Lilienthal v. Kaufman

395 P.2d 543 (1964)

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Nature of the Case

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Facts

P sued D to collect two promissory notes. D's defense was that he had previously been declared a spendthrift by an Oregon court and placed under a guardianship and that the guardian had declared the obligations void. P claims that the notes were executed and delivered in California, that the law of California does not recognize the disability of a spendthrift, and that the Oregon court is bound to apply the law of the place of the making of the contract. The trial court held for D. D was also the prevailing party in a recent decision in Olshen v. Kaufman, 235 Or 423, 385 P2d 161 (1963) where D and the plaintiff, an Oregon resident, had gone into a joint venture to purchase binoculars for resale. P had advanced money to D. D repaid P by his personal check but the check bounced. The evidence, in that case, showed that P had been unaware that D was under a spendthrift guardianship. The guardian testified that he knew D was engaging in some business and had bank accounts and that he had admonished him to cease these practices; but he could not control D. In the Olshen case, the court held that the voiding of the contract by the guardian precluded recovery by the plaintiff. P, in this case, contends that the Olshen case has no application because the law of California governs, and under California law P's claim is valid. The court ruled for D and P appealed.