Goodman v. Ladd Estate Co

224 Or. 621, 427 P.2d 102 (1967)

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Nature of the Case

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Facts

Dr. Wheatley borrowed $10,000 from Citizens Bank of Oregon and gave his promissory note therefor, which was endorsed by D. Contemporaneously with this transaction Liles, individually, and Westover, by Liles as president, and Martin, as secretary, executed an agreement in writing by which they unconditionally guaranteed D against loss arising out of the latter's endorsement of the Wheatley note to Citizens Bank. The agreement was also signed by D. Wheatley defaulted on his note. D paid to Citizens Bank the amount owing thereon, $9,583.61, and demanded reimbursement from Westover. D filed an action at law upon the guaranty agreement against Liles and Westover. Ps purchased all the common shares of Westover from a receiver appointed by the Circuit Court. At the time of such purchase, Ps were fully aware of the guaranty agreement given by Westover and Liles to D. It is conceded that the guaranty agreement was ultra vires the corporation. Ps, as stockholders, brought this suit under ORS 57.040. Ps’ appealed the dismissal of the complaint to enjoin D from enforcing the guaranty.