Columbia Bank, N.A. v. New Cascadia Corp.

Decision Date05 June 1984
Docket NumberNo. 5552-III-3,5552-III-3
Citation37 Wn.App. 737,682 P.2d 966
PartiesCOLUMBIA BANK, N.A., now Peoples National Bank of Washington, Respondent, v. NEW CASCADIA CORPORATION, a Washington corporation; Randal W. Rutledge and Jane Doe Rutledge, husband and wife; Charles E. Hekking and Jane Doe Hekking, husband and wife; Wesley M. Williams and Jane Doe Williams, husband and wife; Patrick W. Lyon and Jane Doe Lyon, husband and wife, Defendants, Willard E. Matheson and Jane Doe Matheson, husband and wife, Appellants.
CourtWashington Court of Appeals

David E. Williams, Critchlow & Williams, Richland, for appellants.

Francois X. Forgette, Raekes, Rettig, Osborne & Forgette, Kennewick, for respondent.

THOMPSON, Judge.

Dr. Willard E. Matheson 1 appeals a judgment against him based on a guaranty of a defaulted loan.

In May 1979, Dr. Matheson and others signed a contract in favor of Columbia Center National Bank (Columbia) agreeing to guarantee all present and future debts of New Cascadia Corporation. At about the same time, Dr. Matheson, as corporate secretary, and Mr. Rutledge, as president, signed a corporate resolution authorizing loans provided both men signed for them. Dr. Matheson signed for two loans which have since been paid and are not part of this appeal.

On December 13, 1979, Dr. Matheson, Mr. Rutledge and Mr. Lyon executed a new corporate resolution authorizing loans. That resolution required the signature of any two of the three signators. The next day, December 14, 1979, Columbia Bank loaned $15,000 to New Cascadia. Mr. Rutledge and Mr. Lyon signed the note; Dr. Matheson did not sign and claimed he did not know about the loan.

Columbia Bank extended the due date for the loan in January, February, and March of 1980, without notice to or consent of Dr. Matheson. The loan was never repaid. In August 1980, Peoples Bank succeeded to the interests of Columbia Bank and brought suit against New Cascadia and all but one guarantor. A default judgment was entered against all the defendants except Dr. Matheson. He unsuccessfully contested liability and now appeals. We affirm.

Dr. Matheson first contends he should not be liable as guarantor because there was a change in the character of the borrower due to his departure. Ordinarily, a surety who guarantees the debts of a business will not be liable for debts incurred after a change in the firm. Lumbermans Bank & Trust Co. v. Sevier, 149 Wash. 118, 270 P. 291 (1928) (change of partners); Tupper v. Hartman, 121 Wash. 142, 208 P. 1103 (1922) (substitution of widow for estate of borrower); Spokane Union Stockyards Co. v. Maryland Cas. Co., 105 Wash. 306, 178 P. 3 (1919); see also 38 C.J.S. Guaranty § 71, at 1232 (1943).

All parties agree the corporation changed after Dr. Matheson departed. However, the court's determination Dr. Matheson was still an officer in the corporation at the time the loan was made is supported by the evidence. For example, the second loan resolution, signed the day before the loan was made, showed Dr. Matheson as secretary-treasurer.

Furthermore, Dr. Matheson was a willing participant in the corporate change. The guarantor's participation in the change of structure of a commercial enterprise, subsequent to the execution of a guaranty, is viewed as a persuasive reason to conclude that the guarantor's liability is not released by the change. Annot., Change in Name, Location, Composition, or Structure of Obligor Commercial Enterprise Subsequent to Execution of Guaranty or Surety Agreement as Affecting Liability of Guarantor or Surety to the Obligee, 69 A.L.R.3d 567, at 579 (1976).

Next, Dr. Matheson argues he was released from liability because the bank extended the loan's due date three times without his consent. Generally, if a creditor, by binding contract with the principal debtor, extends the time of payment without the guarantor's consent, he thereby discharges the guarantor. Lincoln v. Transamerica Inv. Corp., 89 Wash.2d 571, 574, 573 P.2d 1316 (1978); Old Nat'l Bank v. Seattle Smashers Corp., 36 Wash.App. 688, 676 P.2d 1034 (1984); Nord v. Phipps, 18 Wash.App. 262, 566 P.2d 1294 (1977). However, a guarantor is not discharged if he consents to the extension. Lincoln, 89 Wash. at 574, 573 P.2d 1316; Old Nat'l Bank, at 691. Here, the guaranty plainly provides the bank may grant extensions without the consent of the guarantors. Therefore, although Dr. Matheson did not specifically consent...

To continue reading

Request your trial
5 cases
  • Union Bank, N.A. v. Blanchard
    • United States
    • Washington Court of Appeals
    • 6 June 2016
    ... ... , 112 Wash.2d 216, 225, 770 P.2d 182 (1989) (quoting Celotex Corp. v. Catrett , 477 U.S. 317, 32223, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ... and of defense based on lender's acceptance of deed in lieu); Columbia Bank, N.A. v. New Cascadia Corp. , 37 Wash.App. 737, 73940, 682 P.2d 966 ... ...
  • ISC-Bunker Ramo Corp. v. Altech, Inc.
    • United States
    • U.S. District Court — Northern District of Illinois
    • 25 June 1990
    ... ... of those institutions on a trial basis, namely the Enterprise Savings Bank on Wacker Drive, in Chicago. In addition, Altech services several ... , taken his clients and gone into business for himself."); Columbia Bank, N.A. v. New Cascadia Corp., 37 Wash.App. 737, 682 P.2d 966, 968 ... ...
  • Daisy Outdoor Advertising Co., Inc. v. Abbott
    • United States
    • South Carolina Court of Appeals
    • 11 May 1994
    ... ... Punch Line of Columbia, 296 S.C. 66, 370 S.E.2d 711 (1988). To satisfy the ... 386 S.E.2d 259 (Ct.App.1989); South Carolina National Bank v. Silks, 295 S.C. 107, 367 S.E.2d 421 (Ct.App.1988); ... ...
  • Wolfkill Feed & Fertilizer Corp. v. Youngquist, No. 55703-3-I (Wash. App. 11/20/2006)
    • United States
    • Washington Court of Appeals
    • 20 November 2006
    ... ... is granted without the consent or acquiescence of such others); Columbia Bank, N.A. v. New Cascadia Corp., 37 Wn. App. 737, 682 P.2d 966 (1984) ... ...
  • Request a trial to view additional results
2 books & journal articles
  • Table of Cases
    • United States
    • Washington State Bar Association Washington Real Property Deskbook Series Vols. 1 & 2: Washington Real Estate Essentials (WSBA) Table of Cases
    • Invalid date
    ...of Denver v. Merlino, 35 Wn.App. 610, 668 P.2d 1304, review denied, 100 Wn.2d 1032 (1983): 10.4(1) Colum. Bank v. New Cascadia Corp., 37 Wn.App. 737, 628 P.2d 966, review denied, 102 Wn.2d 1014 (l984): 25.7(2) Colum. Cmty. Bank v. Newman Park LLC, 177 Wn.2d 566, 304 P.3d 472 (2013): 20.4(5)......
  • §25.7 - Leasehold Lending
    • United States
    • Washington State Bar Association Washington Real Property Deskbook Series Vols. 1 & 2: Washington Real Estate Essentials (WSBA) Chapter 25 Project Financing
    • Invalid date
    ...defenses are generally enforceable. RESTATEMENT (THIRD) OF SURETYSHIP AND GUARANTY §48 (1996); Columbia Bank v. New Cascadia Corp., 37 Wn.App. 737, 628 P.2d 966, review denied, 102 Wn.2d 1014 (l984); Old Nat'l Bank v. Seattle Smashers, 36 Wn.App. 688, 676 P.2d 1034 (1984); Seattle-First Nat......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT