Court Opinion

ID: 5737590
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:36:23.291954+00
Date Added: 2024-06-11T08:40:59.895118
License: Public Domain

Per Curiam.

The complaint in this action has been dismissed upon a holding that the causes of action therein stated have been released by plaintiff. We conclude that triable issues are presented and that the pleading may not he summarily dismissed.
Defendants are accountants. The two principal stockholders of plaintiff, prior to forming the corporation, expressed to defendants a desire to enter the commercial financing business. According to the complaint, defendants informed these individuals that one Carlin, a man of integrity, conducted an extensive financing business with which defendants were familiar; that if the individuals should decide to enter business with Carlin *219defendants would look after their interests as sole accountants for the new corporation. Thereafter plaintiff corporation was organized pursuant to agreement made by Carlin, one of his corporations, and the two individuals. The latter advanced substantial sums of money and their respective wives agreed to loan further sums to plaintiff. It is unnecessary to recite all the alleged ensuing intricate financial dealings. In substance it is alleged that defendants then knew that Carlin and his several corporations were in serious financial trouble; that Carlin with the aid of defendants by the means of fictitious loans siphoned off large sums of money from plaintiff’s treasury.
Subsequently, plaintiff and Carlin entered into an agreement by the provisions of which the claims of the former were settled. Defendants were not a party to this agreement and were not mentioned therein. The question here presented centers upon a certain release provision in this agreement. Plaintiff therein agreed ‘ ‘ that it will not institute any suit * * * against any person whomsoever ” with certain exceptions here immaterial. Special Term in substance held that there was no ambiguity to be found in this language and giving the release provision its full import it inured to the benefit of defendants.
We construe the third cause of action, as did Special Term, to allege a breach of an agreement by defendants to supervise the activities of Carlin with plaintiff and particularly in the light of the agreement of January 28, 1959.
We disagree, however, with the conclusion of Special Term that, as a matter of law, it may be decided that the release provision inured to the benefit of defendants. This presents a triable issue. Lucio v. Curran (2 N Y 2d 157) relied on by respondents is distinguishable. Therein plaintiff executed a general release to certain defendants in the instant action and subsequently brought another action against them and others. It was held that the second action was barred not only as to the defendants specifically released by the prior instrument but also the remaining defendants who were found to be joint tort-feasors.
The general rule here applicable has been stated as follows: ‘ ‘ Although the effect of a general release, in the absence of fraud or mutual mistake, cannot be limited or curtailed (see Lucio v. Curran, 2 N Y 2d 157, 161; Kirchner v. New Home Sewing Mach. Co., 135 N. Y. 182, 188), its meaning and coverage necessarily depend, as in the case of contracts generally, upon the controversy being settled and upon the purpose for which the release was actually given. Certainly, a release may not be read to cover matters which the parties did not desire or intend to dispose of.” (Cahill v. Regan, 5 N Y 2d 292, 299.)
*220Upon the present record issues are presented as to the scope and meaning of the release that require a trial.
The order appealed from should be reversed and the motion denied.