Bank of California v. Starrett

• Citation: 188 P. 410,110 Wash. 231
• Decision Date: 17 March 1920
• Docket Number: 15434.
• Court: United States State Supreme Court of Washington
• Parties: BANK OF CALIFORNIA v. STARRETT.

188 P. 410

110 Wash. 231

BANK OF CALIFORNIA v. STARRETT.

No. 15434.

Supreme Court of Washington

March 17, 1920

Department 2.

Appeal from Superior Court, King County; Marion Edwards, Judge pro tem.

Action by the Bank of California against Henry W. Starrett. From judgment for plaintiff, defendant appeals. Affirmed.

Poe &amp Falknor, of Seattle, for appellant.

Kerr &amp McCord, of Seattle, for respondent.

FULLERTON J.

This is an action upon a promissory note, of which the following is a copy:

'$4,000. Seattle, Washington, Mar. 15, 1917.

'On demand after date, we jointly and severally as principals promise to pay to the order of the Bank of California, National Association, four thousand dollars, for value received, with interest from date at the rate of 6 per cent. per annum payable monthly until paid. Principal and interest payable in U.S. gold coin, at the Bank of California, National Association, in this city.

'In case default is made in the payment of this note, and the same is placed in the hands of an attorney for collection, we jointly and severally agree to pay five per cent. of the amount then due as attorney's fees, if paid without suit; but if suit be commenced to collect this note or any part thereof, we jointly and severally agree to pay ten per cent. upon the amount due at the time suit is brought, and in case such suit is prosecuted to judgment said attorney's fees equal to ten per cent, of the amount then due, shall be included in said judgment, and such judgment shall bear interest at the rate of ten per cent. per annum.

'All parties to this note, including guarantors, sureties, and indorsers, hereby severally waive presentment, protest, notice of nonpayment, and any release or discharge arising from any extension of time of payment or other cause.

'[Seal] Teller Packing Company,

'Henry Teller. By Henry Teller, Pres.

'H. W. Starrett. W. T. Hall.' Of the parties to the note, Hall and Starrett alone were served with process. Hall defaulted. Starrett answered, putting in issue by denials the traversable allegations of the complaint, and pleading affirmatively the following:

'Further answering said complaint, and as a first affirmative defense thereto, this defendant alleges:

'That at the time of the execution of the said note, described in paragraph 3 of said complaint, this defendant signed the same as an indorser, without consideration, upon the understanding that the plaintiff would collect the amount thereof, with interest, from the defendant Teller Packing Company, a corporation, as and when said corporation, which was then engaged in the salmon packing business, should receive money from the sale of its pack.

'VI. That the said note is a demand note, and at diverse and different times since the making thereof, the said Teller Packing Company, had had on general deposit in an open account with the said plaintiff, from the sale of its pack, large sums in excess of the amount then or at any time due upon the said note, and that this defendant on several occasions notified the plaintiff that the said deposit was on hand, and requested it to make demand upon the said Teller Packing Company, which was primarily liable thereupon for payment of the said note, and to apply so much of said deposit as was necessary to the payment thereof.

'VII. That this defendant further informed the said plaintiff that said Teller Packing Company was in a precarious financial condition, and that defendant might be injured, but that, notwithstanding the defendant's request, the said plaintiff refused and neglected to make application of said deposit towards the payment of said note or any part thereof, or to do anything proper to protect this defendant in the premises.'

'IX. That since the said request was made by this defendant, the said Teller Packing Company has been adjudged bankrupt.'

The plaintiff denied generally the affirmative allegations of the answer. On the issues as thus formed a trial was entered upon before the court sitting without a jury, in the course of which the plaintiff put in proof tending the substantiate the allegations of its complaint. The defendant Starrett thereupon offered evidence tending to substantiate the averments in his answer. To this evidence an objection was interposed, which the court sustained, holding in effect that the defendant had signed the note as maker, and could not interpose such a defense, as it was applicable only to a party secondarily liable. Judgment was entered accordingly, from which Starrett appeals.

The first question presented by the record is: In what capacity did the appellant sign the instrument; that is to say, is he a maker or an indorser? It is the appellant's contention that he signed as an indorser. This is founded upon section 17, subd. 6, of the Negotiable Instruments Act (Rem. Code, § 3408), which provides that, where a signature is so placed upon an instrument that it is not clear in what capacity the person making the same intended to sign, he is to be deemed an indorser. The only thing unusual in the placing of the signature upon this instrument is that it was placed on the left side of the bottom of the body of the...