Manufacturers & Traders Trust Co. v. International Packaging, Inc.

207 A.D.2d 982, 617 N.Y.S.2d 91

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: September 30, 1994
• Status: Published

Opinion

—Order unanimously affirmed without costs. Memorandum: Plaintiff brought this action to enforce general guaranty agreements given by defendants George N. Smith and George V. Smith guaranteeing a loan of $92,900 from plaintiff to defendant International Packaging, Inc. Supreme Court properly granted summary judgment in plaintiff’s favor.

The guaranty agreements entered into by the Smiths provide that they are not entitled to notice of default on the part of the primary obligor. The guaranty agreements also provide that each guarantor waives the right to assert any defense based upon a claim of laches.

Finally, the argument of the Smiths that there is a triable issue of fact because plaintiff unjustifiably impaired their right of recourse against the principal obligor (see, UCC 3-606 [1] [b]) is without merit. UCC 3-606 (1) (b) provides that the holder discharges any party to an instrument to the extent that, without such party’s consent, the holder "unjustifiably impairs any collateral for the instrument given by or on behalf of the party or any person against whom he has a right of recourse”. That section concerns "instrument[s]” that are defined by UCC 3-102 (1) (e) as "negotiable instrument[s]”. Because the guaranty agreements were not negotiable instruments, no triable issue of fact exists regarding the impairment of any right of recourse against the principal obligor. (Appeal from Order of Supreme Court, Erie County, Glownia, J.— Summary Judgment.) Present—Lawton, J. P., Fallon, Wesley, Callahan and Davis, JJ.