Citation Numbers： 247 A.D.2d 904, 668 N.Y.S.2d 854, 36 U.C.C. Rep. Serv. 2d (West) 763, 1998 N.Y. App. Div. LEXIS 1243
Judges： Boehm, Callahan, Lawton, Pine, Wisner
Filed Date： 2/4/1998
Status： Precedential
Modified Date： 10/19/2024
Order unanimously reversed on the law without costs, complaint reinstated, motion granted in part, first affirmative defense dismissed and matter remitted to Supreme Court for further proceedings in accordance with the following Memorandum: In November 1986 defendants, Anthony P. Rivizzigno, Judith P. Rivizzigno and Frank D’Agostino, executed a note payable to Jefferson
On February 15, 1996, plaintiff commenced this action seeking payment on the Note, plus costs and attorney’s fees. In their answer, the Rivizzignos raise four affirmative defenses, including the Statute of Limitations. Plaintiff moved for summary judgment on the unpaid balance of the Note, and for an order striking, inter alia, the first affirmative defense of the Statute of Limitations. Supreme Court denied plaintiff’s motion and dismissed the complaint, determining that the Note is a demand note and the applicable Statute of Limitations is six years from the date of its execution, i.e., November 1987. The court therefore held that plaintiff’s action is barred by the Statute of Limitations. Having made that determination, the court did not reach the merits of plaintiff’s motion for summary judgment.
Demand notes are notes “payable at sight or on presentation and * * * in which no time for payment is stated” (UCC 3-108). Notes payable where the due date of the note “can be determined from the face of the instrument” (UCC 3-109 [2], Comment 2) are non-demand notes. Whether notes are considered payable on demand is dependent upon whether “the notes, as written, were subject to call at plaintiff’s pleasure” (National Westminster Bank v Vannier Group, 160 AD2d 348, 350).
The apparent inconsistency between the typewritten clause and the “X” in the box beside the printed language stating that the loan is payable “on demand, if the lender demands payment” can be reconciled. The typewritten clause is in the nature of an acceleration clause, i.e., it provides that, notwith
What appear to be conflicting provisions should be reconciled where there is a reasonable possibility of doing so (see, 80 NY Jur 2d, Negotiable Instruments and Other Commercial Paper, § 151; G & B Photography v Greenberg, 209 AD2d 579, 581; Robshaw v Health Mgt., 98 AD2d 986), especially where consideration of the contract as a whole resolves the apparent ambiguity (see, Hudson-Port Ewen Assocs. v Chien Kuo, 78 NY2d 944, 945). In viewing the Note as a whole, one understands why the lender checked the box where it did; doing so gave the Note the characteristics of both a demand and a term note. It is a term note until December 1, 1991, after which the acceleration clause changes its nature to that of a demand note.
Further, the typewritten clause controls over the printed language that comes after the box checked. “Handwritten terms control typewritten and printed terms, and typewritten [terms] control printed” (UCC 3-118 [b]; see, 80 NY Jur 2d, Negotiable Instruments and Other Commercial Paper, § 157). In any event, even were this a demand note, the Statute of Limitations was renewed by a partial payment that was made as late as September 1993 (see, Skaneateles Sav. Bank v Modi Assocs., 239 AD2d 40 [decided herewith]).
The court’s reliance upon Environics, Inc. v Pratt (50 AD2d 552) is misplaced. In Environics, the note had no stated maturity date and the language did not limit the right of the holder to make an immediate demand for payment. The note became payable “ ‘thirty days after demand.’ ” (Supra, at 552.) Here, however, there is a stated maturity date of December 1, 2001. Before that date the holder’s right to call the instrument is limited to the debtors’ default.
The Statute of Limitations on a note is six years after the cause of action accrues (see, CPLR 213 [2]). “ ‘[A] cause of action accrues for the purpose of setting the [Statute of Limitations] in motion as soon as the creditor, by his own act and in spite of the debtor, can make the [note] payable’ ” (Knapp v
We therefore reverse the order, reinstate the complaint, grant in part plaintiffs motion and dismiss the affirmative defense of the Statute of Limitations and remit the matter to Supreme Court for a determination of the merits of plaintiffs motion for summary judgment. (Appeal from Order of Supreme Court, Onondaga County, Major, J. — Summary Judgment.)