First State Bank Of Sinai v. Hyland

399 N.W.2d 894 (1987)

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Nature of the Case

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Facts

Randy and P executed two promissory notes. One note was for $6,800, and the other note was for $3,000. Both notes became due on September 19, 1981. The notes were delinquent. Randy came to P and P gave him an extension on the condition that Randy's father, D, act as cosigner. According to Randy, D signed the note on October 20 or 21, 1981. D had transacted business with Bank since 1974. In the past, D had executed approximately 60 promissory notes with D. D paid all of his notes on time. P testified that he knew D drank, but that he was unaware of any alcohol-related problems. Randy returned one week later. D had properly signed the note. In P's presence, Randy signed the note, which had an April 20, 1982, due date. The note was unpaid. A two-month note for $9,800 with a due date of July 2, 1982, was prepared and given to Randy. D did not sign on the two-month note, and D testified that he refused to sign that note. As part of the deal, Randy had a blank check from D to pay the interest on the note as required. On June 22, 1982, Randy filed for bankruptcy which later resulted in the total discharge of his obligation on the note. P came after D for the payment. D's defense was that he was incapacitated through the use of liquor when he signed the note. D claimed he had no recollection of the note; did not remember seeing it, discussing it with his son, or signing it. Randy testified that when he brought the note home to D, the latter was drunk and in bed. D then rose from his bed, walked into the kitchen, and signed the note. Later, Randy returned to P with the signed note. D introduced evidence that he was having drinking problems during this time period which resulted in his involuntary commitment to hospitals. Two of those commitments occurred near the period of the October 1981 note. Between the periods of his commitments, D did transact business with P. D was found to be entirely without understanding (as a result of alcohol consumption) when he signed the October 20, 1981, promissory note. P appealed.