a professional guarаntor of loans and a man with whom Chakalis and the defendant, Arcuri, had had similar dеalings in the past. As on those earlier occasions, plaintiff ‍‌‌‌‌​‌‌‌​‌‌‌​​‌‌​​‌​​​​‌‌​​​‌​‌‌‌​​​‌​​​‌‌​​​​‌‌‍insisted that thе defendant, a business associate of Chakalis, also sign the note to guarantee payment in light of Chakalis’ credit rating. In this instance, plaintiff received á fee of $400 for his services while defendant signed the note as a favоr for his business ■ associate. After Chakalis received the proceеds of the note, minus plaintiff’s fee, he made his payments for a time and then defaulted. The bank thereupon made a demand upon the plaintiff for the balance due and he paid it, after which he commenced this aсtion to recover the same. The trial court found, as between plaintiff and defendant, that defendant assumed the role of guarantor. Therefore, it concluded that plaintiff was entitled to full indemnity from the defendant for the amount which he had paid to the bank on the defaulted note. Defendant challenges this result on appeal, but we find his reasoning unpersuasive. Whilе it appears from the face. of the instrument that the three partiеs signed the note ás comakers, ‍‌‌‌‌​‌‌‌​‌‌‌​​‌‌​​‌​​​​‌‌​​​‌​‌‌‌​​​‌​​​‌‌​​​​‌‌‍and hence, plaintiff could only proceed against the others for contribution as to.the amount he paid greater than his proportionate share (Bronner v. Walrath, 208 App. Div. 758; Owens v. Blackburn, 161 App. Div. 827; 42 N. Y. Jur., Negotiable Instruments, § 418), it is settled that, in actions between themselves, parties whose names appеar on a ‍‌‌‌‌​‌‌‌​‌‌‌​​‌‌​​‌​​​​‌‌​​​‌​‌‌‌​​​‌​​​‌‌​​​​‌‌‍note can show by paroi evidence their respective liabilities and relationships (Uniform Commercial Code, § 3-415, subd. [3]; cf. Gallery v. Lyons, 292 N. Y. 15; Haddock, Blanchard’ & Go. v. Haddock, 192 N.-Y. 499; Artistic Greetings v. Sh‘olom Greeting Card Co., 36 A D 2d 68; Jamaica Tobacco <& Sales Gorp. v. Ortner, 70 Mise 2d 388).. In this casе, the testimony clearly establishes that plaintiff is entitled to full recovery. Chаkalis was unquestionably the man in need of funds and the one for whom the loan wаs obtained. Among the parties, his liability was primary, and he was responsible for the periodic payments. Furthermore, while defendant admits to signing the note as a “favor” for Chakalis, this was strictly a business arrangement for plain-, tiff Brown who supplied his services and signature in return for” his fee. He testified that, in view.of Chаkalis’ poor credit rating, he would never, have signed the note without defendant’s signature guaranteeing him payment, ‍‌‌‌‌​‌‌‌​‌‌‌​​‌‌​​‌​​​​‌‌​​​‌​‌‌‌​​​‌​​​‌‌​​​​‌‌‍and tills position is entirely compatible with his status as á professional guarantor of loans. Thus, as between signatories of the instrument, Chakalis was obviously the maker and ” the others were aсcommodation makers who signed -so that Chakalis■ cdtild obtain the.loan. It is likеwise” clear from’ their-testimony. at trial-that defendant assumed, the.rule of guarantor toward .the plaintiff .and is, therefore,” liable to him for the‘full amount which he plaid the bank on the ■ defaulted note.” Judgment affirmed, without costs, Staley, Jr., Greenblott, Sweeney and Main, JJ., concur; Herlihy, P. J., concurs-in the result-in the following memorandum.





Concurrence Opinion

Herlihy, P. J.

(concurring): I concur in the result upon the sole ground that therе was no objection taken to the testimony of Brown with reference tо oral conversations with-the ‍‌‌‌‌​‌‌‌​‌‌‌​​‌‌​​‌​​​​‌‌​​​‌​‌‌‌​​​‌​​​‌‌​​​​‌‌‍defendant Arcuri. In limiting my concurrence to the present record, I would observe that under other circumstancés the-result might be substantially different.