265 Wis. 108 | Wis. | 1953
Respondents submit that the purchase of accounts receivable by the bank as alleged in the complaint did not make the National Cart Corporation debtor to the bank; also that National Cart Corporation’s agreement with the bank was a guaranty of the debts of its customers and they contend that appellant is trying now to convert respondents’ guaranty of National Cart Corporation’s debts into a guaranty of the corporation’s guaranty.
In view of the broad language of the guaranty defining the term “indebtedness,” the respondents’ argument cannot succeed. “Debts, obligations, and liabilities” of the National Cart Corporation, “voluntary or involuntary,” “absolute or contingent,” are included in respondents’ promise to pay.
In referring to the agreement between National Cart Corporation and the appellant bank, the complaint alleges:
“That under the terms of said agreement it expressly provided that in the event said National Cart Corporation shall be adjudicated a bankrupt, said National Cart Corporation will, on demand, pay plaintiff the aggregate principal amount then owing on all unpaid accounts then outstanding.”
The case of Sharpe v. First Nat. Bank of Antigo (1936), 220 Wis. 506, 507, 508, 264 N. W. 245, cited by respondents, is easily distinguished. There Johns agreed to pay to the bank “ ‘all loans, . . . accounts, . . . liabilities . . . now owing, or which may hereafter become due or owing by the Antigo Canning Company, . . ” to the bank.
Respondents also rely on National Bank of Commerce v. Rockefeller (8th Cir. 1909), 174 Fed. 22. The facts in that case also were very different from the ones now before us. The bank was not suing Rockefeller on his guaranty. On the contrary, Rockefeller had paid his guaranty and brought the action to force the bank to release to him certain collateral posted by the primary debtor to secure the primary debt. The trial court decreed the release but on appeal this part of the judgment was reversed because the collateral also secured debts incurred before Rockefeller executed his guaranty and not guaranteed by him. It was held that the bank was entitled to keep the collateral until such debts were paid. Respondents refer us to that part of the opinion which states that a guaranty of debts does not render the signer liable on the debtor’s guaranty of collateral notes. We quote from respondents’ brief: “The court said that the guaranty did not constitute debts of the corporation but were merely executory contracts on which its liability was contingent and as such were beyond the scope of the guaranty.”
We think the federal court was right. Rockefeller’s guaranty was for nothing but the debts of the company. The collateral notes were not in default, and had not become the debts of the company. The company’s liability at the time of
By the Court. — Order reversed and cause remanded for further proceedings not conflicting with the opinion.