Exchange Leasing Corp. v. Bundy

• Court: New York Supreme Court — Appellate Division
• Citation: Exchange Leasing Corp. v. Bundy, 287 N.Y.S.2d 548, 29 A.D.2d 828 (N.Y. App. Div. 1968)
• Decision Date: 15 February 1968
• Parties: In the Matter of EXCHANGE LEASING CORPORATION, Respondent, v. Donald J. BUNDY, 1033 James Street Corporation, Bundy Securities Corporation, Curran Securities Corporation, Appellants.

Page 548

287 N.Y.S.2d 548

29 A.D.2d 828

In the Matter of EXCHANGE LEASING CORPORATION, Respondent, v. Donald J. BUNDY, 1033 James Street Corporation, Bundy Securities Corporation, Curran Securities Corporation, Appellants.

Supreme Court, Appellate Division, Fourth Department.

Feb. 15, 1968.

Donald J. Bundy, Syracuse, for appellants.

Kavinoky, Cook, Hepp, Sandler & Gardner, Ronald B. Felman, Buffalo, for respondent.

Before WILLIAMS, P.J., and BASTOW, HENRY, DEL VECCHIO and MARSH, JJ.

MEMORANDUM.

The determination of Special Term was based largely upon the rule that the defense of usury is unavailable to the corporate appellants-defendants and their individual guarantor, defendant-appellant Bundy. (General Phoenix Corporation v. Cabot, 300 N.Y. 87, 89 N.E.2d 238) We do not disagree with this rule or its application as to causes of action 'Second' through 'Fifteenth', inclusive. However, the first cause of action does not come within this rule. That cause of action is against Bundy individually, as lessee of certain equipment, for failure to make payments required of him under the so-called leasing agreement. There is no guarantee of any corporate obligation. In fact, there is no corporation involved in the transaction, whatever it was.

The answer of Bundy sets up the defense of usury, not in a particularly artistic manner, but in manner sufficient to give 'notice' to the plaintiff of the nature of the defense and of the transactions intended to be proved and the material elements of such defense. (CPLR 3013; Donnelly v. Rochester Gas and Electric Corp., 21 A.D.2d 740, 250 N.Y.S.2d 90; Foley v. D'Agostino, 21 A.D.2d 60, 248 N.Y.S.2d 121)

The Special Term Justice also put serious reliance upon a provision in the written lease agreement that the instrument contained the entire agreement between the parties 'and no representation, oral or written, shall constitute an amendment hereto unless signed in writing by an officer of the Lessor.'

The Special Term Justice determined that parol evidence could not alter the written lease as it is complete on its face. Fogelson v. Rackfay Constr. Co., 300 N.Y. 334, 340, 90 N.E.2d 881, 884, was cited. However, the general rule that parol evidence may not alter a written agreement is not a hard and fast rule (see p. 340, 90 N.E.2d p. 884, Fogelson v. Rackfay Constr. Co., supra; J. W. Mays, Inc. v. Hertz Corp., 15 A.D.2d 105, 221 N.Y.S.2d 766; Nationwide Mut. Ins. Co. v. Timon, 9 A.D.2d 1018, 194 N.Y.S.2d 429), but it would not apply in the present case in any event because it appears that part of the agreement relied upon by Bundy, before entering into it, was a separate written document containing options upon failure to pay. These options were discussed at the time that Bundy signed the agreement and were printed and delivered to him by the plaintiff. They were definitely a part of the entire agreement and belie the clause in the agreement that it (the lease in question) contained the entire agreement of the parties. Furthermore, a clause of this kind should not rule out a defense of fraud and, as we have indicated, is subject to many exceptions. (J. D. Spencer Co. v. New York Review, Inc., 282 App.Div. 659, 122 N.Y.S.2d 161.)

Rules of evidence should be...