Martindell

Action upon a promissory note.

Appellants, all individuals, together with respondent Martindell, were directors and minority shareholders of a corporation known as El Bodrero Hotel, organized to build and operate a motel.

The corporation encountered financial difficulties in completing construction of the motel.

At a board meeting on February 15, 1958, appellants Bodrero and Sant each agreed to loan $6,000 to the corporation in return for its note. Respondent for himself and wife also agreed to loan $6,000, hut unlike Bodrero and Sant, he stated that he would make it only in exchange for a note signed individually by the directors as makers. The loan was made on that basis. In addition, respondents’ note was guaranteed by Bodrero, the president of the corporation. Respondents’ note was due in May 1958.

To enable the corporation to qualify for a Small Business Administration loan, the corporation made it appear that the note was its obligation; that there were no guarantors on the note and that interest had been reduced to 6 percent. Martindell was in Alaska and had nothing to do with the arrangement for the loan. Martindell, as one of the directors of the corporation, and his…