111 Wash. 262 | Wash. | 1920
Lead Opinion
In years 1902 and 1903, the respondent, Davidson, acquired an interest in certain mineral locations and water rights in the Kugarok mining district of Alaska. In the following year he interested one W. H. Metson and one J. E. Chilberg- therein, and the three organized a corporation, called the Kugarok Mining and Ditch Company, for the purpose of developing and working the properties. In the year 1905, the company spent large sums of money in the prosecution of development work, and, needing additional
“To Scandinavian American Bank, Seattle, Wash.:
“I request you to give credit to the Kugarok Mining and Ditch Company, successors or survivors, for a sum of money not exceeding the amount of ($50,000) fifty thousand and 00/100 dollars, and as said Kugarok Mining and Ditch Company contemplates a course of dealing with you, I request you to continue the said credit and renew the same from time to time for the said or any other amount. And I hereby promise to pay to you on demand in United States gold coin, all moneys which shall at any time, whenever said demand is made, be due from said Kugarok Mining and Ditch Company, successors or survivors, on whatever account, but not exceeding said amount of ($50,000) fifty thousand dollars and accrued interest, in whatever form said indebtedness may be, and whether said Kugarok Mining and Ditch Company be party thereto either alone or in partnership, or in common, or jointly, with any others. These presents shall constitute a continuing guaranty, and shall not be considered satisfied by and payment by or for account of said Kugarok Mining and Ditch Company. You may, without affecting this guaranty, g'rant time or other indulgence to or compound with said Kugarok Mining and Ditch Company, successors or survivors, or release or surrender any collateral security or obligation held by you against any ultimate balance which shall remain due to you from said Kugarok Mining and Ditch Company, successors or survivors, within the limit aforesaid, and accrued interest, notwithstanding whatever intermediate credits, loans, advances or transactions. And this guaranty shall continue after my death until you shall have received notice of revocation from my*265 personal representatives, which revocation shall then apply only to advances made after receipt of such notice. And this guaranty shall not be discharged by your omission to take action upon the principal debt or any collateral that you may hold for its payment, and no notice need be given to me of any default on the part of said Kugarok Mining & Ditch Company, successors or survivors.
“Dated San Francisco, Nov. 20th, 1905.
“ J. E. Chilberg,
“W. H. Metson,
“ J. M. Davidson.”
The respondent, Davidson, held the offices of president and manager of the corporation, and had the active management of its affairs. From time to time following the execution of the guaranty, the corporation borrowed from the bank various sums of money, giving its notes therefor. On January 29, 1912, these loans aggregated seventy-five thousand five hundred dollars, and on that date a renewal note, payable on demand, was given the bank for that sum.
On May 31, 1910, Metson, by an instrument in writing', sold, assigned and turned over to a corporation known as the Pioneer Mining Company all of his interests in the Kugarok Mining and Ditch Company, together with other property. In consideration of the assignment, the Pioneer Mining Company agreed to issue and deliver to Metson, of its capital stock then in its treasury, three hundred and seventy-six thousand shares, and assume and pay all
“outstanding obligations or claims, guarantees or indemnifications which the said party of the first part shall or would have to pay for or on account of the said Kugarok Mining and Ditch Company, . . .”
On January 13, 1913, the Pioneer Mining Company, on demand of the Scandinavian American Bank, paid
“Together with all other personal property now owned or possessed by the Pioneer Mining Company in the district of Alaska, the intent being to convey to the party of the second-part all personal properties of the party of the first part owned by said party of the first-part in the district of Alaska or elsewhere.”
The present action was instituted on November 20, 1918, by the, appellant to recover from Davidson upon the guaranty before quoted. In its complaint it set forth the facts substantially as we have outlined them, and alleged, in addition thereto, that the Kugarok Mining and Ditch Company was, at the time of the transfer of the note, wholly insolvent; that it has been at all times since, and is now, wholly insolvent, and that it had been unable to collect from it any part thereof. Judgment was demanded for one-third of the amount paid to the Scandinavian American Bank by the plaintiff’s predecessor in interest at the time the note was transferred to it.
Issue was taken upon the complaint and a trial entered upon by the court sitting with a jury. At the conclusion of the plaintiff’s case, the defendant challenged the sufficiency of the evidence to sustain a judgment against him, which challenge the trial court sustained, and afterwards entered a judgment of dismissal
Since the record is silent as to the reasons which actuated the trial judge in sustaining’ the challenge to the sufficiency of the evidence, the questions suggested can best be noticed by noticing the reasons urged by the respondent’s learned counsel as supporting his ruling. The first of these is that the record fails to show a payment by the appellant’s assignor of the obligation due from the Kugarok Mining & Ditch Company to the Scandinavian American Bank. The record on this matter is, it will be remembered, that the assignor of the appellant, in consideration of a transfer of certain property to it by Metson, assumed the liability of Metson as guarantor of the note, and that afterwards, on demand of the bank, paid the amount of the note to the bank and took an assignment of the note. The respondent calls attention to the general rule that the right of contribution between sureties arises only after the payment of the common obligation, or after something is done in relation thereto by the surety claiming contribution equivalent to a payment; and argues that, since the obligation still exists against the Kugarok Mining Company, there was here no payment. But this argument mistakes the rule. It is not necessary that the obligation of the principal debtor be canceled or satisfied, as against the principal debtor, to give, rise to the right of contribution. The obligation arises when payment is made to the creditor to whom the guaranty runs. Here there was such a payment. The bank, the guaranteed creditor, no longer has any claim either against the guarantors or the Kugarok Mining & Ditch Company, the principal debtor. As to these parties the debt is paid and the guaranty satisfied. The fact that the guarantor who
The second reason urged is that the appellant, the present plaintiff, has no capacity, as assignee of the Pioneer Mining Company, to sue upon the obligation. This contention is founded upon § 191 of the Code (Rem.) which, omitting the proviso, reads:
“Any assignee or assignees of any judgment bond, specialty, book account, or other chose in action, for the payment of money, by assignment in writing, signed by the person authorized to make the same, may, by virtue of such assignment, sue and maintain an action or actions in his or her name, against the obligor or obligors, debtor or debtors, therein named, notwithstanding the assignor may have an interest.in the thing assigned.”
Arguing in support of the contention, counsel say that this statute “clearly and specifically requires that the obligor or debtor to be sued must be named in the assignment” before an action on an assigned obligation can be maintained by the assignee thereof. But we cannot think this the true meaning of the statute. In the first place, the purpose, of the section of the
In this connection, it is further insisted that the assignment is of itself insufficient to pass choses in action. The concluding clause of the assignment we have quoted, is sweeping in its terms, and clearly shows an intent on the part of the assignor to sell and transfer to the assignee named in the instrument all
The third reason is that the action is barred by the statute of limitations. From an examination of the dates heretofore given, it will be noticed that the present action was begun more than three years, but less than six years, after the time the appellant’s assignor paid to the bank the obligation of the Kugarok Mining & Ditch Company for which it had become sponsor, and the contention is that the three-year and not the six-year statute of limitations is controlling. But we think the question is controlled by our decisions in the cases of Caldwell v. Hurley, 41 Wash. 296, 83 Pac. 318, and Lindblom v. Johnston, 92 Wash. 171, 158 Pac. 972. These were actions for contribution by one surety, who had been compelled to answer for the default of the common principal, against another who was equally liable to answer for the default. In the one case the parties were sureties on the note of a third person, and in the other they were sureties upon the bond of a postmaster. In each of them the action was instituted more than three years, but less than six years, after the cause of action accrued, and in each of them the defense of the statute of limitations was imposed. In each case it was held that the statute was inapplicable, since the action was based upon an implied agreement arising out of a written instrument, and could be maintained at any time within six years after the cause of action accrued.
Counsel seek to distinguish these cases from the case at bar, but, without following the arguments, we think the governing principle is the same. If an action for
The next reason urged is that “the guaranty running to the Scandinavian American Bank is not transferable.” To this it is a sufficient answer to say there was no transfer by any one of the written contract of guaranty. The facts are that, in response thereto, one of the guarantors paid the obligation and sought to assign the right of contribution arising thereby to another, and the real question is whether this right of contribution is assignable. "We have no doubt that it is, and we so held in the case of Lindblom v. Johnston, supra. The principal case cited by the respondent in support of this branch of its contention, namely, Crane Co. v. Specht, 39 Neb. 123, 57 N. W. 1015, 42 Am. St. 562, does not, as we view it, touch the question here involved. There the defendant, in consideration that the Crane Brothers Manufacturing Company, a corporation, would sell certain materials to one Litchenberger, guaranteed payment of the purchase price of the materials. After selling certain materials to the person named, the corporation changed its name to Crane Company and thereafter sold to the same per
But perhaps the respondent means that the obligation of Metson on the guarantee was so far personal that he could not arrange with another to take up the obligation and confer on that other the right to exact from the other sureties their proportional share of the obligation when paid. If this be the point, we cannot think it tenable. The doctrine of contribution is a doctrine of equity. It is not based on contract, but is based on the principle that equality is equity, and manifestly the duty of a surety to respond when a common obligation is paid by a third person at the procurement of his co-surety is just as potent as it would be were the obligation paid by the co-surety personally. Here the co-surety surrendered his property in consideration that the person to whom it was surrendered would take up this obligation, and unless this was done under an understanding or agreement that all the sureties were to be released, the liability of the others to contribute continues. The record before us shows no such understanding or agreement.
The fifth reason assigned is that, when the appellant’s assignor paid this obligation, it was but paying
“It is claimed in this case that the Pioneer Mining Company, assignor of the plaintiff, by virtue of a contract between it and W. H. Metson, one of the joint guarantors, became substituted for Metson as to all rights and liabilities in connection with the affairs of the Kugarok Mining & Ditch Company. Of course, this is absolutely silly. It takes at least three parties to create a contract of novation. In fact, it takes the consent of all interested in the subject-matter. No such novation as here claimed could possibly be created without the express consent and concurrence of the defendant, Davidson, and J. E. Chilberg, the other joint guarantors, and The Kugarok Mining & Ditch Company. This in reference to Kugarok affairs. A glance at the matters involved in this contract will show that it would have needed the concurrence of some ten or fifteen other persons. The agreement ‘as is’ that they refer .to may be good as between the Pioneer Mining Company and Metson, but they cannot foist off onto the defendant any person he has not agreed to accept, nor can they vary his previous rights and liabilities, nor create new ones. This contract does not affect Davidson at all. The only bearing it has on this case is to show why the Pioneer Mining Company paid the amount of this note to the bank. And it shows very clearly. It paid it because for a valuable consideration (and that a very, very valuable one) it promised Metson so to do. It was paying its own debt and not someone else’s.”
This argument does not seem to us to be conclusive. The doctrine of subrogation as between the appellant and the respondent is not involved. The guarantor, Metson, contracted with the Pioneer Mining Company to satisfy an obligation on which he was jointly liable with the respondent and another. To make this con
The sixth reason is that the question involved is res judicata. In his answer to the complaint, the respondent, as an affirmative defense, set out the proceedings in an action in which the respondent, J. W. Davidson, was plaintiff and J. E. Chilberg. was defendant, and alleged that the subject-matter of the present action was fully adjudicated therein; further alleging:
“That the plaintiff (the present appellant) has no title or interest in or to said note and guaranty described in the complaint, but is a mere tool and dummy of the said Chilberg, and bringing this suit fraudulently for the purpose of tying up and preventing the defendant from collecting his said judgment against Chilberg by issuing and serving a writ of garnishment in this suit, and that said Chilberg is the real and beneficial plaintiff in this action; that the subject-matter of this suit is a part of the subject-matter of said suit of Davidson v. Chilberg, and the real parties in interest in both suits are the same.”
“to disregard the erroneous decision of the lower court sustaining the demurrer, take as established the facts stated in said opinion (the opinion of the court rendered in the case of Davidson v. Chilberg) and to hold that this is another good reason to sustain the decision of the court below in this case. ’ ’
But this is asking us to exceed our powers. The question whether the court erroneously sustained the demurrer is not before us. This is an appeal by a plaintiff from a judgment of dismissal entered against it because it was deemed that its evidence was insufficient to make a prima facie case in its favor. In such a case, errors of the court committed against the other side are not reviewable. Moreover, we have quoted enough from the answer to show that it contains traversable allegations extrinsic of the judgment record, the truth of which could not be assumed even were we to hold that a defense to the plaintiff’s cause of action was stated therein.
The final reason assigned requires no special consideration. It is sufficient to say that it suggests inquiries which the court cannot enter upon on this appeal.
The judgment appealed from is reversed, and the cause remanded for further proceedings.
Mount, Tolman, and Bridges, JJ., concur.
Dissenting Opinion
(dissenting)—I dissent; particularly upon the fifth contention of respondent as stated ill the majority opinion.