52 P.2d 1255 | Wash. | 1936
The plaintiff brought this action to quiet title to certain timber land. The defendant denied the claimed right of the plaintiff and, by cross-complaint, sought to have the title to the property quieted in himself as receiver of the Montborne Lumber Company. The trial was to the court without a jury and resulted in a judgment denying the claim of the defendant and sustaining that of the plaintiff, from which the defendant appealed.
The Montborne Lumber Company is a corporation organized under the laws of this state, with its principal place of business in Mount Vernon, Skagit county, and it was engaged in the logging business. A.D. Daniels, a resident of the state of Wisconsin, and Thomas Smith, a resident of Skagit county, were officers of the corporation and the principal stockholders. The North Pacific Public Service Company is a Washington corporation, with its principal place of business in the city of Tacoma.
January 13, 1930, the respondent, being then the owner of certain timber land in Skagit county, entered into a contract to sell the same to the Montborne Lumber Company, Thomas Smith and A.D. Daniels. The purchase price was $64,500, and at the time of the execution of the contract ten thousand dollars was paid. The balance was to be paid as stumpage, as the logging operations progressed. The contract provided that the purchasers bound themselves and their successors and assigns "jointly and severally."
Subsequently, the corporation became insolvent, and receivers were appointed and after a time resigned, and the present appellant, Guy H. Clark, was appointed as receiver. A.D. Daniels died May 7, 1931, and his will was admitted to probate in Oneida county, Wisconsin, and ancillary administration with the will annexed was had in this state. *134
July 23, 1931, a claim was filed against Daniels in the sum of $58,563.87, together with interest, which would be the amount of the balance due upon the contract November 1, 1932. At the time the claim was filed, there had been no default, and there was no unpaid balance due on the contract. June 14, 1932, the respondent settled with Thomas Smith and the executor of the last will of Daniels and his heirs, and took an assignment from each of them, together with a quitclaim deed conveying all of their interests to the property and in the contract. At this time, the Daniels estate paid the sum of ten thousand dollars for this adjustment.
The assignments mentioned contained the express provision that the release of Smith and the Daniels estate should not in any wise operate to discharge the Montborne Lumber Company from any of its liabilities or obligations under the contract and expressly reserved to the respondent all of its rights against that corporation. After the final payment on the contract had become due, the respondent tendered a deed to the receiver and demanded payment, which was refused. Thereafter, this action was brought seeking a forfeiture of the contract for noncompliance with its terms.
[1] The first question is whether the release of Smith and the executor of Daniels and his heirs operated to release the Montborne Lumber Company, the other obligor on the contract. The general rule is that a release by a creditor of one of several persons who are jointly or jointly and severally obligated is to discharge them all. But that rule is not applicable where, in the release, there is an express reservation of rights against the co-obligor or co-obligors. In Restatement of the Law of Contracts, American Law Institute, Contracts, § 122, p. 142, it is said: *135
"Written or oral words of a person entitled to enforce a promise which purport to discharge the promisor but expressly to reserve rights against other promisors jointly bound for the same performance do not operate as a discharge of the promisor but only as a promise not to sue him, . . ."
In 23 R.C.L. 404, it is said:
"While, as stated in the preceding paragraph, the strict common law rule is that if two persons are bound jointly and severally in an obligation, and the obligee voluntarily and unconditionally releases one of them, both are discharged, and either may plead the release in bar, nevertheless the rule deducible from all the authorities is that equity always gives to a release operation according to the intention of the parties and the justice of the case, and although many early cases may be cited to the effect that the rule applied by courts of law was otherwise, and that a saving clause repugnant to the nature of the grant was void, and that the grant remained absolute and unqualified, such is not the modern rule of construction. The equitable rule now prevails, and a release is to be construed according to the intent of the parties and the object and purpose of the instrument, and that intent will control and limit its operation. Hence the legal operation of a release of one of two or more joint debtors may be restrained by an express provision in the instrument that it shall not operate as to the other."
In Shriver v. Carlin Fulton Co.,
The cases, Federal and state, which support the modern rule will be found assembled in a note in 53 A.L.R. 1455.
This court, though the decision was not rested principally upon that ground, in the case of Davis v. *136 Gutheil,
"A release of the maker of a promissory note without the consent of the indorser operates to release the indorser. But it is held otherwise if the instrument by which the maker is released expressly reserves the remedy of the holder of the note against the indorser. Tobey v. Ellis,
In this case, as above stated, there was an express reservation to the effect that the Montborne Lumber Company's obligation should not be affected by the release of Smith and the executor of the last will and testament of Daniels.
Attention has been called to the fact that, in this state, the release of one joint tort feasor, even with the reservation that it is not to be considered as a release against any other of the joint tort feasors, operates as a release of all. There is a reason in tort cases why that should be the rule, which does not exist in the present case. In the case of tort, there is no fixed standard of liability, and the right of a tort feasor, not released, to enforce contribution against the one released would be difficult and impractical. But that is not the case where there is a standard of liability which may be sustained by proof.
In the cases of Sunset Copper Co. v. Zickrick,
When the claim in this case was filed, nothing was due on the contract, and nothing would become due for months afterwards. The personal liability was then contingent upon whether the contract should be carried out according to its terms. It was necessary, within the time provided for the filing of claims, for the respondent to present a claim or forfeit his rights to hold the makers of the contract on their personal liability. At the time the claim was filed, it could not work an election because, there being nothing due on the contract at that time, there was a good defense to it.
The appellant's contention in this regard is "based squarely upon the case" of Kimble Motor Car Co. v. Androw,
The judgment will be affirmed.
TOLMAN, HOLCOMB, BEALS, and BLAKE, JJ., concur. *138