Fruehauf Trailer Co. of Canada Limited v. Chandler
| Decision Date | 06 January 1966 |
| Docket Number | No. 37874,37874 |
| Citation | 67 Wn.2d 704,409 P.2d 651 |
| Court | Washington Supreme Court |
| Parties | FRUEHAUF TRAILER COMPANY OF CANADA LIMITED, a Canadian corporation, Appellant, v. Alvord Leroy CHANDLER and June L. Chandler, his wife, Frank Howard Whiting and Kay Whiting, his wife, Robert Timothy Whiting and Esther H. Whiting, his wife, and W. D. Chandler and Birdie P. Chandler, his wife, Respondents. |
Skeel, McKelvy, Henke, Evenson & Uhlmann, W. Paul Uhlmann, Seattle, for appellant.
Torbenson, Thatcher, Stevenson & Burns, Richard M. Thatcher, Seattle, for respondents.
April 28, 1960, Fruehauf Trailer Company of Canada Limited (hereinafter referred to as Fruehauf) sold upon conditional sale contract 12 trailer units to Pacific Inland Express Ltd. (hereinafter referred to as PIX) for $130,397.58. This contract resulted from the refinancing of a former agreement executed in 1959.
May 10, 1960, Alvord Leroy Chandler, Frank Howard Whiting, Robert Timothy Whiting, and W. D. Chandler (hereinafter referred to as the guarantors), being the principal stockholders of PIX, executed a separate instrument with Fruehauf partially guaranteeing the PIX obligation. The guaranty agreement contained, Inter alia, the following provisions:
NOW THIS GUARANTEE WITNESSETH that in consideration of Fruehauf having executed an instrument of release of the guarantee hereinbefore mentioned, and of Fruehauf having consented to and executed an instrument of transfer of equity from Gill-Pix to PIX as aforesaid, the undersigned agree that in the event the transfer of equity is declared void by a court of competent jurisdiction and the guarantee herein is thereby rendered ineffective, to indemnify and save Fruehauf harmless from all and any loss up to a maximum sum of $13,000 Fruehauf may sustain directly or indirectly, by reason of having permitted the transfer of equity by Gill-Pix to PIX, and hereby guarantee the performance and payment by PIX of all its obligation under the transfer of equity with respect to the aforesaid Fruehauf trailer units to an amount equal to 10% Of any unpaid balance at any time outstanding on the monies falling due by PIX under its assumption of the debt of Gill-Pix as provided in the said transfer of equity from Grill-Pix to PIX.
If and whenever there shall be any breach on the part of PIX of any covenant on its part assumed under the said transfer of equity or in any modification thereof, the undersigned guarantors will, within 30 days after demand in writing by Fruehauf, pay to Fruehauf such sums as may then remain payable by PIX to Fruehauf under its obligation pursuant to the said transfer of equity or any modification thereof relating to the said units or any of them.
The liability of the undersigned for performance of the above-mentioned terms Shall not be affected by any indulgence, Compromise, settlement, extension of credit or variation of terms granted by Fruehaut to PIX Or by the discharge or release of any obligation of PIX or any other person interested by operation of law or otherwise, nor by failure to file, record or register any Conditional Sale Contract or other instrument executed by PIX or Gill-Pix nor by the amount of PIX's obligations outstanding at any one time nor by payment previously made by PIX or the undersigned, nor shall it be necessary for Fruehauf to procure the consent of the unersigned or give any notice in reference thereto.
The undersigned hereby expressly waive and dispense with notice of acceptance of this guarantee, notices of non-payment and non-performance, notices of amount of indebtedness of PIX outstanding at any time, demands, foreclosure and possessory remedies.
This guarantee shall be a continuing guarantee and accordingly shall remain in full force and effect until the whole of the monies in respect of which PIX is obligated under the transfer of equity aforesaid shall have been fully paid and satisfied.
It is agreed that this guarantee may be enforced under the laws of the State of Washington or under the laws of the Province of British Columbia, and as against one or more of the undersigned as may be determined by Fruehauf.
The undersigned, insofar as they are now or hereafter shall be creditors of PIX, hereby acknowledge that their said indebtedness is hereby postponed to the indebtedness of PIX to Fruehauf aforesaid and any further or other obligations due or to become due for the payment of monies by PIX to Fruehauf. (Italics ours.)
May 20, 1960, PIX paid the first monthly instalment in the sum of $2,414.77, and thereafter defaulted. August 29, 1960, Fruehauf made written demand to the guarantors for the payment of $12,798.28, the amount allegedly due in accordance with the terms of the guaranty agreement. Neither the guarantors nor PIX made any payment.
November 4, 1960, Fruehauf repossessed the 12 units from PIX, and thereafter discharged PIX from its liability on the conditional sale contract as having 'been fully paid and satisfied.'
Fruehauf commenced this action against the guarantors in the Superior Court for King County to recover the sum of $12,758.28, 1 being 10 per cent of the alleged unpaid balance of the PIX contract at the time of PIX' default and Fruehauf's repossession of the 12 units. Fruehauf contended that the instrument of guaranty was an independent agreement to pay 10 per cent of the total contract price due it at the time of default by PIX.
The guarantors answered the complaint, contending, Inter alia, that the agreement was one of guaranty only, and that a discharge of the principal obligation released the guarantors from their liability. During the trial, Fruehauf made an offer of proof to show that, by repossession and resale, it had suffered a loss of approximately $12,000. The offer of proof was rejected.
From a judgment of dismissal sustaining the contention of the guarantors, Fruehauf appeals.
There is no dispute as to the material facts, which are substantially as above indicated. Fruehauf concedes the general law in the state of...
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