Bank of British Columbia v. Jeffs

• Decision Date: 03 September 1896
• Citation: 15 Wash. 230,46 P. 247
• Parties: BANK OF BRITISH COLUMBIA v. JEFFS.
• Court: Washington Supreme Court

46 P. 247

15 Wash. 230

BANK OF BRITISH COLUMBIA v. JEFFS.

Supreme Court of Washington

September 3, 1896

Appeal from superior court, King county; T. J. Humes, Judge.

Action by the Bank of British Columbia against Richard Jeffs. Judgment for plaintiff, and defendant appeals. Reversed.

Thomas B. Hardin and Pierre P. Ferry, for appellant.

Burke Shepard & Woods, for respondent.

GORDON J.

This action is based upon a promissory note executed by T. M Alvord, his wife, M. J. Alvord, E. H. Alvord, and appellant Richard Jeffs; said note being for the sum of $10,000, made November 15, 1890, payable to the respondent, the Bank of British Columbia, one day thereafter, with interest after date at the rate of 10 per cent. The action was brought against the appellant, Jeffs, alone.

The amended answer contains nine separate defenses, the first of which alleges that the sum for which said note was given was loaned by the respondent to the said T. M. Alvord; that the appellant was a surety only; and that, after the execution of said note by appellant, the same was altered, without the knowledge or consent of the appellant, by the addition thereto of the signature of one E. H. Alvord, as an apparent principal. The second, third, fourth, fifth, sixth, and seventh defenses all assert that, after the maturity of the note, the same was, for a sufficient consideration, extended from time to time, as set out in said several defenses, and that each of said extensions was had without the knowledge or consent of the appellant. The eighth defense was an attempt to set out an agreement to extend, but it lacks definiteness, and the lower court sustained a demurrer thereto. From an examination, we are satisfied the demurrer was rightfully sustained. Stickler v. Giles, 9 Wash. 147, 37 P. 293.

The ninth defense, in substance, alleged that in June, 1891, at a time when said note was due, T. M. Alvord had on deposit with the respondent the sum of $3,000, which money had been borrowed by him from the respondent, and had been placed to his general deposit account. This defense proceeds upon the assumption that it was the duty of the respondent to have credited the amount of said deposit upon said past-due note, and that its failure to do so operated as a defense pro tanto. A demurrer to the several defenses having been overruled, excepting only as to the eighth (as hereinbefore noticed), the respondent replied, denying each and all of the allegations contained in the several defenses; and, the cause having proceeded to trial, the court, at the conclusion of the testimony, over the objection of the appellant, withdrew from the jury the second, third, fourth, fifth, sixth, seventh, and ninth defenses, instructing the jury to disregard the same in arriving at their verdict, and submitted the cause to them upon the issue raised by the first defense only, viz. as to whether there had been an alteration of the note subsequent to its execution by the appellant. Upon the issue thus submitted, the jury returned a verdict for the respondent, upon which the court, having denied appellant's motion for a new trial, entered its judgment, and the cause comes here on appeal.

It is contended in this court by the learned counsel for the respondent that the judgment was right in any event, inasmuch as the note in question is signed by the appellant as an apparent maker; and it is urged that it is not competent for him to show that he executed the same in the capacity of a surety. So much has been said by courts and text writers upon the proposition which is here urged that we deem it unprofitable to enter upon a discussion of the subject, and are content to announce that, in our opinion, the great weight of authority upon the question is against the contention of respondent, and that the trend of modern authority is against it. Nor do we think that it can be regarded as an open question in this state, and the right of one of two or more makers of a joint and several negotiable note to show by parol evidence that he was in fact a surety, and that that fact was known to the payee of the note when the same was taken, has been frequently recognized by this court. Binnian v. Jennings (Wash.) 45 P. 302; Warburton v. Ralph, 9 Wash. 537, 38 P. 140; Culbertson v. Wilcox, 11 Wash. 522, 39 P. 954; Bank v. Harris, 7 Wash. 139, 34 P. 466. Probably a different rule exists where one who is in reality a surety expressly declares in his contract that he is a principal, or adds the word "Principal" to his signature.

Proceeding to a consideration of the questions relied upon by the appellant for a reversal, aside from the error predicated upon the ruling of the court sustaining a demurrer to the eighth defense, already noticed, we think that the action of the court in withdrawing from the consideration of the jury the so-called "defenses" numbered 2, 3 4, 5, 6, and 7 involves but a single question, and that it is not necessary to consider said defenses separately. The testimony introduced upon the trial relating to these defenses showed that the entire sum represented by said note, viz. $10,000, was a loan of money to the said T. M. Alvord, and that the appellant, Jeffs, never received any part thereof; also, that the respondent had full knowledge of that fact at the time when said loan was made, and at all times thereafter. It further appears: That on July 30, 1892, said Alvord gave respondent his check drawn upon the respondent bank against the account of said Alvord in said bank, for the full amount of interest on the note in suit for the month of July, 1892. Said check was accepted by the respondent, and charged to the account of Alvord on that day, and an indorsement thereupon made on the back of said note, as follows: "Int. paid to the 31 July, '92." That on March 30, 1893, a similar check was given in payment of interest for the month of March, and a like indorsement was made by re...