Bird v. Steele

• Decision Date: 10 June 1913
• Citation: 132 P. 724,74 Wash. 68
• Court: Washington Supreme Court
• Parties: BIRD v. STEELE et al.

132 P. 724

74 Wash. 68

BIRD v. STEELE et al.

Supreme Court of Washington

June 10, 1913

Department 1. Appeal from Superior Court, Pierce County; M. L. Clifford Judge.

Action by J. E. Bird, trustee, against Callie L. Steele and others. Judgment for plaintiff, and defendants appeal. Affirmed.

H. F. Norris and T. W. Hammond, both of Tacoma, for appellants.

Fitch Jacobs & Arntson, of Tacoma, for respondent.

CHADWICK J.

On May 17, 1910, Roberge, Steele & Roberge entered into a contract for lathing a building at Vancouver, B. C. For some reason not now material, one member of the firm retired, and it was agreed that the two remaining members should complete the contract, receiving therefor an additional sum of $1,000 or $11,700 for the work, that in all other respects the contract should stand as before, and that security should be given to respondent for performance of the work for the benefit of Raftery & Co. Thereafter defendants Callie L. Steele and Mary E. Steele executed a mortgage upon certain property in the city of Tacoma. The mortgage was conditioned as follows: 'Whereas, the said Callie L. Steele, William Roberge and Al Roberge have * * * entered into a written agreement as subcontractors with Raftery & Co., wherein said subcontractors * * * are to do the lathing * * * according to the plans and specifications annexed. Now, therefore, it is agreed * * * that this instrument shall be * * * security * * * that the said William Roberge and Callie L. Steele will forthwith proceed to the due completion of said contract. * * * It is also agreed that this document shall be taken as security mentioned in said agreement of the 21st day of March, 1911, * * * for all moneys that said Raftery & Co. shall be called upon to pay over and above the sum of $11,700 * * * to discharge any lien, charges, incumbrances or to pay any debts of the said Roberge & Steele in respect thereof.' Roberge & Steele did not perform their contract, and Raftery & Co. had to pay $1,081.31 in addition to the contract price to discharge incumbrances and pay debts contracted by Roberge & Steele. The plaintiff, who is trustee for Raftery & Co., began this action to foreclose the mortgage. From a decree in favor of plaintiff, the defendants have appealed.

It is first contended that Mrs. Steele was in no way bound to sign the mortgage which covered the home of the defendants Steele, and which would otherwise have been exempt; that she signed as a surety, and, being now released because of certain alleged omissions on the part of the principal contractors, the mortgage has become void for the want of an obligation to sustain it. If Mrs. Steele signed the mortgage as a principal, and not as a surety, it will be unnecessary to comment upon the evidence and the cases relied on to show a release, although in passing we will say that we have examined both the facts and the law, and are of the opinion that the defense of release cannot in any event be sustained.

Roberge & Steele were subcontractors, and engaged to do certain work for a stipulated price. They failed to meet the terms of their contract, and the firm is chargeable with the amount that Raftery paid for them. The primary test in this, as it has been in all of the later decisions of this court, is to ascertain the character of the debt. If the debt is a separate debt of the husband, the community would not be bound. If it is a debt incurred in the prosecution of a business or an enterprise out of which the community would have reaped a benefit, it is a community debt, and the husband and wife are principals in so far as their community property is concerned. Measured by this standard we have no doubt that the obligation assumed by Mrs. Steele was direct and not collateral; that she executed the contract as a principal, and not as a surety. This court has held in a long line of cases, indeed, as is said in Floding v. Denholm, 40 Wash. 463, 82 P. 738, that a debt contracted by the husband in the prosecution of the community business renders the community property liable for the debt is no longer an open question in this state. This principle has been applied to simple contract debts ( Oregon Imp. Co. v. Sagmeister, 4 Wash. 710, 30 P 1058, 19 L. R. A. 233; Horton v. Donohoe Kelly Banking Co., 15 Wash. 399, 46 P. 409, 47 P. 435; McKee v. Whitworth, 15 Wash. 536, 46 P. 1045; Philips & Co. v. Langlow, 55 Wash. 385, 104 P. 610); to an accommodation indorser ( Shuey v. Holmes, 22 Wash. 193, 60 P. 402); to one liable for a superadded liability as a subscriber to the stock of a corporation ( Shuey v. Adair, 24 Wash. 378, 64 P. 536); to obligations incurred as a surety for a corporation in which the husband is a stockholder and the stock belongs to the community ( Allen v. Chambers, 18 Wash. 341, 51 P. 478; Allen v. Chambers, 22 Wash. 304, 60 P. 128); in an action for fraud and deceit ( McGregor v. Johnson, 58 Wash. 78, 107 P. 1049, 27 L. R. A. [N. S.] 1022); and, finally, it was held that the community is liable for a tort committed by the husband when engaged in a business conducted for the benefit of the...