ERICKSTAD, Chief Justice.
Ned Nastrom Motors, Inc., formerly Nas-trom-Peterson Motors, Inc., brought an action against Nastrom-Peterson-Neubauer Company, N.P.N., Inc., Donald Peterson, and David Neubauer alleging that the defendants were liable to the plaintiff under the terms of seven lease agreements. The trial court adjudged in a bench trial that defendant, Nastrom-Peterson-Neubauer Company (hereinafter “Equipment”), was liable to Ned Nastrom Motors, Inc. (hereinafter “Motors”), pursuant to the specific contractual agreements in question and that defendant, Donald Peterson, had personally guaranteed Equipment’s indebtedness under such agreements. A
judgment
,
dated October 26, 1982, in the amount of $129,793.21, was entered in accordance therewith from which Peterson now appeals. For the reasons hereinafter stated, we affirm.
The issues to be adjudicated on appeal are two-fold:
(1) Whether or not Nastrom-Peterson-Neubauer Company was obligated to Ned Nastrom Motors, Inc., under the specific financial transactions in question; and, if so, whether or not Equipment was obligated in the amount of $129,793.21; and,
(2) Whether or not Peterson personally guaranteed Nastrom-Peterson-Neu-bauer Company’s indebtedness to Ned Nastrom Motors, Inc.
For púrpóses of clarity, we will divide this, opinion into two distinct sections.
I.
Nastrom-Peterson-Neubauer Company’s Obligation to Ned Nastrom Motors, Inc.
The facts relevant to this aspect of the case are not in dispute and thus can be
briefly summarized. Nastrom-Peterson Motors, Inc., was owned jointly by Ned Nastrom and Donald Peterson when it was formed in 1972. Nastrom-Peterson-Neu-bauer Company was owned equally by Ned Nastrom, Donald Peterson, and David Neu-bauer when it was organized in 1976. On April 24,1978, pursuant to a stock exchange agreement, Nastrom transferred his stock in Equipment to Peterson in exchange for Peterson’s stock in Motors. As a result, Nastrom became the sole owner of Nas-trom-Peterson Motors, Inc., which became known as Ned Nastrom Motors, Inc., and Peterson became the controlling shareholder in Equipment.
Throughout 1976, 1977, and 1978, Motors and Equipment entered into approximately 70 lease agreements. These contractual agreements in which Motors was the lessor and Equipment was the lessee covered cars, trucks, construction equipment, telephone equipment, radio equipment, tools and furniture. This lawsuit is premised upon seven such leases which were received into evidence as Exhibits 1-7:
Exhibit 1: Tools and Furniture
Exhibit 2: Furniture
Exhibit 3: Six radios
Exhibit 4: Twelve radios
Exhibit 5: (Tony Boehm)
Exhibit 6: (A & B Construction)
Exhibit 7: (Kyro Construction)
The lease agreements covering the tools and furniture were executed by Motors and Equipment on October 21, 1977. The items covered by these two leases were originally purchased by Equipment. However, Equipment gave the invoices evidencing these purchases to Motors who prepared, based upon these invoices, lease agreements covering the items. Motors assigned such leases to the First National Bank and Trust Company for value. With the proceeds it received from First National, Motors paid Equipment for the tools and furniture. The end result of these financial arrangements was that Motors was obligated to pay the bank certain monthly payments and Equipment was obligated to pay Motors the same monthly payments. The circumstances surrounding the leases covering the radios were similar in nature to those concerning the tools and furniture.
On July 27, 1976, Equipment leased certain pieces of machinery to Tony Boehm, A & B Construction, and Kyro Construction. Motors did not prepare any leases evidencing that it was in fact leasing the machinery covered by such leases to Equipment; nevertheless, invoices, dated July 27, 1976, reveal that such machinery was sold by Equipment to Motors as of that date. To finance these purchases, Motors assigned its interest under the Boehm, A & B, and Kyro leases to the First National Bank and Trust Company and the State Bank of Burleigh County for value. Motors paid Equipment for such machinery with the funds it received from First National and State. Summarily described, these financial arrangements created a situation where the original lessee, either Tony Boehm, A & B Construction, or Kyro Construction would pay Equipment; Equipment would then remit this same sum to Motors who would pay the financial institution involved.
Upon analyzing these seven transactions, it is evident that Motors was in essence a “funnel” through which Equipment obtained financing. This complicated method of financing was embarked upon because Equipment did not have “legitimate credit available at the bank.”
Preliminary to our adjudication of the merits of this appeal, we must ascertain whether or not Exhibits 1-7 were properly admitted into evidence through the testimony of David Graham. Peterson contends that Graham was not employed at Equipment when the Boehm, A & B Construction, and Kyro Construction leases were consummated, and therefore the plaintiff failed to lay a proper foundation for such exhibits.
Nevertheless, whether or not an exhibit should have been excluded on the basis that it lacked adequate foundation is primarily within the sound discretion of the trial court, the exercise of which will not be disturbed on appeal in the absence of a showing that it affected the substantial rights of the parties.
Fox v. Bellon,
136
N.W.2d 134, 142 (N.D.1965). In the case at bar, the financial arrangements in question were ongoing during the time Graham was employed at Equipment. Hence, Graham became familiar with both the documentation and the circumstances surrounding these transactions through servicing such accounts. Accordingly, we conclude that Exhibits 5, 6, and 7 were properly admitted into evidence. Peterson has neglected to enlighten this court as to why Exhibits 1, 2, 3, and 4 lacked adequate foundation. Hence, we conclude that such exhibits were also properly received into evidence.
The remainder of Peterson’s assertions involve the trial court’s findings of fact. It is elementary that a trial court’s findings of fact “shall not be set aside unless clearly erroneous.” Rule 52(a), N.D.R. Civ.P. A finding is clearly erroneous only when, although there is some evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made.
United States v. United States Gypsum Co.
333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948);
Wilhelm v. Berger,
297 N.W.2d 776, 779 (N.D.1980);
Alumni Association of University v. Hart Agency, Inc.,
283 N.W.2d 119
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ERICKSTAD, Chief Justice.
Ned Nastrom Motors, Inc., formerly Nas-trom-Peterson Motors, Inc., brought an action against Nastrom-Peterson-Neubauer Company, N.P.N., Inc., Donald Peterson, and David Neubauer alleging that the defendants were liable to the plaintiff under the terms of seven lease agreements. The trial court adjudged in a bench trial that defendant, Nastrom-Peterson-Neubauer Company (hereinafter “Equipment”), was liable to Ned Nastrom Motors, Inc. (hereinafter “Motors”), pursuant to the specific contractual agreements in question and that defendant, Donald Peterson, had personally guaranteed Equipment’s indebtedness under such agreements. A
judgment
,
dated October 26, 1982, in the amount of $129,793.21, was entered in accordance therewith from which Peterson now appeals. For the reasons hereinafter stated, we affirm.
The issues to be adjudicated on appeal are two-fold:
(1) Whether or not Nastrom-Peterson-Neubauer Company was obligated to Ned Nastrom Motors, Inc., under the specific financial transactions in question; and, if so, whether or not Equipment was obligated in the amount of $129,793.21; and,
(2) Whether or not Peterson personally guaranteed Nastrom-Peterson-Neu-bauer Company’s indebtedness to Ned Nastrom Motors, Inc.
For púrpóses of clarity, we will divide this, opinion into two distinct sections.
I.
Nastrom-Peterson-Neubauer Company’s Obligation to Ned Nastrom Motors, Inc.
The facts relevant to this aspect of the case are not in dispute and thus can be
briefly summarized. Nastrom-Peterson Motors, Inc., was owned jointly by Ned Nastrom and Donald Peterson when it was formed in 1972. Nastrom-Peterson-Neu-bauer Company was owned equally by Ned Nastrom, Donald Peterson, and David Neu-bauer when it was organized in 1976. On April 24,1978, pursuant to a stock exchange agreement, Nastrom transferred his stock in Equipment to Peterson in exchange for Peterson’s stock in Motors. As a result, Nastrom became the sole owner of Nas-trom-Peterson Motors, Inc., which became known as Ned Nastrom Motors, Inc., and Peterson became the controlling shareholder in Equipment.
Throughout 1976, 1977, and 1978, Motors and Equipment entered into approximately 70 lease agreements. These contractual agreements in which Motors was the lessor and Equipment was the lessee covered cars, trucks, construction equipment, telephone equipment, radio equipment, tools and furniture. This lawsuit is premised upon seven such leases which were received into evidence as Exhibits 1-7:
Exhibit 1: Tools and Furniture
Exhibit 2: Furniture
Exhibit 3: Six radios
Exhibit 4: Twelve radios
Exhibit 5: (Tony Boehm)
Exhibit 6: (A & B Construction)
Exhibit 7: (Kyro Construction)
The lease agreements covering the tools and furniture were executed by Motors and Equipment on October 21, 1977. The items covered by these two leases were originally purchased by Equipment. However, Equipment gave the invoices evidencing these purchases to Motors who prepared, based upon these invoices, lease agreements covering the items. Motors assigned such leases to the First National Bank and Trust Company for value. With the proceeds it received from First National, Motors paid Equipment for the tools and furniture. The end result of these financial arrangements was that Motors was obligated to pay the bank certain monthly payments and Equipment was obligated to pay Motors the same monthly payments. The circumstances surrounding the leases covering the radios were similar in nature to those concerning the tools and furniture.
On July 27, 1976, Equipment leased certain pieces of machinery to Tony Boehm, A & B Construction, and Kyro Construction. Motors did not prepare any leases evidencing that it was in fact leasing the machinery covered by such leases to Equipment; nevertheless, invoices, dated July 27, 1976, reveal that such machinery was sold by Equipment to Motors as of that date. To finance these purchases, Motors assigned its interest under the Boehm, A & B, and Kyro leases to the First National Bank and Trust Company and the State Bank of Burleigh County for value. Motors paid Equipment for such machinery with the funds it received from First National and State. Summarily described, these financial arrangements created a situation where the original lessee, either Tony Boehm, A & B Construction, or Kyro Construction would pay Equipment; Equipment would then remit this same sum to Motors who would pay the financial institution involved.
Upon analyzing these seven transactions, it is evident that Motors was in essence a “funnel” through which Equipment obtained financing. This complicated method of financing was embarked upon because Equipment did not have “legitimate credit available at the bank.”
Preliminary to our adjudication of the merits of this appeal, we must ascertain whether or not Exhibits 1-7 were properly admitted into evidence through the testimony of David Graham. Peterson contends that Graham was not employed at Equipment when the Boehm, A & B Construction, and Kyro Construction leases were consummated, and therefore the plaintiff failed to lay a proper foundation for such exhibits.
Nevertheless, whether or not an exhibit should have been excluded on the basis that it lacked adequate foundation is primarily within the sound discretion of the trial court, the exercise of which will not be disturbed on appeal in the absence of a showing that it affected the substantial rights of the parties.
Fox v. Bellon,
136
N.W.2d 134, 142 (N.D.1965). In the case at bar, the financial arrangements in question were ongoing during the time Graham was employed at Equipment. Hence, Graham became familiar with both the documentation and the circumstances surrounding these transactions through servicing such accounts. Accordingly, we conclude that Exhibits 5, 6, and 7 were properly admitted into evidence. Peterson has neglected to enlighten this court as to why Exhibits 1, 2, 3, and 4 lacked adequate foundation. Hence, we conclude that such exhibits were also properly received into evidence.
The remainder of Peterson’s assertions involve the trial court’s findings of fact. It is elementary that a trial court’s findings of fact “shall not be set aside unless clearly erroneous.” Rule 52(a), N.D.R. Civ.P. A finding is clearly erroneous only when, although there is some evidence to support it, the reviewing court is left with a definite and firm conviction that a mistake has been made.
United States v. United States Gypsum Co.
333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948);
Wilhelm v. Berger,
297 N.W.2d 776, 779 (N.D.1980);
Alumni Association of University v. Hart Agency, Inc.,
283 N.W.2d 119, 121 (N.D.1979);
In Re Estate of Elmer,
210 N.W.2d 815, 820 (N.D.1973). That we may have viewed the facts differently if we had been the initial trier of the case does not entitle us to reverse the lower court.
United States v. National Association of Real Estate Boards,
339 U.S. 485, 495-96, 70 S.Ct. 711, 717, 94 L.Ed. 1007 (1950);
Nee v. Linwood Securities Co.,
174 F.2d 434, 437 (8th Cir.1949);
In Re Estate of Elmer, supra,
210 N.W.2d at 820. Our function is not to decide factual issues de novo.
Zenith Radio Corp. v. Hazeltine Research, Inc.,
395 U.S. 100, 123, 89 S.Ct. 1562, 1576, 23 L.Ed.2d 129 (1969);
In Re Estate of Elmer, supra,
210 N.W.2d at 820.
The first factual issue to be resolved on appeal is:
Whether or not the trial court was clearly erroneous in concluding that Motors was a secured creditor, not a capital investor, of Equipment.
Peterson’s specific contention is that the monies Motors advanced to Equipment pursuant to the aforementioned agreements constituted capital contributions.
The intent of the participating parties is the salient factor in determining the true relationship between parties to a monetary transaction.
Wood Preserving Corp. of Baltimore v. United States,
347 F.2d 117, 119 (4th Cir.1965);
Mosebach v. Blythe,
282 N.W.2d 755, 761 (Iowa 1979). A party’s intent is ascertained not only from his testimony but also from the circumstances surrounding the transaction.
Wood Preserving Corp. v. Baltimore, supra,
347 F.2d at 119;
Mosebach, supra,
282 N.W.2d at 761.
Upon scrutinizing the evidence, it is clear that the trial court correctly concluded that these financial transactions did not constitute capital contributions. The reasons underlying our conclusion are threefold. First, Equipment dutifully remitted payments to Motors on the basis of these seven transactions until April 19, 1979. Second, such transactions were reflected in Equipment’s general ledger as liabilities. It is highly unlikely that the parties involved intended the monies in question to be injections of capital if such transactions were entered on Equipment’s books as obligations. And, thirdly, the parties executed written lease agreements with regard to the “tools”, “furniture”, and “radios.” Although the parties did not execute any written leases with regard to the Tony Boehm, A & B Construction, and Kyro Construction transactions, such transactions were structured in the same manner as those concerning the “tools”, “furniture”, and “radios” and, accordingly, we believe the parties intended these transactions to be construed in a similar manner
(i.e.
as leases).
Peterson next attacks the trial court’s determination of the amount of damages suffered by Motors:
“Motors sustained damages as follows:
Lease payments due_$163,793.21
Less N.P.N., Inc., settlement_ 19,000.00
Subtotal. $144,793.21
Less value of returned equipment_ 15,000.00
Net loss. $129,793.21
Plus interest from
5//1979 to date .. 27,300.00
Total.$157,093.21”
Specifically, Peterson contends that based upon the unrebutted accounting testimony of Marvin Heinert, a C.P.A., the lease payments due were $24,622.23 not $163,793.21.
Nevertheless, on cross-examination, Hei-nert conceded that this figure merely represented Equipment’s indebtedness under the “tools”, “furniture”, and “radio” leases. Heinert further testified that Equipment’s general ledger reflects that $45,000 of Equipment’s indebtedness to Motors under the Tony Boehm and Kyro Construction leases was shown as “cancelled by the delivery of a loader” to Ned Nastrom. However, the record clearly reveals that this loader was delivered to Nastrom as payment for real estate, not as payment for Equipment’s lease obligations.
Heinert’s testimony also reveals that Equipment’s obligation pursuant to the A & B Construction lease was transferred into another liability account, namely “First National Bank, notes (accounts) payable.” This transfer, which in effect eliminated Equipment’s obligation to Motors under the A & B lease from Equipment’s books, was a mere accounting entry inasmuch as there is no evidence to indicate that Equipment actually paid such debt.
It is our view from examining the record that the trial court’s finding that lease payments were due in the amount of $163,793.21 is not clearly erroneous. This figure which was introduced into evidence through David Graham’s testimony was calculated by Graham thusly: the monthly lease payment due under the lease in question was multiplied by the number of monthly payments due under such lease; from this figure Graham subtracted, based upon Motors accounts receivable journal, the lease payments which Motors had received.
Peterson also asserts that the trial court erred in concluding that the value of the returned equipment was $15,000.00. The equipment which was recovered by Motors included a dynahoe and a Kubota garden tractor.
Upon scrutinizing the record, we are not left with a definite and firm conviction that the trial court committed a mistake in concluding that the value of the dynahoe and tractor was $15,000.00. The reasons underlying our conclusion are twofold. First, the tractor was resold by Motors “for a couple thousand dollars.” Secondly, the trial court’s finding that the dynahoe had a value of approximately $13,000.00 appears reasonable in light of the fact that it was originally purchased on July 27, 1976, for $35,500.00.
II.
Donald Peterson’s Personal Guarantee of Nastrom-Peterson-Neubauer Company’s Obligation to Ned Nastrom-Mo-tors, Inc.
The following facts are relevant to this aspect of the case. All of the equipment sold or leased by Equipment was floor planned to either a financial institution or a manufacturer such as Clark Equipment Company. When Equipment sold or leased a piece of this equipment, the bank or manufacturer which floor planned that particular piece of equipment was entitled to all or a portion of the proceeds Equipment received. If Equipment failed to remit such monies, the sale or lease in question was deemed to be “out of trust.”
In 1978, Clark Equipment Company discovered that a large “out of trust” situation existed at Equipment. Hence, Clark who had a blanket security interest on virtually all of Equipment’s machinery and other property placed Equipment under “lock and key” pending foreclosure. At this time, it should be noted that Peterson had personal
ly guaranteed a large number of Equipment’s debts.
Confronted with this financial crisis, Peterson negotiated to sell Equipment’s assets to N.P.N., Inc. The sole purpose of this sale, which was consummated on April 14, 1979, was to generate enough capital for Equipment to pay off all its valid creditors. As a consequence thereof, Peterson would be absolved of his personal liability to such creditors. Subsequent to such sale, Equipment did in fact satisfy all of its outstanding liabilities with the exception of its indebtedness to Motors.
While Peterson was negotiating to sell Equipment’s assets, Nastrom heard that Peterson was contemplating such sale and as a result he became apprehensive about the validity of Equipment’s lease obligations to Motors. Nastrom therefore arranged to meet with Peterson so that they could discuss these leases. Nastrom’s testimony
concerning his conversation with Peterson reads as follows:
“Q. Can you relate to the Court as best you can recall what was said by the participants in that discussion?
“A. Well, we visited primarily, and I asked Mr. Peterson how his transaction was coming with the possible sale, and he said it looked fine or at least they were in negotiations. And at that point in time I asked him concerning our lease portfolio, and he assured me at that time that I would be taken care of or the car company would be taken care of.
“Q. Can you remember the exact words that were spoken? I don’t know if you can. I’m asking you: Can you?
“A. I said, ‘Don, are you going to take — you know, get a deal put together? What about all the stuff we’ve got leased out there?’ And he said, ‘Well, we’ll put a deal together, and I’ll make sure that you’re taken care of.’
⅜: ⅜ sfc ⅝:
“Q. And do I interpret the wording of your recollection of that conversation to indicate to you that Mr. Peterson was personally going to pay those leases out of his own pocket?
“A. He would — He assured me that he personally would take care of it, yes.
“Q. He personally, out of his own funds?
“A. Out of the funds of the company or whatever, he was going to see that I would be — or the garage or the motor company would be reimbursed for their leases.”
Determining whether or not Peterson’s statements constituted a personal guarantee was the exclusive function of the trier of fact, the trial court.
Nelson v. TMH, Inc.,
292 N.W.2d 580, 588 (N.D.1980);
State Bank of Towner, Inc. v. Rauh,
288
N.W.2d 299, 305 (N.D.1980). In this instance, Nastrom and Peterson had been involved in numerous business ventures throughout the past ten years, many of which were loosely structured. Based on his prior dealings with Peterson, Nastrom believed that “Mr. Peterson’s word was better than most men’s checks.” Hence, given the relationship between the parties, it is abundantly clear that Peterson must have known that Nastrom would interpret his statements as a personal guarantee. Furthermore, it would have been unreasonable for Nastrom to believe that Peterson was making such statements in his capacity as an officer of the corporation inasmuch as “no purpose would be served by a corporation guaranteeing its own debts.”
Johnson Brothers Wholesale Liquor Company v. Otto’s Liquor, Inc.,
292 Minn. 481, 194 N.W.2d 592 (Minn.1972). Viewing the circumstances surrounding Peterson’s statements in their entirety, we conclude that the findings of the trial court to the effect that Peterson personally guaranteed Equipment’s obligations to Motors were not clearly erroneous.
Peterson's next contention is that even if a personal guarantee was created, such guarantee is not enforceable under Section 22-01-04, N.D.C.C.,
as it was not in writing:
“22-01-04. Guaranty to be in Writing-Exception
— Consideration
need not be expressed.
— Except when a guaranty is deemed an original obligation as provided in section 22-01-05, a guaranty must be in writing and signed by the guarantor, but the writing need not express a consideration.”
Nevertheless, this court has previously stated: “[a] rule of law in any event should not be applied so as to benefit the principal perpetrator of the violation.”
Beck v. Lind
235 N.W.2d 239, 246 (N.D.1975). In addition, the statute of . frauds should never be utilized to perpetrate a fraud or promote an injustice.
Nelson, supra,
292 N.W.2d at 584.
In accordance with the foregoing philosophies, the following general rule has been developed to determine whether or not an oral guarantee is excepted from the statute of frauds:
“ ‘... when the leading object of the promise or agreement is to become guarantor or surety to the promisee, for a
debt for which a third party is and continues to be primarily liable, the agreement, whether made before or after, or at the time with the promise of the principal, is within the statute, and not binding unless evidenced by writing.
On the other hand, when the leading object of the promisor is to subserve some interest or purpose of his own, notwithstanding the effect is to pay or discharge the debt of another, his promise is not within the statute.’
”
State Bank of Towner, Inc., supra,
288 N.W.2d at 308, quoting from
Glock v. Hillestad,
85 N.W.2d 568, 575 (N.D.1957).
Hence, if the primary objective of Peterson’s oral guarantee was to subserve some object of his own, notwithstanding that the effect of such promise would be to pay Equipment’s debt, Peterson’s promise was an original obligation and not within the statute of frauds.
State Bank of Towner, Inc., supra,
288 N.W.2d at 308;
Nelson, supra,
292 N.W.2d at 584;
Austford v. Smith,
196 N.W.2d 413, 417 (N.D.1972);
Glock, supra,
85 N.W.2d at 575.
In this instance, the trial court apparently concluded, and reasonably so, that the principal objective of Peterson’s oral guarantee was to further the sale of Equipment’s assets without any interference from Motors. Nastrom apparently relied upon Peterson’s assurances and, in accordance therewith, refrained from pursuing either a lawsuit or bankruptcy proceedings to protect his interests. Because Peterson had personally guaranteed a number of Equipment’s debts, he had a direct financial interest in completing such sale. Hence, by completing the sale, Peterson received a direct personal benefit. Peterson’s oral guarantee was therefore an original obligation and not within the statute of frauds.
In accordance with the reasons stated herein, we affirm.
YANDE WALLE, SAND, PEDERSON and PAULSON, JJ., concur.