122 Kan. 716 | Kan. | 1927
The opinion of the court was delivered by
This proceeding was’brought by plaintiffs who were directors of the Hopewell Cooperative Equity Exchange against the defendants, who were stockholders of the exchange, to obtain equitable contribution on liabilities assumed and paid by the plaintiffs in behalf of the members of the exchange. The exchange was a corporation organized to carry on the business of buying farm products and selling merchandise and supplies to its members and others in the community. Prior to June 12, 1918, the exchange found itself without sufficient funds to carry on the business, and the directors who had been providing money on their individual credit to keep it going, reported to the annual meeting of the stockholders the financial condition of the exchange. At that stockholders’ meeting, the directors asked the stockholders to join in raising a fund of $25,000 deemed to be necessary to continuing the business. To accomplish their purpose the members then voted to and did amend the by-laws of the exchange so as to authorize its officers to borrow the money necessary to transact the business and
“Know All Men by These Presents: That we, the undersigned, being stockholders or other interested parties in The Hopewell Cooperative Exchange, a corporation duly organized and existing under and by virtue of the laws of the state of Kansas, do hereby request the directors of said The Equity Exchange to bond and pledge themselves individually to The Farmers State Bank of Hopewell, Kansas, for the purpose of obtaining credit for said The Equity Exchange in the amount of twenty-five thousand dollars.
“Now, if the directors of said The Equity Exchange will so bond and' pledge themselves individually to said bank, we the undersigned stockholders hereby agree that we will reimburse said directors for any loss arising on account of said bond or pledge up to and including the sum of five hundred dollars each; it being our intention that each signer of this instrument shall stand individually liable for any sum up to and including five hundred dollars for the purpose of making said directors safe in signing said pledge, or bond, to said bank.
“In case any loss is sustained by said directors on account of said bond or pledge, we hereby agree promptly to reimburse said directors for said loss; it being distinctly understood, however, that no one stockholder shall be called upon to pay more than five hundred dollars.
“In Witness Whereof, We have hereunto set our hands this - day of June, a. d. 1918.”
This contract and obligation was signed by each member of the exchange. Following the proceedings at the annual meeting, and the execution of the writing quoted, the directors executed and indorsed notes upon which money was obtained for some time of the Farmers State Bank of Hopewell, but that bank with a capital of only $10,000 found itself unable to carry so large a loan as was demanded, and reported that it was not authorized to carry more than $6,000. Then the board of directors borrowed money at the Macks-ville State Bank sufficient to meet the obligations to the Fanners State Bank of Hopewell and took up the notes which they had previously and personally indorsed. The First State Bank of Macks-ville required the plaintiffs to become personally responsible for
Plaintiffs alleged that a mutual mistake was made in the contract quoted in that it should have included after the name of the Farmers State Bank of Hopewell the words “and such other banks or persons as may be necessary.” Recognizing that the obligations of defendants sought to be enforced ran to the Hopewell bank and not to the Macksville bank from which plaintiffs had borrowed money and had assumed personal responsibility for unpaid loans, amounting to more than $15,000, plaintiff asked that the obligation executed by defendants should be reformed by adding the words “and such other banks or persons as may be necessary,” making it read so that defendants “pledged themselves individually to the Farmers State Bank of Hopewell, Kansas, and such other banks or persons as may be necessary.” The question of reformation was the only contested issue upon which proof was submitted. In the midst of the trial the court asked if the allegation and controversy was that of mutual mistake in making the contract, and counsel for both parties replied in the affirmative. Considerable testimony was offered on the subject, but wre are unable to find any substantial evidence in the record showing mutual mistake upon which reformation can be based. The defendants obligated themselves to the Hopewell Bank, and a number of them conceded their liability on the obligation as written until it had been discharged. They had of course the right to choose their obligee and their liability could not be extended to another without their consent. That the guaranty as written did not bind them to stand liability to other parties, was conceded by the demand of plaintiffs for reformation. A witness introduced by the plaintiffs to show mutual mistake, stated that the contract expressed the intention of the parties and that “nobody thought that the words ‘any other bank’ should have been inserted.” Another witness, one of the plaintiffs, testified that no one suggested that there was a mistake in the contract, and when the court called his attention to the allegation in his petition that a mistake had been made he replied, “I do not know that I said there was a mistake or not.” Another witness for the plaintiff, when asked if he had dis