38 Town Associates v. Barr

225 A.D.2d 613, 639 N.Y.2d 442, 639 N.Y.S.2d 442, 1996 N.Y. App. Div. LEXIS 2167

Opinion

The plaintiff, a partner of the defendants, brought this action to recover the proceeds of an alleged loan made to the partnership. The defendants moved to dismiss the action, asserting, in essence, that the alleged loan was in fact a capital contribution. The Supreme Court granted the motion to dismiss.

The Supreme Court erred in granting the motion to dismiss. The partnership agreement does not by its terms clearly rule out loans by partners to the partnership. Accordingly, its provisions are subject to interpretation and inquiry as to the intent of the partners who entered into the agreement. For that reason, summary judgment is inappropriate (see generally, Jackson Hgts. Med. Group v Complex Corp., 222 AD2d 409; Icon Motors v Empire State Datsun, 178 AD2d 463; see also, Hynes v Barr, 225 AD2d 588 [decided herewith]).

Moreover, apart from the terms of the agreement, there are questions of fact as to whether the monies advanced were either loans or capital contributions based on the surrounding circumstances and the conduct of the parties (see, e.g., BenDashan v Plitt, 58 AD2d 244). Rosenblatt, J. P., Ritter, Copertino and Goldstein, JJ., concur.