64 A.D.2d 573 | N.Y. App. Div. | 1978
Judgment, Supreme Court, New York County, entered October 18, 1977, whereby it was adjudged that plaintiff recover of defendant Edward Chu the sum of $50,181.72, plus interest and costs, affirmed, without costs and disbursements. Plaintiff National Bank of North America brought this action to recover $50,181.72 on account of an overdraft in the checking account of defendant Chia Mei Corporation. Recovery was sought against the individual defendants based upon guarantees executed by them covering debts of the corporate defendant. Plaintiff successfully moved for partial summary judgment on its fifth cause of action as against the defendant guarantors Edward Chu and David Chien. Defendant Chu appeals the judgment entered pursuant to the order granting such partial summary judgment. The existence of the debt and the fact that the defendant Chu signed an individual guarantee are not disputed. Instead, defendant Chu claims fraud in the inducement of the guarantee executed by him in that he was not informed that he was signing a guarantee of a loan from plaintiff to the corporate defendant, and he signed the guarantee without reading it in the mistaken belief that it related solely to the signing of checks for Chia Mei Corporation. It was asserted by Chu that he has limited reading ability and is not fluent in English, the language of the written guarantee, and that he did not even know what a guarantee was. In Pimpinello v Swift & Co. (253 NY 159, 162-163), the Court of Appeals most pertinently observed: "Ordinarily, the signer of a deed or other instrument, expressive of a jural act, is conclusively bound thereby. That his mind never gave assent to the terms expressed is not material. (Wigmore on Evidence, § 2415.) If the signer could read the instrument, not to have read it was gross negligence; if he could not read it, not to procure it to be read was equally negligent; in either case the writing binds him. (Chicago, St. P., M. & O. Ry. Co. v Belliwith, 83 Fed. Rep. 437.) * * * If the signer is illiterate, or blind, or ignorant of the alien language of the writing, and the contents thereof are misread or misrepresented to him by the other party, or even by a stranger, unless the signer be negligent, the writing is void” (emphasis supplied). We do not have here a case involving misinterpretation or misreading. Defendant-appellant implicitly admits to having engaged in business and expresses no unfamiliarity or hesitancy respecting the business acumen necessary for signing checks on behalf of the corporate defendant. There is no claim that plaintiff’s vice-president K. C. Leung misinterpreted or misread the document to defendant-appellant, or that the latter requested Mr. Leung to explain or read the document to him and that Leung refused to do so. There is no basis on this record for concluding that plaintiff had a duty, sua sponte, to explain to defendant Chu the terms of the guarantee and mere silence by plaintiff may not, under these circumstances, be viewed as constituting a species of fraud so as to render void the written guarantee admittedly executed by defendant Chu (see Peoples’ Bank of City of N. Y. v Bogart, 81 NY 101; see, also, White v Idsardi, 253 App Div 96, 100-101). "There was here no confidential relationship nor one of trust between the plaintiff bank and the [defendanfe-appellant]. The parties were dealing in a commercial transaction at arm’s length. The duty of inquiry was upon the [defendant-appellant] It was the duty of the [defendant-appellant] to look out for [himself] and ascertain the nature of the obligations embraced in [his] undertaking. Any other rule would render securities of this character of but little, if of any, value. (Western N. Y. Life Ins. Co. v. Clinton, 66 N. Y. 326, 331.) The concealment which will avoid a guarantee must be a fraudulent one; if not fraudulent in fact or in law, the defense is not made out” (Security Nat. Bank of Long Is. v Compania Anonima De