Opinion
May 17, 1971
In an action inter alia to reform an unlimited guarantee, defendant appeals from a judgment of the Supreme Court, Nassau County, entered November 2, 1970 after a nonjury trial, which reformed the guarantee, dismissed defendant's counterclaim and awarded plaintiff monetary recoveries. Judgment reversed, on the law and the facts, with costs, complaint dismissed, and action remitted to the Supreme Court, Nassau County, for trial of defendant's counterclaim. In January, 1967, plaintiff executed the instrument in question, guaranteeing, without limitations, the liabilities of Howard Fried, Inc. Assuming that plaintiff executed the instrument believing it to be a guarantee only of a loan of $10,000 by defendant to Howard Fried, Inc., for which the latter was then applying, it was not proved that plaintiff's unilateral mistake was caused by any fraud or inequitable conduct of the defendant (6 N.Y. Jur., Reformation of Instruments, § 48). Defendant was not under a duty to inform plaintiff of the credit history of Howard Fried; and the guarantee instrument adequately informed plaintiff of the risk he was undertaking in executing it. Evidence that defendant's employees, in defendant's internal operations after plaintiff's execution of the guarantee, may have treated the guarantee as limited to the January, 1967 loan of $10,000 is not evidence of any fraud or inequitable conduct of defendant which caused plaintiff's alleged unilateral mistake in executing the guarantee. In connection with defendant's counterclaim upon the unlimited guarantee for payment of the sum owing on the September, 1967 note of Howard Fried, Inc., a trial is necessary to determine, among other things, whether plaintiff's letter of May 10, 1967 to defendant terminated his liability as guarantor. Rabin, P.J., Hopkins, Munder, Martuscello and Shapiro, JJ., concur.