[DOWNLOAD] "Sterling National Bank & Trust Company New York v. John Giannetti" by Supreme Court of New York * eBook PDF Kindle ePub Free

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eBook details

• Title: Sterling National Bank & Trust Company New York v. John Giannetti
• Author : Supreme Court of New York
• Release Date : January 08, 1976
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 76 KB

Description

John Giannetti had executed and delivered two negotiable promissory notes to the Sterling National Bank & Trust Company in the total amount of $261,000. Giannetti defaulted in payment. There is a principal balance due of $159,000. Nat Herman, Jesse Jayson and Howard J. Fremont had executed unconditional guarantees of payment of the debts of Giannetti, which guarantees included a waiver of the right to interpose any defense based on set-off or counterclaim of any nature or description. After default in payment on the notes, Sterling sued Giannetti as the prime obligor and sued Herman, Jayson and Fremont on their guarantees. Each guarantor appeared, answered and interposed affirmative defenses, offsets and counterclaims. Sterling moved to dismiss these defenses, offsets and counterclaims on the ground that the defendants had contractually waived their right to interpose them. The motion was granted by Special Term. While it is not against public policy to enforce waiver of the right to interpose counterclaims (Chemical Bank NY Trust Co. v Batter, 31 A.D.2d 802), nonetheless, defenses based upon allegations of fraud may not be waived. This is because a written waiver in any form cannot operate to shield a party from his own fraud. For the courts to give effect to such a clause would be violative of both public policy and morality, since an ultimate finding of fraud must of necessity vitiate the contract relied upon (Bridger v Goldsmith, 143 NY 424, 428; Sabo v Delman, 3 N.Y.2d 155, 161; Rizzi v Sussman, 9 A.D.2d 961; Arena v Hegyhaty, 30 A.D.2d 808). To the extent, therefore, that any of the stricken counterclaims interposed by the guarantors have articulated a defense of fraud, though denominated as offsets and counterclaims, we have directed that they be reinstated as defenses. Settle order on notice.

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