Sterling Factors Corp. v. Freeman

Appellate Division of the Supreme Court of New York

Sterling Factors Corp. v. Freeman

27 A.D.2d 956, 279 N.Y.S.2d 577, 1967 N.Y. App. Div. LEXIS 4386

CourtAppellate Division of the Supreme Court of the State of New York

DecidedApril 24, 1967

StatusPublished

Cited by2 cases

This text of 27 A.D.2d 956 (Sterling Factors Corp. v. Freeman) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Sterling Factors Corp. v. Freeman, 27 A.D.2d 956, 279 N.Y.S.2d 577, 1967 N.Y. App. Div. LEXIS 4386 (N.Y. Ct. App. 1967).

Pincite

Opinion

In consolidated actions by a corporate factor against guarantors of a corporate indebtedness on their guaranties and to foreclose a mortgage given by them as collateral security, plaintiff appeals from a judgment of the Supreme Court, Nassau County, dated July 13,1966, in favor of respondents and dismissing the complaints, after a nonjury trial. Judgment affirmed, with costs. In our opinion, the auction sale of March 1, 1963 and plaintiff’s conduct thereafter were an effective repudiation of the agreement of February 28, 1963. Since plaintiff prevented performance under that contract, it cannot later seek to avail itself of rights obtained thereunder (cf. Grad v. Roberts, 14 N Y 2d 70, 75; Dulberg v. Equitable Life Assur. Soc., 277 N. Y. 17, 24; Homer v. Guardian Mut. Life Ins. Co., 67 N. Y. 478, 481). Nor did plaintiff obtain any better rights from the auction sale. The proof established that the sale to plaintiff lacked good faith (Matter of Kiamie, 309 N. Y. 325; Lien Law, § 202-b) and did not comply with the statutory requirements (Lien Law, § 202). Further, by entering into the agreement of February 28, 1963, which provided for an “ orderly liquidation ” of the debtor’s inventory for the “ mutual benefit ” of plaintiff and the debtor, plaintiff waived its right to sell the property without notice to the debtor (Toplitz v. Bauer, 161 N. Y. 325). There was no contractual provision which permitted such a sale to be held without notice to the guarantors. We agree with Special Term’s finding that the value of the security (the debtor’s inventory) was far greater than the debt. The guarantors must be exonerated from liability, as the security was impaired to an extent greater than the debtor’s obligation to plaintiff (Antisdel v. Williamson, 165 N. Y. 372, 375-376; Humphrey v. Hayes, 94 N. Y. 594, 604). Ughetta, Acting P. J., Brennan, Rabin, Benjamin and Munder, JJ., concur. [50 Misc 2d 715.]

Free access — add to your briefcase to read the full text and ask questions with AI

In consolidated actions by a corporate factor against guarantors of a corporate indebtedness on their guaranties and to foreclose a mortgage given by them as collateral security, plaintiff appeals from a judgment of the Supreme Court, Nassau County, dated July 13,1966, in favor of respondents and dismissing the complaints, after a nonjury trial. Judgment affirmed, with costs. In our opinion, the auction sale of March 1, 1963 and plaintiff’s conduct thereafter were an effective repudiation of the agreement of February 28, 1963. Since plaintiff prevented performance under that contract, it cannot later seek to avail itself of rights obtained thereunder (cf. Grad v. Roberts, 14 N Y 2d 70, 75; Dulberg v. Equitable Life Assur. Soc., 277 N. Y. 17, 24; Homer v. Guardian Mut. Life Ins. Co., 67 N. Y. 478, 481). Nor did plaintiff obtain any better rights from the auction sale. The proof established that the sale to plaintiff lacked good faith (Matter of Kiamie, 309 N. Y. 325; Lien Law, § 202-b) and did not comply with the statutory requirements (Lien Law, § 202). Further, by entering into the agreement of February 28, 1963, which provided for an “ orderly liquidation ” of the debtor’s inventory for the “ mutual benefit ” of plaintiff and the debtor, plaintiff waived its right to sell the property without notice to the debtor (Toplitz v. Bauer, 161 N. Y. 325). There was no contractual provision which permitted such a sale to be held without notice to the guarantors. We agree with Special Term’s finding that the value of the security (the debtor’s inventory) was far greater than the debt. The guarantors must be exonerated from liability, as the security was impaired to an extent greater than the debtor’s obligation to plaintiff (Antisdel v. Williamson, 165 N. Y. 372, 375-376; Humphrey v. Hayes, 94 N. Y. 594, 604). Ughetta, Acting P. J., Brennan, Rabin, Benjamin and Munder, JJ., concur. [50 Misc 2d 715.]

Cite This Page — Counsel Stack

Bluebook (online)

27 A.D.2d 956, 279 N.Y.S.2d 577, 1967 N.Y. App. Div. LEXIS 4386, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sterling-factors-corp-v-freeman-nyappdiv-1967.

Opinion

Related

Cite This Page — Counsel Stack