Savings Bank of New Britain v. Weed

• Decision Date: 03 June 1936
• Citation: 185 A. 571,121 Conn. 414
• Court: Connecticut Supreme Court
• Parties: SAVINGS BANK OF NEW BRITAIN v. WEED et al.

185 A. 571

121 Conn. 414

SAVINGS BANK OF NEW BRITAIN v. WEED et al.

Supreme Court of Errors of Connecticut.

June 3, 1936

Appeal from Superior Court, Hartford County; Allyn L. Brown, Judge.

Action on a guaranty by the Savings Bank of New Britain against Truman L. Weed and others. From a judgment for plaintiff defendants appeal.

No error.

Margaret P. Camp and Mortimer H. Camp, both of New Britain, for appellants Weed and others.

Josiah H. Peck, of Hartford, for appellant George P. Spear's estate.

Cyril F. Gaffney, of New Britain, for appellants Bruemmer and others.

Leo V Gaffney, of New Britain, for appellants Rickey and others.

Charles Welles Gross and Willis G. Parsons, both of Hartford, for appellee.

Argued before MALTBIE, C.J., and HINMAN, BANKS, AVERY, and BALDWIN, JJ.

HINMAN, Judge.

The complaint alleged that on November 14, 1928, the Masonic Temple Corporation of New Britain, Incorporated (hereinafter called the " Corporation" ), by its note, promised to pay to the order of the plaintiff $125,000, with interest, payable semi-annually in advance, on the first days of May and November in each year. At the time of the execution and delivery of the note, and to induce the plaintiff to make the loan, there was executed an agreement, in writing, signed by five of the defendants and Eugene J. Porter, since deceased, whose executors are also made defendants, as follows: " For value received, we hereby, jointly and severally, guarantee the payment of the within note, both principal and interest, according to its tenor, and hereby expressly waive all demand and notice of protest." The note has not been paid by the maker or by the defendants and there is due thereon $95,000 with interest from November 1, 1933. Allegations were added, by amendment, that prior to November 1, 1934, the plaintiff notified the maker that the note must be paid on or about November 1, 1934, and on November 2, 1934, the directors of the Temple Corporation by vote decided that it would be unable to pay the note. Except admission of the execution of the note and guaranty, the answers amounted to a general denial; five of the defendants adding a special defense which we discuss at a later stage of this opinion. The trial court found facts according with the allegations of the complaint as to the execution of the note and guaranty, nonpayment, and that the total amount due, including $95,000 principal and accrued interest, was $103,790.54.

The finding includes the following further facts: Porter died in September, 1933, and on December 1, 1933, the plaintiff filed with the executors of his estate a claim for the amount of the note and interest. On May 19, 1934, at the suggestion of Howard J. Breummer, one of the executors, a meeting of the directors of the Corporation was held for the purpose of discussing the note. There were present, with Breummer, all of the other guarantors, and several directors of the Corporation including Benjamin W. Alling, who also was counsel for the plaintiff bank. During this meeting Alling, as attorney for the bank, " stated in substance that this note would have to be paid or some extension arranged by November 1st, 1934." The matter was referred to the finance committee to report back recommendations. The directors, through this committee, made attempts to arrange to have funds raised by public solicitation, also to have the loan taken over by other parties, but without success, and on or about October 30, 1934, a meeting was held at the office of the plaintiff bank, at which there were present certain officers of the Corporation, Mr. Stanley, president of the bank, Mr. Lucas, its treasurer, and Mr. Alling, its counsel, and certain of the guarantors. At this meeting President Stanley and Attorney Alling stated that the note must be paid or some extension arranged for by November 1, 1934. On November 2, 1934, at a special meeting of the board of directors of the Corporation, which the plaintiff had not been invited to attend but at which Alling was present, the chairman stated that the meeting was called for the purpose of officially notifying the guarantors on the note that the Corporation was unable to meet it, and it was voted that the secretary so notify all guarantors by registered mail. On November 3, 1934, the secretary notified all the guarantors that the Corporation had been unable to refinance its mortgage, and that the note must be taken care of before November 14, 1934. The present action was commenced on November 7, 1934. Other facts found are referred to hereinafter in appropriate connections. Statements from the draft-finding sought by the appellants to be added are either sufficiently included in the finding as made or, although testified to, are not admitted or undisputed facts.

The reason for the bank's requirements regarding the note, the notice of the Corporation to the guarantors that it " must be taken care of before November 14th, 1934," and the bringing of this action before that date appear from the conclusion of the trial court that " under the decision in Broadway Bank & Trust Co. v. Longley, 116 Conn. 557, 165 A. 800, a cause of action against the guarantors accrued as soon as the note was executed and delivered." The date of the note was November 14, 1928; under that decision payments of interest by the maker would not toll the statute of limitations (Gen. St. 1930, § 6005) as to the guarantors; therefore (116 Conn. 557, at page 565, 165 A. 800) no action would lie against them unless brought within six years from that date.

One of the conclusions, assigned as error, is that the facts found constitute and were a demand upon the Corporation for payment of the note. The appellants claim that these facts do not amount to a demand as a matter of law, in that they did not peremptorily require immediate payment but, instead, set a future date therefor. In this the appellants seem to seek to apply here the strict and technical requirement of presentment imposed in order to charge an indorser. Bredow v. Woll, 108 Conn. 489, 492, 143 A. 849, 62 A.L.R. 293; General Statutes, §§ 4387, 4388. As counsel for appellants appear to concede, the purpose and office of a demand, if, as they claim, one was required in the case of an absolute guaranty, is to lay a foundation for action against the guarantors by putting the maker in default. No reason is discernible why this purpose is not as fully served by a designation, with sufficient certainty, of a future date by or upon which payment or performance is required, as by a requirement of the same forthwith. The facts found are sufficient to place the Corporation, as maker of the note, in default when November 1, 1934, the date designated, on behalf of the bank, in May and again on or about October 30th, as the definite time limit, passed without compliance with the specified requirements, and therefore would constitute a demand adequate to the purpose of fixing liability upon the defendant guarantors, if any demand was a prerequisite thereto. So concluding, we might well treat as immaterial the further conclusions stated by the trial court that (a) the defendants expressly waived demand by the plaintiff upon the Corporation and no demand upon the guarantors was necessary (b) no demand upon the Corporation was necessary in order to give the plaintiff a cause of action against these defendants; and (c) as the defendants neither alleged nor proved any damage to them as a result of failure to make demand upon the Corporation, lack of demand could not avail the defendants. We indulge the appellants, as did ...