Pacific Factors, Inc. v. St. Paul Hotel, Inc.

NOURSE, P. J.

Plaintiff brought this action on a promissory note against St. Paul Hotel, Inc., as maker, and J. IT. Jonas & Sons, Inc., as guarantor. Service was not had upon St. Paul Hotel, Inc. J. H. Jonas & Sons, Inc., answered and the trial was had before the court sitting without a jury. Judgment went for plaintiff, and defendant J. H. Jonas & Sons, Inc., appeals upon a typewritten transcript.

Appellant was the holder of a negotiable promissory note in the sum of $4,150.20, executed by the St. Paul Hotel, Inc., as maker, payable March 1, 1928. Appellant negotiated with respondent for the purchase by respondent of this note at any time appellant might be in need of funds and instructed its bookkeeper to that effect. On September 29, 1927, appellant’s bookkeeper took the note to the office of respondent. At that time the note was not indorsed. The bookkeeper presented the note to Mr. Richard, secretary-treasurer of respondent corporation, and the latter caused to be written on the back of the note a guaranty which he informed the bookkeeper must be signed by an officer of the Jonas Company. The bookkeeper took the guaranty to Mr. Molerstein, secretary of the Jonas Company, for signature. Mr. Molerstein indorsed the guaranty, but did not affix the corporate seal, as he was not, at the time of signing, at the office of the corporation.

The respondent then paid to the Jonas Company the amount agreed on to discount the note, and a letter written by its secretary, stating that the purchase had been made,

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was sent to the Jonas Company. On February 20, 1928, respondent wrote to appellant.advising it that the affairs of the St. Paul Hotel, Inc., were in an involved condition, calling appellant’s attention to its liability on the note, and asking what disposition the appellant wished made of the note. No reply to the letter having been received the respondent again, on March 6, 1928, wrote advising the Jonas Company of its liability on the note. The Jonas Company did not answer this letter, and the respondent again wrote, on March 9, 1928, stating that the note had been returned uncollectible and that the matter was then in the hands of its attorneys. On March 15, 1928, the Jonas Company replied to the three above-mentioned letters, denying liability on the note, because it was its understanding that the transaction was an indorsement without recourse. The respondent filed suit on March 15, 1928.