Chemical Bank v. Wasserman — 37 N.Y.2d 249

Majority

p. 249

Chemical Bank, Respondent, v Maxine Wasserman, Appellant, et al., Defendants.

Argued May 5, 1975;

decided June 19, 1975

p. 250

Barton Nachamie for appellant.

I. A continuing guarantee can be terminated or abandoned. (Strong v Scheffield, 144 NY 392 .) II. The facts of this case if proven constitute termination and abandonment of the guarantee. (Green v Doniger, 300 NY 238 ; Schwartzreich v Bauman-Basch, Inc., 231 NY 196 ; Velveray Corp. v Jolo Plastics Corp., 19 AD2d 69 ; Young Foundation Corp. v Ottaviano, Inc., 29 Misc 2d 302 ; Alcon v Kinton Realty, 2 AD2d 454 ; Einzig v Aulisio, 286 App Div 1127 ; Grad v Roberts, 14 NY2d 70 ; Alside Aluminum Supply Co. v Berliner, 32 AD2d 731 ; Bostwick v Van Voorhis, 91 NY 353 ; Manufacturers Hanover Trust Co. v Trans Nat. Communications, 36 AD2d 709 .) III. Plaintiff bank is estopped from proceeding against defendant on the guarantee. (Meadow Brook Nat. Bank v Feraca, 33 Misc 2d 616 ; Becker Pretzel Bakeries v Universal Oven Co., 279 F Supp 893 ; Congress Factors v Malden Mills, 332 F Supp 1384 ; Matter of Rosenbaum-Grinnell, Inc. [Schwartz Int. Textiles], 15 Misc 2d 450 ; Gray v Met Contr. Corp., 4 AD2d 495 ; Imperator Realty Co. v Tull, 228 NY 447 ; Scheuer v Scheuer, 308 NY 447 .)

Harold Weisblatt, William I. Rodier, Jr. and Susan Mae

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Wanderman for respondent.

I. An alleged oral executory agreement is not effective to change or terminate a written agreement, which, by its terms, requires such change or termination to be in writing. (Manufacturers Hanover Trust Co. v Trans Nat. Communications, 36 AD2d 709 .) II. An executed oral agreement is effective to terminate a written agreement which provides for written termination only if specific acts unequivocally referable to the agreement are proven. (Bakhshandeh v American Cyanamid Co., 8 AD2d 35 , 8 NY2d 981 ; Bright Radio Labs. v Coastal Commercial Corp., 4 AD2d 491 , 4 NY2d 1021 ; Reoux v First Nat. Bank of Glens Falls, 17 AD2d 915 ; Burns v McCormick, 233 NY 230 ; Sleeth v Sampson, 237 NY 69 ; Alside Aluminum Supply Co. v Berliner, 32 AD2d 731 ; Meadow Brook Nat. Bank v Feraca, 33 Misc 2d 616 .) III. Defendant’s obligation under the guarantee is not affected by the lender obtaining additional guarantees. (S & L Paving Corp. v MacMurray Tractor, 61 Misc 2d 90 ; Chase Manhattan Bank v May, 311 F2d 117 , 372 US 930 .) IV. Defendant’s attempt to claim bad faith or fraud in the inducement is without support in the record.

Memorandum. The order of the Appellate Division granting respondent’s motion for summary judgment should be affirmed. In December, 1967 the respondent bank extended a loan to a corporation — the loan being guaranteed by the appellant. The guarantee was continuing in nature and covered not only the 1967 loan but also applied to any subsequent loans made by the bank to the corporation; it also provided that the appellant could terminate her liability thereunder only by written notice to the bank. In January, 1970 the corporation satisfied its indebtedness arising out of the 1967 loan, and in November of the same year the bank made a second loan to the corporation, which subsequently defaulted in payment.

Appellant concedes that in accordance with her prospective guarantee she would ordinarily be liable for the subsequent indebtedness incurred by the corporation. Likewise, she admits that she has never given the appellant the written notice required to terminate her liability as guarantor. However, she contends that her obligations under the 1967 guarantee were orally terminated by an officer of the respondent bank in 1970. As the majority at the Appellate Division concluded, the alleged oral agreement cannot operate to terminate appel

p. 252

lant’s obligation and does not create a triable issue of fact (General Obligations Law, § 15-301).

Pursuant to section 15-301 (subds 1, 4) of the General Obligations Law, the alleged oral notice is completely ineffectual to terminate appellant’s obligations under the written guarantee which here specifically provided that it could not be modified or terminated, unless such modification or termination was communicated to the respondent in writing (see Rothschild v Manufacturers Trust Co., 279 NY 355 ; Mount Vernon Trust Co. v Bergoff, 272 NY 192 ; Bay Parkway Nat. Bank v Shalom, 270 NY 172 ; Manufacturers Hanover Trust Co. v Trans Nat. Communications, 36 AD2d 709 ; Manufacturers Trust Co. v Palmer, 13 AD2d 772 ).

The appellant’s reliance on Green v Doniger ( 300 NY 238 ) is misplaced. In that case, decided .under the provisions of section 33-c of the Personal Property Law, this court held only that a provision precluding oral modification would not bar the respondent from proving that by an oral understanding the agreement was abandoned. More specifically, in Green we did not hold that an oral understanding could effectively terminate an agreement requiring termination to be in writing. Moreover, the viability of the distinction recognized in Green has been negated by the enactment of section 15-301 of the General Obligations Law, which precludes both oral modifications and oral terminations.

Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur.

Order affirmed, with costs, in memorandum.

Cases cited

Strong v. Sheffield 144 NY 392 N.Y. 1895-01-15 p. 250
Green v. Doniger 300 NY 238 N.Y. 1949-12-29 p. 250, p. 252
Schwartzreich v. Bauman-Basch, Inc. 231 NY 196 N.Y. 1921-05-10 p. 250
Velveray Corp. v. Jolo Plastics Corp. 19 AD2d 69 N.Y. App. Div. 1963-06-27 p. 250
Young Foundation Corp. v. A. E. Ottaviano, Inc. 29 Misc 2d 302 N.Y. Sup. Ct. 1961-03-29 p. 250
Alcon v. Kinton Realty, Inc. 2 AD2d 454 N.Y. App. Div. 1956-11-09 p. 250
Grad v. Roberts 14 NY2d 70 N.Y. 1964-03-26 p. 250
Bostwick v. Van Voorhis 91 NY 353 N.Y. 1883-02-09 p. 250
Manufacturers Hanover Trust Co. v. Trans National Communications, Inc. 36 AD2d 709 N.Y. App. Div. 1971-03-18 p. 250, p. 251, p. 252
Meadow Brook National Bank v. Feraca 33 Misc 2d 616 N.Y. Sup. Ct. 1952-02-02 p. 250, p. 251
In re the Arbitration between Rosenbaum-Grinell, Inc. & Bart Schwartz International Textiles, Ltd. 15 Misc 2d 450 N.Y. Sup. Ct. 1958-12-08 p. 250
Gray v. Met Contracting Corp. 4 AD2d 495 N.Y. App. Div. 1957-10-22 p. 250
Imperator Realty Co. v. Tull 228 NY 447 N.Y. 1920-04-13 p. 250
Scheuer v. Scheuer 308 NY 447 N.Y. 1955-04-28 p. 250
Bakhshandeh v. American Cyanamid Co. 8 AD2d 35 N.Y. App. Div. 1959-05-12 p. 251
Bakhshandeh v. American Cyanamid Co. 8 NY2d 981 N.Y. 1960-07-08 p. 251
Bright Radio Laboratories, Inc. v. Coastal Commercial Corp. 4 AD2d 491 N.Y. App. Div. 1957-10-22 p. 251
Bright Radio Laboratories, Inc. v. Coastal Commercial Corp. 4 NY2d 1021 N.Y. 1958-06-25 p. 251
Reoux v. First National Bank 17 AD2d 915 N.Y. App. Div. 1962-06-28 p. 251
Burns v. McCormick 233 NY 230 N.Y. 1922-04-18 p. 251
Sleeth v. Sampson 237 NY 69 N.Y. 1923-11-20 p. 251
S & L Paving Corp. v. MacMurray Tractor, Inc. 61 Misc 2d 90 N.Y. Sup. Ct. 1969-06-23 p. 251
Rothschild v. Manufacturers Trust Co. 279 NY 355 N.Y. 1939-01-10 p. 252
Mount Vernon Trust Co. v. Bergoff 272 NY 192 N.Y. 1936-11-24 p. 252
Bay Parkway National Bank v. Shalom 270 NY 172 N.Y. 1936-03-03 p. 252