Cadle Co. v. Ginsburg

Robert Ginsburg (defendant) was a shareholder of a real estate company, Delco Development Company, Inc. (Delco). The real estate market collapsed. Consequently, Delco borrowed $2,000,000 from Great Country Bank (Great Country). Ginsburg, Dennis Nicotra, and another shareholder personally guaranteed Delco’s repayment of the loan. Delco defaulted on the loan. Accordingly, Great Country sued Ginsburg and the other shareholder-guarantor for damages. However, Great Country did not sue Nicotra and instead entered into separate agreements with Nicotra that released Nicotra from any further liability to Great Country as a guarantor. Ginsburg ultimately settled the lawsuit with Great Country and executed a promissory note in which Ginsburg promised to pay Great Country $100,000 with interest. Thereafter, Ginsburg learned about Great Country’s agreements with Nicotra, and Ginsburg refused to pay the promissory note. Great Country then transferred the note to Cadle Company (Cadle) (plaintiff) in bulk along with 106 other notes for one payment. Ginsburg continued to refuse to repay the note. Thus, Cadle sued Ginsburg for damages. The trial court found that Cadle was a holder in due course and ruled in Cadle’s favor. On appeal, Ginsburg argued that the trial court erred in finding that Cadle was a holder in due course because Cadle did not take the note for value, as required. Specifically, Ginsburg argued that Cadle could not specify the amount that Cadle paid for the note in question, considering that Cadle purchased the note in bulk along with many other notes for one payment. Ginsburg also argued that he did not receive adequate consideration for executing the note.