Barto Co. v. Aylmore

• Decision Date: 02 July 1923
• Docket Number: 17560.
• Citation: 216 P. 857,125 Wash. 394
• Parties: BARTO CO. v. AYLMORE.
• Court: Washington Supreme Court

216 P. 857

125 Wash. 394

BARTO CO. v. AYLMORE.

No. 17560.

Supreme Court of Washington

July 2, 1923

Department 1.

Appeal from Superior Court, King County; Boyd J. Tallman, Judge.

Action by the Barto Co., against Reeves Aylmore, Jr. From judgment for less relief than demanded, plaintiff appeals. Reversed and remanded, with directions.

Tucker & Hyland and Ford Q. Elvidge, all of Seattle, for appellant.

Million & Houser, of Seattle, for respondent.

MITCHELL J.

This is an action by the Barto Company, a corporation, on two promissory notes executed and delivered by the defendant to Barto & Sons Bank, a corporation, which notes were assigned and transferred to the plaintiff. One note is in the sum of $85 and interest, the other one $550 and interest. The statute of limitations was plead as a defense to the action upon each of the notes, and, further, it was answered that the $85 note had been given to cover an advance of expense money in connection with services to be rendered Barto & Sons Bank, and that as to the $550 note it was to be paid by services rendered and other expenses incurred by the defendant to and on behalf of Barto & Sons Bank, which services and expenses were rendered and incurred.

On the trial of the case without a jury there was judgment for the plaintiff on the $85 note and against the plaintiff as to the larger note. The plaintiff has appealed from that part of the judgment against it.

The court found that after the $550 note was given the respondent performed legal services for and at the request of the payee Barto & Sons Bank, of the reasonable value of the amount owing on the note, and that at the time of the employment and rendition of the services it was agreed that the value of such services should offset the note.

Upon an examination of the evidence we are satisfied it does not support the finding. There is a dispute as to whether or not any agreement upon the subject was made, but, accepting the testimony of the respondent as true, which we do, as did the trial court, it shows that shortly after the note was given one H. B. Barto, manager and an officer of Barto & Sons Bank employed the respondent to render legal services in a case of H. B. Barto's father-in-law before one of the United States land offices in Oregon and from thence before the department in Washington, D. C., with the understanding that his charges therefor should be applied as payment on the note; that the services were rendered and that they were reasonably worth fully as much as the note together with interest at that time; and that after completing the services, without being asked to have the accounts adjusted the respondent told H. B. Barto that the amount due the corporation as shown by the note was adjusted by the amount of money respondent had actually put in together with the services he performed.

The note was not surrendered to the respondent. There is no evidence to show that the manager had any authority whatever to bind the corporation by such a promise. There is an absence of proof that any other officer or stockholder of the corporation ever knew or had any opportunity of learning of the attempted application. The transaction was an attempt by the manager and officer to use the property of the corporation, the note, in his own private business or that of some one other than the corporation, from which the corporation could not possibly derive any benefit.

This upon good reasoning, just principles, and the authorities, he could not do. Hoffman v. Gottstein Investment Co., 101 Wash. 428, 172 P. 573; Mooney v. Mooney Co., 71 Wash. 258, 128 P. 225; Wallace v. Oceanic Packing Co., 25 Wash. 143, 64 P. 938; CoshMurray Co. v Adair, 9 Wash. 686, 38 P. 749; Rhodes v. Webb., 24 Minn. 292; McCloskey v. Goldman, 62 Misc. 462, 115 N.Y.S. 189; 1 Mechem on Agency (2d Ed.) § 981; 2 Thompson on Corporations (2d Ed.) § 1459. The principle involved is well expressed in the...