Dave Snyder Lumber Co. v. Karlson Associates, Inc.

7 A.D.2d 925, 183 N.Y.S.2d 493, 1959 N.Y. App. Div. LEXIS 9970

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 9, 1959
• Status: Published

Opinion

In an action by an alleged holder in due course of four promissory notes, the appeal is from an order denying a motion for summary judgment striking out the answer. The notes were executed by the corporate respondent payable to Baywood Manufacturing Company and were indorsed by the individual respondents. The answer pleads, as an affirmative defense, a breach of an agreement between the corporate respondent and the payee in that the payee refused to honor the sales requirements of the corporate respondent except for cash. The record indicates that respondents have commenced a third-party action against the payee. Order reversed, with $10 costs and disbursements, motion for summary judgment striking out the answer granted, with $10 costs, and third-party action severed. There is no proof of a breach of the agreement between the corporate respondent and the payee before appellant acquired the notes on August 14, 1958. A breach thereafter is not a defense. (Petroleum Acceptance Corp. v. Queen Anne Laundry Service, 265 App. Div. 692.) In any event, it does not appear that the agreement was breached because the written agreement between the corporate respondent and the payee does not contain any requirement that the payee honor the sales requirements of the corporate respondent except for cash. Wenzel, Acting P. J., Beldoek, Murphy, Hallinan and Kleinfeld, JJ., concur.