Lally v. Graves

63 P.2d 361, 188 Wash. 561, 1936 Wash. LEXIS 674
CourtWashington Supreme Court
DecidedDecember 14, 1936
DocketNo. 26362. Department Two.
StatusPublished
Cited by9 cases

This text of 63 P.2d 361 (Lally v. Graves) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lally v. Graves, 63 P.2d 361, 188 Wash. 561, 1936 Wash. LEXIS 674 (Wash. 1936).

Opinion

Beals, J.

Plaintiff sues as receiver of the Exchange National Bank of Spokane, demanding judgment against defendants on account of a balance due upon notes payable to the bank and endorsed by defendants.

Prior to 1928, one H. L. Thwaite was a large stockholder in Constitutional Mining & Milling Company, a corporation; the defendants in this action and other persons also owning stock. The corporation having fallen upon evil days, during the month of October, 1928, Mr. Thwaite, together with the defendants in this action and other persons, guaranteed payment of the corporation’s notes for a large amount in favor of the bank. The corporation having become insolvent, its properties were sold on execution, and finally naught remained but the debts.

. Large sums were paid upon the notes, but during the fall of 1934, a considerable balance remained unpaid. As the statute of limitations was about to run against the obligation, in so far as defendants were concerned, the receiver insisted that something be done which would protect the bank. The stockholders of the corporation who resided in this state, having paid large sums on account of their guarantees of the corporate obligations, felt that Mr. Thwaite, their co-guarantor, who was the largest stockholder, should bear his share of the burden, and suggested that the receiver attempt to enforce payment by Mr. Thwaite of the balance due. The receiver, being apparently willing to cooperate, *563 prepared a written agreement, which he signed, together with the defendants in this action. By this agreement, defendants recognized the obligation to the bank in manner and form sufficient to toll the statute of limitations. Concerning Mr. Thwaite, the agreement contains the following:

“That second parties wish first party to refrain from immediate suit thereon; that one of the signers on one of said notes and on said guaranty, to-wit: H. L. Thwaite, does not reside in the state of Washington, and that it may be necessary for first party to send the originals of said notes and guaranty so executed out of the state of Washington, if first party desires to sue the said H. L. Thwaite.”

The agreement bears date December 24, 1934, and during the month of April following, plaintiff sued defendants for the balance due, together with additional interest, attorney’s fees and costs. In his amended complaint, plaintiff, in order to avoid the bar of the statute of limitations, pleaded the agreement above referred to.

Defendants answered the amended complaint, admitting liability upon the promissory notes which are the basis of the action, and admitting execution of the written agreement above referred to. They pleaded affirmatively that plaintiff, in his capacity as receiver, had agreed with defendants that he would not sue defendants until he had first instituted suit against H. L. Thwaite and had attempted to collect from him the balance due; that the writing pleaded by plaintiff did not embody, and that the parties did not intend it to embody, the entire agreement between them; that an agreement by plaintiff to sue H. L. Thwaite was an express condition to the writing of acknowledgment, and that plaintiff’s agreement to sue Mr. Thwaite was the inducing and moving cause for the execution of the acknowledgment by defendants, and was the only con *564 sideration therefor; that plaintiff failed to keep his agreement to sue Mr. Thwaite, and that, for this reason, the writing* relied upon by plaintiff was not binding upon defendants, and they should not be held thereon; defendants praying for the dismissal of the action.

Plaintiff moved to strike defendants ’ affirmative defense and also demurred thereto, his motion and demurrer having been respectively denied and overruled. Plaintiff having* denied defendants’ affirmative allegations in his reply, the action was tried to a jury, which returned a verdict in favor of defendants. From a judgment of dismissal entered pursuant to this verdict, plaintiff has appealed.

Appellant assigns error upon the denial by the trial court of his motion to strike the affirmative matter contained in respondents’ answer and upon the overruling of his demurrer thereto; upon the receipt of parol evidence which he contends varied the terms of the writing dated December 24,1934; and upon the refusal of the court to grant him a new trial. The errors assigned all cover the same matter, namely, the receipt of parol evidence which appellant contends varied the terms of the written agreement.

Evidence was introduced by respondents which tended to prove that, at the time the written contract was signed, they entered into an oral agreement with plaintiff in substance as pleaded in their answer. On the other hand, appellant’s evidence tended to disprove any such understanding*. The question of whether or not any such oral contract was made was by the court submitted to the jury under instructions, which were not excepted to.

The first portion of instruction No. 1 given by the court reads as follows:

*565 “This case has resolved itself into the issue of whether or not the inducement for the execution of the writing of December 24, 1934, marked Plaintiff’s Exhibit No. 5, by the defendants Prank H. Graves, Benjamin H. Kizer and Richard W. Nuzum, was an oral agreement entered into between said defendant Benjamin H. Kizer and the plaintiff, Thomas A. E. Lally as receiver of the Exchange National Bank of Spokane.

“The defendants claim that the plaintiff, Thomas A. E. Lally, as such receiver, agreed with the defendant Benjamin H. Kizer, that no suit or action against the defendants executing the said instrument would be brought until the said receiver had instituted suit against H. L. Thwaite and diligently prosecuted the same to judgment and had attempted to collect the said judgment, and that no suit or action against the said defendants would be brought until the termination of the said litigation with the said H. L. Thwaite, and in no event would be brought within a period of one and one-half years from the date of executing said writing, to-wit, December 24, 1934; that said writing does not embody and was not intended by the parties thereto to embody the entire agreement between the plaintiff and the defendants executing the same; that the agreement between the said Benjamin H. Kizer and said plaintiff was intended by the parties to be a part of the agreement partially evidenced by the said writing; that the said agreement to sue H. L. Thwaite, above referred to, was an express condition to the said written instrument becoming a binding obligation upon the defendants signing the same, and an express condition to the said writing having any legal force or effect; that the said agreement of the plaintiff with reference to the suit against H. L. Thwaite was the inducing and moving cause, and the only inducing and moving cause of the execution of the writing by the defendants, and the sole and only consideration for the same; that said writing was executed and delivered by the defendants Nuzum and Graves upon the repre: sentation made to them by the defendant Benjamin H. Kizer that the plaintiff herein had agreed as above recited, and the said instrument was executed and de *566

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Cite This Page — Counsel Stack

Bluebook (online)
63 P.2d 361, 188 Wash. 561, 1936 Wash. LEXIS 674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lally-v-graves-wash-1936.