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was supposed to use the funds contributed by its investors to buy
and develop gold mining property.3
Because decedent had a good reputation in Missoula, Montana,
he was asked by the other investors to serve as president of
International Mining. He accepted the post. Despite being
president, decedent had no daily involvement in the business of
International Mining, nor did he have operating control over the
business of International Mining.
International Mining needed additional capital shortly after
it was formed in order to continue operations. International
Mining attempted to secure a loan from the First State Bank of
Stevensville, Montana (the Bank); however, the Bank was unwilling
to make such a loan. The Bank did lend $40,000, on March 23,
1984, to decedent and Warren E. Meader, another International
Mining investor. To secure the loan, the Bank required that
decedent pledge his personally owned Cessna airplane as
collateral. Mr. Meader put up stock as collateral. The loan
proceeds were contributed to International Mining. International
Mining entered into a resolution on March 23, 1984, pledging
proceeds from sales "for repayment of the $40,000.00 promissory
note drawn by Joseph D. Osterbauer and Warren E. Meader in favor
of First State of Stevensville Bank. Said promissory note in
3It is unclear from the record whether any gold mining
properties were ever bought by International Mining.
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