33 Misc. 2d 616 | N.Y. Sup. Ct. | 1952
This is a motion pursuant to rules 103, 113 and 114 of the Buies of Civil Practice, to strike the answers and grant summary judgment to plaintiff on the ground that the denials are sham and the defenses insufficient in law.
The action is against defendants as guarantors of payment of loans made to two corporations.
Affidavits are not usable on such a motion, and the facts brought to the court’s attention on the other phase of the motion may not be considered. (St. Regis Tribe of Mohawk Indians v. State of New York, 5 N Y 2d 24.)
The first affirmative defense pleads oral termination of defendants’ guarantee, and the second defense pleads an estoppel to claim liability on future loans based on plaintiff’s oral statements that no further action was needed to terminate liability after defendants’ oral notice of termination. Under common law a continuing guarantor could be terminated orally. The complaint does not allege that this instrument contained a provision that the guarantee was not to be terminated orally. Therefore, section 33-c of the Personal Property Law is inapplicable, and the common law governs. (Associated Food Stores v. Siegel, 10 A D 2d 1003 [2d Dept.].) Further, subdivision 2 of section 33 of the Personal Property Law requiring either a consideration or a writing to effect a modification or discharge is not applicable; it refers to contracts. Here the instrument was but a continuing offer of guarantee, and binding as a contract only when accepted by extending credit in reliance thereon. (Union Bank of Louisiana v. Coster, 3 N. Y. 203.) Thus the defenses are sufficient as to the cause of action alleged in the complaint.
(3) If this be treated as a motion for summary judgment, so that affidavits and proofs may be considered, a copy of the guarantee is annexed to the moving papers. It states, 11 This guaranty shall continue in full force * * * and the Bank may continue to act in reliance hereon until receipt by the Bank of written notice from the undersigned ”. This may be construed as a statement ‘1 to the effect ’ ’ that it cannot be terminated orally within the meaning of section 33-c of the Personal Property Law, which states that such written agreement or other instrument cannot be terminated orally. The section would seem applicable to a continuing guarantee containing such term. (Associated Food Stores v. Siegel, supra.) Thus the first defense would be sham and frivolous if the complaint alleged such a guarantee. Even if it did, the second defense would be valid. Subdivision 4 of section 33-c of the Personal Property Law provides that where an agreement contains a provision for termination by written notice of one party, the requirement that such notice be in writing cannot be waived except by a writing signed by the party against whom the waiver is sought to be enforced. Though oral termination or waiver would seem to be
The motion for summary judgment is therefore denied. Upon the pleadings and affidavits, the denials of paragraphs 2, 3 and 5 are not sham; nor is the second affirmative defense insufficient. Further, the first affirmative defense is sufficient as to the cause of action stated in the complaint. On a motion for summary judgment the court must consider the complaint as drawn, not what the result might be on a differently drawn complaint (Bright v. O’Neill, 3 A D 2d 728 [2d Dept.]).
Motion is granted to the extent of striking the denials of paragraph 4 of the complaint, but in all other respects is denied.