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AMPEX CORP. v. APPEL MEDIA

May 9, 1974

AMPEX CORPORATION
v.
APPEL MEDIA, INC. and Charles F. Appel, Jr.


Knox, District Judge.


The opinion of the court was delivered by: KNOX

KNOX, District Judge.

In this suit to recover monies allegedly due by the defendants upon a series of notes executed by the defendant on February 10, 1972, and also upon a personal guaranty of payment of any amounts due by the individual defendant, plaintiff has filed a motion for summary judgment. The case is for trial nonjury if this motion is not granted.

 The facts, most of which are admitted, show that this action was commenced June 14, 1973. There are two counts in the complaint. The first count seeks payment of a series of six notes executed by the defendant on February 10, 1972, in the total amount of $30,000 together with interest at eight per cent and reasonable attorney's fees. The notes were signed by the individual defendant as president of the defendant corporation. The payments due on the note were not made as scheduled and therefore this action was brought. It is averred that a payment of $3,000 was made on June 19, 1972 and there was a subsequent credit of $650 on January 12, 1973, arising from the sending of a camera which was part of the original sale for which the notes were given to Audio-Vido Corporation in New York. There is thus a balance claimed of $26,350 together with interest as aforesaid.

 The second count of the complaint against the individual defendant alleges that he entered into a personal contract of guaranty on December 10, 1969, in consideration of credit extended or to be extended whereby he guaranteed personally the payment of any amounts due or to become due by the corporate defendant to the plaintiff.

 A request for admissions was filed by the plaintiff which was unresponded to and hence the matters contained therein would be considered admitted under Rule 36. Also, the defendants in their answer admitted the truth of the allegations contained in paragraphs 7, 9, 11, 12 and 13 of the complaint.

 These notes, being negotiable instruments, import consideration. See Uniform Commercial Code, Article III, Section 307, Subsection 2 (12A Purdon's Pa. Statutes, Section 3-307 [2]). *fn1" No defense of lack of consideration for either the notes themselves or the guaranty of payment of the same has been pleaded or established by the defendants. Under Uniform Commercial Code Section 408, lack of consideration or failure of consideration would be a defense between the original parties to the notes.

 Since the execution and validity of the notes is admitted, we then turn to the question as to whether defendant has alleged sufficient matters in defense to constitute payment, satisfaction, modification, termination and so forth.

 The defendants claim that there was a novation; that when pressed for payment of these notes, it was agreed by Mr. Blamey on behalf of plaintiff that plaintiff would release him and the corporate defendant from liability, provided he would send out the goods in inventory which had been purchased from the plaintiff to other distributors upon direction. Defendants claim that as a matter of fact one camera was sent out pursuant to this arrangement and a credit of $650 given. This credit is admitted by the plaintiff.

 This being a motion for summary judgment, there is a question as to whether there are genuine issues of material fact before the court which would necessitate a trial upon the merits. Since the matter is non-jury, the question is whether there are any disputed facts as to which the trier of facts, in this case the court, must determine credibility of witnesses or inferences to be properly drawn therefrom. The attitude of the Court Appeals of this Circuit as to motions for summary judgment was recently summed up in Tomalewski v. State Farm Life Insurance Co., et al (3d Cir. 1974, slip opinion 73-1301) wherein the familiar rule was reiterated: "Summary judgment may not be granted where there is the slightest doubt as to the facts". The court also quoted from Mintz v. Mathers Fund, Inc., 463 F.2d 495 (7th Cir. 1972) which quotation reads as follows:

 
"The use and purpose of a motion for summary judgment is well stated in Mintz v. Mathers Fund, Inc., 463 F.2d 495, 498 (7 Cir. 1972), as follows: 'As a procedural matter, granting summary judgment, while a drastic remedy, is a wholesome one where applicable to the circumstances. It is never warranted except on a clear showing that no genuine issue as to any material fact remains for trial. * * * If the pleadings and proof in the form of depositions, affidavits and admissions on file disclose that no real cause of action or defense exists, the court may determine there is no issue to be tried and may grant a summary judgment. In reaching its determination the court has the power to penetrate the allegations of fact in the pleadings and look at any evidential source to determine whether there is an issue of fact to be tried. * * * The primary purpose of a motion for summary judgment is to avoid a useless trial, and summary judgment is a procedural device for promptly disposing of actions in which there is no genuine issue of any material fact even though such issue might have been raised by formal pleadings. The very purpose of Rule 56 is to eliminate a trial in such cases where a trial is unnecessary and results in delay and expense. Appellate courts should not look the other way to ignore the existence of the genuine issues of material facts, but neither should they strain to find the existence of such genuine issues where none exist. * * * ' But it is the law that where motions for summary judgment are made by both parties, if the pleadings present a genuine issue as to a material fact, there can be no valid summary judgment of the disputed facts."

 In Tomalewski, the court determined that there was an issue of fact which had been disregarded by the district court and therefore the summary judgment was reversed and the case remanded for trial. In the instant case, we determine that there is no issue of fact to be presented at a trial upon the merits.

 
"Any party is also discharged from his liability on an instrument to another party by any other act or agreement with such party which would discharge a ...

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