Danleigh Fabrics, Inc. v. Gaynor-Stafford Industries, Inc.
| Decision Date | 23 June 1983 |
| Docket Number | GAYNOR-STAFFORD |
| Citation | 95 A.D.2d 719,463 N.Y.S.2d 828 |
| Court | New York Supreme Court — Appellate Division |
| Parties | DANLEIGH FABRICS, INC., Plaintiff-Appellant-Respondent, v.INDUSTRIES, INC., Defendant, and Chemical Bank, Dommerich Division, Defendant-Respondent-Appellant, and John P. Maguire & Co., Inc., Defendant. |
J.R. Schlacter, New York City, for plaintiff-appellant-respondent.
K.J. Kelly, New York City, for defendant.
Before MURPHY, P.J., and SULLIVAN, FEIN, MILONAS and KASSAL, JJ.
Order, Supreme Court, New York County, entered July 19, 1982, denying defendant Chemical Bank's motion and plaintiff's cross-motion for summary judgment, unanimously modified, on the law, with costs and disbursements, to the extent of granting the motion for summary judgment dismissing the third and fourth causes of action as against Chemical Bank, and otherwise affirmed.
Danleigh seeks to recover on alleged wrongful charge-backs by Chemical Bank, its factor, on accounts receivable relating to textile goods sold by plaintiff to defendant Gaynor-Stafford. In the factoring agreement Danleigh warranted to Chemical Bank that its customers would accept the goods sold and would pay invoices as they became due, "without dispute, claim, offset, defense or counterclaim." Plaintiff was obligated by the agreement to notify the bank of any dispute or claim and, in such event, the factor was accorded the right to charge back the amount of the receivable to Danleigh's account. Thus, par. 7 of the agreement provides in part:
"In addition to all other rights to which you are entitled under this agreement, where there is such dispute and/or claim ... you may charge the amount of the receivable so affected or unpaid to the undersigned ... Regardless of the date or dates upon which you charge back the amount of any receivable where there is such dispute, claim, offset, defense or counterclaim, the undersigned agrees that immediately upon the occurrence of any such dispute, claim, offset, defense or counterclaim, the undersigned agrees that immediately upon the occurrence of any such dispute, claim, offset, defense or counterclaim, you shall no longer bear the loss on such receivables due to the financial inability of the customer to pay, and such loss shall immediately revert to and be assumed by the undersigned without any act upon your part to effect the same."
It appears that in January 1979, the bank was advised of a dispute between plaintiff and Gaynor-Stafford involving claimed defects with respect to certain goods shipped by Danleigh, style nos. 536, 536RT and 536DM. As a result, Chemical charged back to Danleigh's account $230,177.78 on 15 invoices, thereafter issuing a credit to plaintiff in the sum of $68,891.24 to account for payment in that amount which had been received from Gaynor-Stafford. This resulted in a total charge back of $161,286.64. In arguing that the charge backs were improper, plaintiff contends that they included debits with respect to...
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