Heilbronn v. Fine Line, Inc.

165 A.D.2d 866, 560 N.Y.S.2d 336, 1990 N.Y. App. Div. LEXIS 11526

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: September 24, 1990
• Status: Published

Opinion

In an action to recover on a promissory note, the defendant appeals from an order of the Supreme Court, Suffolk County (Luciano, J.), dated April 21, 1989, which granted the plaintiff’s motion pursuant to CPLR 3213 for summary judgment in lieu of complaint.

Ordered that the order is affirmed, with costs.

We find that the Supreme Court properly granted the plaintiff’s motion for summary judgment in lieu of complaint on the promissory note executed by Fine Line, Inc., in favor of Industrie-Siebdruck-Systeme GmbH. The defendant failed to allege sufficient facts showing that the plaintiff bank, Kreissparkasse Heilbronn, had actual notice that the subject note was a voidable obligation at the time it purchased the note (see, First Intl. Bank v Blankstein & Son, 59 NY2d 436, 443-446). Moreover, the defendant has failed to offer evidentiary facts or documentary proof that the plaintiff had actual notice of the defendant’s defense of failure of consideration at the time the plaintiff purchased the note or of knowledge of such facts that the plaintiff’s action in taking the instrument amounted to bad faith (see, Hartford Acc. & Indem. Co. v American Express Co., 74 NY2d 153, 162-163; UCC 3-304 [7]).

We further find that the plaintiff has satisfied the requirements of the Uniform Commercial Code § 3-302. As a holder in due course, the plaintiff must be deemed to have taken the subject promissory note free from all of the defendant’s personal defenses (see, First Intl. Bank v Blankstein & Son, supra, at 446).

Brown, J. P., Kooper, Harwood and Balletta, JJ., concur.