Millerton Agway Co-op., Inc. v. Briarcliff Farms, Inc.

Decision Date24 February 1966
Citation17 N.Y.2d 57,268 N.Y.S.2d 18,215 N.E.2d 341
Parties, 215 N.E.2d 341 MILLERTON AGWAY COOPERATIVE, INC., Respondent, v. BRIARCLIFF FARMS, INC., Defendant, and Edward G. Brown et al., Appellants.
CourtNew York Court of Appeals Court of Appeals

Milton Pollack, New York City, for Anthony D. Duke and Angier B. Duke, appellants.

James B. Kilsheimer, III, and Dermot G. Foley, New York City, for Peter D. Murray, appellant.

Thomas I. Sheridan, Jr., New York City, for Thomas E. Murray, Jr., appellant.

Glazer & Pollack, New York City, for Edward G. Brown, appellant.

Harry Litwin, Harold Greenwald, New York City, and Adrian P. Driggs, Syracuse, for respondent.

DESMOND, Chief Judge.

Plaintiff corporation is in the business of selling cattle feed, farm supplies, etc. The corporate defendant Briarcliff Farms, Inc. (not a party to this appeal) raises beef cattle on several farms and beginning in 1962 was one of plaintiff's customers. Appellants together own a majority of Briarcliff's shares and are a majority of its board of directors. Appellant Brown is its president and appellant Peter D. Murray, an attorney, is its secretary and treasurer.

The Appellate Division, reversing Special Term, has granted plaintiff partial summary judgment against the individual defendants for the total of the following amounts, all with interest: on the first cause of action for $283,818.05, and on the second count for $443,828.93, representing amounts due on Briarcliff's promissory notes given for merchandise sold by plaintiff to Briarcliff and other good considerations payment of which appellants had individually guaranteed; and for the third cause of action for $15,000 because of nonpayment of another Briarcliff note similarly guaranteed. These defendants opposed the granting of summary judgment, swearing (in a form and at a time hereafter explained) that their $1,000,000 guarantee sued upon in this action had been fraudulently induced by plaintiff through false oral representations that plaintiff would, in addition to about $100,000 already owed by Briarcliff when the guarantees were executed, supply to Briarcliff on credit and on open account additional animal feed to a total amount of $1,000,000, the top limit of the guarantee, and would not enforce payment thereof until the total guaranteed indebtedness of Briarcliff should reach $1,000,000, all in consideration of the increase to this new $1,000,000 limit of an earlier outstanding guarantee given by appellants to plaintiff in the amount of $400,000.

Appellants' appeal from the granting of summary judgment (a counterclaim and an item as to attorney's fees were reserved for trial) stands solely on their sworn assertion that, as an inducement and consideration for the increase in the guarantees, plaintiff promised additional credit and forbearance but never intended to keep those promises. Special Term, after first granting summary judgment prayed for by plaintiff, ordered reargument when presented with an affidavit by appellants Brown and Peter D. Murray which contained an assertion not previously made in appellants' answer or previously served affidavits as to plaintiff's fraudulent oral inducement of the guarantee. After reargument at Special Term the motion was denied, appellants were permitted to amend their answers and plaintiff was granted leave to renew its application for summary judgment after such amendment. Plaintiff then appealed to the Appellate Division.

The Appellate Division unanimously reversed and granted the summary judgment. The court's decision recited various facts, including the fact that the written agreements of guarantee were unconditional and said nothing as to the alleged representation. The court commented that 'In view of the size of the commitment, it must be considered unusually strange that the alleged representations were not included in the guarantees', also expressing the idea that 'the fact that the notes were negotiable militates against any claim of the existence of such an important condition'. Furthermore, the Appellate Division remarked that 'the claim of a misrepresentation was belatedly offered after the original motion for summary judgment had been submitted' and that correspondence between appellant Brown who was, it is alleged, present when the claimed oral representation was made and his coguarantors did not mention any such representation. (However, no such correspondence appears in the record.) The Appellate Division concluded that the defense of fraudulent inducement was 'feigned' and that there was no triable issue as to it and no proof sufficient to raise a bona fide issue as against the unconditional terms of the guarantees themselves. The court, therefore, reversed Special Term and ordered the partial summary judgment in the total amount of about $742,000, plus interest.

The Appellate Division's reversal was stated to be 'on the law' which necessarily means that the court held as matter of law that the opposing affidavits were inadequate to set up a triable issue of fact (Sillman v. Twentieth Century-Fox Film Corp., 3 N.Y.2d 395, 404, 165 N.Y.S.2d 498, 504, 144 N.E.2d 387, 393). As the Sillman opinion put it, the 'drastic remedy' of summary judgment should not be granted where there is any doubt as to the existence 'of (factual) issues'. It is to be noted also that the Appellate Division did not hold that the alleged fraudulent agreement to exend further credit, etc., must be denied effect because it was not in writing. Parol evidence of a fraudulent misrepresentation including a misrepresentation as to intent is admissible to avoid an agreement induced by such fraud (Sabo v. Delman, 3 N.Y.2d 155, 160--161, 164 N.Y.S.2d 714, 716--717, 143 N.E.2d 906. 908--909).

The question on this appeal is, therefore, the one commonly presented on motions for summary judgment: is there to be found in the papers presented on the motion a material and triable issue of fact? As we see it, such an issue was presented here and...

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    ...its action for recovery on the promissory note. 125 A.D.2d at 462, 509 N.Y.S.2d 569. See also, Millerton Agway Coop., Inc. v. Briarcliff Farms, Inc., 17 N.Y.2d 57, 61, 268 N.Y.S.2d 18, 21 (1966) (parol evidence of fraudulent misrepresentation is admissible to avoid agreement induced by such......
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    ...oral representations by one party to induce another to enter a written contract. Millerton Agway Cooperative, Inc. v. Briarcliff Farms, Inc., 17 N.Y.2d 57, 215 N.E.2d 341, 268 N.Y.S.2d 18 (1966). Parol evidence is also admissible to shed light on ambiguous terms in the contract. Morris v. M......
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    ...which should only be employed when there is no doubt as to the absence of triable issues ( Millerton Agway Co-op v. Briarcliff Farms , 17 N.Y.2d 57, 268 N.Y.S.2d 18 (1966)). But when there is no genuine issue to be resolved at trial, the case should be summarily decided, and an unfounded re......

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