Koenig

On the sixteenth day of December, 1927, the defendant Steinbach was indebted to the plaintiff on a promissory note, and plaintiff held as security therefor an assignment by Steinbach of a property interest described as a “unit” interest in certain oil-wells in the state of Texas. By reason of pending litigation in courts of the state of Texas, wherein Steinbach and numerous other owners of unit interest in said oil-wells were defendants, it was found to be desirable that the owners should transfer their units to some person to hold the same as trustee for the owners. Defendant Larson was selected to act as such trustee, and assignments of those units were made to him as trustee. With respect to the Steinbach unit it was necessary that Koenig, by reason of his interest, join in the assignment. When Koenig was asked to do this he insisted upon a renewal note, and that Larson should guarantee payment of the new note, which is the note sued on in this action. Larson refused to become personally responsible, but was willing to indorse the note as trustee, with the understanding that thereby he would be under obligation to apply toward the satisfaction of the note any money which he…