Farmers' & Merchants' Nat. Bank v. Doffing

Decision Date01 April 1927
Docket NumberNo. 25969.,25969.
Citation171 Minn. 53,213 N.W. 375
PartiesFARMERS' & MERCHANTS' NAT. BANK OF CANNON FALLS v. DOFFING et al.
CourtMinnesota Supreme Court

Appeal from District Court, Goodhue County; W. A. Schultz, Judge.

Action by the Farmers' & Merchants' National Bank against Charles Doffing and another to recover on guaranties. From an order denying its motion for a new trial, plaintiff appeals. Affirmed.

Oppenheimer, Dickson, Hodgson, Brown & Donnelly, of St. Paul, for appellant.

Thomas Mohn and Horace W. Mohn, both of Red Wing, for respondents.

WILSON, C. J.

Plaintiff appealed from an order denying its motion for a new trial.

On June 11, 1923, Wadson Patalas executed and delivered his note for $1,000 to the Mohall Security Bank, payable November 1, 1923. On April 28, 1923, J. P. Stevens gave said bank his note for $1,707.18, payable October 1, 1923. On October 22, 1923, C. J. Tuor gave his note to said bank for $3,000, payable six months after date.

The Patalas note contained this language:

"The * * * guarantors and indorsers hereof hereby * * * consent that the time of payment may be extended or this note renewed without affecting their liability thereon."

The Tuor note contained this language:

"The * * * guarantors of this note agree that any renewal or extension may be granted to the maker without their consent and without releasing them from liability."

The record does not show that the Stevens note contained any provision for renewal or extension.

On July 25, 1923, said bank assigned the Patalas and Stevens notes to plaintiff, and, in consideration of plaintiff buying these notes, defendants by a separate instrument in writing guaranteed their payment, saying:

"We * * * hereby guarantee the payment of said notes when due, * * * presentation for payment, protest, and notice of dishonor being waived by us."

Said Mohall bank assigned said Tuor note to plaintiff on or about October 22, 1923. In consideration of plaintiff buying said note, defendants, on November 6, 1923, gave plaintiff another separate, written guaranty of like tenor covering the Tuor note.

Patalas failed to pay his note when demanded at maturity. On December 6, 1923, a renewal note was given to the Mohall bank due October 1, 1924. This note on the day of the date thereof was transferred to plaintiff without the knowledge of defendants. Stevens did not pay his note when demanded upon its maturity. He did pay $32.18 on the principal and interest to December 7, 1923 when he gave his renewal note for $1,675, due October 1, 1924, to the Mohall bank, which transferred it to plaintiff. Tuor did not pay his note when demanded at maturity. On May 24, 1924, Tuor gave his renewal note for $3,000, due November 1, 1924, to plaintiff.

This action is to recover upon the respective guaranties, the complaint stating three causes of action. The trial court sustained defendants' contention that they did not consent to the extension of time for payment.

1. Plaintiff claims that the notes and the guaranty are to be read together as constituting the contract of guaranty. Under some circumstances this may be done. 28 C. J. 933; Hall v. Oleson (Minn.) 210 N. W. 84. But in this case the notes which contain the provision for extension of time of payment or renewal were not a part of the transaction which constituted the guaranty. That was a part of the transaction between the makers and the payee in the notes.

The contract of guaranty was a separate instrument not made when the notes were made, and did not arise out of the transaction which brought the notes into existence. The language in the notes was never intended to be binding upon any persons but those who became parties to them. The guarantor's liability is not determined by the terms of the note, but upon his contract to pay in case his principal fails, which is entirely a separate and independent obligation. Northern States Bank v. Bellamy, 19 N. D. 509, 125 N. W. 888, 31 L. R. A. (N. S.) 149; Schultz v. Wise, 141 N. W. 813; Jordan v. Flour City Feed & F. Co., 159 Minn. 518, 199 N. W. 231; Acme Brick Co. v. West (Tex. Civ. App.) 215 S. W. 476. The stipulations of the original obligations cannot be read into the contract of guaranty unless they are set forth or are identified by reference. Guerini Stone Co. v. Carlin Const. Co., 240 U. S. 264, 36 S. Ct. 300, 60 L. Ed. 636; Mount Calvary Church v. Albers, 174 Mo. 331, 73 S. W. 508. Defendants contracted to pay certain notes "when due." The renewals at maturity extended the time of payment for a definite period during which the debtor could not be made to pay. These notes and their acceptance constituted a definite agreement of extension of time of payment to the maturity of the notes. This released the guarantors. Wheaton v. Wheeler, 27 Minn. 464, 8 N. W. 599; Washington Slate Co. v. Burdick, 60 Minn. 270, 62 N. W. 285; Guderian v. Leland, 61 Minn. 67, 63 N. W. 175; St. Paul Trust Co. v. St. Paul Chamber of Commerce, 64 Minn. 439, 67 N. W. 350; Norton v. Met. Life Ins. Co., 74 Minn. 484, 77 N. W. 298, 539; Bandler v. Bradley, 110 Minn. 66, 124 N. W. 644; ...

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