Meer v. Weurding

• Citation: 198 N.W. 828,227 Mich. 46
• Decision Date: 08 May 1924
• Docket Number: No. 100.,100.
• Parties: VANDER MEER et al. v. WEURDING et al.
• Court: Supreme Court of Michigan

227 Mich. 46

198 N.W. 828

VANDER MEER et al.

v.WEURDING et al.

No. 100.

Supreme Court of Michigan.

May 8, 1924.

Error to Circuit Court, Kent County; Major L. Dunham, Judge.

Action by George Vander Meer and another against George Weurding and others and Moline Milling Company. Judgment for plaintiffs, and defendants bring error. Affirmed.

Argued before CLARK, C. J., and McDONALD, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ. Fred P. Geib, of Grand Rapids, and T. N. Robinson, of Holland, for appellants.

Elvin Swarthout, of Grand Rapids, for appellees.

STEERE, J.

On March 12, 1923, plaintiffs recovered a judgment in the circuit court of Kent county against all of the above defendants for $7,405.81. The action was in assumpsit upon two promissory notes of the Moline Milling Company and a guaranty agreement signed by the seven other defendants. The two promissory notes were in customary form, both dated April 16, 1918, payable to plaintiffs or order at the Grand Rapids Savings Bank, due six months after date, with interest at 6 per cent. per annum after maturity, one being for $5,000 and the other for $4,098.81, the latter being a renewal of a former note of the same amount.

The guaranty agreement is as follows:

‘George Vander Meer and John Buys, of Grand Rapids, Mich., are hereby requested to give and continue to the Moline Milling Company credit as they may desire from time to time, and in consideration thereof we hereby guarantee payment of any indebtedness, whether direct or contingent, now or hereafter owing to said George Vander Meer and John Buys by said Moline Milling Company, and agree to indemnify said George Vander Meer and John Buys against any loss thereon, provided, however, said George Vander Meer and John Buys shall in no event collect from the undersigned a greater sum than ten thousand ($10,000) dollars.

‘Notice of the acceptance of this guaranty and of any indebtedness at any time covered by the same is hereby waived. This guaranty shall continue until written notice of the discontinuance thereof shall be received by said George Vander Meer and John Buys. In case of insolvency, bankruptcy, or death of one or more signers hereof, it shall continue as to the others, and George Vander Meer and John Buys may give and continue credit hereunder by making loans, renewing notes, or otherwise, unless and until written notice of discontinuance is given by the other signers.

‘Dated April 16, 1918, Grand Rapids, Mich. [Signed] George Weurding, R. Weurding, Frances Weurding, Jas. F. Schuiling, Henry De Pree, John P. Luidens, James Weurding.’

Plaintiffs' declaration, filed November 4, 1920, contained both a special and the common counts. Defendants pleaded the general issue with notice of special defenses. The case was not brought to trial until January 30, 1923. Various amounts had been credited on the notes, and the computation of balance due, for which judgment was rendered, is not questioned, if the notes were valid, and any indebtedness existed as evidenced by them. The case was tried before the court without a jury. Findings of fact and conclusions of law thereon were made and filed by the court. Defendants proposed various findings of fact and conclusions of law which were in the main denied, though some portions were granted and incorporated in the court's findings.

The Moline Milling company was a corporation which plaintiffs had organized, owned, and managed up to the time the transactions involved here took place. They purchased the mill property and business in the spring of 1915 from a man named Gray for $15,000. They ran the business for some time as a partnership, and then incorporated, issuing $15,000 of stock to themselves, $5,000 to Buys, and $10,000 to Vander Meer, who gave $100 par value of stock to his son to satisfy statutory requirements for incorporating. Of the transaction involved here the trial court found, amongst other things, as follows:

‘(5) Early in the spring of 1918 the defendants Weurdings and Luidens (practical millers and owners of a milling company at Holland, Mich.) began negotiations with plaintiffs for the purchase of the Moline Milling Company. The price asked by the plaintiffs for the real estate, machinery, and fixtures was $15,000. They had actually invested more than $15,000 in the plant (i. e. the real estate and machinery) at that time. But, when the deal was finally closed, the middle of April, 1918, they cut this price to $13,000, and the sale of the mill, real estate, and machinery was covered by a land contract running direct from Vander Meer and Buys (in whom the record title stood) to the Weurdings and Luidens. But the land contract did not cover or pretend to cover the merchandise, grain, etc., in the mill and sheds adjacent. It was part of the bargain between plaintiffs and the Weurdings and Luidens that an inventory of this personal property should be taken; and this was done, and the total amount thereof was fixed at $7,030.81. There was in addition at that time owing to the company upwards of $2,000 worth of bills and accounts receivable. Accordingly the bills and accounts were lumped at the sum of $2,068, which, added to the $7,030.81, made a total of $9,098.81, the face of the two notes Exhibits A and B-thus covering the entire sale price of the Milling Company. It was feared, however, that a portion of these bills and accounts receivable might not be collectable; and so it was agreed that whatever balance of these accounts the Weurdings and Luidens were not able within a reasonable time to collect should be indorsed on these notes by the plaintiffs. And subsequently nearly $1,000 of these uncollectable accounts were indorsed thereon. Other payments were made on the notes, reducing them to the amount claimed as due on April 16, 1920, namely, $5,931.81.

‘(6) The amount covered by these notes was largely represented by advancements made to the Moline Milling Company by the plaintiff during the three years of their ownership. They actually put in $5,000 of money during that time, out of their own pockets, besides their labor and services in managing and operating the company. They never drew out anything for salaries, dividends, interest or by way of loans.

‘(7) Moreover, it was part of the bargain at the time of the sale to the Weurdings and Luidens that Vander Meer and Buys personally should pay off all of the debts and liabilities of the Milling Company owing at the date of the sale, April 16, 1918. And I find as a matter of fact that Vander Meer and Buys did this, paying out between $8,000 and $9,000 for that purpose. All the debts and obligations which subsequently (March, 1920) brought the Moline Milling Company into bankruptcy...