Bank of California v. Union Packing Co.

• Citation: 111 P. 573,60 Wash. 456
• Parties: BANK OF CALIFORNIA v. UNION PACKING CO. et al.
• Decision Date: 15 November 1910
• Court: United States State Supreme Court of Washington

111 P. 573

60 Wash. 456

BANK OF CALIFORNIA v. UNION PACKING CO. et al.

Supreme Court of Washington

November 15, 1910

Department 2. Appeal from Superior Court, Pierce County; W. O. Chapman Judge.

Action by the Bank of California against the Union Packing Company and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Marshall K. Snell, F. S. Blattner, and L. B. Da Ponte, for appellants.

Walter Loveday, Frank H. Kelley, and Raymond L. McMillan, for respondent.

DUNBAR J.

This is an action by respondent, plaintiff below, against the appellants on a contract of guaranty which is as follows: 'Tacoma, Washington, March 13, 1906. To the Bank of California, Tacoma, Washington--Dear Sirs:--We hereby jointly and severally authorize and request you to advance to Union Packing Co. such moneys as they may require from time to time, and for value received we jointly and severally guarantee payment of whatever balance may remain due, not exceeding thirty-five thousand dollars, in United States gold coin, with interest at the rate of seven per cent. per annum until paid, and upon failure to pay the amount thereof due by Union Packing Co. we jointly and severally promise to pay the same to you on demand. This is intended as a continuing guarantee and requires no notice to us, and is to remain in force until canceled by notice in writing. Peter Hale. Chas Hale. Knute Langlow. Dirk Blaauw. Union Packing Co., Louis Langlow, Treas. Peter Iverson, by Louis Langlow, Attorney in Fact. Louis Langlow. O. J. Ekre.' Respondent alleges that, in pursuance of and on the faith of said contract of guaranty, on or about the 19th day of September, 1906, it loaned to defendant Union Packing Company the sum of $8,000 evidenced by a promissory note. The note was a joint the several note for $8,000, with interest at the rate of 7 per cent. per annum until paid, signed by Louis Langlow, O. J. Ekre, Union Packing Company, Louis Langlow, treasurer. Balance is claimed on this note against all of the defendants, of $6,218.39, besides interest and attorney's fee. Motions and demurrers were filed and answers by Hale and Blaauw to the effect, in substance, that the plaintiff did not loan to the defendant Union Packing Company the sum of $8,000, in pursuance and on the faith of an agreement entered into between plaintiff and said defendants. It is alleged that, if the plaintiff did loan such money, it was loaned to the Union Packing Company, Louis Langlow, treasurer, Louis Langlow, and O. J. Ekre, and that the same was not loaned on the faith of any agreement had between plaintiff and said defendants. Other defendants defaulted. The trial proceeded, and resulted in a judgment against the appellants for the full amount asked for, and the case is brought here on appeal.

There are two propositions contended for by appellants: (1) That the offer to guarantee the indebtedness to be incurred by the Union Packing Company does not cover a promissory note executed by that company and others as their joint and several obligation; (2) that the judgment of the superior court is erroneous because respondent failed to allege and prove that appellants' offer to guarantee was accepted and notice thereof communicated to appellants. The first proposition, it seems to us, is entirely without merit. It is true that appellants cite the case of Bell v. Norwood, 7 La. 95; but that case simply held that, where A. recommended B. to the credit of C., and C. later made an advance to B. and D. as a firm, on the faith of the guaranty, the guarantor was not bound thereby. But that is a different proposition from the one under consideration. A person might well be willing to guarantee a payment to an individual whom he knew and with whom he had business relations, when he would not care to extend that guaranty, and did not intend to extent it, to a firm with which the person he intended to accommodate was connected. In the case cited they were two distinct entities, and we think unquestionably that that decision was right. But in this case the promissory note in suit was evidence of the indebtedness of the Union Packing Company alone. The record and proof show that all the parties, who were parties to the guaranty, were officers and stockholders of the Union Packing Company, and the testimony is to the effect that the money went to the credit of the Union Packing Company. This testimony is uncontradicted, for the appellants rested upon the testimony of the respondent, and offered none of their own. It was not necessary for Langlow and Ekre to sign the note, as they had already signed the guaranty; but the fact that they did sign the note certainly could not under any circumstances detract from the effect of the guaranty, or affect it, deleteriously or otherwise.

On the second proposition, it is earnestly contended that the rule is that a guarantor of this character must have notice that the proposition made by him is accepted, and appellants cite many cases to sustain this contention. This, no doubt, is the general rule, because the doctrine of notice is based upon the theory that a mutual assent is necessary to the validity of a contract, and this lack of mutuality is discoverable where one party makes an offer to another the binding force and effect of which necessarily depends upon the consent of the other. It is nothing more than an announcement of the common expression that the minds of the parties must meet in order to constitute a contract, for it is elementary that one party alone cannot be bound. But, where for a consideration a party obligates himself to do a particular thing, a different rule obtains and an obligation is created. This distinction between a guaranty and an offer to guarantee must not be lost sight of. It will be observed from a perusal of this guaranty that it is not an offer to do...