Court Opinion

ID: 5713353
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:57:13.383636+00
Date Added: 2024-06-11T08:40:34.210255
License: Public Domain

—In an action on a promissory note, the appeal is from a judgment, entered after trial before the court without a jury, dismissing the complaint. Judgment affirmed, with costs. One Maesano purchased an automobile from respondent. In connection therewith he executed an installment note .cm April 18, 1956 to the order of respondent payable at appellants place of business. Respondent indorsed and delivered the note to appellant, a nonbanking corporation. If the transaction was a present loan from appellant to Maesano on a note which had no prior legal inception, the transaction was void. (Banking Law, ■§ 131, subd. 1; General Corporation Law, § 18 [as it read at the time the note was executed].) If the transaction was a purchase by appellant of an existing note which did have a prior legal inception, th.e transaction was valid, (Meserale Securities Gq. y. Gosman, 253 N. Y. 130.) Whether the transaction was of the former or ,of the latter type presented a question of fact. The evidence presented was sufficient to sustain the determination .pf the trial .court that the transaction was .of the former typ.e. Beldoek, Hallinan and Kleinfeld, JJ,, concur-; Wenzel, Acting P. J,, an.d Ughetta, J., dissent and vote to reverse the judgment and t.o .direct the .entry of jndgment in fa-var of appellant, -with the following memorandum: In our opinion, the evidence required a finding that the transactions in question constituted a sale of an automobile by respondent, an automobile dealer, to the maker of the note, or his wife, that the consideration was partly in the form of .cash and partly -in the form of credit, in connection with which the note and chattel mortgage .on the automobile were given t.o the respondent, that the respondent sold the note and mortgage to appellant, and that the -payment by appellant to respondent for the note and mortgage was not a loan to th.e maker of the note or -to anyone else. Under the circumstances, the provisions of subdivision 1 of section 131 of the Banking Law and section 18 of the General Corporation Law, as in .effect in .April, 1-956, which rendered void a note given to--secure the payment of money loaned or discounted by a non-banking corporation, are inapplicable (cf. Jackson v. Westchester Auto Credit Corp., 267 App. Div. 890, affd. 293 N. Y. 840; Moldovan v. Julius Hebenstreit, Inc., 266 App. Div. 998; Morris Plan Ind. Bank of Schenectady v. Faulds, 269 App. Div. 238; Archer Motor Co. v. Relin, 255 App. Div. 333; Failing v. National Bond & Inv. Corp., 12 N. Y. S. 2d 260, affd. 258 App. Div. 778; 143 A. L. R. 242 et seq.; 152 A. L. R. 598 et seq.). [13 Misc 2d 850.]