Arner v. Arner

In an action to recover moneys due on a contract, (1) defendant appeals and plaintiffs cross-appeal from an order of the Supreme Court, Queens County (Sharpe, J.), dated March 23, 1981, which, upon the plaintiffs’ motion for summary judgment, inter alia, dismissed the claim asserted on behalf of plaintiff Robert Arner and granted plaintiff Howard Arner partial summary judgment against the defendant in the principal amount of $12,500, and (2) defendant appeals from a money judgment of the same court entered in favor of plaintiff Howard Arner on August 21, 1981. Order and judgment reversed, on the law, without costs or disbursements, motion denied, and Robert Arner’s claim is reinstated. The affidavit submitted in opposition to the plaintiffs’ motion establishes the existence of a triable issue of fact regarding the intent of the parties in executing the underlying agreement. When the issue involved is whether the parties intended to create a legal relationship or enter into a binding contract, the parol evidence rule has no application and does not bar the admission of extrinsic evidence to establish that a writing which appears to be a contract is not a contract because it was never intended to operate as such (see Bernstein v Kritzer, 253 NY 410; International Assets Corp. v Axelrod, 245 App Div 300; see, also, Fisch, New York Evidence [2d ed], § 52, p 34; Richardson, Evidence [Prince, 10th ed], § 607, p 602). In essence, then, the defendant does not rely upon the alleged agreement to establish his ownership of plaintiff Howard Arner’s former interest in the underlying business enterprise, but rather on the concept of a completed gift of stock. In addition, and contrary to the conclusion of Special Term, plaintiff Robert Arner may, in fact, maintain a cause of action against the defendant as a third-party beneficiary of the underlying agreement between the defendant and coplaintiff Howard Arner (see Clark v Howard, 150 NY 232). Accordingly, summary dismissal of so much of the [900] complaint as affected Robert Arner’s claim for damages was improper. Gulotta, O’Connor and Rubin, JJ., concur.