Albright v. Weissinger

• Court: United States State Supreme Court of Wisconsin
• Writing for the Court: MARTIN
• Citation: 298 N.W. 220,238 Wis. 355
• Parties: ALBRIGHT v. WEISSINGER et al.
• Decision Date: 07 July 1941

238 Wis. 355
298 N.W. 220

ALBRIGHT
v.
WEISSINGER et al.

Supreme Court of Wisconsin.

May 20, 1941.
Rehearing Denied July 7, 1941.

Appeal from an order of the Circuit Court for Milwaukee County; Charles L. Aarons, Judge.

Affirmed.

Action begun July 29, 1940, by plaintiff, Dr. C. E. Albright, respondent herein, against defendants, E. C. Weissinger and Henry Gotfredson, for the balance due on a promissory note for $8,000, dated April 25, 1929, due on or before April 25, 1932, with interest at six per cent per annum, given by defendant Weissinger, payable to the plaintiff. The defendant-appellant Gotfredson is joined as a guarantor for the payment of said note. Plaintiff also seeks to recover the amount of premiums paid by him on two policies of life insurance on the lives of the defendants, which were pledged as collateral security for said note. Defendant Weissinger defaulted. Defendant Gotfredson demurred to the complaint on the ground that same failed to state facts sufficient to constitute a cause of action, either against him or defendant Weissinger, and upon the further ground that the action was not commenced within the time limited by secs. 330.15 and 330.19, Wis. Stats. On December 12, 1940, the circuit court entered its order overruling the demurrer. Defendant Gotfredson appeals from this order. The material facts will be stated in the opinion.

[298 N.W. 221]

Wood, Warner & Tyrrell and John K. Wood, all of Milwaukee, for appellant.

Charles D. Ashley and George A. Gessner, both of Milwaukee, for respondent.

MARTIN, Justice.

It appears from the complaint that on April 25, 1929, defendant Weissinger gave his promissory note for $8,000 to the plaintiff, and deposited as collateral certain shares of stock of Builders Needs, Inc., a corporation in which defendants were majority stockholders, holding a controlling interest. It is alleged that the loan was made to enable Weissinger to pay for his subscription to the stock of said corporation. Defendant Gotfredson executed the following guarantee of payment: “For value received, I hereby guarantee payment of the within note at maturity or at any

[298 N.W. 222]

time thereafter waiving presentment, demand, protest and notice of non-payment.”

At the time of executing the note, an agreement between plaintiff and defendant Weissinger was entered into providing for repayment of the $8,000 loan in installments of $100 per month during the first two years and for the final payment of $5,600 at the maturity of said note. Each of the defendants executed to the plaintiff an assignment of a life insurance policy issued to each of them by the Northwestern Mutual Life Insurance Company as collateral security for present and future indebtedness. On January 23, 1932, defendant Gotfredson consented in writing to an extension (to April 25, 1932) of payment by defendant Weissinger, who had failed to pay the installments for several months, which consent in part provides: “Now, therefore, for value received, and in consideration of said payee (plaintiff) forbearing to declare the entire principal sum due, said guarantor, the undersigned, Henry Gotfredson, hereby consents to the foregoing extension of payment as herein provided, agreeing that said guaranty shall remain in full force and effect; it being understood that such extension shall in no wise discharge said guarantor from liability under the guaranty of said note.”

On September 7, 1932 (Weissinger still owing the sum of $5,477.35 which was then past due and desiring an extension), the defendant Gotfredson executed the following instrument consenting that the payee (plaintiff) and the maker (Weissinger) “may enter into any extension of time extending payment of principal and interest under the within note without any further consent of the undersigned guarantor (Gotfredson), the said guarantor agreeing that said guarantee shall remain in full force and effect, and that any such extension agreement shall in no wise discharge said guarantor from liability under the guarantee of said note; provided, however, that as a condition precedent for suit against the undersigned guarantor said payee, or his assigns, shall give fifteen (15) days notice in writing to said guarantor demanding the payment of any principal and interest due under said note and upon the termination of said fifteen (15) day period said payee may bring suit against said guarantor for any amount of principal and interest remaining unpaid under said note and the guarantee thereof.” The consideration for the foregoing consent and agreement was stated to be: “Now, therefore, for value received, and in consideration of said payee (plaintiff) forbearing at this time to sue said maker and said guarantor for said principal sum of $5,477.35 ***.”

Defendant Weissinger paid installments on the note indebtedness to June 24, 1932. He made no further payments of principal or interest since said date.

Builders Needs, Inc., paid the accruing premiums on the life insurance policies between April 25, 1929, and April 25, 1932. Said corporation became insolvent in the early part of 1932 and was later adjudicated a bankrupt and liquidated. On different occasions beginning May 18, 1932, plaintiff, at the request of defendants, paid the annual premiums accruing on their life insurance policies, which had been assigned to the plaintiff as collateral security. The plaintiff continued to made such premium advances on the Weissinger policy to and including May 17, 1938; and on the Gotfredson policy, to and including May 20, 1934. On the occasion of each payment, the amount of the premiums paid were added to the indebtedness on the note, and defendants informed thereof. It further appears that as and when plaintiff made premium payments on the Weissinger policy, and as a part of the same transaction, defendant Weissinger gave his promissory note to the defendant Gotfredson in the amount of the premium so paid by the plaintiff, to maintain the value of the Weissinger policy which he had theretofore assigned to Gotfredson, subject to the prior assignment of the plaintiff.

On July 31, 1934, Gotfredson reimbursed plaintiff in the sum of $358.20 on account for premiums advanced on his insurance policy. On April 23, 1936, an agreement was entered into between the plaintiff and defendants whereby the interest rate was reduced from six per cent to five per cent per annum. On July 15, 1937, an agreement was entered into between the plaintiff and defendants whereby installments of $100 every three months were to be paid by Weissinger, commencing in October, 1937, and ending in October, 1938, at which later date other arrangements for payment were to be made. In this connection it is alleged that in consideration thereof, plaintiff agreed to meanwhile forbear demanding payment of the total indebtedness and agreed to keep said policy, insuring the life of defendant Weissinger,

[298 N.W. 223]

in force throughout said period and advance and pay the accruing premiums thereon for said defendants, all of which was done and performed by plaintiff accordingly; that on April 15, 1938, defendant Gotfredson offered plaintiff a deed to certain encumbered real estate of said defendant located in the city of Milwaukee, in part...