Summary
In Banque Worms v. Andre Café Ltd., 183 A.D.2d 494, 583 N.Y.S.2d 438, 439 (N.Y.App.Div. 1992), for example, the Appellate Division, First Department held that because a guarantor had executed a short form power of attorney in favor of the president of the principal, an extension of time granted to that principal did not release him from his obligation under the guaranty.
Summary of this case from U.S. Fideliy and Guar. v. Braspetro Oil ServicesOpinion
May 14, 1992
Appeal from the Supreme Court, New York County (Carol E. Huff, J.).
A guarantor is bound by an anticipatory agreement in his undertaking that he will not be relieved of liability by a modification of the principal contract (Chase Manhattan Bank v Kahn, 66 A.D.2d 704, 705; see also, Banco Portugues do Atlantico v. Asland, S.A., 745 F. Supp. 962, 967-970), and the short form power of attorney executed by Felix Max Sfez authorized and empowered Andre Moise Sfez, his brother and president of defendant and principal obligor, Andre Cafe Ltd., to act in his name, place and stead with respect to "banking transactions" and "all other matters" (General Obligations Law § 5-1502D; cf., Twyeffort v. Unexcelled Mfg. Co., 263 N.Y. 6, 9, rearg denied 263 N.Y. 585). Accordingly, defendant Felix Sfez is liable under the guarantee, even though the time for making payments was extended for the principal obligor by plaintiff.
As to the amount of the indebtedness or the alleged usurious nature thereof, defendants have not produced any evidence supporting their claims, and it is uncontroverted plaintiff never charged or collected interest at a rate in excess of 13.5%, in accordance with the term loan agreement. Finally, as to the remaining issues raised by defendants, many of which are raised for the first time on appeal, a review finds them lacking in merit.
Concur — Murphy P.J., Sullivan, Carro, Rosenberger and Rubin, JJ.