Court Opinion

ID: 5233142
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:02:15.300319+00
Date Added: 2024-06-11T08:27:41.755791
License: Public Domain

Kruse, P. J. (dissenting):
I think the contract of guaranty covers the bonds in suit. It covers all obligations of the Waterloo Organ Company, which, in the language of the contract, “the said bank now has, or which it may hereafter have, hold, purchase or obtain within one year from date hereof,” and the only limitation upon that liability is that it shall not exceed the sum of $15,000 and interest thereon.
After the joint and several covenants and promise made by the guarantors to pay to the bank the obligation in case of default, the contract of guaranty concludes with the following statement: “This instrument is intended to be a full, complete, and perfect security and indemnity to the said bank to the extent and for the time above stated, for any indebtedness or liability of any kind owing by the said company to it from time to time, ánd to bé valid and continuous without other or further notice to uS or tó any of us.”
Assuming that the sole purpose of the stockholders-of the Waterloo Organ Company in making this contract of guaranty was to obtain loans, discounts and credits and other pecuniary accommodations from the bank, it is clear from the recital in the bond that in order to obtain such accommodations the bank not only required security for the loans and discounts, but for all other indebtedness or liability of the com*286pany which it might purchase or obtain within the time and limitation therein stated.
Furthermore, it was important to the stockholders as well as the bank that the general credit and financial standing of the organ company should be maintained. While the contract did not require the bank to take care of these outstanding obligations, I think it was contemplated that it might do so; and in Considering this circumstance the situation must be viewed as it was when the contract was made and not when the bonds were acquired.
To hold that these bonds are not covered by the contract of guaranty does violence to the plain language of the contract, as it seems to me. Upon the first trial there was an express finding that the bonds were covered by the contract, and this court explicitly stated in its opinion that the bonds were so covered. (First National Bank of Waterloo v. Story, 131 App. Div. 472, 474.) Although there was a reversal in the Court of Appeals (First National Bank v. Story, 200 N. Y. 346) there is no suggestion to the contrary in its opinion. The reversal was upon another ground.
I think the judgment should be reversed and judgment directed for the plaintiff.
Judgment affirmed, with costs.