Windhorst v. Bergendahl
| Decision Date | 02 April 1907 |
| Citation | 111 N.W. 544,21 S.D. 218 |
| Parties | WINDHORST v. BERGENDAHL et al. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Deuel County.
Action by William Windhorst against B. A. Bergendahl and others. From an adverse judgment, plaintiff appeals. Affirmed.
John I Davis, A. Sherin, and Thomas Davis, for appellant.
Hanten & Loucks, for respondents.
The trial of this action on a promissory note resulted in the discharge of the respondents Trageser from all liability on the theory that they signed the same as sureties for the nonappearing defendant, B. A. Bergendahl, and that appellant to whom the note was given, extended the time of payment for one year for a valuable consideration and without their knowledge or consent. While by the terms of the promissory note the three signers appear to be joint makers, the record discloses facts amply sufficient to charge appellant with knowledge that P. A. Trageser and Stephen Trageser signed the instrument for and at the request of B. A. Bergendahl to enable him to obtain a loan of $300 for one year at the bank of which appellant, the payee named in such note, was president, and that neither of the Tragesers expected to be or ever were, benefited by the transaction.
Consonant with the rule in equity, section 1994 of the Revised Civil Code provides that: "One who appears to be a principal whether by the terms of a written instrument or otherwise, may show that he is in fact a surety, except as against persons who have acted on the faith of his apparent character of principal." Now, it clearly appears from the testimony that all the parties understood that Bergendahl, to whom the loan was made, executed the note as principal, and induced the Tragesers to sign the same to enable him to get the money, and appellant had actual knowledge that they were to sign as sureties, and not otherwise. As the purpose of securing their signatures was to give credit to Bergendahl, without any personal benefit to themselves, their obligation was merely that of suretyship, and there is no merit in the contention of counsel for appellant that their true relation to the contract could not be shown by parol. Bailey Loan Co. v. Seward, 9 S. D. 326, 69 N.W. 58.
After Bergendahl had negotiated for the loan and signed the note at appellant's bank in the village of Halloway, Minn., he sent it to respondents by United States mail, and obtained their signatures at Gary, S.D. For the reason that the note was executed by Bergendahl in Minnesota, and made payable in that state, it is contended by counsel for appellant that the laws of Minnesota govern its interpretation and enforcement; but even in that event, and in the absence of anything before us to the contrary, it might be presumed that the Minnesota statute is the same as our own. In the recent case of Barry v. Stover, 107 N.W. 672, this court, speaking through Mr. Justice Haney, said: "The validity and interpretation of a contract may be controlled by the laws of a sister state; but, in determining what shall be good defenses to actions instituted in this state, its courts must administer its own laws and not those of other states."
The $300 note which respondents signed with Bergendahl as sureties bears date November 30, 1903, and was made payable on or before December 1, 1904, together with 9 per cent interest per annum. Concerning the transaction by which these sureties claim to be discharged from all liability, Bergendahl testified that on the 2d day of December, 1904, he called at the bank of appellant where the note above mentioned was executed, and requested an extension for one year, which was granted upon the payment of $27 interest and the execution of a renewal note for one year, signed by Bergendahl alone, which was taken by appellant pursuant to an agreement then and there expressly made and entered into by and between appellant, Windhorst, and Bergendahl, that the time of payment was to be...
To continue reading
Request your trial