Court Opinion

ID: 5768312
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:27:14.51629+00
Date Added: 2024-06-11T08:41:42.819130
License: Public Domain

McGivern, J. (dissenting).
The plaintiff bank seeks recovery on these drafts on the assumption it is a holder in due course of negotiable instruments and that the issues raised by the defendant are not available to it on this motion for summary judgment. But the drafts are not negotiable instruments according ii Lf.o Uniform Commercial Code. On their face they are payalVk- at “ forty-five days from receipt of goods in Fonda, New York ”, or “ at forty-five days sight from receipt of goods in Fonda, New York ”, or “ at forty-five days after arrival of goods in Fonda, New York ” or “ forty-five days after arrival of merchandise in Fonda, New York.” And subdivision (1) of section 3-104 of the code states: “ Any writing to be a negotiable instrument within this Article must * * (c) be payable on demand or at a definite time; and (d) be payable to order or to bearer ”. The drafts before us are neither. Indeed, the code further says in subdivision (2) of section 3-109: “ An instrument which by its terms is otherwise payable only upon an act or event *126uncertain as to time of occurrence is not payable at a definite time even though the act or event has occurred.”
Moreover, on the papers seeking summary judgment there is no proof by the moving party that all the goods for which payment is sought ever did arrive at Fonda, New York. Nor is there any proof that 45 days elapsed before the drafts were presented for payment. But there is an affidavit by an officer of the defendant corporation that differences arose concerning the quality of certain shipments, that the merchant vendor ‘ ‘ breached the contract by failing to deliver the full amount of the yarn ’ ’ and there is an unchallenged copy of a letter from defendant complaining about “ non-delivery in accordance with the shipment schedule in the yarn purchase agreement ”, and the statement “We have been forced to obtain the yarn at other sources at considerable increase in price.” Whether these defenses are really meritorious and will ultimately prevail is not before us. But since the drafts here involved were not negotiable instruments there are defenses against the merchant vendor, which preclude the granting of summary judgment to the plaintiff bank. There is also a sharp question of fact as to when and by whom the fixed due dates were inserted. It is even declared, and the record indicates, they were inscribed on the drafts long after the appellant’s acceptance. The subsequent unauthorized insertion of fixed due dates cannot change the tenor of the drafts or make them negotiable. Such insertion is, in any event, a material alteration (Uniform Commercial Code, § 3-407, subd. [1], par. [c]) which raises the issues of fraud and discharge. (Uniform Commercial Code, § 3-407, subd. [2], par. [a]; Oltarsh v. Turf Broadway, 12 Misc 2d 984 and cases cited therein.)
Under the circumstances disclosed on the record below, summary judgment is insupportable. (Bakerian v. Horn, 21 A D 2d 714; Millerton Agway Co-op. v. Briarcliff Farms, 17 N Y 2d 57, 61, 64; Gravenhorst v. Zimmerman, 236 N. Y. 22, 38-39; Sillman v. Twentieth Century-Fox, 3 N Y 2d 395, 404; Unadilla Nat. Bank v. McQueer, 27 A D 2d 778.)
I would reverse and deny the motion.
iStetjeb, J. P., and Capoxzoli, J., concur with McNally, J.; MoGivebu, J., dissents in opinion.
Order and judgment, entered May 28, 1968, and June 5, 1968, respectively, affirmed, with $50 costs and disbursements to respondent.