Smith v. Meadow Mechanical Corp.

Appellate Division of the Supreme Court of New York

Smith v. Meadow Mechanical Corp.

203 A.D.2d 356, 610 N.Y.S.2d 76, 1994 N.Y. App. Div. LEXIS 3695

Appellate Division of the Supreme Court of the State of New York·Decided April 11, 1994·Published·Cited by 2 cases

Opinion

—In an action to recover on a promissory note, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Rutledge, J.), dated June 18, 1992, as denied their motion for summary judgment.

Ordered that the order is affirmed insofar as appealed from, with costs.

The subject promissory note made by the corporate defendant is not a negotiable instrument and therefore, the plaintiffs are not holders in due course (see, UCC 3-102 [1] [e]; 3-302; 80 NY Jur 2d, Negotiable Instruments and Other Commercial Paper, § 9). Under the facts presented here, we agree with the conclusion of the Supreme Court that the plaintiffs failed to establish their entitlement to compel payment on the note as a matter of law. The note is intertwined with a shareholders’ agreement and a subordination agreement. The court properly considered the three documents together in finding that factual issues existed concerning whether the conditions for payment on the note had been satisfied. Additionally, a factual issue existed as to whether the defendant was entitled to a set-off.

We have considered the plaintiffs’ remaining contentions [357] and find them to be without merit. Balletta, J. P., Rosenblatt, Ritter and Altman, JJ., concur.

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—In an action to recover on a promissory note, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Rutledge, J.), dated June 18, 1992, as denied their motion for summary judgment.

Ordered that the order is affirmed insofar as appealed from, with costs.

The subject promissory note made by the corporate defendant is not a negotiable instrument and therefore, the plaintiffs are not holders in due course (see, UCC 3-102 [1] [e]; 3-302; 80 NY Jur 2d, Negotiable Instruments and Other Commercial Paper, § 9). Under the facts presented here, we agree with the conclusion of the Supreme Court that the plaintiffs failed to establish their entitlement to compel payment on the note as a matter of law. The note is intertwined with a shareholders’ agreement and a subordination agreement. The court properly considered the three documents together in finding that factual issues existed concerning whether the conditions for payment on the note had been satisfied. Additionally, a factual issue existed as to whether the defendant was entitled to a set-off.

We have considered the plaintiffs’ remaining contentions [357] and find them to be without merit. Balletta, J. P., Rosenblatt, Ritter and Altman, JJ., concur.

Smith v. Meadow Mechanical Corp., 203 A.D.2d 356, 610 N.Y.S.2d 76, 1994 N.Y. App. Div. LEXIS 3695 (N.Y. Ct. App. 1994).

Pincite

203 A.D.2d 356 (Smith v. Meadow Mechanical Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Opinion

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