Fleck v. Bank of Suffolk County

— In consolidated actions involving the enforcement of an unpaid promissory note, the Bank of Suffolk County appeals from an order of the Supreme Court, Kings County, entered February 16, 1978, which, inter alia, denied it summary judgment. Order re 677 versed, on the law, with $50 costs and disbursements, and summary judgment is granted to the Bank of Suffolk County. Appellant made a loan to respondents in the sum of $400,000. The note evidencing this loan contained a clause whereby those receiving the loan waived all defenses. Respondents now claim that the note was not to become effective unless they first received a mortgage from another bank. In fact, the note was intended to conceal appellant’s participation in a building loan. "Public policy requires that a person who, for the accommodation of the bank executes an instrument which is in form a binding obligation, should be estopped from thereafter asserting that simultaneously the parties agreed that the instrument should not be enforced” (Mount Vernon Trust Co. v Bergoff, 272 NY 192, 196). The case of Long Is. Trust Co. v International Inst, for Packaging Educ. (38 NY2d 493), cited by Special Term, is inapplicable to the facts of this case, in that Long Is. Trust in no way involved an attempt to conceal the financial situation of the parties. Furthermore, the absolute waiver of defenses set forth in the note is substantially similar to an unconditional guarantee to repay a note, and parol evidence is therefore inadmissible to establish conditional delivery because such evidence would contradict the express terms of the written agreement (see Meadow Brook Nat. Bank v Bzura, 20 AD2d 287). O’Connor, J. P., Cohalan and Margett, JJ., concur.