Gwinn v. Ford

• Decision Date: 27 May 1915
• Docket Number: 12225.
• Citation: 85 Wash. 571,148 P. 891
• Court: Washington Supreme Court
• Parties: GWINN v. FORD et al.

148 P. 891

85 Wash. 571

GWINN v. FORD et al.

No. 12225.

Supreme Court of Washington

May 27, 1915

Department 2. Appeal from Superior Court, Spokane County; E. H Sullivan, Judge.

Action by C. A. Gwinn against L. A. Ford and others. Judgment for plaintiff, and defendants appeal. Reversed and cause remanded.

Mulligan & Bardsley, of Spokane, for appellants.

J. N Pickrell, of Colfax, and Jos. Rosslow, of Spokane, for respondent.

MAIN J.

The purpose of this action was to recover upon two promissory notes. The complaint alleges as a first cause of action, in substance, that the defendants L. A. Ford and Anna Ford, his wife, on July 15, 1910, for value received, made, executed and delivered to the defendant E. J. Rice a promissory note for the principal sum of $300, bearing interest at 8 per cent. per annum, payable semiannually, and providing for the payment of a reasonable attorney's fee in case of suit thereon; that subsequent to the execution of the note, and prior to the maturity thereof, the defendant E J. Rice, for value, sold and transferred the note to the plaintiff, who is now the owner and holder thereof; that at the time the defendant E. J. Rice sold and assigned the note to the plaintiff, he guaranteed the payment of the same by a written guaranty indorsed on the back of the note; and that the whole amount of principal and interest is due and unpaid. The allegations contained in the second cause of action are the same as those of the first cause of action, except the note sued upon is for the principal sum of $500. The defendants Ford and wife answered the complaint by denials and by setting up an affirmative defense. To this answer a general demurrer was interposed and sustained. They thereupon filed an amended answer, denying each and every allegation contained in both causes of action, except as admitted, qualified, or explained in the affirmative defenses of the answer. The same affirmative defense was interposed to each cause of action in the complaint, and in substance alleged: That shortly prior to July 15, 1910, the plaintiff introduced the defendant E. J. Rice to Ford and wife, stating that Rice had a business proposition which he desired to take up with them; that Anna D. Ford had been well acquainted with the plaintiff for nearly 25 years, and had implicit confidence in his integrity and honesty, and by reason thereof relied upon each and every representation and statement made by him, and entertained the business proposition which resulted in the execution and delivery of the notes in question; that shortly after his introduction, Rice, in explanation of the business proposition referred to, stated to Mr. and Mrs. Ford that he was a stock salesman connected with a corporation known as the 'Jexite Powder Company'; that he was well and intimately acquainted with its affairs; that at that time its stock was selling in the open market [85 Wash. 573] at 35 cents per share; that on account of inside information of the affairs of the company which he had, he knew the stock to be of much greater value than 35 cents per share, and in a very few days the price would be raised; that he knew where the stock could be sold in a very few days at 50 cents per share, and that he could and would sell the stock at that price, and thereupon Rice proposed that if Mr. and Mrs. Ford would finance a proposition whereby he could purchase a certain amount of the stock at 35 cents per share, he would resell the stock at 50 cents per share within a very few days, and divide with them the profits made on the transaction; that after some negotiations Mr. and Mrs. Ford agreed with Rice to execute the notes in suit; that Rice agreed...