115 Wash. 635 | Wash. | 1921
In this action the appellant, Miller, seeks to recover from the administratrix of the estate of Charles L. Denny, deceased, the sum of eleven thousand nine hundred dollars and interest, which he was compelled to pay to the surety, upon an injunction bond, whom he had guaranteed against any loss that might accrue upon the bond. He failed of recovery in the court below, and appeals from the adverse judgment.
At some time prior to the beginning of the year 1903, the Charles L. Denny named acquired certain placer
The corporation took over the property from Denny immediately upon its incorporation, and during the years 1904 and 1905 operated the property through its regularly appointed officers and agents. During the year 1904, it became involved with adverse claimants over its water supply, and in the litigation which followed was defeated. The expense of this litigation, together with the expense of operation, practically exhausted the funds in the corporation’s treasury, the report of the treasurer for the year 1905 showing a balance on November 15 of that year of four hundred fifty-seven and fifteen hundredths dollars.
The property was operated in 1906, through Charles L. Denny, he advancing the money necessary for the purpose, over and above the small balance in the treasury, from his own resources.- The treasurer’s report shows that the sums so advanced aggregated approximately nine thousand dollars.
Before entering upon its obligation as surety as above mentioned, tbe United States Fidelity & Guaranty Company exacted of tbe mining company a guaranty against loss, and this was furnished it on June 25, 1907, in tbe form of a written obligation executed by tbe appellant and one Holland H. Denny. After paying tbe judgment entered against it in tbe British Columbia court, tbe guaranty company recovered of tbe appellant and Holland H. Denny, in tbe superior court of King county in this state, tbe amount it bad so paid with interest. The appellant paid one-balf of this judgment, and it is tbe sum so paid that he seeks to recover in this action.
Tbe action was originally begun against Charles L. Denny in his lifetime. Issue was taken on the complaint by Denny by motion and demurrer. Pending
In the amended complaint, upon which the cause was tried, it is alleged, in substance, that Charles C. Denny, during his lifetime was, and that his estate is now, the owner of practically all of the capital stock of the corporation named, and that Denny up to the time of his death was the active manager, and in the sole and exclusive control of the corporation; that by reason of the adverse decision of the British Columbia court in the litigation over the water rights, its mining claims were rendered worthless and without value; that the corporation as such thereupon abandoned the property and surrendered the same to Charles L. Denny, who from that time on assumed exclusive charge and control of the property, and operated the same thereafter at his own cost and expense and for his own use and benefit, although in the name of the corporation. It is then alleged:
“That prior to June- 25th, 1907, there was commenced in the supreme court of the Province of British Columbia, an action entitled in said court ‘Anton Deisler vs. The Spruce Creek Power Co., Ltd., John T. Prescott, John Marked, Arvid Andérson and Peter Boline’, and said Charles L. Denny, in the name of the Spruce' Creek Power Co., Ltd., but on his own behalf and in his own interest and for his own use and benefit, caused to be furnished in said proceeding and in said cause a certain obligation or bond in writing executed by the United States Fidelity & Guaranty Company of Baltimore, Md., to said Anton Deisler, and said Charles L. Denny, on his own behalf and in his own*639 interest, and for Ms own nse and benefit, in tbe name of said corporation as aforesaid, but in order to procure said bond as aforesaid to be executed by said United States Fidelity & Guaranty Company of Baltimore, Md., for Ms own use and benefit in tbe name of said corporation, did orally request tMs plaintiff to sign, execute and deliver unto said Urnted States Fidelity & Guaranty Company of Baltimore, Md., a certain contract or obligation in writing, a true and correct copy of wMch is hereto annexed, marked Exhibit ‘A’ and made a part hereof, as fully as if copied at length herein; and at said time and at said place said Charles L. Denny, on his own behalf and in his own interest, and for his own use and benefit, did orally promise and agree to hold harmless tMs plaintiff from any and all liability arising on account thereof.”
The further allegations relate to the recovery of the judgment upon the bond of the guaranty company, its payment of the judgment, and its recovery of a judgment against the plaintiff for the amount so paid, and the subsequent satisfaction of the judgment by the plaintiff.
The evidence as we read it does not substantiate these allegations. While it does show that Charles L. Denny was one of the promoters of the corporation, that he was, and his estate is, its principal stockholder, and that he advanced from his own resources such sums of money as were used in operating expenses during the year 1906, it fails to show that the corporation abandoned the property prior to the conclusion of the litigation Anton Deisler instituted against it, or ever turned it over to the exclusive control of Denny. The records of the corporation, it is true, close with the year 1906; that is to say, the records show no meeting either of the directors or of the shareholders of the corporation subsequent to that time, although they do show a call made by the directors for a sharehold
While no direct reference is made thereto, the action instituted by Deisler. must have been one of the subjects discussed at the meeting. The action had been instituted more than two months prior thereto and the question whether the bond subsequently issued, and which gives rise to the present controversy, was a live question at that time. It was actually given in the month following the meeting, the directors elected at that meeting executing it on behalf of the corporation. The evidence does not show what disposition was finally made of the corporation’s property, although it does show that the corporation was later formally dissolved. Nor does the evidence show, that at the time of the execution of the guaranty, there was any promise on the part of Charles L. Denny to save the guarantors harmless from liability thereon. It is shown
From the record we think the trial court could well find, as it did in substance find, that the obligations for which the guaranty was given was the obligation of the Spruce Creek Power Company, and not the personal obligation of Charles L. Denny. This being true, the guarantor was surety for the corporation and not surety for Denny, and no implied obligation arose on Denny’s part to repay to the surety the money which the surety was compelled to pay on account of the
It remains to inquire whether the oral promise to repay the obligation made subsequent to the execution of the guaranty is binding upon the promisor. We are dear that the trial court correctly held that it was not. Since the obligation was not the obligation of Denny, but was the obligation of the Spruce Creek Power Company, it was an oral promise to answer for the debt of another and was thus within the statute of frauds. Rem. Code, § 5289. A case in point is First Nat. Bank of Pullman v. Geddis, 31 Wash. 596, 72 Pac 460. There the defendants, who were cashier and assistant cashier, respectively, of the bank, loaned funds of the bank to a mining corporation in which they were interested as stockholders. When the loan was called in question by the directors of the bank, the explanation was given that it was
“A little mining deal which some of us boys have . . . that is a matter we owe and we will take care of it in a short time.”
It was held that this promise was not binding on the defendant, that it was at most but an oral promise to answer for the debt of another, which, under the statute, must be in writing. See, also: Taylor v. Howard, 70 Wash. 217, 126 Pac. 143; Goldie-Klenert
It is not to be denied that the appellant is the innocent victim of the transaction. He had no personal interests to promote by the execution of the guaranty, and he was hampered in his proofs by the unfortunate circumstances of the death of Charles L. Denny. The record makes it clear also that there are others directly interested in the corporation much more morally bound to answer to its default than is he. But the courts, before they can hold the estate of Charles L. Denny to answer, must find a legal obligation on the part of the estate to bear the loss. This the trial court ruled it could not do from the evidence as presented, and we are constrained to hold that it committed no error in reaching its conclusion.
The judgment is affirmed. •
Parker, C. J., Bridges, Mackintosh, and Holcomb, JJ., concur.