Court Opinion

ID: 5764674
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:20:32.195445+00
Date Added: 2024-06-11T08:41:37.280745
License: Public Domain

Eager, J. P.
(dissenting). I would reverse and vacate the judgment for defendants but would modify the order, entered September 20,1967, to delete the direction that defendants have summary judgment and otherwise affirm. Special Term properly denied plaintiff’s motion for summary judgment.
The close questions of construction involved here should not be determined without affording the parties an opportunity of a plenary trial.- “ It may preliminarily be observed that, as a general rule, the construction of a written instrument is a question of law for the court to determine, but when the language employed is not free from ambiguity, or when it is equivocal and its interpretation depends upon the sense in which the words were used in view of the subject to which they relate, the relation of the parties and the surrounding circumstances properly applicable to it, the intent of the parties becomes a matter of inquiry, and the interpretation of the language used by them is a mixed question of law and fact.” (Kenyon v. Knights Templar & Masonic Mut. Aid Assn., 122 N. Y. 247, 254; Lacks v. *394Fidelity & Cas. Co. of N. Y., 306 N. Y. 357, 364.) Thus, ambiguity in a contract generally gives rise to issues of fact precluding summary judgment. (See Rochester Capital Leasing v. Barber, 19 A D 2d 114; Janos v. Peck, 21 A D 2d 529, 536, affd. 15 N Y 2d 509.)
The written “ Customer Guaranty ” agreement by its intendment and terms was a continuing guaranty to cover plaintiff as a factor or otherwise in extending credit to Milard Clothes, Inc. (the customer). The parties expressly agreed that the continuing guaranty was to remain in full force and effect until terminated by written notice and that “ such termination shall be applicable only to transactions having their inception thereafter, and rights and obligations arising out of transactions having their inception prior to such termination shall not be affected.” The parties are in dispute as to the meaning and effect of these provisions in their application to merchandise ordered by Milard from plaintiff’s factoring clients but not delivered as of the time of defendants’ termination of the agreement. The question arises as to whether these orders should be considered as “ transactions having their inception ” prior to the termination. Further, there exist issues of fact as to the “ rights and obligations ” of the plaintiff “ arising out of” such orders.
Concededly, the agreement should be given the effect intended by the parties but the record discloses substantial doubt as to such intent, thereby raising triable issues. To ascertain the parties’ intent, the agreement should be construed in light of all relevant surrounding circumstances. In this connection, reference may be had to the terms and conditions of the factoring contracts between the plaintiff and its clients. (The plaintiff makes such contracts a part of its motion papers.) Under the terms of such contracts, the plaintiff was not obligated to and did not extend credit to clients until the taking of an assignment of the particular accounts and the making of advances thereon. As pointed out by Special Term, it appears that the plaintiff retained and had the power and authority upon a tendered assignment of a particular account to reject it at any time before delivery of the merchandise. Here, it appears that the plaintiff did not make any advances or take any assignments on the basis of the particular merchandise orders until after it had received the notice terminating the defendants’ guaranty. In light of these circumstances, there are issues of fact as to the “ rights and obligations ” of the plaintiff under the guaranty agreement with reference to the alleged credit approvals issued by plaintiff with respect to the particular orders.
*395Particularly, the record does not support a matter of law determination that the plaintiff should have a judgment for the alleged loss of merchandise ordered from Export-Import Woolens Corp. by Milard but not shipped to Milard. Although the burden of proof is upon the plaintiff, the record contains very little by way of evidentiary showing in support of plaintiff’s claim to recover its alleged loss from the defendant guarantors, and, in fact, the details of such loss are not shown. It appears that the goods were shipped to and received by plaintiff (not Milard) some two or three months after the termination of the guaranty. Under these circumstances, it would appear that plaintiff did not and could not acquire by assignment any account payable by Milard nor make any advance on the basis thereof. Furthermore, a question arises as to whether there was in fact ever a ‘‘ debt ’ ’ owing by Milard and, thus, the terms of the guaranty agreement, referred to in the opinion of the majority, would not establish a matter of law liability on the part of the defendants to pay plaintiff for its alleged loss in taking and reselling this merchandise.
Tilzer and Rabin, JJ., concur with Capozzoli, J.; Eager, J. P., dissents in opinion in which Bastow, J., concurs.
Order and judgment reversed, on the law, with $50 costs and disbursements to appellant, and plaintiff’s motion for summary judgment granted, with $10 costs.