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ARTHUR A. ROEDER v. BERNARD JUDOVITZ ET AL. (06/27/68)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FOURTH DEPARTMENT


June 27, 1968

ARTHUR A. ROEDER, APPELLANT
v.
BERNARD JUDOVITZ ET AL., RESPONDENTS

Appeal from judgment of Erie Trial Term, dismissing complaint.

Bastow, P. J., Goldman, Del Vecchio, Witmer and Henry, JJ.

Memorandum: Plaintiff appeals from a judgment of Erie Trial Term which dismissed his promissory note action at the close of his case on the ground that the loan was usurious and the note was the individual obligation of defendant Judovitz and not that of the defendant Rochester Furniture Fashions, Inc., of which he was an officer. The note which is signed by defendant Judovitz "Vice President, Rochester Furniture Fashions, Inc." and by plaintiff's brother (who is not sued) as president and secretary provides: "The undersigned agree that this note is a debt of Rochester Furniture Fashions, Incorporated and also a personal debt, which in case the Rochester Furniture Fashions, Incorporated should be unable or unwilling to pay the total amount due, it is to become a personal liability and obligation of either and/or of both undersigners. Signed as private individuals and as corporate officers of Rochester Furniture Fashions, Inc." Plaintiff testified that defendant Judovitz and his brother were in business as Rochester Furniture Fashions, Inc., and they borrowed the money to assist in financing the opening of a second store. A corporation as principal obligor cannot plead usury and an individual as surety or guarantor can avail himself of only those defenses which are available to the corporation. (Leader v. Dinkler Management Corp. 20 N.Y.2d 393; General Phoenix Corp. v. Cabot, 300 N. Y. 87, 95.) On the proof at the close of plaintiff's case there was a triable issue as to whether the individual defendant was a principal debtor or whether his liability was secondary accruing only after default of the corporation. (Pink v. Kaplan Inc., 252 App. Div. 490, 491, 492.)

Disposition

Judgment unanimously reversed on the law and facts and a new trial granted, with costs to the appellant to abide the event.

19680627

© 1998 VersusLaw Inc.



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