Bank of California, Nat. Ass'n v. Mortgage Co., Holland-America

• Citation: 104 Wash. 196,175 P. 956
• Decision Date: 19 November 1918
• Docket Number: 14937.
• Court: Washington Supreme Court
• Parties: BANK OF CALIFORNIA, NATIONAL ASS'N, v. MORTGAGE CO., HOLLAND-AMERICA.

175 P. 956

104 Wash. 196

BANK OF CALIFORNIA, NATIONAL ASS'N, v. MORTGAGE CO., HOLLAND-AMERICA.

No. 14937.

Supreme Court of Washington

November 19, 1918

Editor's Note: Modified by 179 P. 853.

Department 2.

Appeal from Superior Court, King County; Everett Smith, Judge.

Action by the Bank of California, National Association, against the Mortgage Company, Holland-America. Judgment for plaintiff and defendant appeals. Affirmed.

Ernest B. Herald, of Seattle, for appellant.

Kerr &amp McCord, of Seattle, for respondent.

HOLCOMB J.

This cause of action originated out of a transaction between the appellant and McPherson Bros. Company. In 1915, McPherson Bros. Company negotiated with appellant for a building loan of $2,300 evidenced by three promissory notes, one for $1,300 and two for $500 each, dated November 5, 1915, and agreed that the first of the $500 notes was due November 1, 1916 and that the interest on all the notes was payable semiannually on the 1st days of May and November respectively. These notes were secured by a mortgage, and executed prior to the payment of the money by appellant to a broker alleged to have been representing McPherson Bros. Company. This broker retained the difference between $2,300 and $2,146.41 as commission. McPherson Bros. Company contended that it was not chargeable with a brokerage commission, and assumed the position that it had received but $2,146.41 from appellant, while appellant contended that it had paid the entire $2,300 to McPherson Bros. Company, or on its account, and that therefore the true amount of indebtedness was $2,300 as evidenced by the notes. When the first installment of interest became due, McPherson Bros. Company remitted only a sufficient amount to cover interest at the agreed rate on the principal sum of $2,146.41. A great deal of correspondence regarding the dispute had been had between appellant and McPherson Bros. Company prior to November 1, 1916, the date of the second installment of interest and the maturity of the first of the $500 notes.

The foregoing events had transpired unknows to the respondent, and on or about November 1, 1916, it received by mail the following letters:

'First National Bank.

'Brewster, Wash., Oct. 30, 1916.

'Bank of California, N. A., Seattle, Wash.--Gentlemen: Inclosed herewith please find our draft to your order in the sum of $585.75, together with a letter of instructions from one of our customers, Peter McPherson. Will you kindly look after the matter there for us. You may retain this letter if you wish, as we have a copy for our files.

'Thanking you for your services in this matter,

'Yours very truly,

p>Page

'E. D. Clapp, Asst. Cashier.'

'Brewster, Wash., Oct. 30, 1916.

'First National Bank of Brewster, Brewster, Washington--Gentlemen: Inclosed herewith we hand you our check for $585.75, which sum we will ask you to pay to Mortgage Co. Holland-America, 402 Hoge Bldg., Seattle, Wash., subject to the following conditions: $500 of which is to be applied on the principal on a loan made by that Co. to us for $2,146.41. The $85.75 is to pay the second installment of interest on said note due Nov. 1st, 1916. Said Mortgage Co. shall deliver to you two coupon interest notes, one due May 1st, 1916, which interest you paid for us on said last named date; also, one coupon interest note due Nov. 1st, 1916, for which you will pay them $85.75. If however said Mortgage Co. refuses to deliver to you the two coupon interest notes above mentioned, and indorse on the principal note the $500 payment you make them, on such refusal, you shall retain until further notice from us, the full amount represented by this check, subject to the demand of said Mortgage Co. on compliance with the conditions above mentioned to wit: the delivery to you for us the two coupon interest notes above mentioned, and proper acknowledgment of the payment of the $500 on said principal note.

'Yours truly,

McPherson Bros. Co.

'By Peter McPherson.'

Respondent prepared and addressed a letter to appellant, accompanied by a form of receipt to be signed and executed by appellant, which are as follows:

'The Bank of California, National Association.

'Seattle, Wash., November 1, 1916.

'Mortgage Co., Holland-America, 402 Hoge Building Seattle, Washington--Dear Sirs: At the request of the First National Bank, Brewster, we inclose herewith our manager's check for $585.75, together with receipts in duplicate.

'Of this amount, $500.00 is to be applied on the principal of the McPherson Bros. Co. loan for $2,146.41. The $85.75 is to be the second installment of interest of the said note, due November 1st, 1916.

'Please deliver to the bearer two coupon interest notes, one due May 1st, 1916, which interest was paid on that date, also interest coupon due November 1st.

'Please deliver the receipts to the bearer.

'Yours very truly,

'The Bank of California, N. A.,

'L. T. Macklem, Manager.' '$585.75. Seattle, Washington.

'Received of the Bank of California, National Association, Seattle, Washington, five hundred

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