Mercantile Trust Co. v. Dulle

• Decision Date: 09 April 1926
• Docket Number: 26177
• Citation: 282 S.W. 414
• Parties: MERCANTILE TRUST CO. v. DULLE et al
• Court: Missouri Supreme Court

282 S.W. 414

MERCANTILE TRUST CO. v. DULLE et al

No. 26177

Supreme Court of Missouri

April 9, 1926

D. W Shackleford, of Jefferson City, Paul Barnett, of Sedalia, D W. Peters, of Jefferson City, and Sam B. Jeffries, Arthur E Simpson, and Paul F. Plummer, all of St. Louis, for appellants.

Sam A. Mitchell, Thompson & Thompson, Guy A. Thompson, and Frank A. Thompson, all of St. Louis, for respondent.

In Banc.

OPINION

BLAIR, C. J.

This is an action upon a written instrument, signed by certain directors and stockholders of the Standard Crate & Filler Company, a corporation, guaranteeing the payment of bonds of said corporation. At the conclusion of all the evidence, the trial court directed the jury to return a verdict for plaintiff (respondent). From the judgment upon such verdict in the sum of $ 186,318.42, certain of the defendants appealed.

There were originally ten defendants. Two of them made default. Two of those for whom answers were filed did not appeal. The appeals of six of the appealing defendants have been dismissed in this court because of settlements with respondent. On the record before us the only remaining appellants are W. A. Dulle and James A. Hill.

The written instrument, signed by all of the original defendants is as follows:

'For value received, and for the purpose of enabling the Standard Crate & Filler Company, a corporation, hereinafter described as the debtor corporation, to obtain a credit of two hundred and fifty thousand dollars ($ 250,000.00) from Howard Cook, of Jefferson City, Mo., upon its first mortgage six per cent. serial gold bonds, payable to bearer, dated May 15, 1923, bearing six per cent. interest per annum, payable semiannually, and secured by a deed of trust or mortgage on 20.35 acres, more or less, in the northeast quarter of section twelve (12), township forty-four (44) range twelve (12), and other property, more particularly described in said deed of trust or mortgage, and which shall mature as follows: (We omit such maturities) The undersigned, being directors and stockholders of the debtor corporation, jointly and severally hereby guarantee to purchase at maturity, or as the same shall become due and payable, at the price of par plus accrued interest to the date of purchase, all of the above-described bonds, which may remain unpaid by the debtor corporation, and to pay the interest as due upon all bonds which interest may be due and unpaid by the debtor corporation, as specially set forth in the bonds and deed of trust or mortgage, and agree to pay all costs and expenses paid and incurred in collecting the same. It being the intention of the undersigned that this is a continuing inexhaustible guaranty and shall cover the purchase or payment of all principal sums and all interest due at any time and unpaid by the debtor corporation, when presented for payment by the legal holders of said bonds.

'This guaranty shall remain in full force and be binding upon the undersigned until all of the above-described indebtedness shall have been paid in full.

'The failure of any person or persons, being directors and stockholders of the debtor corporation, to sign this guaranty shall not release or affect the liability of any signer hereof.

'Demand for payment, notice of default or nonpayment, protest and notice of protest as to any or all obligations arising hereunder is hereby waived. It is understood and agreed that the holders of said bonds shall not be required to first proceed against or exhaust their remedies against the said debtor corporation before proceeding to collect under this instrument, and the parties hereto obligate themselves, jointly and severally, to purchase the principal obligations and pay the interest as due, the same as if the above described obligations were direct and primary obligations of the undersigned.' (Signatures omitted.)

It appears in evidence that said bonds were delivered to Howard Cook, and that he delivered to the Standard Crate & Filler Company his check for $ 250,000. Said guaranty was delivered to Cook with said bonds.

Prior to the execution of the bonds, of the deed of trust by the corporation, and of the guaranty by the signers, said corporation had given its short term notes to J. M. Hays Industries, a corporation, in the sum of $ 183,000, and J. M. Hays, its president, had deposited the said notes with respondent as collateral security for a note of $ 150,000. Part of the bonds of the corporation was delivered to the Hays Company to take up the said notes of the corporation and Hays substituted, and respondent accepted 175 of said bonds of the par value of $ 175,000, together with certified copy of the foregoing guaranty, as collateral to said note for $ 150,000. Respondent thus became the holder of said bonds. The debtor corporation thereafter became bankrupt and failed to pay the interest on said bonds when due, and this failure constituted default as to the principal of said bonds. Demand was made upon the signers of the guaranty to pay said bonds and interest in accordance with their guaranty. Upon their failure so to pay, this suit was instituted.

Appellants contend that the instrument signed by them and the other original defendants was merely an offer to guarantee the payment of the principal and interest of said bonds, and such guaranty did not become effective until said offer was accepted by Cook as made, and since there is no proof of such acceptance, the signers are not bound thereby. There is no merit in this contention. The proof was that the bonds were executed...