Addy v. Myers

GLASER, Surrogate Judge,

Dissenting.

[¶ 20] I concur with most of what is said in the opinion. Nevertheless, analysis of the undisputed facts leads me to a different conclusion. There is no dispute that a line of credit was given to the plaintiffs Addy and Hutchens and not to the corporation. The Plaintiffs’ exhibit 7, which is the note they signed, demonstrates this. The corporation was never and is not now indebted to the bank for the funds discussed in the opinion. Addy and Hutchens were. They indebted themselves to the bank personally because the corporation could not at that time obtain a line of credit on its own, being a new business. Addy, Hutchens and separately the Doerrs made available to the business the funds to provide working capital with the hope that the business would later repay them out of hoped for profits. The business used the bank loans and made some payments toward interest but not on principal. There were no guarantees or contributions to capital from or to anyone at this point. The business did owe $15,000.00 each to Boyd, Hutchens and Doerrs.

[¶ 21] In due time, the business exhausted these cash infusions and at the much discussed meeting of 11-7-1996 the necessity of obtaining an additional $15,000.00 was again considered. The plaintiffs claim is that it was clearly understood by all parties that “the Myers” would obtain the needed $15,000.00 from the bank by signing a note to the bank for that amount which would then be made available to the business as the previous loans had been. Doing so would equalize each party’s exposure to indebtedness at $15,000.00 or one quarter each of the total indebtedness. There is evidence in the record the Myers explicitly agreed to this or at least didn’t object. The loan was made the next day but only Addy and Hutchens signed the note. Mrs. Myers was not present and there is no clear evidence why she was absent. None of the foregoing suggests the existence of a guarantee on the part of anyone.

[¶ 22] The trial court in its opinion did not find that Nancy Myers did not intend or agree to assume any personal liability for the loan. It stated:

The main issue in this ease is whether or not Nancy Myers guaranteed repayment on the $15,000.00 loan. (See plaintiffs Exhibit 7.)

[¶ 23] The trial Court stated that such a guarantee must be in writing and signed by the guarantor. It wasn’t, of course, because it didn’t exist. Later, in its opinion the trial court does state that:

Defendants Exhibit 4 also show quite plainly that Nancy Myers did not intend to assume any personal liability for the $15,000.00 loan at BNC Bank.

[¶ 24] The only reference to this subject in the minutes which were kept by Mrs. Myers (Exhibit 4) is:

Need for rent and to pay bills— $15,000.00 line of credit was agreed upon.

[¶25] This minute neither “clearly” exonerates or implicates Ms. Myers. If anything, it demonstrates the subject was discussed. Ms. Myers did later object to the assertion that she was responsible for that last loan but this did not occur until March 26,1997.

[¶ 26] I would remand to the trial court with directions to determine whether the plaintiffs have established by the greater weight of the evidence that Mrs. Myers did *365orally agree with the co-owners that she would be the principal obligor on the last loan obtained from the bank and, if so, was she agreeing to be responsible for one fourth of the entire debt (one fourth of $60,000.00) or for one fourth of the last loan ($3,750.00).

[¶ 27] The trial court declined to consider statements made by Mr. Myers as hearsay. From the nature of the questions, it appears the statements were offered to establish they were made. Their accuracy was not in issue. In any event, statements made by Mr. Myers, the agent and alter ego of Mrs. Myers, are admissible against her.

[¶ 28] Gerald G. Glaser, Surrogate Judge