89 A.D.2d 575 | N.Y. App. Div. | 1982
In an action on a promissory note, commenced by service of a summons with notice of motion for summary judgment in lieu of a complaint, plaintiff appeals from so much of an order of the Supreme Court, Nassau County (Pantano, J.), entered September 25,1981, as denied its motion for summary judgment. Order reversed, insofar as appealed from, on the law, with $50 costs and disbursements, and plaintiff’s motion is granted. On August 11, 1975 defendants, doing business as RWB Associates, issued a note to Penral, Inc., payable on May 14, 1976, in the face amount of $10,000 with 8% annual interest. The note was discounted by plaintiff’s predecessor, First State Bank of Hudson County (hereinafter the Bank) on December 12, 1975. On the maturity date of May 14, 1976, defendants stopped payment on the original note and issued a replacement note, which was payable August 12, 1976. The original note was not, however, returned. On May 14, 1976, the Bank sent a certificate and notice of protest to defendants RWB Associates and Russo. The Bank was declared insolvent by the New Jersey Commissioner of Banking on June 14,1976, and plaintiff was appointed receiver of the Bank; as such, it became the holder of the note. This action was commenced by plaintiff “in its corporate capacity as Liquidator of certain assets”. Plaintiff, as transferee of the Bank, takes the Bank’s interest in the note (see Uniform Commercial Code, § 3-201, subd [1]). On August 12, 1976, three months after the issuance of the certificate and notice of protest and without the original note having been returned, defendants authorized the payment of the replacement note. In the early part of September, 1975, prior to discounting the original note, the Bank’s president had discussions concerning the note with defendant Russo. The note did not refer to any other document and was unconditional on its face. It had been issued as payment for excavating work to be performed by Penral, Inc. The contract for the work was not produced for the Bank and is not part of the record on appeal. Russo explained that he did not think the work