Burns v. Poole

• Decision Date: 06 November 1908
• Docket Number: 15,716 - (15)
• Citation: 118 N.W. 156,106 Minn. 69
• Parties: ROBERT B. BURNS v. EDMUND L. POOLE and Another
• Court: Minnesota Supreme Court

118 N.W. 156

106 Minn. 69

ROBERT B. BURNS v. EDMUND L. POOLE and Another

Nos. 15,716 - (15)

Supreme Court of Minnesota

November 6, 1908

Defendants were stockholders in the Guaranty Petroleum & Gas Co., and in order to enable the corporation to borrow money upon its promissory notes, they executed a guaranty in writing, to the effect that they would be responsible for all sums not exceeding $10,000 borrowed upon the corporation's promissory notes, and all renewals and extensions of such notes. Upon the strength of this guaranty the Second National Bank of St. Paul loaned the corporation $10,000 on or about October 17, 1905, for which the corporation gave its promissory note. This note was renewed from time to time at the request of the corporation. At its final renewal payment was demanded by the bank which was refused. No part of the principal sum was ever paid except the sum of $8,323.60, which was paid prior to February 20 1907. This is an action in the district court for Ramsey county to recover $1,676.40, the balance alleged to be still unpaid. Plaintiff having rested his case, defendant's motion that the action be dismissed was granted. From an order, Brill, J., denying plaintiff's motion for a new trial, he appealed. Reversed.

SYLLABUS

Guaranty -- Notice of Acceptance.

Assuming that the instrument under consideration did not constitute an original undertaking, and that the signers were entitled to notice of its acceptance by the bank, held, evidence was admissible to prove that the signers had knowledge, within a reasonable time thereafter, that the loan had been consummated on the strength of the guaranty.

Durment & Moore, for appellant.

John M. Cannon and James Manahan, for respondents.

OPINION

LEWIS, J.

Respondents Poole and Kelly, with others, being stockholders in the Guaranty Petroleum & Gas Company, executed the following instrument:

"Whereas, the board of directors of the Guaranty Petroleum & Gas Company has authorized the president and secretary of said corporation to borrow from time to time prior to the first day of November, 1905, such sums as shall be necessary for the purposes of the business of said corporation, not exceeding in the aggregate $10,000, and to execute and deliver in the name of the corporation such promissory notes or other evidence of indebtedness as they may deem advisable for the moneys so borrowed:

"Now, therefore, in order to induce the lending of such moneys, and for value received, which we hereby conclusively admit, we, the undersigned, do hereby jointly and severally guarantee the payment of all sums which shall be so borrowed, and all promissory notes or other evidence of indebtedness which shall be given in the name of said the Guaranty Petroleum & Gas Company, not exceeding in the aggregate $10,000, principal indebtedness so incurred, and all renewals or extensions of any such notes or evidence of indebtedness."

Thereafter the president and treasurer of the company, two of the parties who signed the instrument, negotiated a loan for $10,000 at a certain bank. The loan was made on a note for that amount, indorsed by the president and secretary of the company, and also upon the strength of the contract above set out. The note was payable four months from date, and renewed on two occasions for the same length of time. When the last renewal note matured, all of the signers to the contract except respondents and two others who were insolvent, contributed pro rata and paid the note, with...