Opinion
October 26, 1967
Appeal from the Erie Special Term.
Present — Williams, P.J., Henry, Del Vecchio and Marsh, JJ.
Order unanimously modified by deleting from the first ordering paragraph the words "Ray Royce Aircraft, Inc." and by adding the following provision: "Ordered, that the motion for summary judgment by Hylan Flying Service, Inc. against Ray Royce Aircraft, Inc. be granted", and as so modified, affirmed, without costs. Memorandum: Special Term in denying appellant's motion for summary judgment against respondents Ray Royce Aircraft, Inc., and Ray H. Royce, Jr. erroneously assumed that both respondents had pleaded discharge in bankruptcy as a defense to appellant's third-party complaint and denied the motion as to both respondents on the ground that there was a question of fact as to whether the respondents were guilty of such fraud as would avoid the defense of discharge in bankruptcy. It appears that the corporation did not assert the affirmative defense of bankruptcy discharge. Its sale of the aircraft while it was incumbered by a chattel mortgage was a breach of its implied warranty that it was free from incumbrances. (Personal Property Law, § 94, subd. 3.) Appellant's motion for summary judgment should, therefore, have been granted against the corporation.